Cargo Chat Edition 22

Contingencies,Eventualities and Sudden Shocks

In setting out service pricing, Management takes into account known factors and also makes allowances for likely challenges and threats. A longterm strategy is the highway to which the business returns after being tactically diverted alongside roads. So we are constantly vigilant to market and competitive forces including international and local regulation, employment codes, new security measures, actions by strategic allies like ACSA and the activities of the traffic authorities. What no strategist in our industry foresaw was a 35-44% rise in the price of aviation fuel which burst through the best-case/ worst-case barrier last year. It affected all airlines, as Comair testify in their annual results. Unlike petrol and diesel, jet fuel is not government price-moderated so the hike was an immediate shock. A cornerstone of our partnershipping approach is that we aspire to shield clients and their customers from fluctuating costs. The unexpected sharp spike in the aviation fuel price caught everyone off-guard. The cost implication - coupled with the rand weakness against the US$ - resulted in a perfect storm, too extreme simply to be absorbed. We are grateful loyal clients showed understanding