Impact Publications : Aircargo_235
Page 16 • AirCArgo AsiA-PACifiC • FEBRUARY-MARCH 2015 Continued from previous page. interview or controls that protect us against fuel price spikes in the future. Surcharges are certainly a source of tension with customers so the move to something simpler now makes sense. The reality is that there has been an abundance of all-in rates in the market for some time. The deepening alliance between Virgin Atlantic and Virgin Australia is exciting. What does it mean for freight forward- ers in both your combined markets? We have an excellent working rela- tionship with Virgin Australia that dates back to the start of 2009. Under the terms of our agreement, we sell all of Virgin Australia’s long-haul interna- tional capacity connecting Sydney and Brisbane with Los Angeles. It works for both parties. For Virgin Australia, it gen- erates a healthy financial contribution from cargo without the need for, and cost of, an in-house operation and they trust us to deliver the highest levels of customer service. In 2014, the amount of cargo we attracted for the Virgin Australia network rose by just over 20 per cent year-on-year. We saw growth throughout the year and 2014 ended with the highest December tonnages we have seen in four years. For Virgin Atlantic, it ensures we can connect customers in Australia and around the world with the rest of our network over the US west coast and means we have valuable transpacific capacity both ways. It also gives us a presence in Australia, which has always been a very important market for us from both a financial and emotional point of view because we have a strong connection with customers there and we remain passionate about working with them. We have just appointed Neil Vernon as Virgin Atlantic Cargo’s vice president Sales International and Australia is one of the first markets he is going to visit in his new role. Both we and Virgin Australia are actively looking for ways to further develop our relationship. global economic problems continue with China, russia and elsewhere on the globe. What markets most impact Virgin Atlantic Cargo’s growth? China is certainly a factor. We are still filling our aircraft but the market is suffering a little at the moment and yields are suppressed, though this may only be a short-term situation. Otherwise, we are fairly well protect- ed. Our primary market has always been the US and our service levels and reliability mean we compete well on the routes we serve. We don’t flood the market with capacity and we have a good spread of medium-high demand routes. Our latest route to Atlanta has started positively with very encouraging load factors and in June we open our tenth US route to Detroit. Whatever is happening in the world, the priority for us is to stay close to our customers. Our approach is based on talking to our customers to understand what it is that works for them and to then ensure we offer the service levels and pricing that makes Virgin Atlantic the right choice for their business. What other new destinations might prove attractive this year? As I said, Atlanta is still a relatively new route for us and it will soon be joined by Detroit. Otherwise this year is about increasing frequencies of some existing routes. This will include extra services to Atlanta, New York JFK, Los Angeles, San Francisco and Las Vegas. Detroit gives us another gate- way in the US Midwest and we expect it to generate a lot of on-forwarding business for our trucking services to other points nearby. fuel price reductions must be a boon for freight operations. is Virgin locked into hedging contracts or can we soon expect a sharp reduction in surcharg- es? Yes, we have a comprehensive hedg- ing portfolio that will take a little time to unwind and feed back into pricing levels. High value shipments and pharma have been growth areas for carriers. is Virgin Atlantic developing any special or unique freight services? Air cargo is obviously a premium mode of transport in terms of its speed and reliability, so quite a high percentage of what we already carry is of relatively high value. Pharma business contributes a growing share of our revenues and we expect this to increase thanks to the reliability of our cool chain service. We have always taken a simple approach to our services because our customers are influenced only by what we promise, how we deliver and the value we provide. The hands-on nature of the way we work and our service levels lend themselves well to time- and temperature-sensitive cargo or any shipments that demand a premium service. We certainly want to New ties to Virgin Aust expected to improve results...