Air Transport World

CHAMP finding the bottom line. (Cargo Handling and Management Planning system can analyze whether an air cargo route will gain or lose money)

LUXEMBOURG--It was a tale to warm the heart of a Harvard business professor.

Europe's largest all-cargo airline was bleeding red ink from every pore. It knew it was losing money throughout its network but its accounting system was taking weeks to get full financial analysis on shipments and no one really knew how bad the losses were or which routes were responsible.

To solve the problem, the president created a new division, tasked to develop a computer system that could provide the information needed to staunch the flow.

Two years and millions of dollars later, Sten Grotenfelt, president of Luxembourg-based Cargolux Airlines International, essentially called in the creators of the new CHAMP (Cargo Handling And Management Planning) computerized cargo-management system, pointed out that millions had been spent to create the system at a time when the airline was losing money and laying people off, and the moment had come to prove the system or move on to more lucrative endeavors. The time had come to fish or cut bait.

A proposed new route was selected--one that the cargo managers felt would be a sure winner. All the parameters of the route were programmed in, from direct and indirect operating costs to projected rates and earnings. The computer immediately spat out the answer: The route would lose money.

Other routes were programmed in. Again, the computer spat out answers--which routes were profitable or could be made profitable, and which ones weren't and never would be.

CHAMP did not show Cargolux how to make money. It isn't supposed to. What it does is provide a financial-management system that will let the cargo manager know the profit or loss figures for every flight on every route, virtually overnight. …

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