Creating value through extensive network

With over two decades of experience in the air cargo industry in multiple roles at leading airlines, Martin Drew comes into India to head the cargo division of India’s popular airline Jet Airways. Before joining Jet Airways, Drew was with Etihad Airways for nine years where he was head of freighters and business partnership. In April2014, he was chosen to head Jet Airways cargo division. As the vice president for cargo, Drew will report to the Chief Commercial Officer and has been entrusted with the responsibility of substantially increasing the airline’s cargo business taking advantage of the airline’s strategic partnership with Etihad. Martin Drew speaks to Reji John about the launch of freighter operations in India and what it means to head cargo operations for Jet Airways in India.

 

What is the brief to you when you joined Jet Airways to head its cargo division in India?
The mandate has been to enhance revenue, leverage the strong Jet Airways brand and strengthen the position of Jet Airways Cargo. A particular focus area is to improve Cargo revenues from the domestic market. Jet Airways’ domestic network is vast, serving 50 Indian cities with around 400 flights each day. The overall capacity per day is huge at around 650 tonnes. So the main focus is to better optimize this capacity and enhance the revenue this generates. Another key part of my mandate is to work on the strategic partnership with Etihad, and other interline partners by identifying opportunities to work together and capitalize on the synergies.

Please comment on the significance of the launch of freighter operations in India by Jet Airways and how do you personally evaluate this event since you were given this mandate less than a year ago?
Jet Airways will be the first privately owned Indian passenger airline to operate a freighter, so this is a huge milestone. Induction of the freighter is further evidence that Cargo is a serious growth priority at Jet Airways. The ability to offer main deck capability complementing our extensive passenger network will raise our profile making us even more relevant to our customers. This development is not only a major fillip for the Indian air cargo market, but it also fully backs the Indian Government’s “Make in India” strategy.
From a personal perspective, the last year with Jet Airways has been incredibly enjoyable, we have achieved a lot and launching the freighter operations is certainly a high point. A lot of hard work and effort has gone into making this happen and it really was a team effort. I have to say the Indian regulatory authorities have been very helpful.

Where do you see the growth and revenue coming from for Jet Airways Cargo?
We are certainly benefitting from the huge demand increase in the domestic market. This is primarily being driven by the thriving e-commerce sector in the country. Year on year, we have seen double digit growth in revenue on our domestic network. Many of the major agents are key customers and we have focused on how we can do more with them as well as trying to capitalize as much as we can on the growing e-commerce sector. Another key area where we see improved performance in the domestic market is in the movement of valuables and in life sciences products, which require specialized transportation.
We have also grown our business through broader distribution and increased customer engagement. We have launched a Global Key Account programme increasing our engagement with the largest global forwarders and continue to build on our strong relationships with the independent forwarders. Furthermore, we have increased revenues through the development of high yield products, greatly increased focus on partnership, a critical area in enabling us to expand our network reach.
The launch of our freighter operations will enhance our network offering, expand the scope of services we offer, and inject significant capacity helping us to further boost our revenues and market presence.

What is your strategy and value proposition for your Indian customers?
With our extensive domestic network and frequency we serve multiple segments such as the express and courier industry, auto parts, e-commerce, pharmaceuticals, consumer goods, life science products, valuables and perishables. We aim to deliver greater value to customers of these market segments by providing customized solutions to transport their goods swiftly and reliably. We continue to evaluate opportunities to broaden our market scope especially with flights where we compete with other modes of transport.
As one of India’s major international airlines with non-stop services to key destinations, we are extremely well placed to serve India’s growing economy and support its trade and commerce within the country and with international partners. We are delighted to help facilitate the growth of India’s pharmaceutical trade and work closely with key customers in this industry. Linking India’s horticulture, and agriculture industry’s exports to major markets, we take pride in delivering value to this vital part of India’s economy. We support the express industry and its customers providing timely, reliable and consistent services. Similarly we bring tangible value to multiple segments such as garments, manufacturing, fashion and valuables,
To further enhance the value we offer our customers, we are soon launching branded products to bolster our offering in the express, valuables, life sciences, and pharmaceuticals industries. We will continue to strive to improve our services, products and aspire to be the premier cargo carrier in India.

What is your current assessment of your operations in India?
We have steadily grown our business in both the domestic and international services with growth in tonnage, sizeable increase in load factor, and strong yield. Our distribution has expanded as has our market segmentation. While we have made much progress, we continue to seek opportunities to improve not only the quality of our revenue but also the services and products we offer our customers. We are working on ways to boost performance on domestic flights. As our business continues to grow, we are working on ways to overcome infrastructure challenges, and resource constraints. We are making significant investment to strengthen our operations with additional manpower, equipment, processes, etc. Our team of committed and talented people has been augmented with specific skill-sets and more defined roles. Testifying to our commitment to the Indian market, our freighter operation adds significant opportunity to expand relationships with key customers as also boost our contribution to India’s economy.

How do you remain competitive in this market without undercutting your margins?
From the yield perspective we are top-end. We are very conscious about our cost, very conscious about maximizing yield. I think that is something we do very well and we have improved further. Our product offering, customer relationships, and responsiveness allow us to be competitive and offer excellent value to customers. Providing services that offer strong value to customers, focusing on those flights which offer greatest potential to maximize yield, as also on market segments that offer yield premium, enables us to strengthen our yield.

What are the challenges in operating in India?
India offers tremendous opportunities and has massive potential. In certain aspects infrastructure needs improvement. At times the complexities of doing business in India adds cost and reduces speed. It is very encouraging to see the initiatives the government is taking to address these challenges… The Honorable Minister for Civil Aviation has clearly expressed intent to develop the air cargo sector.

How do you plan to build your strategy on the back of the Etihad relationship?
Leveraging Etihad’s relationship with the major multinational forwarders, we have implemented our Global Key Accounts programme. Combining with Etihad, our network is very complimentary and it is a very powerful proposition. We have also worked closely to develop a common product portfolio to better serve our customers e.g. Fasttrack our express offering. Products to be soon launched include Safeguard for our valuables customers, a life sciences product, and pharmaceutical product.
Leasing the freighter from Etihad has allowed us to bring this path-breaking initiative to fruition relatively quicker and with greater commercial solidity. Both airlines have been able to feed into each other’s networks to offer their customers broader network reach, expanded transport solutions, increased access to hitherto untapped markets thus widening customer choice. Our partnership benefits and adds value to our customers as also both partners.