Dubai Air Show

Maximus explores new strategies to boost yield

 - November 11, 2011, 12:59 AM
Maximus Air Cargo remains active in the market for oversize freight, largely due to the suitability of the company's Antonov AN-124 and Ilyushin Il-76s.

With much of the world’s air freight business still struggling to earn decent yields, United Arab Emirates-based Maximus Air Cargo is stepping up efforts to tilt its business plan increasingly in favor of wet leases covering aircraft, crew, maintenance, insurance (ACMI).

According to president and CEO Fathi Buhazza, developing long-term ACMI partnerships with other carriers is a more sustainable foundation for Maximus, although it intends to remain active in the niche market for oversized freight charters for which its heavy-lifting Antonov An-124 and Ilyushin Il-76s are especially well suited.

Growing demand for ACMI work, including a contract under which two Maximus aircraft are flying for Etihad Crystal Cargo, has prompted the carrier to invest in more fuel-efficient Western aircraft. It has acquired three decades-old Airbus A300-600s from Japan Air Lines, two of them already in the fleet flying under ACMI contracts.
Now the company is looking to add a pair of nose-loading Boeing 747-400s that could arrive by year-end. They could be used to realize Maximus’s ambitions to start operating to South America.

“For us, ACMI is more of a partnership in which we share in the good times and the bad times,” Buhazza explained. So instead of making airlines commit to five-year, fixed-terms contracts, which in tough market conditions might soon prove to be disadvantageous for them, Maximus gives its clients renewable one-year deals. The ACMI provider pushes hard to reduce direct operating costs, such as fuel and ground handling, with Buhazza maintaining that, generally, freight carriers have not been as progressive as passenger airlines in this respect.

Just as with the freight charter sector, tough market conditions elsewhere have led operators from other regions to tap the ACMI market in the Arabian Gulf. “Unfortunately, this region has attracted substandard operators that are hard to compete with,” observed Buhazza. “For instance, it is hard to provide an aircraft like the Il-76 for less than $2,500 per hour and yet other operators are offering them for $1,000. How can they do this? By not doing maintenance, using fake parts, overworking crews and not having adequate insurance.”

More recently, Gulf states’ aviation authorities have tightened up on these anti-competitive, and potentially unsafe, practices. In the UAE, the GCAA now requires minimum insurance levels of $5 million and is more proactively conducting ramp safety audits on all aircraft arriving in the country.

Meanwhile, Maximus’s Antonov and Ilyushin heavylifters are profitably tapping strong demand in sectors such as military logistics, oil field support and electricity generation. “No other aircraft is capable of carrying what the An-124 can lift,” claimed Buhazza. “The Russian aircraft have unique ramp loading capability that works well at substandard airports in Africa and in disaster areas.”

Maximus would be willing to invest in more aircraft from Russia and Ukraine, he said. Support for the Ilyushins is available through Volga-Dnpr’s facility in Sharjah, but for heavier maintenance, they and the Antonovs have to fly back home to the north.

Meanwhile, Maximus is giving its fleet a facelift, with French company Happy Design having been commissioned to develop a new paint scheme. Models of the new-look exteriors are on display here at the Dubai Air Show