Carriers: Animal air shipments profit steady as most air cargo lags

ANIMAL cargo has softened declines in the air cargo by remaining a constant speciality freight and producing steady revenue for carriers.

The profitability of animal freight lies in the value of larger animals such as thoroughbred horses, giant pandas and dolphins on international flights which create bigger margins for the carriers, Reuters reports.

Lufthansa's Cargo animal unit creates steady sales of EUR30 million (US$39 million) per year against the group's overall revenue of EUR$1.4 billion, but it remained constant during the downturn.

Lufthansa invested EUR10 million in its Animal Lounge, a 4,000-square-metre animal facility, opened four years ago to expand the business that increases revenue by three to four per cent a year compared to other freight which has experienced a drop of 9.2 per cent in volume in the first half of 2012.

"There's hardly any volatility, said head of Lufthansa Cargo's Animal Lounge in Frankfurt, Axel Heitmann, adding that the annual throughput of 100 million live animals comes close to its passenger totals.

KLM Cargo, part of Air France-KLM, has also experienced cargo uplift for its animal shipments of "bumblebees to giraffes and from guppies to horses" despite economic difficulties in other cargo areas.

It supports this diverse business which can include the challenges of transporting 3,000 tonnes of worms as fishing bait or dealing with sedation of larger animals like rhinoceroses or acclimatising giraffes to the flight experience as they are highly sensitive and risk heart attacks.

Despite strict regulations for animal cargo and the challenges for particularly large and exotic zoo animals where "you don't want such a large animal lumbering about in flight," the sales stream and industry demand makes it worthwhile, said Mr Heitmann.

The most frequent flyer for freight carriers is the horse that costs from EUR5,000-8,000 to transport from Europe to North America compared to a medium-sized dog at EUR800. Unlike a domestic pet, the horse cannot fit in a passenger bellyhold but instead requires a freighter and special containers. This can be costly if a horse is shipped one-way creating an empty on return leg.

The popularity of equestrian sports globally has seen the number of annual events increase by 34 per cent since the 2008 financial crisis and is expected to increase further, according to the Federation Equestre Internationale.

Emirates head of cargo planning Hiran Perera agrees that growth of animal cargo is not in line with economics and that the precious cargo can see high prices as long as it delivers on safety and reliability. With a thoroughbred racehorse reaching value of tens of millions of dollar, an international consignment of a team of horses can cost more than the value of a Boeing 777 freighter itself at list price $280 million.

The Dubai-based carrier has invested in Boeing 777s adaptation so that heating and seats may be provided for horse grooms travelling with their horses. Mr Perera said investment for this growing demand is "beginning to pay off".