Qatar Airways Cargo first to use index-linked agreements
QATAR Airways Cargo is the first carrier to use index-linked agreements (ILAs) with customers, a method likely to take off in large, but lower capacity-constrained markets, reports London's Loadstar
QATAR Airways Cargo is the first carrier to use index-linked agreements (ILAs) with customers, a method likely to take off in large, but lower capacity-constrained markets, reports London's Loadstar.
ILAs are expected to 'bring fairness and transparency to pricing', giving airlines the ability to compete on issues other than rates.
The spot rate market is systemically volatile, explained Peter Stallion of Freight Investor Services. 'No one knows what everyone else is doing; it's only since we've been able to observe it that we can see what the market does.'
ILAs are a procedure by which a contract includes a periodic adjustment to the prices paid for the contract, based on the level of a nominated price index.
'They represent innovation for the industry and, as a company, our goal is to always stay ahead of the competition when it comes to improvements,' said Qatar cargo chief Guillaume Halleux.
'Overall, rate transparency will increase, giving a clear reference of what a fair rate can be, which would then improve the overall efficiency of business transactions,' he said.
'On the airline side, for example, we expect it to reinforce the added value of operational reliability and of being able to deploy capacity in an agile way, in comparison to being the lowest quote in a procurement exercise.
'Our capacity and fleet is growing and this kind of agility is, coincidentally, one of our strengths,' said Mr Halleux.