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Cathay-Lufthansa air freight JV an example of responses to the growing role of Gulf airlines

Analysis

Among the challenges in the continuing weak air freight market is the role of Gulf airlines moving freight between Europe and Asia. Gulf airlines have already well proven themselves adept at moving people between many markets (some argue unprofitably so) but though their role in freight is quieter it is not without consequences.

Gulf airlines can offer dedicated freighter flights from cargo hubs to their home bases, where cargo is then transferred to lower-cost passenger belly space. European and Asian airlines typically fly freighter aircraft, with more expensive costs, over the entire journey. As a result, freighter flights between Asia and Europe have significantly decreased. Gulf airlines have bulked up freighters since 2012, in addition to doubling passenger flights to Europe and Asia since about 2010, creating ample belly space for freight.

In response to this is a growing, but still small, number of joint ventures, including Lufthansa-ANA and IAG-Qatar. Both were comfortably within Star and oneworld alliance groupings, but a recent JV formation between Star's Lufthansa and oneworld's Cathay Pacific indicates that solutions to the weak cargo market must be deeper.

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