Dive Brief:
- Cargolux and Emirates SkyCargo established an operational partnership at Air Cargo Europe, establishing a shared space agreement, The Loadstar reported.
- Emirates SkyCargo can now utilize Cargolux's Boeing 747F freighters, while Cargolux will have access to Emirates' "high frequency distribution network," reaching more than 150 destinations in 83 countries.
- The two lines consider their decision to share capacity an industry first. Starting in June, Cargolux will increase its frequency of freighters to Dubai World Central while Emirates cargo can be handled at Cargolux's Luxembourg facility.
Dive Insight:
The airlines' deal mainly affects shippers in Europe and Asia, but shows an air cargo industry trend where passenger airlines invest more in freight networks as freighter lines chase greater distribution potential.
In just one example, American Airlines told The Loadstar it seeks to invest heavily in its freight capacity as a greater channel for revenue, given optimism for the industry. Meanwhile, freight lines are feeling pressured to offer greater geographic reach to consumers. A great option, for both types of cargo carriers, is partnerships taking advantage of economies of scale with freighter lines and vast access with passenger lines.
The additional benefit being that the two types of cargo do not cannibalize upon each others' sales: Passenger lines carry cargo only on a portion of their plane, and therefore cannot produce the specialized capabilities or even price differentials of freighter planes. However, their frequent flights are attractive for consumers with diverse needs.
Partnerships allow for more comprehensive solutions for shippers without much greater capital investment. It's all about customer acquisition and retention. And, as specialized needs grow alongside tightened fulfillment timelines, so does the attractiveness of air cargo. While air cargo competes with shipping, such partnerships appear to be a way to gain access without sacrificing product quality.
