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Wednesday, 3 April 2024
Strategic Hub and Niche Market are The Success Key of Asia Cargo Airlines to Keep Growing

On August 4, 2021, the license from the Directorate General of Civil Aviation (The Transportation Ministry of the Indonesian Republic), a cargo airline, TriMG Airlines officially changed their name to Asia Cargo Airlines (ACA). Then, Asia Cargo Network (ACN) Group, the parent company of Asia Cargo Airlines held an event of the grand launching of ACA rebranding themed “Malam Mencakar Langit” (The Night of Scratching the Sky) at The Ritz Carlton, in Jakarta (November 19, 2021).

ACN is a well-known group of companies providing air cargo and logistics services in the Southeast Asia region, especially in Indonesia, Malaysia, and Singapore.

As the CEO of Asia Cargo Airlines and President Director of Raffles Global Airlines, Zack Isaak has an important role in pioneering the expansion of ACN’s strategic routes, moreover, there are many important destinations in East and South Asia, Middle East, Africa, and other big airports in Southeast Asia.

ACN, where its head office is located at Marina Bay, Asia Square Tower 1, 14-07 Floor, Singapore, is a holding company of 4 airlines that has four AOC (Air Operator Certificates). Two AOCs of the Directorate General of Civil Aviation (The MOT of the Indonesian Republic), based in Indonesia - Asia Cargo Airlines and RGA Airlines (Black Stone Airlines). One of the Civil Aviation Authority of Malaysia (CAAM) based in Malaysia - World Cargo Airlines (WCA); and one from Civil Aviation Affairs of Bahrain based in Bahrain - MENA Cargo. Besides the Singapore Head Office, and regional hubs in Jakarta, Kuala Lumpur, and Maharraq (Bahrain), ACN also has a regional hub in Dubai, UAE.

“Besides as a head office, our office in Singapore is also for financial and marketing management as a representative office to welcome customers. So, the marketing arm for AOC Indonesia and Malaysia is in Singapore. The marketing arm for AOC Bahrain is in Dubai. For us, the location of AOC operation and marketing offices are not necessarily similar. It depends on the potential market location is,” said Zack Isaak to Cargo Times in ACN Indonesia Office, in Jakarta recently.

Airline that has been in air cargo service industry since 2002 (previously Tri MG), serve domestic cargo flight to any regions in Indonesia, and international destination like Singapore, Malaysia, Vietnam, Philippines, Thailand, Hong Kong, and Australia. Now, together with ACN Group has served 64 domestic and international routes.

“We do have Changi (SIN) - Halim Perdanakusuma (HLP) - Balikpapan (BPN) flight schedule that operate 5 times a week, and also the route of Jayapura (DJJ) - Wamena (WMX) that operate 28 times a week, and Jakarta (CGK) - Timika (TIM) that operte 4 times a week. Normally, we bring United Tractor tools and spare parts,” he explained.

Zack Isaak continued that ACA’s operation is more active in Papua, Halim Perdakusuma (HLP) - Changi (SIN) - Balikpapan (BPN), Saigon (SGN) - Japan (NRT & KOJ), Saigon (SGN) - Incheon (ICN), and also routes to Paro Bhutan (PBH) once three month regularly.

The total throughput of cargoes period 2019 - 2022 that were carried by ACA and ACN Group’s fleets was 200 thousand tons. “During the COVID, we carried 70 - 80 thousand tons. In 2023 was 170 thousand tons, and in 2024 is predicted about 170 thousand tons,” he said.

Besides running the business, ACA also assists the Indonesian government in humanitarian missions by transporting the logistics for the casualties like in Aceh, Yogyakarta, and Palu. As info, during the COVID-19 pandemic, ACA also contributed by opening special services for patient evacuation and COVID-19 supporting logistics delivery.

Starting from the institutions of governments, airlines, e-commerce platforms, express couriers, freight forwarders, manufacturers, and also natural resources & oil drilling companies have used ACA’s services. To date, some companies have made up strategic partnerships for ACA like PT Cipta Krida Bahari (CKB Group), PT Bahana Argadaya Persada, DHL Express and others.

“Example of partnership. Many cargoes come from the Fedex Hub in Singapore, and Fedex itself has a B767 freighter. However, because the capacity is 60 tonnes, and only around 10 - 15 tonnes are transported to Indonesia, the aircraft’s operations are inefficient. As partners, we can transport their cargo, because our aircraft capacity is around 15 - 18 tons on the Singapore (SIN) - Semarang (SRG) - Jakarta (CGK) route. So we are a feeder for global companies, FedEx and DHL. “We support their cargo activities, and not compete,” explained Zack Isaak.

Since 2015, ACA (formerly TriMG) has also taken on the role of serving logistics needs in the Papua region, for example, the Jayapura (DJJ) - Wamena (WMX) route, with 5 daily flights. Transports daily necessities totalling around 80 tons (@18 tons per flight) such as basic necessities (sembako), live animals, and building materials. Flights to Papua also serve several companies such as PT. Bahana Argadaya Persada, PT. BULOG, and PT. Freeport Indonesia.

Specifically for CKB partners, this integrated logistics company has chartered a B737-300F type fleet with a capacity of 15 - 16 tons, for regular flight routes specifically for air cargo including Changi (SIN) - Jakarta (CGK), Changi (SIN) - Balikpapan (BPN), Jakarta (CGK) - Ujung Pandang (UPG) - Timika (TIM), and Manado (MDC) – Changi (SIN).

For being consistent, innovating and satisfying its clients, ACA won the award as winner of ‘Rising Cargo Carrier of the Year 2022’ from Payload Asia media, and also received an award from the Singapore Changi Airport Authority (CAAS), in the Changi Cargo Partners Appreciation Award 2022 - Top Cargo Airlines.

“This award from Changi for me is prestigious. Because they see company activities in detail. We compete with Singapore Airlines, Japan Airlines, Raya Air, Chapman Freeborn, and even Emirates. This makes me very proud,” said Zack Isaak, who is also an airplane pilot.


ACN Track Record

In Indonesia, ACN has expanded the project of the air cargo service market with the purpose of improving the market share through some main strategies, they are :

1) ACN has launched Black Stone Airlines (Raffles Global Airlines/RGA ) after receiving AOC in Indonesia on 28 March 2022. The maiden flight was held on 30 March 2022 from Soekarno-Hatta International Airport (CGK) to the East Nusa Tenggara, El Tari International Airport (KOE), and then to Komodo International Airport (LBJ);

2) Currently, ACA has 5 fleets with the type of narrow-body Boeing 737-300 Freighter. They include 13 Boeing freighter aircraft; in ACN fleets, they are nine 737-300F, one 737-400, and three 737-800BCF; and,

3) ACN builds an Maintenance Repair Overhaul (MRO) facility at Kertajati International Airport (KJT), West Java to maximise aviation security and safety during the flight for the internal of ACN Group and other airline companies.

“Additionally, ACN currently also has a business producing aircraft wheels and braking systems, targeting aircraft operating in Indonesia, Singapore and Malaysia,” added Zack Isaak.

The newest news, in September 2023, ACN opened a finance service in the aviation industry (aircraft leasing), named ACN AeroLeasing in London, UK.

Meanwhile, for international market expansion, ACN expanded its regional hub in Bahrain Kingdom, a tactical location at the crossroads of potential markets in the MENA (Middle East and North Africa) region. With the strategic partnership between ACN and MAE Aircraft Management, WLL is expected to make a positive contribution to strengthening Bahrain’s position as a global logistics hub.

“As an information, in Africa, freighters are scarce; if there is, it’s a wide-body aircraft. And Bahrain hub has a tactical position for 2-4 hours to Africa using narrow-body aircraft. We even dare to take a risk, even though we know that some African regions are still prone to conflict,” Zack Isaak explained.


Being asked about the strategy to be more excellent than others, Zack Isaak answered that there are crowded domestic markets for competition. “The domestic cargo cake is being a bone of contention by many airlines, such Jakarta (CGK) - Kualanamu (KNO) route, Jakarta (CGK) - Banjarmasin (BDJ), Jakarta (CGK) - Kupang (KOE), Jakarta (CGK) – Balikpapan (BPN) and others,” said Zack Isaak.

He continued, ACN is now focusing on overseas flight, like to Korea, Japan, Singapore, Africa, and others. But the base is still with AOC Indonesia. “Previously, when we focused on e-commerce items, we use 7 freighters with 2,000 hours flight per month. That was the record for freighters with 50% were e-commerce items. After post-covid, there were many new born companies and fought over our routes”, said Zack.

At the end of the interview with Cargo Times, Zack Isaak gave two ideas for the national air cargo development.

First, it needs a control for the new AOC issue based on quota. The ideal regulation is 1 AOC for 1 year, or following the national cargo volume. “If there are many new AOC startup, it will make the market price fall sharply, and that will have implications for us,” he said.

Why do they want to make a new AOC ? Then, Zack Isaak said that during the pandemic (covid), many investors of startup airlines saw ACN got many cargoes, then flew from 600 hours to 2,000 hours in one year. From 3 fleets to 9 fleets in 2 years, and now there’ve been 13 fleets. However, the cargo volume remains the same. Plus, many newborn AOCs made the market price fall off badly.

“Second, the price for avtur from the our state-owned oil company can at least be the same as that which applies at the Southeast Asian airports. The price is very competitive and it won’t create our operational bigger,” concluded Zack Isaak.

Author: Martin Jop
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