How Singapore airline companies can maximise air cargo opportunities

Booming intra-Asian trade has positioned airlines flying through Singapore to not only take advantage of growing passenger numbers but also expanding cargo volumes.

An important regional and global airhub, Singapore’s Changi Airport is one of the world’s busiest airports for air cargo, handling over 1.81 million tonnes in 2012, with transhipment accounting for about half its throughput[1].  Its cargo volume has grown by an average annual rate of 7 per cent since the airport began operations in 1981 and continues to set new standards in operational efficiency and expertise, targeting for 90 per cent of cargo to be available within 3.5 hours of passenger aircraft arrival and cleared by customs within 13 minutes[2].

According to Boeing’s World Air Cargo Forecast, global air cargo traffic is expected to grow 5.2 per cent annually over the next 20 years, with Asia continuing to lead the charge. The domestic China market will expand 8 per cent while intra-Asia traffic will grow 6.9 per cent yearly[3].

Accenture’s on-going High Performance Business research initiative has confirmed that top airlines distinguish themselves by taking maximum advantage of non-passenger revenue-generating opportunities. Optimising cargo services is one of the most important ways these companies can boost revenue.

To capture a larger share of the lucrative air cargo market profitably, revenue management is key. The ability to effectively and accurately allocate airlines’ inventory of cargo capacity and services to the right customers at the right price will enable airline companies to raise its revenues and profitability.

A first step for airlines keen to expand their air-freight business is to define solution requirements, conducting fit/gap analyses with the goal of having a tailored revenue management system customised to their specific needs.

Integrated software packages can optimise cargo network and aid planning, forecasting and pricing. Historical booking data are used to create demand forecasts. Mid-term planning processes based on these forecasts will then be adopted to ensure the right allotment for the correct flight, while short-term planning processes will more accurately evaluate and manage cargo capacity and bookings.

This improved decision-making will allow airline companies to focus on the most profitable cargo bookings and better allocating its inventory to its customers at the best prices.

Managing information

Information management systems can be extended to share information with customers, giving them secure access to the airline’s cargo tracking system so that they can locate their valuable shipments at every stage of its journey. This will lead to enhanced customer satisfaction creating more repeat business.

Automating such systems also benefits the company. When leveraged to deliver an integrated and consistent view of sales-bookings, customer information and distribution, operations, finance and monitoring of service level agreements, such automation will remove the need for manual processing, lowering time consuming and error-prone reporting.

Automatic generation of user-defined reports can help increase transparency across operations. In addition, the system’s information serves as an invaluable basis for measuring performance, identifying areas of improvement and detecting irregularities in daily operations.

Lastly, maintenance and support for such technology systems can be outsourced so that airlines can focus on their core business of moving people and cargo. In the highly competitive airline industry, improved productivity, increased sources of business and enhanced revenues and profits margins can be achieved with some added investment in technology solutions.