The dedicated TNT flight to Malta which started operating a few weeks ago has been an instant success, with the company already considering upgrading to a larger aircraft, according to the managing director for TNT Associates, David Burton.
The Boeing 737 started operating five times a week to TNT’s aircargo hub in Liege, Belgium, whose central location enables the vast majority of shipments to reach their destination the next day.
The service will eventually come and go via Tunisia, and although it has no traffic rights between the two countries, Mr Burton said the demand for space would grow.
“We believe that the markets will justify the investment as there is sufficient business being generated to and from Malta,” he said.
It is the first time that TNT has put a dedicated aircraft to serve the requirements of an associate. C&C Express Ltd, a subsidiary of Cassar and Cooper, has been TNT’s associate for 28 years, one of around 170 looked after by Mr Burton.
Most of the associates – around 100 – are small companies which handle deliveries in the far-flung corners of the world, making Malta one of the largest in Europe, where most operations are directly owned by TNT.
“The service offers an important alternative to the distribution model based on road freight via Sicily or Italy,” he said, pointing out that many customers often want next day delivery, whether pharmaceutical companies or industries wanting spare parts.
The past weeks have been interesting for TNT, which is the target of a $4.8 billion bid from American company FedEx.
A few years ago, a bid by European rival UPS was unsuccessful because it raised competition issues but the FedEx bid is seen as being more complementary.
“FedEx is very strong in parts of the world where TNT is not so strong, so on paper, it is an easier fit,” Mr Burton said.
Last year was a difficult one for TNT, which saw its revenues drop 3.2 per cent to €6.7 billion, resulting in a loss of €190 million, mostly on the back of high restructuring costs and one-off charges.
The company has responded to challenges by cutting the workforce by 1,450, and drafting a strategy based on a four-year investment programme which saw €190 million in capital expenditure last year, aimed at making the company sustainable within three to five years.
The flight to Malta is part of a series of service improvements and investments made by TNT under its Outlook strategy to improve its delivery service to customers.
In recent months, TNT also added Tel Aviv, Venice and Hannover to its air network and added additional road connections to Turkey and the Balkans.
“The UPS issue put us into suspended animation for over a year... To an extent, we were just treading water as we could not really make any major investments.
“When you are a global operation, it takes time to crank the machine up again – and restructuring also requires a temporary internal focus.
“The upside is that we are now more aware of what we should not do. We know that we need to maintain the focus on business as usual, without getting drawn too much into the inevitable discussions that will ensue.”