DHL has successfully 'frightened' some of Asia's major airlines into a deal in which it will add capacity to handle DHL's spectacular growth in the regional freight business.
Continental Micronesia, Cathay Pacific and two unnamed Asian carriers were afraid that DHL would bring in its own aircraft, losing the carriers critical cargo revenue at a time when freight income is becoming increasingly crucial to the bottom line.
In a project tagged Operation Jigsaw, DHL has been in deep negotiations with the carriers for several months to fill gaps regular passenger services have left in its overnight delivery business. The company has until now relied entirely on commercial uplift to meet its overnight, door-to-door express delivery service throughout Asia.
But with growth in shipments throughout the region exceeding 50 per cent year-on-year, commercial airline schedules have slipped behind demand. DHL, as part of a $980 million investment in the Asia Pacific, planned to bring in 10 Boeing 727 freighters to fill the gaps. This will now be trimmed back following the four carriers' agreement to put on extra flights effective 1 February, including some dedicated cargo uplift, to meet DHL's needs.
Chip Longley, DHL's Asia Pacific chief executive, says negotiations are continuing with several other major airlines in the region, which he expects to become part of Operation Jigsaw in the near future. At present DHL's investment programme in Asia is geared predominantly to servicing trade between Asian countries, and most recently it opened a big distribution centre in Bombay, one of its fastest growing markets.
Source: Airline Business
