“In the UAE, we do not only donate money, we can also donate systems and ideas. This is the spirit that we got from Sheikh Zayed. He built this in us.”
Responsible Business - Abu Dhabi
‘Care By Air’, an innovative and a very unique Corporate Social Responsibility platform in the region, seeks to unite the UAE’s aviation sector to pool its resources and become truly responsive to help those in most need. Aimed at championing a system hailed from the UAE, founding President and CEO FathiHilalBuhazza shares with Responsible Business how the newly-established not-for profit organization maximizes efficiency to save millions of dollars for humanitarian aid and at the same time, run a sustainable business.
UAE’s air cargo operator Maximus Air Cargo gave birth to ‘Care By Air’ in 2008 at a time when the company has made an agreement with UAE Red Crescent Society to provide transport of its aid to countries in humanitarian crisis. At that time, Mr.Buhazza has taken over the leadership at Maximus and the idea was developed to make use of its facilities for the benefit of humanitarian missions.
Logistics as a business is all about maximizing efficiency. But for Buhazza, for it to become a sustainable business that gives back to society, the transport of goods for humanitarian purposes must not be seen as an opportunity to make profit, but as an opportunity to lend a helping hand.
“We have two objectives here. The first objective is to make ‘Care By Air’ the aviation CSR model for airlines. The second objective is to highlight the level of contribution that the United Arab Emirates gives to the world.In the UAE, we do not only donate money, we can also donate systems and ideas. This is the spirit that we got from Sheikh Zayed. He built this in us,” he explained.
Through ‘Care by Air’, Buhazza is proposing a business model that centers on increasing efficient operations and collaborating with other logistics operators in order to achieve one main goal: make the transport of humanitarian aid more sustainable and reduce the cost of humanitarian aid logistics so that resources can be concentrated on the actual aid and those who need it most.
From various data gathered by the organization, it cited that 80% of the United Nations humanitarian budget is spent on logistics alone, while on the other hand, IATA has reported that air cargo operations in the world fly with 30% empty spaces. With these figures, ‘Care by Air’ saw the opportunity how to fill these gaps.
The Math of Flying ‘At a Cost’
To show what it means to fly ‘at a cost’, Buhazza shares one of the several humanitarian flight missions. Maximus Air Cargo has arranged the ‘Care by Air’ system in partnership with three other founding members, which include national airline Etihad Airways, Abu Dhabi Airports Company and Dubai-based logistics provider Aramex.
In a mission to transport medical goods from the UAE Ministry of Health to Nepal, about four million single-use syringes, weighing around 30 tonnes, Maximus implemented the ‘Care by Air’ ‘at cost’ business model, which reduced the normal delivery cost from about US$200,000 down to $8,500. The mission managed to deliver the goods in a total of eight flights.
Buhazza accounted, “What we are saying here is, ok you got 30% of your cargo capability is empty and you are going to fly it anyway. So we are saying use it ‘at cost’. So when you use it at cost, it is good for the airline because it increases margin of a profit, at the same time it is good for humanitarian agencies.”
How it is achieved, Buhazza then elaborated on the essence of partnership to bring down the cost. The first partner was Etihad, which has a daily flight from Abu Dhabi to Nepal, and committed to take the goods ‘at cost’ from its normal charge of $US4.25 per kilo to US$.25 per kilo. Another founding partner, Aramex had to build and rebuild pallets in order to place the goods to the belly of the aircraft and transport them from Dubai to Abu Dhabi airport.
Another partner, the Abu Dhabi Airports Company contributed to bringing down the cost by waiving off the charges for weighing, handling and moving the goods to the airport. As the cost has come down to US$8,500, Maximus decided to pay for the whole amount, which then made the whole mission free of charge.
Buhazza mentioned that there are several faces with which ‘Care by Air’ could maximize the aviation sector to achieve such endeavours. One major player that could make a big difference is the participation of commercial airlines with scheduled services and established destinations. Buhazza also sees the significance of the participation of all the airports in the UAE, which ‘Care by Air’ is hoping into making them as partners.
‘Care by Air’ is keen to continue developing the system and Buhazza remains on top of looking for ways to save more cost for each and every mission. “Another area which we have not tapped yet which is also going to be significant would be the over flight clearance. When an aircraft goes from here to Yemen, for example, it overflies Oman, Saudi Arabia, and it lands there. Every time, the aircraft flies the country underneath, they charge money. We need to develop a system where we need to identify a humanitarian flight and they should not be charged, if it’s a dedicated freighter.”
“The difference of ‘Care by Air’ from other initiatives is that it gathers people. We are not talking about Maximus. We are talking about all the companies that contribute to the cost cycle of the aircraft, from A-Z. One thing we need to care for in this initiative to bloom is that it has to have transparency because if there is a small doubt of what we carry, then it’s gone.”
The organization is also looking into partnerships that would initiate an expansion to other modes of transport that would spur a Care by Sea or Care by Road momentum. However, Buhazza is cautious about companies and organizations that would join the organization. The team at ‘Care by Air’ is currently building on a criteria and qualifications that would set standards and code of ethics to bring about a transparent and accountable business agenda.
A ‘Sustainable Business’ Model
According to Buhazza, in the aviation sector, efficiency is judged by cost per hour. And the cost per hour is the result of dividing all overhead cost by the number of hours flown.
“So if I fly at cost, that means my hours will increase and when it comes to my cost per hour then my cost per hour will be smaller. It is at cost and it is sustainable because it targets efficiency. So on the ground, I will fly it ‘at cost’. So I will increase my hours per year, which will improve my cost per hour. There is a line, it should not exceed over 10% of my overall activities. I am not losing, but I am not making money.”
He further emphasized that the essence of the initiative is to promote the idea to do business and at the same time help others. “Every commercial company has a goal, and every commercial company has a role, and the role is to help society, and the society will help the company achieve its goal. It’s a cycle. This is the type of mindset we have to put among the youngsters.”
Meanwhile, Buhazza views how naturally sustainability and the environment is taken care of by the system. While there is no monitoring mechanisms yet in place, he sees that Care by Air’s goal is definitely to benefit the environment, reduce cost, reduce flights, which will result in reducing accumulated carbon footprint. ‘Care by Air’, if expanded, is one of the best thing to happen to the environment. Because now, there is an aircraft to move humanitarian aid and pollute the environment by transporting the aid. If we can use the existing system, the 30% empty space, we can reduce the overall cost.”
“Something like ‘Care by Air’, you can imagine and that’s the vision for the future, became a known brand and a known logo, like you see with the Red Cross or the Red Crescent, if such a plane comes with a cargo labeled as ‘‘Care by Air’’ to any airport in the world, this would be known as humanitarian, so it will be given priority and it will be given ‘at cost’, and it will be put in an airline that is going, and connecting. For me, humanitarian is help, to help an individual in need, whether they need shelter, food, education material, if there is a help, that’s the balance. There is no limit,” he concluded.
Source: Responsible Business Magazine