News / QR, IAG, MAS announce air cargo partnership – but are conditions right?

© Iaroslav Tymonko

Three Oneworld airlines are attempting a move which has had little success in cargo to date: they are forming a joint global cargo business. 

The cargo arms of Qatar Airways, IAG and Malaysia Airlines announced today – subject to regulatory approval – that they would combine expertise, infrastructure, and customer service levels. 

Very little detail is available yet, but in a joint statement the airlines said: “A streamlined product offering enhanced connectivity, faster transit times, and new routing opportunities across our combined extensive networks will deliver greater value and service flexibility to customers worldwide.”  

They added: “The parties are jointly working at developing industry-leading harmonised safety and security standards for their customers.” 

Describing the plan as “ground-breaking”, they said the move would improve air freight efficiency and offer a “more agile cargo network”. 

Few airlines have achieved a full cargo partnership beyond interline agreements, although SkyTeam Cargo has gone further than most.

While passengers see more tangible benefits from an alliance – joint ticketing, lounges, and so on – cargo prefers direct flights, and forwarders already know the market, so booking via an alliance, especially with so many digital booking platforms available, may not have the same appeal. 

In a 2010 Dutch university study, MASkargo listed a number of reasons why it wasn’t in a cargo partnership, believing the costs would outweigh the expected benefits. It also noted that a common culture and trust was crucial for a successful alliance, and that the fear of a partner doing better was a concern for airlines.  

The study reported: “Competition agencies have created various impediments and there is a continuous threat that an alliance could be more beneficial for a partner or competitor. Joining an alliance could, therefore, create high risks for an airline, with a possible low return on investments through the lack of customer benefits.” 

Benefits could be found instead via bilateral agreements – but the 2010 study noted that “current circumstances” were not beneficial to partnerships, but that they could, in the end, “create a number of substantial benefits for the airline involved”. 

IAG Cargo, a group which includes Aer Lingus, Iberia, and British Airways, noted it had experience in collaborations and “understands the value they bring”. Culturally, IAG and Qatar are already aligned; Qatar has a 25.1% stake in IAG, while MAS, which said the deal was “pivotal”, is 100% owned by the Malaysian state. 

The partnership would give belly carrier IAG Cargo’s customers access to freighters: Qatar has 28 777Fs and MASkargo has three A330-200Fs. 

The question will be whether the conditions are indeed right for cargo partnerships, which could trigger other airlines to follow suit. Vigin Atlantic, which is 49% owned by Delta, is also eyeing a cargo partnership, said new cargo boss Nick Diesel, in an interview with The Loadstar this month. 

Noting the arrival of former forwarder Peter Penseel to head Delta Cargo, Mr Diesel said: “I think there’s a lot of opportunity in a joint-venture. We need to look at how we could set it up to give the best offering to customers. We work really well and really closely with Delta as it is, and look at interline opportunities as and when they come up.  

“I think part of this is linked to tech development, how do we improve the technology so we can have a better offering, and make that more valuable to our customers? I think we’ll see some development and improvements in that space.” 

The Virgin/Delta JV is specifically on the transatlantic, “not beyond”.  

“There’s some complexity naturally that comes with that,” explained Mr Diesel. “It’s a bit more straightforward to do on the passenger side. And that’s kind of where the joint-venture started. But we’re looking at it and I think there’s definitely some opportunity. And we meet pretty regularly with the senior leaders of Delta, Air France, KLM to work out how we can improve.” 

Qatar, IAG and Mas said they “expect to implement the agreement in the near future, subject to first obtaining the necessary regulatory clearances.