AIRCHARTER


For Smith it is all about casting the net far and wide to get those enquiries. The enquiry level is broadly getting better, explains Smith: “I would say the enquiry level, with customers asking about the options, is probably better than it was 12 months ago and the market is hardening, but it is not substantial.” The substantial truth is that charter hasn’t seen the bounce back it experienced after previous recessions and the recovery is turning out to be long and drawn out, just as it has been for every other part of the Western economy. Hunziker sees a market landscape that is tough to read, “It’s difficult to say, ‘there is so much capacity,’ in the market, compared to earlier times. Then bigger carriers, they parked aircraft earlier than planned. [Today] the aircraft are still in operation, they just don’t fly as many hours as they could.” Other factors faced by air charter services are the technologi- cal changes society is adapting to and, for some, there can be no solution. “The banking sector is getting rid of cheques in the next couple of years,” explains Capital Air Charter’s operations man- ager, Peter Wells . His company has operated a fleet of three Piper PA-31 Navajo Chieftans, but since a contract for parcels includ- ing banks’ mail ended in April, the aircraft are now not flying any packages. “We haven’t done any cargo since then [April],” adds Wells.


A long, drawn out recovery The long and drawn out recovery, compounded by longer-term


technology changes to how some businesses operate, makes for a complicated picture regarding demand for capacity. Whether it is Chieftans or larger airliner aircraft that are being parked, airlines and others are ceasing operations, and the contraction of the sup- ply basis is still going on and that is of general concern. Smith explains what is keeping the industry going: “The oil


and gas industry, the airline support business, a little bit of auto- motive, those things have kept going, surprisingly, despite the background of what is going on in the wider world.” Oil and gas have also sustained Chapman Freeborn, “We have a dedicated product manager for oil and gas and this is one of our focus points for next year,” explains Hunziker. “There is still a lot of movement around, which can’t be flown on commercial carriers and because this stuff goes to remote places. We have dedicated people in the organisation to cover the industry.” Beyond oil and gas, niches are another way of eeking out reve- nue. Air Partner is taking aim at a very large niche that is always a worldwide spectacle, the Olympics.


Winter Olympics Next year the 2014 Winter Olympics is in Sochi, Russia. “We


are seeing interest, in that there is very niche demand for trans- fer of equipment into a relatively difficult place to get to,” says Smith. The service is called the Sochi Express and it will have several flights of Boeing 747-400s out of Frankfurt Airport every week direct to Sochi from November. The typical route to Sochi is through Moscow airspace, which Smith describes as “slow and laborious”. He explains, “it is an example of where charter brokers are able to provide something unique where there is a short term demand leading up to the Olympics and we have set up scheduled flights.” His company is marketing Sochi Express to freight forwarders that move broadcasters’ equipment and look after the sports federation. “That is the type of thing we can put in a bespoke product for fairly short term demand and provide a service that isn’t quite out there.” Chapman Freeborn also has its eye on the Olympics. Hunziker


says: “We are looking at it [Sochi Olympics] with some of our partners, we are in the discussion phase, we are not operating the flight yet. It’s of course an important event, but we are not only focused on this.” Remote locations, flying around accepted routes, could also describe Peters’ way of finding clients for Hunt and Palmer for that month-on-month growth. “It’s all sort of cross trade,” he offers. “it is such a vast variety there is not one particular sec- tor or segment. It is a mix of everything from the smallest to the largest in all areas of the world. An Antonov one week, and a 747 the next, and an [Airbus] A300 the following week, a variety of aircraft types carrying a variety of commodities.” His firm can have a client in North America that is flying freight


from Europe to the Middle East or Europeans only interested within their continent or Asian clients that want transport on an Asia South America route. However, a reason why it is so varied, Peters admits to, is, “there is nothing that is strong at the moment, everything that we come across has strong possibilities and we


ACW 9 SEPTEMBER 2013 9


are competing for it and winning it.” To spread that risk Hunt and Palmer’s client base is not dominated by the UK, it is global with Asians and Europeans. Africa has been noted as a region with a healthier level of activ- ity and it has not been lost on Chapman Freeborn. Hunziker says: “We recently started our own operations in Libya.” He is referring to the company operating an Antonov An-26 out of Tripoli to ser- vice the Libyan city of Benghazi and its oil fields in the south of the country. “We think in Libya there is a lot of potential because of the oil and gas and because of all the reconstruction that has to take place over the coming months and years,” Hunziker adds. Further south on the continent Chapman Freeborn has dedi-


cated aircraft and staff based in Johannesburg, flying to the Congo and elsewhere. but the continent is not the easiest place to oper- ate, as Hunziker admits: “Africa is an important market but it is not an easy market to deal with.” Tough markets, tough times, air charter has struggled since demand fell away in 2008 and 2009. However, the ditching of air- craft by scheduled carriers since then could be the source of a great many orders, if that consumer need for the Iphone 5 and Xbox One are realised, and if IATA (IATA detects recovery, page 5) and the OECD’s (Major economies go slow, Page 5) figures really are the beginning of growth. “We’re hopeful, certainly the decline


has stopped and we’re just going along in a trough and waiting for things to improve,” says Smith. If there is to be a near term


turnaround thanks to consumer electronics then Smith, Peters and Hunziker should see the shippers of the shiny toys con- tacting them during this month of September or in October. Beyond that the Sochi, Russia Winter


Olympics that takes


place in February is the next low hanging fruit to be plucked. The real test for the world’s economy comes after the sea- sonal peak of the holiday season and the one-off extravanganza that is the Olympics.


HUNZIKER


Tere will be a peak season


As Smith puts it: “In the early part of 2014, then it will be a question of seeing how the economy goes, if you start to see a general recovery we would expect business to pick up in response to that.”


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