Full of eastern promise
Maskargo MD Shahari Sulaiman
Malaysian Airlines (Maskargo) MD Shahari Sulaiman tells Mike King "the worst is behind us" and that the carrier is looking to China for further growth
Maskargo expects to record a 10-15% growth in revenue this year, as the international air cargo market regains some stability. Sulaiman says that while he expects demand to slow this month, for the Chinese new year, the global outlook is significantly better for air cargo operators.
“The worst is behind us,” he says, “and we are looking forward to a more consistent market, with less of the extreme fluctuations we saw in 2009.
“January has been OK; the load factors were there. We expect February to be a bit quieter and then the market should pick up again from March.”
China will be critical to Maskargo’s success says Sulaiman, who also sits on the board of The International Air Cargo Association (TIACA). Last October the carrier’s parent company, Malaysia Airline System (MAS), signed an agreement with China’s Hainan Airlines Group (HNA) which lays the framework for greater co-operation between their respective cargo divisions.
HNA boasts a number of airport and maritime assets in China and is also the country’s fourth largest, and its biggest non-state-owned, airline group. Although the fine print and operational details of the deal are still being worked through, Sulaiman says the synergy between the two airlines was obvious.
“We want to try and leverage each other’s networks. The overlap between them is minimal. We have a great network in south-east Asia, Australia and into China, with freighters at Pudong and Hong Kong. HNA is strong from Shanghai and into the US, where we don’t fly. By May, we are hoping we will be offering joint freighter services.”
Salvaging something from a bad year
Although Maskargo’s year-end uplift figures are not yet available, Sulaiman says volumes out of China in the final quarter of 2009 helped the carrier salvage something from one of the worst years on record for air cargo carriers.
“Last year was bizarre. In the first six months, we had the worst set of economic factors. Then, in the third quarter, the market started recovering. The fourth quarter was extraordinary: it went from the worst possible scenario to the best. Our volumes via Kuala Lumpur were down 13.9% overall last year, but in December, they were up around 30% year-on-year.
“We had a fantastic fourth quarter, like all airlines. Basically, if you had capacity you made money.”
Maskargo made money by moving as much of its available freighter capacity onto the key China-Europe trade. “We carried a lot of additional freight from the Far East,” says Sulaiman. “We also saw sea-air volumes via Kuala Lumpur increasing. It just reaffirmed how important China is for the air cargo market.”
Fleet under review
Maskargo is currently reviewing its fleet with an eye on the long-term. Last year, the carrier let the lease on its A300-600F expire. Ownership of its two B747-400Fs will be transferred from its parent company to Malaysia Airlines in the next few months, while its wet-lease on four B747-200Fs ends in February, an arrangement definitely “under review”.
“We’re going to reduce our freighter fleet by one aircraft, and we’re looking at our options on aircraft and different packages,” says Sulaiman. “Last year we an aircraft grounded for eight months. In a crisis environment the priority is to preserve cash and a maintain presence in key markets. This year we think we can increase revenue by 10-15% using less equipment.
“But we are also looking at purchasing aircraft, so any new lease will just be to bridge the gap.”
Maskargo is also upgrading its Advanced Cargo Centre at Kuala Lumpur International Airport by investing some M$100m (US$30m) over the next four years to boost capacity from 650,000 tonnes to 1m tonnes a year. Forwarders are being encouraged to use the centre for transhipment cargo, with Maskargo offering a 75% rebate on air-air cargo, which works out at $0.05/kilo.
“Our plan is attract as much cargo as we can through KL using our bellyhold and freighter fleet,” says Sulaiman. “We intend to remain one of Asia’s leading cargo carriers.”
Maskargo expects to record a 10-15% growth in revenue this year, as the international air cargo market regains some stability. Sulaiman says that while he expects demand to slow this month, for the Chinese new year, the global outlook is significantly better for air cargo operators.
“The worst is behind us,” he says, “and we are looking forward to a more consistent market, with less of the extreme fluctuations we saw in 2009.
“January has been OK; the load factors were there. We expect February to be a bit quieter and then the market should pick up again from March.”
China will be critical to Maskargo’s success says Sulaiman, who also sits on the board of The International Air Cargo Association (TIACA). Last October the carrier’s parent company, Malaysia Airline System (MAS), signed an agreement with China’s Hainan Airlines Group (HNA) which lays the framework for greater co-operation between their respective cargo divisions.
HNA boasts a number of airport and maritime assets in China and is also the country’s fourth largest, and its biggest non-state-owned, airline group. Although the fine print and operational details of the deal are still being worked through, Sulaiman says the synergy between the two airlines was obvious.
“We want to try and leverage each other’s networks. The overlap between them is minimal. We have a great network in south-east Asia, Australia and into China, with freighters at Pudong and Hong Kong. HNA is strong from Shanghai and into the US, where we don’t fly. By May, we are hoping we will be offering joint freighter services.”
Salvaging something from a bad year
Although Maskargo’s year-end uplift figures are not yet available, Sulaiman says volumes out of China in the final quarter of 2009 helped the carrier salvage something from one of the worst years on record for air cargo carriers.
“Last year was bizarre. In the first six months, we had the worst set of economic factors. Then, in the third quarter, the market started recovering. The fourth quarter was extraordinary: it went from the worst possible scenario to the best. Our volumes via Kuala Lumpur were down 13.9% overall last year, but in December, they were up around 30% year-on-year.
“We had a fantastic fourth quarter, like all airlines. Basically, if you had capacity you made money.”
Maskargo made money by moving as much of its available freighter capacity onto the key China-Europe trade. “We carried a lot of additional freight from the Far East,” says Sulaiman. “We also saw sea-air volumes via Kuala Lumpur increasing. It just reaffirmed how important China is for the air cargo market.”
Fleet under review
Maskargo is currently reviewing its fleet with an eye on the long-term. Last year, the carrier let the lease on its A300-600F expire. Ownership of its two B747-400Fs will be transferred from its parent company to Malaysia Airlines in the next few months, while its wet-lease on four B747-200Fs ends in February, an arrangement definitely “under review”.
“We’re going to reduce our freighter fleet by one aircraft, and we’re looking at our options on aircraft and different packages,” says Sulaiman. “Last year we an aircraft grounded for eight months. In a crisis environment the priority is to preserve cash and a maintain presence in key markets. This year we think we can increase revenue by 10-15% using less equipment.
“But we are also looking at purchasing aircraft, so any new lease will just be to bridge the gap.”
Maskargo is also upgrading its Advanced Cargo Centre at Kuala Lumpur International Airport by investing some M$100m (US$30m) over the next four years to boost capacity from 650,000 tonnes to 1m tonnes a year. Forwarders are being encouraged to use the centre for transhipment cargo, with Maskargo offering a 75% rebate on air-air cargo, which works out at $0.05/kilo.
“Our plan is attract as much cargo as we can through KL using our bellyhold and freighter fleet,” says Sulaiman. “We intend to remain one of Asia’s leading cargo carriers.”
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