Barely an inch of space is showing on the wood-panelled walls of Ram Menen's third-floor office in the Emirates corporate head office. Certificates and awards vie for space. On the cabinets stand trophies and aircraft models presented to the senior vice-president of the Emirates cargo business by grateful customers, suppliers and industry watchers.
Having achieved a 49% growth in revenues for the first half of the year – edging ahead of the record 48% for the whole of the previous year – and this at a time of a global downturn in the cargo business, it is easy to see why he was given a lifetime achievement award at the Air Cargo Americas International Conference in Miami last month.
"We've not done bad," Menen laughs. "Its been satisfactory."
He attributes the success to having a team of people driven by customer service standards and the flexibility within the operation to tailor the service to individual requirements and direct customer needs.
Crisis
"There has been a lot of over-capacity in the market with companies going broke and aircraft being laid up. There have been areas of crisis. Emirates SkyCargo has continued to serve those areas during the crisis and keep a supply line open for our customers. When others have backed off we have increased our service and it has worked."
The growth has seen Emirates SkyCargo add a fourth freighter – a Boeing 747-200 on charter from Atlas Air – to meet demand. In the past month the airline added a second weekly Dubai-Gothenburg-New York freighter service only two months after launching the route. It also added additional freighter routes from Shanghai to Mumbai (Bombay) and is currently negotiating with the Chinese military air traffic controllers for rights to open up a service to the northern Chinese industrial city of Dalian to add to the four-times-a-week freighter service to Shanghai.
"The JFK (New York) route exceeded our most optimistic assumptions," says Menen. "We started it in mid-September and within 10 weeks were achieving 100% capacity and so had to add another freighter."
The story is the same on many of the routes by which Emirates SkyCargo is earning almost 20% of the airline's revenues. "When people ask me how many freighters we have, I say 57," Menen says. "It's just that some are disguised as passenger aircraft."
Network
Emirates SkyCargo makes full use of the available space on the passenger network. "By using the bellies of our all-widebody fleet as the core means of cargo transportation we have been less sensitive to directional imbalances and therefore able to provide a high level of service consistency to our customers."
Each of the Airbus A330-200 or Boeing 777 aircraft are able to take 13-20t of cargo with a full passenger load, which Menen points out is more than a Boeing 737 freighter's payload.
Menen believes that the double-digit growth that he has managed over recent years will continue for at least another seven years as the Emirates fleet expansion plans are realised along with recovery in the global economy driven by the USA. But it is the anticipated trade growth from China and the Asian countries driven by WTO (World Trade Organisation) membership requirements from 2005 that will make the biggest impact.
"China's growth rate is phenomenal," he says. "It is only a matter of time before it becomes the world's second largest economy.
"There is a new order in trade routes. The textiles industry is a good example with garments and materials going from China to India, Bangladesh and Sri Lanka and then being exported to the rest of the world.
"Dubai is very much the hub between East and West and I am convinced we will continue to have a vital role to play in the movement of goods, particularly as we apply more and more of the ‘just in time' philosophy to our businesses.
"Cargo is no longer about moving boxes from A to B; we've moved from supply management to capital management.
"The cargo business changes regularly. We learn something every day and we have to be adaptable to changing demands and sometimes we have to lead."
Menen is passionate about the role of his business in the whole supply chain and is critical of the failure of the industry to move with available technologies.
"We are plagued by legacy systems in the airline industry," he says. "People argue that these systems work on like a mule. I say they are like a mule – stubborn and inflexible."
He is adamant that Emirates SkyCargo will lead the way in the development of a new generation of cargo systems. "As our volumes have increased, so we have been able to focus on this. We are close to an announcement that will allow us to launch a new system that would be an extension of our cross-platform SkyChain system. But this is something we will give to the industry. It is in all of our interests to move away from the old legacy systems."
Passive
Emirates SkyCargo is also looking at the use of passive RFID (radio frequency ID) technologies and GPS systems to improve customer service and efficiency in tracking shipments. "The challenge will be in developing the right standards with IATA," he says.
Emirates is investing heavily in a new flower handling centre at Dubai airport. "It seems incredible that this is being built in the desert," Menen says, "but this is a rapidly growing industry. Africa is supplying much of the flowers but there is a shortage of capacity with routes to Amsterdam and beyond.
"This centre will handle 150t of flowers in Phase 1. We are looking at processes for extending the ‘cool chain' so the plants will be handled in clinical conditions as they are repacked and prepared for the markets. This will extend the shelf life of the product."
As well as calling on Atlas Air to meet the flexible demands of the cargo trade, Menen is waiting anxiously for the delivery of more Airbus A340-500s to the fleet (more routes to Australia, Moscow and New York direct) and of course for the first of the A380 freighters. Emirates is the launch customer for the freighter version of the super jumbo which will have capacity for 150t of cargo. The airline takes delivery of two in 2008.
Emirates SkyCargo is keen to see further developments in the production of freighter aircraft. "We think the Boeing 777 will make a good freighter, but it will be interesting to see what both manufacturers are planning to do," Menen says.
Meanwhile as both Iraq and Afghanistan begin major rebuild programmes, as Kuwait and Saudi Arabia look at moving from pure oil-based economies to a broader based plan, there is even more demand for cargo to arrive just in time.
"We are thanking God for it," says Menen with a look skywards. Those customers, suppliers, partners, agents and journalists who so regularly vote Emirates SkyCargo as the number one in the industry are thanking Ram Menen.
Source: Flight Daily News
