Swiss International Air Lines has launched Boeing 777-300ER operations to Hong Kong, making this the airline’s second long-haul and first Asian route for the new aircraft type.

“This is good confirmation that we’re continuing our focused way of doing business,” said Urs Stulz, head of cargo central services and vice president of Swiss WorldCargo, in an interview with Asia Cargo News after the inaugural flight from Zurich. “We’re continuing to focus on belly space and the new aircraft is a sign of trust from the management board.”

The airline took delivery of its first 777 in January 2016, a second in March and a third in April. The new frames were first deployed on short-haul European routes such as Barcelona, Frankfurt, Geneva and Prague before operating to Montreal in March 2016. Hong Kong is currently Swiss’ longest 777 route, as well as the first destination in Asia to receive the type.

As Swiss gradually receives the remainder of its order of nine 777-300ERs, it is scheduled to launch it to Los Angeles in June, to Bangkok in July, to Sao Paulo for the month of August, to San Francisco at the end of August, and to Singapore and Tel Aviv in September.

According to Stulz, it was the contribution of cargo to the overall business which influenced the decision to not only order the 777, but to use it to replace the Airbus A340-300 on the Hong Kong route at such an early stage.

“If you compare the 777-300ER with the A340, it has about 30% more capacity, be it in terms of tonnes or volume,” said Stulz. “Also, with the extended-range configuration, we can offer this capacity reliably throughout the year. With the A340, what used to happen was that there were some days or weeks in the year when we had to reduce the offering to the market because the pilots had to take additional fuel due to winds or weather, cutting into the cargo payload. The 777-300ER means our product has a higher degree of reliability and our customers can count on the uplift. This is a big advantage.”

Something which can benefit from that is the growing e-commerce business, according to Tod Mawhinney, director and head of the Far East at Swiss WorldCargo, who said that this segment has grown at least 50% over the past couple of years.

“It’s one of those areas where, even though it might not be an overnight courier type of thing, the customers who are buying over the internet expect a commitment from the delivery apparatus, whether it’s going through the forwarding channel or the mail channel,” he said. “They have expectations on when it’s going to be delivered to their home, which means they need reliable partners. When you have one or two freighter frequencies, yes, you can take the volumes and the peaks and so on, but e-commerce goes every day and that’s why these 777s are so attractive. We’ll see more of that coming. We’ll see more cargo, as well as more mail filtering through the e-commerce from China and Hong Kong.”

Another aspect of the business which has been growing is the demand from Europe to Asia. According to Mawhinney, what was striking was that during the slowdown associated with Chinese New Year, which in 2016 fell on February 8, there were fewer cancellations and charters started up much more quickly afterwards because commitments had already been made.

“In February, the volume of imports into Asia surpassed that of exports and the balance of trade is coming back, which is good,” he said. “This balance just makes the business of air freight to and from Europe even stronger. I see that what we might have been losing on the outbound, we’ll be gaining on the inbound and I’ve heard that the rates from Europe have been increasing as the demand has been increasing. It’s been challenging sometimes to get access to capacity that used to be quite easy to get.”

The Asia-Europe trade lane is a challenging one for European carriers, with competition from the Middle East as well as from an increasing number of widebody flights by Chinese carriers. Fortunately for Swiss, no mainland Chinese airline currently flies to Zurich, but Air China has already applied for approval from the Civil Aviation Administration of China to start non-stop flights from Beijing in October 2016.

“We do feel the pressure,” said Stulz. “Therefore we need to stick with what we know best – quality and total transportation time. When it comes to connectivity over our hub, I think that’s where we have to focus and sharpen the image. Our handling partners are aware of what they are creating together with us. In Zurich, we can go down to 60 minutes for transfers. If a flight is slightly delayed, we can lower that further if operations request it.”

Stulz and Mawhinney said that the focus for now is to look for ways to make the most out of the existing airport infrastructure so that the carrier can further improve its network and connections. For example, the company is taking measures to appease the local community so that the night curfew at Zurich Airport only allowing scheduled flight operations between 6am and 11pm can be eased. Another example is changing some of the approach paths into Zurich to avoid restrictions on flying over southern Germany at certain times of the day.

“We will still play a pivotal role in the area,” Mawhinney said. “It just may not be as huge and grand as some of the designs the carriers in the Middle East have in mind. What I can tell you for sure is that it’s built on something that’s solid like rock. We’ve proven over and over that we run a profitable business and we’re able to keep our share of the marketplace in a very difficult environment.”

Mawhinney added that he thought Zurich Airport would remain quite adequate for Swiss, taking into account the volume that goes through it.

“That’s the thing with being in a small country – we think of optimization as a solution so we never see size as a problem,” he said. “We’re not going to build another airport in Zurich and we’re not going to build a bigger Switzerland either.”

By Jeffrey Lee

Asia Cargo News | Hong Kong