Dubai’s SkyCargo soars high

News Story
- 31 May 2007 ( #312 ) - CAIRNS, Australia
5 min read
Ram Menen
Ram Menen
Ram Menen, Emirates Airline's award-winning air freight division's divisional senior vice president for cargo, was in Cairns last week for the 2007 Australian Federation of International Forwarders' annual conference. He spoke to Forkliftaction.com News reporter Christine Liew in an exclusive phone interview.



"We are extremely serious and focused on cargo." Ram Menen said. "More than 20 per cent of the airline's business actually comes from cargo."

For the fiscal year ended March 31, 2007, Emirates SkyCargo's fleet carried 1.2 million tonnes of cargo, surpassing its record of one million tonnes carried in the previous fiscal year. SkyCargo said in an April 26 statement that its revenue for last financial year was AED5.4 billion (USD1.47 billion), 19 per cent or AED874 million (USD238 million) higher than the year before.

Emirates SkyCargo's revenue and freight capacity had been growing 20 to 25 per cent annually since the airline's inception in October 1985, Menen said. A past president of The International Cargo Association, Menen has headed SkyCargo since its establishment.

Today, SkyCargo's fleet of 100-plus planes flies to more than 80 cities worldwide.
"We move more palletised cargo all over than lots of airlines. We have an all wide-bodied fleet, which allows palletised movement all across our network, unlike a lot of other passenger airlines that tend to have narrow-bodied airplanes operating regionally out of their hubs.

"Nine of our 103 planes are freighters. We have a further 21 new wide-bodied production freighters on order for delivery over the next four to five years," Menen said.

This month, SkyCargo announced that the first of three Boeing 747-400ERF aircraft, being wet-leased from Netherlands-based global express and mail delivery services company TNT, would be delivered this week. SkyCargo will also dry lease two aircraft from Guggenheim Aviation Partners for a 10-year term. The aircraft, which will be operated by TNT, will be delivered in July 2007 and February 2008. SkyCargo also ordered 10 Boeing 747-8 freighters at the Farnborough Air Show in England last year.

Menen credits Dubai's infrastructure for SkyCargo's success. He said the Dubai Government started a distribution network when it established Emirates in 1985.

"[Dubai] is a city that is being built on fast forward mode. When the government set up the airline, [Emirates] probably catalysed Dubai's growth. Later, in the 1990s, Dubai started catalysing our growth. It's a very happy relationship."

The Dubai Government has allocated 140 sq km of land to establish the Dubai World Central International Airport. To be completed by 2017, the airport will have six parallel runways, three passenger terminals and eight concourses capable of handling 120 million passengers a year. Twenty-five sq km of the land had been set aside to create Dubai Logistics City, next to the Jebel Ali Free Zone. Slated for operations at the end of 2007, its air cargo capability would be 12 million tonnes a year. The largest air cargo volume currently handled, about 3.6 million tonnes a year, is by Memphis International Airport, in Tennessee, USA.

"The airports and ports are not growing fast enough. We know passenger numbers and air cargo are growing. [Dubai World Central] will be the world's largest airfield.

"The first phase of the airport is finished. It will come to its full glory in the next 10 to 11 years," Menen said.

To keep ahead of the competition, SkyCargo has invested in SkyChain, an in-house built cargo logistics management system that Menen says is the largest IT initiative by the aviation industry in the last three years.

"This is the first non-legacy based system to be created in the air cargo industry. It virtually manages all aspects of the airline cargo business and creates added transparencies, adding value to our customers' businesses."

Officially launched in September 2006 at the Air Cargo Forum in Calgary, Canada, SkyChain will be sold to other cargo carriers through Emirates Group's IT subsidiary, Mercator. SkyCargo claims other cargo carriers currently use systems 10 to 30 years old, which offer little flexibility.

The network of integrated systems allows users to check Emirates flight schedules, track and trace shipments and check space availability on Emirates flights. It was developed by SkyCargo and Dubai-based Mercator.

"SkyChain has allowed us to build the system around the processes rather than building processes around inflexible systems," Menen said.

Fuel costs were the top expenditure for the Emirates Group last fiscal year, accounting for 29.1 per cent of total operating costs, up from 27.2 per cent the previous year and 21.4 per cent the year before.

"Surcharges don't even cover 35 per cent of actual costs [now]. It hurts every airline. It's the same story. We look for cost efficiency in other places to try to bring costs down," Menen said.

One way SkyCargo cut costs was to be flexible by "building systems around processes" and not processes around systems, the same concept behind the division's cargo logistics management system, he said.

Trained as an engineer, Ram Menen is a founding member of The International Air Cargo Association, serving as president, CEO and chairman of the board in 1995 and 1996. In December 2002, Air Cargo News, USA, named Menen cargo executive of the year and, in 2003, he received the 2003 international air cargo achievement award from the World Trade Centre Miami for "excellence in promoting east-west trade". In October 2006, Menen was inducted into the Lloyd's FTB Asia Hall of Fame at the Asian Logistics Awards.

SkyCargo has also received numerous international recognitions. Last month, it received triple accolades at awards ceremonies in London, Macau and Singapore. It was recognised as best airline to the Middle East 2007 for the 19th consecutive year and best airline to Africa 2007 at the Cargo Airline of the Year Awards in London. It won best air cargo carrier - Middle East at the Asian Freight & Supply Chain Awards, in Macau, and was honoured as one of the top 10 airlines by cargo carriage at the second annual Changi Airline Awards in Singapore.
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