Partners take long-term view as AeroLogic set to launch

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Executives at new German cargo venture AeroLogic admit it is too difficult to predict when the freightmarket will recover from the current economic crisis, but believe the long-term prospects outweigh the difficult launch environment.

AeroLogic, which received its first Boeing 777 freighter last month and has now secured its air operator's certificate, will launch operations on 29 June. Capacity on the joint venture carrier will be shared between DHL Express and Lufthansa Cargo, predominantly on their respective weekday and weekend peaks. The first aircraft will operate weekdays on the Leipzig-Bahrain-Singapore-Delhi-Leipzig express route for DHL and the Leipzig-Tashkent-Hong Kong route for Lufthansa Cargo.

AeroLogic will take its second 777 freighter next month and two more in December, at which point it will also begin operating flights out of Lufthansa Cargo's Frannkfurt hub to Asia and North America. Four more aircraft will follow in 2010.

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Plans for the Leipzig-based cargo carrier were first unveiled in September 2007. But global air cargo traffic has plummeted over the last nine months.

Speaking at a press conference in Leipzig marking AeroLogic's formal launch, Deutsche Post DHL chief executive Frank Appel said: "It is important to invest in opportunities even in times of difficulties. In the light of an inevitably recovering market, the strengthening of vital trade lanes through cost-efficient shared use of modern freighters must be viewed as a smart investment.

"Nobody can foresee when the economy is going to recover. We just have to wait for the figures and see if they are going up or down. The latest figures we have are April and we neither see it going up or getting worse. It looks a bit like the bottom has been reached, but we have no clear sign of improvement."

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By launching slightly later than planned, as a result of last year's Boeing strike delaying deliveries, the carrier has managed to avoid much of the slump so far.

But AeroLogic managing director Thomas Pusch says: "We will have to make a few adjustments [to our plan]. We earlier said we wanted break-even in 2010 and that continues to be our target."

He says firm targets are difficult to set given the ecomomic uncertainty, but states that the 777Fs will provide increased efficiency: "When you have a downturn you try to operate as economically as possible."

The new carrier is taking a cautious approach over initial plans to expandthe fleet to 11 aircraft.Pusch says: "We start with the eight, and then we see what the market will be."

DHL Express executive vice-president forglobal network management and operationsCharlie Dobbie adds: "We haven't placed the order yet for [the further] three. It is very easy to scale up. For now we are quite happy with can meet the demand."