NICHOLAS IONIDES / SINGAPORE
Despite the current downturn, the newly independent entity aims to increase its share of parent company's revenue
Singapore Airlines (SIA) has made its cargo division a self-sufficient entity with its own freighter aircraft and independent air operator's certificate (AOC) as part of an aggressive growth plan to increase capacity by around 10% annually.
SIA Cargo was incorporated last year and won its AOC this April. Formal operations were set to have begun on 1 July.
Its fleet comprises nine Boeing 747-400 freighters, with eight more on firm order. The division is also responsible for marketing belly-hold space on SIA's passenger aircraft. Cargo accounts for around 20% of the SIA Group's total revenue and this is expected to grow in the coming years, despite a potentially serious downturn now hitting the industry.
Cargo loads have been suffering for some time and, in April and May, volumes fell for some Asian carriers by between 6% and 12%.
SIA Cargo president Hwang Teng Aun says there are no immediate plans to defer deliveries of 747-400Fs ordered last year, although he says being an independent company will allow it to better control its own destiny. "Unless there is a real traumatic downturn in the industry-we have no plans to change our aircraft delivery schedule," he says.
While SIA Cargo also has no plans to acquire smaller freighters for regional routes, Hwang adds, the ultra-large Airbus A380 freighter will be considered in the coming years. SIA last year ordered 10 A380 passenger aircraft and took options on 15 more, which can be taken as freighters.
"In about 2-3 years we can look at fleet expansion plans beyond 2005," Hwang says. "The [A380 freighter] options are useful to us."
Hwang says operating as a separate airline from its parent, which is a member of the Star Alliance, will allow SIA Cargo to tie up with more international carriers and service providers.
Last year it signed a wide-ranging freight tie-up with the cargo divisions of Lufthansa and SAS and joint products are to be offered from later this year after IT systems are "harmonised". Partnerships are also possible with carriers outside of Star but no talks are currently being held.
SIA Cargo will also consider a public share offering in future, Hwang says.
Source: Flight International
