Niche business keeps IAM ahead
Ireland is doing a fantastic job to export its way out of recession and now has the highest trade surplus in the EU relative to GDP, according to Ian McCool, MD of leading Irish GSA International Airline Marketing (IAM).
Air exports, which plunged by 21% in 2009, have nudged back upwards since with 2% growth in 2010 and 3% last year. IAM’s volumes grew significantly ahead of the market at 13%, boosted by strong niche business such as bloodstock. “We shipped over 300 horses to a number of destination,” McCool says.
Temperature-controlled shipments have also been a significant growth area, with products from both American Airlines (AA) and Air Canada (AC) well received in the Irish market. Both carriers operate seasonal widebody services, with AC set to return in June on the Dublin-Toronto route while AA resumes a daily B767-300 service to Chicago from April.
AA’s parent company, AMR Corporation, filed for Chapter 11 bankruptcy protection in November and could spend 12 to 18 months achieving necesary cost reductions. Creditors are believed to favour an ultimate merger with US Airways. McCool says longhaul services are thus far unaffected and believes AA will cull mostly domestic routes served by smaller, older aircraft.
With ‘vast amounts of overcapacity’ and more to come, IAM sees a hard slog ahead on rates. Surcharges can be four times the base rate and all-in rates below the surcharge level in some markets.
The Middle East and south east Asia could become a ‘bloodbath’ as Emirates, Etihad and Malaysia Airlines fight for market share, McCool predicts. A relatively recent client, Air Asia X, has been forced by high taxes and increasing fuel prices to pull its A340 services out of Europe. “We’re working hard to agree interline feed to keep hold of our strong market share to the Australian market,” McCool says.
Editorial piece published in Freight Business Journal (FBJ) Issue 2 2012