Air Transport World

Dutch trading

KLM has restructured its cargo operations to meet new definitions in air freight

AMSTERDAM--Today's air car go industry no longer is defined as simply carrying a piece of freight from point A to point B. The problem, however, is determining exactly how it is defined-not only what is its role but who is the customer, who is the competition and who are the partners.

Forming alliances has also become part of that definition. The problem here is determining who does what and how, since virtually no two operators do the same thing the same way-a serious flaw in an industry that is trying to mesh all of the components into a seamless-service concept.

This lack of definition has led to what Jacques Ancher, executive VP-cargo for KLM, calls a "black hole," with many carriers simply trying to figure out exactly what their position is in the overall international air cargo industry.

Ancher noted that while the airline business in general was "being buffeted by volatile economic forces," the airline's ultimate customers were introducing their own repositioning policies. "And if they were changing, we certainly needed to be changing right alongside them."

To meet the challenge of working its own way out of this "black hole," KLM has restructured its entire cargo operation.

In 1989, KLM introduced a corporate program called Vision '93, designed to determine more specifically what its core businesses were regarding both its passenger and cargo operations-to determine what the airline's position should be by 1993.

One of the first steps, taken in 1991, was to reorganize KLM Cargo as a separate division. Although it was not created as a separate company such as Lufthansa Cargo or American Airlines Cargo, KLM Cargo may eventually grow into a separate entity eventually, probably triggered by some outside driver such as an alliance "on a major scale," Ancher said.

Once it became a separate division within KLM, cargo was further divided into five semiautonomous business units, designed to give the new division flexibility while keeping it within a controlled element.

Further refining of the division occurred through last year, when KLM Cargo emerged with a total of seven business units. …

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