News / Air France Cargo pins its hopes of better yields on its new hi-tech express hub

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Air France Cargo is hoping to beat competitors and attract business from integrators and couriers through its use of technology and a new express hub.

As its traffic volumes continue to head south, the French flag-carrier is sharpening its focus on yields with its newly opened HubExpress warehouse at Paris Charles De Gaulle Airport (Paris CDG).

The €22m air-to-air transit facility, partly funded by express partners SoDExI and GeoPost, is capable of sorting 6,000 parcels every hour.

Eight entry points feed a 300-metre intelligent parcel sorter that separates packages between 41 container stands, 10 bulk stands and 19 standby stands. Air France hopes the facility will boost its credentials in the fast-expanding e-commerce sector.

“Of course our business is hugely under pressure,” admitted Bram Graeber, executive vice-president of Air France KLM Martinair Cargo (AFKLMP Cargo), at an event in Paris on Thursday. “But in the end I’m still very confident in the heritage and the expertise we have.”

He says the new warehouse’s location is one of its strongest selling points. Unlike Air France’s previous express centre in the Cargo Village of Paris CDG, HubExpress is in close proximity to the aircraft parking stands. This means average transfer times of just seven minutes between aircraft and warehouse, potentially lifting the group’s appeal to integrators, couriers and freight forwarders.

AFKLMP Cargo inventories can also now be accessed via one system, noted Jerome Balbi, chief executive officer of SoDExI. He believes this will enable the group to more effectively compete with rival cargo operators in western Europe and the Persian Gulf.

“Everything is controlled by IT. We scan every parcel at every stage of the process,” explained Mr Balbi. “We cannot fight Emirates’ capacity and, as a European country, we cannot fight against workplace regulations that may be easier in other places in the world.

“The point on which we can compete is technology and IT systems.”

Upgrades to the group’s IT infrastructure include a new mail system, produced by CDA and due to be completed in 2016, and the phased roll-out of the Cargobus AFLS express system. Implementation of Cargobus begins this year with the introduction of a joint booking system across AFKLMP Cargo.

Co-operation is also being pursued across the wider SkyTeam alliance, although Mr Graeber said HubExpress and other dedicated express facilities were “not fully geared” for booking and handling interoperability.

“It’s a little bit more complex to connect these [SkyTeam] airline systems,” he said, and he singled out Korean Air as an attractive partner for AFKLMP Cargo.

“We plan later this year to start piloting a more intense interlining offer … We do think there’s value in being better able to interline.”

German flag-carrier Lufthansa last year launched an IT-based joint-venture with All Nippon Airways, a fellow member of the Star Alliance.

Although optimistic about the scope for new partnerships, Mr Graeber confirmed that Alitalia had signalled the end of an agreement giving Air France KLM full commercial responsibility for the belly space on its passenger jets. The co-operation will be wound down in two years.

“January 2017, in cargo terms, is a long time from now,” he insisted. “We will see how things will evolve.”

Meanwhile, Mr Graeber, currently “interim” EVP Cargo, as well as group CEO for the budget carriers, says he spends just 20% of his time on the passenger business, and expects a permanent cargo role “eventually”.