Oct 3, 2013

Aeroflot ceases cargo business

Aeroflot’s MD11F aircraft

Aeroflot Russian Airlines (AFL) disclosed recently that it has terminated the operation all its cargo flights starting July this year. The company leases and owns three MD11F aircrafts, but all such planes have been grounded since July 16. It decided to stop its air cargo services as the MD11F aircrafts run up higher operational costs than the other aircrafts in the market, the transport demand in the air freight market has been mired in a slumped state and the freight rates are hovering in the lower levels. According to a related source, this cessation of operation does not necessarily mean the company has already withdrawn from the cargo business at this point in time as it still plans to study if it would resume its cargo business or pull out of it altogether when the global economy turns for the better. It is projected, however, that the MD11Fs will not be redeployed. The expiration of the lease contract of the aircrafts is also drawing near, so it is expected that these planes will be returned to their owners one after another.

AFL had carried out cargo flights in Moscow, Novosibirsk, Beijing, Shanghai, Hong Kong, Narita and Frankfurt-Hahn since it kicked off cargo flights in 1978. With no firm commencement date yet for the operations in/after the winter season, the company's cargo business has virtually stopped. The twice-weekly cargo flights to Moscow from Narita were scheduled to go on until the flight on May 16, but they actually ceased after the last flight on April 28. The said trade segment is now being serviced by the Frankfurt-Hahn–Novosibirsk–Narita–Hong Kong–Novosibirsk (technical landing)–Moscow–Frankfurt-Hahn route via Hong Kong, instead of the hitherto via-Incheon service. The company changed its service route against the backdrop of the plunging South Korean market and the rising demand for cargoes from Hong Kong. With regard to the handling of cargoes between Narita and Hong Kong, it had applied for the permit from the authorities as of mid-April this year.

At present, AFL offers passenger flights that it independently operates, as well as cargo services that make use of the belly space in the commercial flights operated by Vladivostok Airlines (VLK), its subsidiary. As for the flights of VLK, these flights are run by VLK, while the sale of the cargo space of the aircrafts is done by AFL.

In the Japan trade route, AFL offers daily flights between Narita and Moscow (using A330 aircrafts, while VLK runs thrice-weekly flights each in the Narita-Vladivostok (via A320s) and Narita-Khabarovsk (via A320 and TU20 aircrafts) routes. Now with regard to the flights of VLK, it is expected that these flights will also cease to run starting the winter schedule (which kicks off on October 27) following the dwindling passenger demand in the Japan-Far East lane.

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