Virgin Blue, Australia's number two carrier, is planning to beef up its air freight business, in a move unusual for a discount airline.
Brett Godfrey, Virgin Blue's chief executive, denies that Patrick Corp, the Australia transport conglomerate that now owns half of the carrier, is responsible for the shift. But it is also clear that Patrick aims to help Virgin Blue expand its cargo role. Virgin Blue has always handled express packages. Overnight parts delivery for automotive manufacturers and work for courier DHL have been lucrative. "I don't want to go into how much it contributes," says Godfrey, "but annually it's millions of dollars in incremental profit."
By the end of May, Patrick Corp hopes to complete its purchase of Ansett's former cargo arm, Ansett International Cargo Handling. It bought the unit in April, provisionally, after agreeing to buy half of Virgin Blue.
Virgin Blue is considering whether to acquire several quick-change (QC) aircraft. "We need to look at freighters because we have more than we can handle at the moment," says Godfrey. He foresees flying QCs at night and using them as spares during the day. "You can't afford to have spare aircraft sitting on the ground," says Godfrey. "But there are peak times in the morning and evening where it would be lovely to have one."
Cargo loading ability could also influence Virgin Blue's imminent order for 30-40 new aircraft. It now uses a sliding carpet system to load and unload its Boeing 737-800s, but the carpets add several hundred kilogrammes in weight. "One reason we're looking at the Airbus is because the A320 fleet can be palletised," says Godfrey. Moving to pallets could change Virgin Blue's entire outlook toward freight. Currently, it does not carry anything that would require a hi-loader ground vehicle for loading.
Typically, discount airlines avoid freight because of the loading and unloading time. High aircraft utilisation rates, which translate into a need for quick turnarounds, are critical to keep costs down. Virgin Blue's solution is to put most freight on its last flight of the day. "We have some flights that leave a bit later, but we beat Qantas by half an hour on the cutoff," Godfrey says. "We may drop a few passengers, but we make a lot more in terms of freight." And Virgin still keeps utilisation at over 11 hours per day.
Source: Airline Business
