Heavylift / Breakbulk
Helping hands high in the sky
The aircraft charter company Chapman Freeborn’s has developed into a successful problem-solver for its clients since landing its first contract in 1973. In a recent discussion with ITJ editor Andreas Haug in Basel, CEO Russi Batliwala explained why aircraft – of any size and able to offer any performance – frequently remain the last solution for urgent or large and heavy consignments.
Mr Batliwala, please give us a brief description of your career. What was it that led you into the aviation and airfreight industry?
I come from a family whose members have traditionally worked as pilots and flight attendants. My mother, a German citizen, was the first-ever foreign flight attendant to be employed by Air India. She met her future husband, an Air India pilot, on her first training flight from Düsseldorf. My father later flew in the charter sector, including services to and from Africa, where I subsequently made my first contacts.
My first steps up the career ladder already took me to the airlines. My first employer merged with another airline, two others went bankrupt, and in 1987, shortly before I wanted to try and seek my fortune in England, I answered a small job advert that read «aviation company needs a pair of hands to help». I phoned them and got the job. I worked in a team of eight people at the time; today we are a very large company with 450 employees working in more than 30 countries.
You’ve been with Chapman Freeborn for 27 years now. How has business changed during that time?
Well I would have reams to report! And one needs to consider the fact that air chartering is a highly specialised field. During my initial years the business ran according to a clear plan. Services were purchased and sold, and there was a margin. One knew the market and could easily tackle the next contract. This form of business is no longer possible today. Customers’ demands have become much more sophisticated and their projects are much more comprehensive. Clients appreciate it when their partner has all the know-how at his fingertips.
In the meantime we have our own lawyer and an in-company compliance department. The latter checks all the data that is captured online in our systems. Business obligations also play a major role. For example, every year we pay a six-figure sum for our non-owned aircraft insurance. Naturally we’ve never had to make a claim, but you would not believe how many forwarders simply want to have the security this coverage offers!
Such protection can also be taken as a sign of how seriously we conduct our business – for there are some black sheep in the charter business. Take, for instance, a firm that calls itself 1 Air Charter. An incident occurs, the firm has to close, but it opens again the very next day – under the name 2 Air Charter. We cannot afford to take risks, as we’re the biggest UN service provider in the broker business field, and on top of this the value of shipments we handle amounts to millions of dollars.
In which business fields is Chapman Freeborn active?
Freight basically accounts for 70% of our business. We evolved from humanitarian aid flights. These still play an important role today, even though – and it might not be suitable to mention this in the same breath – contracts for armed forces made up the greater part of our volumes in the last few years. But we don’t transport weapons or ammunition, as a matter of principle. We’re just a part of the logistics supply chain.
Let me give you an example. We fly canned beer and trucks to Afghanistan on behalf of various armies. That country was key for us and will remain so this year. In connection with this business we founded a small airline with its own warehouse and a 80-strong workforce in Sharjah. In addition to this, we’re active in the automotive sector, support the oil and gas industry, and transport heavylift items as a matter of course. We receive requests for quotations from a multitude of fields, but only 5% of them end up actually being carried out.
And where are you active in those domains you’ve just mentioned?
Basically we offer our services and can also position aircraft wherever the need arises. The spotlight is now on the Central African Republic, The UN manages matters well by shipping freight to Douala (Cameroon). We then fly the shipments from there to Bangui (CAR). That is just 1,000 km – but still quite special…
... the last mile so to say ...
Yes, but this combination of air and seafreight is a good method for reaching the target.
Business predictions are always difficult to make – but what are your expectations for 2014?
We’re pursuing our strategy of having partnerships with forwarders and airlines, such as Lufthansa and Swiss, but budgeting is complicated for us as a firm that doesn’t have its own substantial operating capital. Nevertheless, I can tell you that the figures for 2014 are already three times higher than planned. And that is partially due to the humanitarian activities in Africa.
Major projects inevitably require long-term planning, on the other hand.
Large companies naturally want to forward their goods in an economical way. However if a problem crops up – such as the weather or for production reasons or even on account of geopolitical developments – then it’s time to charter an aircraft. This was reason why we had to step in recently after an earthquake in Chile. Forwarding items by sea to complete a project would have taken too long.
In my opinion there’s an ever greater realisation in industry and trade that almost anything is possible these days – thanks to air chartering. This awareness, which wasn’t so common 10–15 years ago, has certainly helped us develop.
Do you notice the supposed shift from air to sea freight in your charter sector?
Not really. You need to remember that our business always depends on the concrete situation. We will remain a product of bad planning or disasters
What hurdles does your business face?
Regulations. There are countries, such as India, where the situation for overflights and landings has improved greatly. In earlier times the only way to move a compressor from Dubai to Bangladesh in 48 hours was to take an absurdly long route via Sri Lanka, in order to circumvent flying over India. China is also relatively restrictive in this matter. But a broker who knows what he is doing will always find a way.
Where are the geographical growth markets for air charters?
South America is very interesting for us, as is Australia. We’ve been present there for four to five years. The Middle East has always been an exciting region, whilst Europe and North America are developing somewhat sluggishly.