Airlines sign memorandum to integrate cargo services

PUBLISHED : Wednesday, 17 March, 1999, 12:00am
UPDATED : Wednesday, 17 March, 1999, 12:00am

Singapore Airlines (SIA), Lufthansa Airlines and Scandinavian Airlines System (SAS) have announced plans for closer co-operation in the air-cargo business.

A memorandum of understanding has been signed by Cheong Choong Kong, deputy chairman and chief executive of SIA, Juergen Weber, chairman and chief executive of Lufthansa, and Jan Stenberg, president and chief executive of SAS.

The airlines will carry out a feasibility study on integration models among the companies in the air-freight market.

The study, which is to be completed within a year, will scrutinise the prospects for wide-ranging matching of network management, marketing and sales, product harmonisation and a common infrastructure for information technology.

It also will look at the type of organisational structure best suited to implement these extensive integration plans.

'There is a growing trend towards globalisation and maintaining just-in-time inventories,' Mr Cheong said.

The combined freighter network of the three airlines covering the Americas, Europe, Asia, the Middle East, South Africa and the Southwest Pacific would provide customers with improved service benefits, such as more frequent and direct routes, increased capacity and shorter transit time, he said.

In the increasingly intensive competitive environment, the common aim of the companies committed to the project was to strengthen their position in the air-cargo market of the future and equip themselves to serve even better the global logistics requirements of customers and partners, Mr Weber said.

Mr Stenberg said SAS Cargo was one of the three initiators of the study.

Air freight was becoming a mature business and it was natural that in the future it should develop more on its own terms, he said, adding that the airlines had seen this development coming for some time.

He said he was pleased that SAS Cargo, together with its two partners, had placed itself in the lead.

The signing of the memorandum enhances ties among three cargo carriers that already command a strong position in the world air-freight market.

International Air Transport Association statistics for international air-cargo traffic in 1997 show the combined international market share for the three airlines was more than 13 per cent.