Volcano serves timely air freight warning

With air freight low on the political agenda, stakeholders want to raise their profile both in government and among the public Swiss Worldcargo

The temporary suspension of air traffic over Swiss skies due to an erupting Icelandic volcano has highlighted the importance of air freight to the economy.

About a third of all Swiss exports, amounting to some SFr60 billion ($56 billion) a year, travel by plane. Industry experts warn that flight restrictions and infrastructure shortfalls could damage Switzerland’s competitiveness.

Swiss companies managed to negotiate the volcano-related flight ban without sustaining serious losses, a conference at Zurich airport heard on Tuesday. Longer lasting restrictions would have caused a real headache, but firms are more concerned about other air freight issues.

An air freight survey, released one week after flights resumed at Swiss airports, issued the stark warning that the economy risked falling behind other nations unless more emphasis was placed on upgrading services.

The air logistics industry was fragmented after the collapse of former national airline Swissair, with some parts of the bankrupted carrier splitting off and going private. In the meantime, countries such as Dubai are building new freight facilities at a tremendous pace.

The Swiss industry is afraid this development could threaten some of the 188,000 jobs directly or indirectly linked to air freight.

Noise debate too noisy

Voters in Zurich approved a plan to restrict flights in and out of the airport 18 months ago to limit noise. This follows an evening and weekend ban on Zurich bound flights over southern German airspace.

But Joerg Hofstetter, vice-director at the school of logistics management at St Gallen University, believes the arguments are one-sided.

“All the main debate on the limitation of flights was about noise pollution, but there are also other issues to consider,” the air freight report co-author told swissinfo.ch.

“There is always a trade-off to make when you restrict flights. Several countries are moving forward with their infrastructure and if we stay as we are then we will become uncompetitive.”

The Swiss plan is to specialise more in niche services such as express deliveries, catering for temperature sensitive goods, such as transplant organs, or providing security solutions for items such as new movie releases.

But Switzerland could even be in danger of losing ground in some of these specialised areas. There are no plans to restrict flights to Basel airport, but if voters followed the same path as Zurich it could spell disaster.

Pharma’s special needs

“If we restricted evening or morning flights by just half an hour our express air freight service would simply vanish,” Ralph Erhart, head of Basel airport told swissinfo.ch.

Refrigeration and air conditioning services at Swiss airports are below the standard provided by many European competitors, said Mathieu Aman, a global logistics expert at Basel-based pharmaceutical giant Roche.

“Frankfurt and Paris have better facilities so Switzerland is losing business to these competitors,” he told swissinfo.ch.

“We have to be confident that our temperature sensitive products are stored correctly and are properly secured during an eight hour flight.”

Yet more business is being lost to neighbouring airports that have a better network of direct flights, Aman added. “We supply high-tech, high value products and we rely on short transit times around the world,” he said.

United front

Nearly two-thirds of the 217 companies surveyed by the report predicted a substantial increase in the volume of their exports through Swiss airports by 2030. Some 70 per cent already consider air freight as a basic necessity for their business.

Switzerland also receives a sixth of its imports via air and 44 per cent of recipients feel this too will become more important in the next 20 years.

Air freight is low on the political agenda, but the stakeholders are determined to raise its profile both in government and among the public. But first, they admit they must start presenting a more united front.

“In the days of Swissair, freight came under one umbrella,” Bernd Maresch, head of marketing and strategy for Swiss WorldCargo – the freight unit of new carrier Swiss International Air Lines – told swissinfo.ch.

“We have to develop as a strong, orchestrated group that is following the same development path.”

Matthew Allen at Zurich airport, swissinfo.ch

Swiss air freight

Air freight covers one-third of the SFr180 billion worth of total Swiss exports (air, train, road combined, according to Swiss customs).

Switzerland’s three busiest airports – Zurich, Basel and Geneva – employed 2,350 people to move 500,000 tonnes of freight and mail in 2008.

The industry directly employs 25,000 people in Switzerland and another 163,000 indirect positions. As almost all air freight is carried on passenger planes, the industry warns that such flights would also become unprofitable if logistics suffer.

The air freight report lists Switzerland’s strengths as the ability to move goods at speed, the expertise and flexibility of handling agents and the ability to move goods at short notice.

Weaknesses to be addressed include: the lack of direct flights and frequency of flights compared to European neighbours, inflexible opening hours of customs offices and a paucity of specialised freight aircraft.