F E A T U R E UAESNAPSHOT Dubai’s global reach fares well A


ccording to Ram Menen, Emirates divisional senior vice president cargo, the appetite for new aircraft is incredibly low at the moment. With rising fuel prices, this could place carriers awash with old aircraft in a pre- carious, catch-22 situation.


“Those with new freighters — which offer


greater fuel efficiency — are obviously at an advantage. For those lacking these more fuel-ef- ficient carriers, the present market leaves them stuck in the wind, not sure which way to turn. Do they continue to use their aging fleet at greater cost? Or do they gamble on market growth and splash out on aircraft that will ultimately prove more cost-efficient?” asked Menen. A lot of what happens in terms of market growth is dependent on two regions currently suffering financially: the US and the Eurozone. “This market will be catalysed by falling oil


Successful first year for flydubai


prices — reaching $50-$60 per barrel will be the point of change. It will decrease the cost of production, resulting in more production and will decrease the cost of transportation, resulting in people having better expendable income as fuel is a major cost item in any household. “Until this happens though, I predict the mar- ket in these areas will remain flat; Europe and the US will throw up challenges for the foresee- able future,” he continued.


Emirates has managed to sidestep a lot of the economic challenges, with its base in Dubai proving a useful tool — for the region and carrier. “The UAE is geocentrically well placed. We are within eight hours’ flight time of 5.8 billion peo- ple. This has allowed us to become a key transit hub. We’ve had a fairly prosperous year against the odds and are still buoyant,” he said. On top of this, Emirates is on the doorstep of Africa, which is being hailed by all as the “next


frontier”. As with their competitor, Etihad, Emir- ates shares similar trade lanes linking Africa to its biggest partner, China. “There is competition, but this rallies us. The worst thing to do in a growth market is to throttle capacity. We have competitors, but they incen- tivise and benefit us. Through making more capacity available, more capacity is being used. The market is big enough to accommodate us all,” he added.


The importance of logistics for the region hasn’t escaped the notice of Dubai’s local gov- ernment, with it making the sector a major pillar of the economy.


But things are also changing for the UAE, according to Menen; the region is seeking to change its status as ‘transient’, and is looking to develop its manufacturing industry. Menen notes that a lot of manufacturers have already moved to the region.


MENEN- Carriers awash with old aircraft may find themselves in a


catch-22


Predicting the future, he points out that there will be a shift towards local production for local consumption,


highlighting Foxxcon’s (Apple)


opening of new factories in Brazil and the US as an obvious example.


“There is also a changing attitude towards technology. Life-cycles are getting shorter, with new products coming out at a greater frequency. This ‘speed of production, speed to market’ approach will proffer great opportunities for airfreight,” Menen concluded.


DESPITE launching in January 2012, flydubai Cargo has experienced “tremendous growth”, according to its CEO Ghaith Al Ghaith.


“When we started operations, we were transporting 400 tonnes of goods per month, but by the end of the year this had risen to more than 2,100 tonnes, exceed- ing our 1,500-tonne target by 30 percent,” he said. With both of Dubai’s airports having witnessed an in- crease in volumes over the last 12 months, Al Ghaith recognises the importance of air cargo for the region. “Our routes to the CIS region are doing well, shipping pharmaceuticals and spare parts — this is due to the number of direct routes we have opened over the past year,” continued Al Ghaith. Textiles and perishables in and out of Addis Ababa, Ka- rachi, Kiev and Kathmandu are also proving profitable. The carrier recently signed a blocked-space agree- ment on a 777F for six months due to the high demand for cargo between Dubai and Chittagong, Bangladesh, with Al Ghaith hailing this as a “tremendous achieve- ment for us just one year into operations”. Development of new services has been at the core


of flydubai Cargo’s operation, with the introduction of a number of new features: “Customers are able to mon- itor their shipments 24 hours a day, thanks to our free online tracking and electronic air waybills. Services like these enhance our business and we will seek further developments throughout 2013,” he added. Al Ghaith is confident that the carrier will continue to develop: “We will continue to build flydubai Cargo to offer convenient and affordable transportation of goods to more businesses around our network. Central and Eastern Europe, the Indian subcontinent and the CIS will remain key growth areas, and as our fleet expands and new routes open, we will be able to serve a greater number of customers,” he concluded.


ACW 21 JANUARY 2013 7


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