Separating cargo: the strategy at SIA is to divorce cargo from passenger operations. (Singapore Airlines Ltd.) (company profile)

Separating Cargo

The strategy at SIA is to divorce cargo from passenger operations.

Huang Cheng Eng, cargo manager -- worldwide for Singapore Airlines (SIA), has big plans. By 1999, he wants to see cargo operated as a separate enterprise, divorced from passenger operations. "Cargo is a big business," he said.

Cargo income contributes about 20 percent to SIA's overall revenues. "But in terms of profit margin, it's much higher," he added.

International Civil Aviation Organization (ICAO) forecasts certainly validate Eng's enthusiasm. According to the organization, freight traffic is expected to continue growing at a greater rate than passenger traffic, with international FTKs (Freight Ton Kilometers) increasing at 8.5 percent a year. Total cargo flown on scheduled services worldwide is expected to increase to 124 billion FTKs by the year 2000.

ICAO also predicts the Asia-Pacific share of freight traffic to increase to 40 percent by then, from 27 percent in 1988, surpassing Europe and North America.

The phenomenal growth of the air cargo industry most likely was inconceivable in 1972 when SIA started service as an independent carrier, handling 49 million …