Time to Change?
Traditional Air Cargo business has been operating on the maxim 'Higher the weight, Lower the rate'. Is it not the time that this is changed? The dropping yields have been a matter of concern and while Airline may be smart to fill their aircraft belly with the right mix of cargo to maintain an acceptable yield but is that always possible? The small packets / cargo may be diverted to Integrators besides can one be complacent with limiting to an 'acceptable yield' only? The cost elements continue to rise and the bottom line margin will continue to dwindle. Integrators have been successful in being different with their pricing so what is stopping us from looking at alternate pricing models. We do have competition from the shipping industry, however the need for Air Cargo will continue. Revenue Management, long term contracts with Agents and Shippers and other promotional activities may to a certain extent offer sustained payloads and the committed revenue but isn't it a right time for us to innovate and work for a pricing model that will help the industry remain competitive and yet improve their yields. Personally, I am exploring what alternate model may work. My thinking cap is on!