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Nordisk Aviation sees salvation in air industry services
(Oct. 26, 2001) Hydro's wholly-owned aluminium air cargo pallet and container supplier Nordisk Aviation Products (NAP) is relying on its service side to offset the economic impact of the airline industry's dramatic downturn since the September 11 attack on America.
 AIR TURBULENCE: Jose Gonzalez Divasson, Nordisk Aviation Products vice president for Europe, Africa and the Middle East, left, and Roger Beard, NAP's regional quality manager for the same international territories, expect the current air industry malaise to last a year. |
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"The market is as bad as it can possibly get. In fact it's utter turmoil," says Jose Gonzalez Divasson, NAP vice president for Europe, Africa and Middle East. "Next year will be tough for anyone supplying the airline industry, but we should be able to make a relatively soft landing due to our strength in the service part of the business."
Industry analysts predict new equipment purchases by international airlines will drop 50 percent next year. Most airlines have already shelved purchasing budgets until further notice and are cancelling existing orders. More airplanes have been grounded, meaning fewer containers in use. Some airlines are starting to sell unused containers and the resulting second-hand market will pressure new sales. Other airlines have simply gone bust.
NAP is on the "premium side of the new equipment supply market, the side that will suffer most," remarks Divasson. He anticipates "price wars ahead."
He expects the downturn to last just one year. Meanwhile, the company's service side is kicking in like reliable landing gear.
"The airlines won't buy new equipment, but they'll need to repair existing gear. As airlines downsize, they're outsourcing more and more of their needed internal activities like cargo container maintenance and repair, container ownership, fleet management and container logistics," he explains. "Somebody still has to do it."
Despite industry projections for global airline services to drop 20 percent next year, NAP recently landed a three-year £400,000 cargo pallet net repair contract with British Airways, in a joint venture with Dutch company Cargo Network, for all the airline's units at London Heathrow Airport. The joint venture has also captured a global net repair contract with US carrier United Airlines. Other deals are in the wings, but not yet formalized, Divasson indicates.
"Air cargo has not experienced the same downturn as passenger traffic," he says. Subsequently, NAP's service sector keeps getting new inquiries and more business. "There's serious shakedown underway and we don't exactly know how the pieces will fall, but if you're clever and fast enough, you might get the pieces you need."
Founded in Norway in 1972, Nordisk Aviation Products is a wholly-owned subsidiary of Hydro under the concern's Light Metals business area. NAP has developed, manufactured and marketed aluminium air freight pallets since 1972 and aluminium air freight containers since 1978.
NAP presently provides numerous air cargo products and services worldwide. It has 17 of its own locations and another 14 partner affiliate sites in Europe, North and South America, the Middle East, Asia and Pacific region. Regional headquarters are located in Holmestrand, Norway; London, Hong Kong and Los Angeles.
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