Interview with Pavel Kuznetsov | Head of Air Chartering
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Hey Pavel, thanks a lot for taking the time for this interview. Can you shortly introduce yourself and tell us about your position and tasks at deugro Air Chartering, along with your job or industry experience?
PK: Sure. My name is Pavel Kuznetsov, and my role at deugro is Head of Air Chartering. In my position, I am responsible for providing best-in-class air charter solutions to deugro clients globally. I joined the company five years ago and prior to that, for about 15 years, I was working in various leading positions in the cargo charter airline and charter brokerage industry.
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Can you shortly introduce your team?
PK: Our Air Chartering Center of Excellence team consists of seasoned experts with a great mix of experience in the air charter business that allows us to excel in every aspect of the solutions that we offer. In our group, we have airline and forwarding backgrounds, individuals with deep knowledge of heavy lift aircraft and time-critical charters with small aircraft, as well as tons of hands-on experience “in the field” and flying on board cargo aircraft. I believe this depth of knowledge makes a big difference when serving our clients.
When was deugro Air Chartering launched, and what are the advantages that you offer clients with an own Air Chartering department?
PK: deugro’s Air Chartering department was officially launched in 2020 with the mission to be a recognized leader in providing cost-effective and reliable air charter solutions to any destination worldwide. Our own Air Chartering department allows us to source air charters directly from the airlines without any middlemen, to keep a finger on the market pulse and to use the buying power of the whole deugro global network to negotiate the most competitive conditions with the charter carriers. A big advantage, of course, is the ability of our Air Chartering team to speak the same language as the airlines, not only understanding their lingo and terminology but also how their processes work from the inside. This helps to identify potential cost-savings for our clients and anticipate and overcome potential challenges in execution.
Which services do you offer clients in addition to air chartering solutions?
PK: Besides full charters, we offer part-charter solutions, combinations of scheduled flights and charters as way of cost optimization, on-board courier services for small shipments that can be moved as hand-carriage, or even helicopter charters to deliver cargo to difficult-to-reach destinations with no suitable runway for fixed-wing aircraft types.
Air charters cause mixed feelings in the project sector. On the one hand, they ensure that highly critical and urgent cargo is delivered to global project locations and construction sites to keep industrial processes running. On the other hand, the reasons for such premium transport solutions often lie in production delays, extremely costly facility downtimes caused by facility incidents, or by planning errors. From a purely cost-related perspective, air charters are certainly not the first choice. So why do clients still choose this premium solution, and what reasons are the most common for choosing air charters?
PK: Air charters offer unparalleled flexibility—you can agree with the carrier to operate the flight for the dates you require, and you can choose airports closest to the production site and destination. Coupled with shortest transit time, no transloading at hub airports, and unparalleled reliability based on exclusive access to capacity, there is no other logistics solution that can be more suitable for the most critical and urgent shipments. Although such situations do not arise daily in our clients’ business, sometimes the financial losses due to cargo arriving to the site too late are simply much higher than the cost of air charter, and this is when it makes absolute sense to go for it.
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Aircraft usually move cargo between official international airports while pre- and on-carriage is covered by other transportation modes such as truck, rail or barge. How important are pre- and on-carriage within the solutions you design for your clients, and do you offer this as well?
PK: We work closely with deugro’s regional branches to ensure that the airports chosen for air charter operation allow smooth loading and offloading, customs clearance as well as first- and last-mile delivery. Generally, we try to pick airports closest to the sites, but of course a lot depends on available transport infrastructure for pre- and on-carriage as well. Depending on the urgency and cost sensitivity of the shipment, we might sometimes investigate cost-saving solutions by offering airport options from where trucking to the site might take a bit longer, yet, in turn, the air charter cost would reduce significantly due to less flight time. Or we even offer sea-air options that would be considerably lower in cost while still meeting the client’s deadline.
The cargo volume and weight capacities of the big aircraft go up to 1,000 CBM or 150 metric tons. How do you ensure that project cargo, which often comes close to these volume or weight restrictions, is loaded, stowed, secured and delivered safely and efficiently?
PK: It’s important to understand exactly what the operational capabilities and limitations of the aircraft types are that we offer our clients, which loading and offloading methods and equipment are being used, what the requirements for lashing and weight distribution are, etc. As we specialize in project cargo, our teams have a lot of practical experience in the transportation of heavy and oversized items. In the situations where we get very close to the limits, it is important to work with precision in close collaboration with the engineers of the shipper’s and carrier’s load engineers to ensure the cargo is transported safely and reliably. We often also engage the transport engineers from our sister company dteq Transport Engineering Solutions to assist in the preparation of cargo for transportation by air: on-site inspections, designing and manufacturing of specialized transport frames, preparing method statements for complex loading and lashing procedures, etc.
The demand for urgent air charter solutions often arises at very short notice. When we consider that the availability of suitable aircraft, especially for complex, oversized and heavy lift project cargo, is limited and such aircraft are often already fully booked in advance, how do you manage to offer clients fast, safe and efficient solutions?
PK: As air charter experts, it is our job to know where and how to find capacity even when the market is tight. From my point of view, one of the key aspects here is close and trusted relationships with airline partners; they keep us up to date on their scheduling situation, and we, in turn, alert them timely about the projects and requests that we have in the pipeline to ensure our clients get the aircraft when they need it. If the carriers have some last-minute openings in their schedule due to other flights being canceled or postponed, we want to be first to know about it and offer this availability to our clients.
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Can you give some examples of interesting air freight charter projects that you have executed recently (including the most interesting challenges and solutions)?
PK: This year, we performed a lot of quite diverse air charter projects. We transported a heavy 80-metric-ton turbine rotor using the iconic Antonov-124. We moved various urgent time-critical equipment within super-tight timeframes using full charters and part charters as well as on-board couriers (in some cases, the time between the client’s request and the arrival of the shipment to the destination was less than 24 hours). We secured exclusive dedicated flights from China where scheduled flight capacity was so extremely constrained, that three full-charter flights were not only the quickest but even the more cost-efficient air freight solution for 300 metric tons of critical equipment. We executed complex transfer solutions based on a combination of scheduled flights and charter flights to help our clients reach remote destinations while still remaining within reasonable budgets. We sourced various external equipment and materials to accommodate non-standard loading and offloading methods in the airports with limited ground support equipment. So, I would say we had a fun year with lots of interesting challenges that gave us the opportunity to apply and grow our expertise to meet the needs of our clients.
As an expert who has been working in the air charter business for many years, where do you see the biggest changes in the business compared to the past and can you give a personal estimation of further critical developments in the coming years (such as AI, geopolitical changes and challenges, the energy transition, industrial business models and old/new industries)?
PK: The key driving factor in the current air freight market is the booming e-commerce segment. Exponential growth of online shopping has led to unprecedented volumes of general cargo moved by air. Nowadays, for example, e-commerce cargo is taking up more than half of all available air freight capacity from China. This development has kept the market upbeat in the last years and has certainly had a huge impact on the market structure, rate levels and capacity available for ad-hoc shipments. How and if the customs policy of the new US administration would influence this boom in e-commerce traffic is yet to be seen.
Along with that development, we are observing an increasing shortage of wide-body aircraft: older aircraft is being retired and deliveries of new airplanes (factory freighters as well as conversions) are not able to keep up with the growth in demand. This gap between supply and demand will probably only increase in the coming years.
And of course, we still have the bottleneck in the niche of the heavy lift ramp aircrafts. After the start of the war in the Ukraine, the number of available AN-124 and IL-76 has reduced drastically due to Russian carriers exiting the market because of sanctions. Further geopolitical development is difficult to forecast, but it is probably safe to assume that if we are ever to see the return of Russian aircraft to the Western market, this would not happen in the short term.