SAS Cargo – lifting the load
While it’s impossible to underestimate the coronavirus effect on SAS’ business, one area – cargo – has turned out to be lifesaver (in some cases, literally). After an initial hit, as we all adapted to our new circumstances demand for freight transportation rebounded quickly, and since January 2021 especially, has increased on a monthly basis.
“We had to ground some 90% of our planes right at the beginning, but cargo traffic is now above pre-coronavirus levels, and has proved to be a rare light in the dark,” says Max Knagge, President and CEO at SAS Cargo Group.
Change in the air
With passenger numbers inevitably hit, the role and importance of the cargo division has changed significantly. First, it would become a vital means of transportation for medical supplies, such as the sourcing and delivery of PPR equipment and face masks from Asia to Scandinavia.
“SAS cargo is an important piece of the of the whole infrastructure of the society we’re living in. In this case, by feeding in necessary equipment and goods to help address the critical situation faced by the whole world, the importance of cargo I think, was quite evident,” Knagge says.
As the initial shock began to wear off, it soon became clear how many industries were dependent on the shipping of goods and spare parts across the world to maintain productivity. Air freight, offering speed and capacity, quickly provided an answer.
“You had factories standing still because they were lacking spare parts,” Knagge says. “The second phase of cargo’s importance for industry as an enabler became evident. Seeing how vital it is for things to continue in terms of manufacturing and the production of goods again showed the importance of cargo and what it means for us as a society.”
Boosting the business
With SAS proving to be an enabler from a society infrastructure point of view in the first two cases, from a company perspective, a third factor has been crucial for the business too – the surge in demand resulting from e-commerce.
“E-commerce is a customer segment that has increased dramatically during the pandemic and again, that increases the demand for cargo,” says Knagge, highlighting the growing revenue contribution that cargo has helped deliver.
While things look optimistic from a freight perspective however, on the travelers’ side there’s still plenty of concern and uncertainty. Here too though, there’s been a positive knock-on effect of the success of the freight operation, as demand for cargo has actually meant that several long-haul routes have been reopened for passengers, especially to the US and Asia. In this respect cargo has proved to be an enabler for those passengers than can and need to travel, such as VFR (Visit Family and Friends) and business travelers.
The dawn of the “Preighter”
How airlines make provision for cargo transportation generally falls into three categories. SAS used to employ the method of flying specially fitted freight-only, vessels, but it ceased the practice many years ago. Instead, the airline favors the option of placing cargo in the hold of passenger planes where it’s possible and most efficient. And more recently, a third, hybrid method, has come into play. Known as “Preighters”, aircraft that were originally intended to carry passengers are just carrying cargo, without the need for refitting. Having this alternative has provided SAS with great flexibility when it comes not only to fulfilling demand, but also getting travelers back in the air.
Although Max Knagge is understandably pleased to see the work and contribution of SAS Cargo brought into the spotlight, he’s keen to impress that it is very much a joint effort.
“The charter flights transporting medical supplies is a great example,” he says. “It’s all down to the teamwork encompassing the expertise of many areas, such as the network, the ground handling crews and the technical staff. It has also been acknowledged by pilots and other employment groups that cargo is something really good, so of course we are a core piece of that but it’s very much a team effort,” he says.
The role of SAS’ early-adopted digital freight booking service, launched back in 2015, is also worth highlighting, as it has been instrumental in providing the groundwork not only for the current success of the operation, but with one eye on the future, too.
“It’s something we are focusing heavily on,” says Knagge. “The freight industry has been behind the passenger side of the business in this respect, but the pandemic has really pushed and developed that side of the industry in general.”
Eyes on the future
Looking ahead, Knagge remains cautiously optimistic, aware of the need for the passenger-cargo balance to be redressed, but proud of what the division has achieved in these tough times.
“What’s happened over the past two years has underlined the importance of cargo for SAS as a company and the value of having two legs to stand on,” says Knagge. “Our core business is passenger sales and will continue to be so, but SAS Cargo is a supplement, a very important one, that has proved to be an enabler not just for the company, but for society as a whole.”
Published: January 21, 2022