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together with Liege Airport Authorities

Time:2018-02-10 11:18Underwear site information Click:

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Offer Gilboa went from running a successful textile business to owning Israel’s CAL Cargo Airlines (CAL) because he liked the cut of its cloth.

Gilboa, trained as a lawyer and with an MBA, began his career in the rag trade supplying clothing for some of the world’s largest retailers.

“I was managing director of a UK operation in the 1990s before I went back to Israel,” he says. “I was trying to get away from the clothing industry and for a while I was with a construction company.”

His escape was temporary and Gilboa was soon head-hunted by another clothing company in Israel: “Whereas the first company was focused on underwear and socks, the new one produced suits, so you can say that I moved up in life, from socks to suits.”

Gilboa headed this company for another ten years as chief executive, making it a global player with manufacturing bases in China, Egypt and Jordan, selling high quality wares to the US and UK.

A new opportunity

He was part of the 2005 initial public offering, and after selling his shares 
in 2010 was looking for a new opportunity. This came when a friend mentioned that CAL was up for sale, but needed some nifty management footwork to keep flying.

“I saw that CAL is a great company, with a great culture, and that it was at a critical point because it needed to rejuvenate its fleet.”

CAL had two vintage B747-200s. One was grounded and would not fly again, while the other had to undergo a heavy maintenance check within four weeks of Gilboa’s arrival but did not have a slot with a maintenance, repair and overhaul (MRO) provider to carry out the job.

Says Gilboa: “The first challenge was to find an MRO to refurbish that plane and to find another aircraft to support the needs of the company, which we did.”

There was a further administrative obstacle to overcome: CAL was not allowed to use a foreign MRO and there was no slot available with an Israeli company.

Gilboa managed to convince the Israeli authorities that China had great MROs who could carry out the work.

His experience of setting up businesses in China had given him an appreciation of the nation’s engineering prowess.

The best MROs

“In 2010, China had two or three of the best MROs but they were sneered at. I was a veteran of the textile industry and had opened a factory producing high-level suits with Italian fabrics made in China. I had been in China since 2004 and I had a very high appreciation of their abilities.

“Sure enough we found one in China that could challenge any MRO in the world. Don’t forget, these were new operations with state-of-the-art facilities.”

In September 2010 the freighter flew out on the last day before it could be grounded just as CAL management sourced another B747-200F. 

“We relied on those two aircraft while trying to develop an alternative growth strategy for the group,” says Gilboa.

Having stabilised the company, whose European operation has been hubbed out of Liege in Belgium since 1996, Gilboa started working out a strategy to establish a unique selling proposition (USP). This, he says, was  based on “what are we good at and what are the opportunities that will make a sustainable business?

“We understood that we needed to grow, as Israel is a very limited market.”

Gilboa quotes the Red Queen from Alice in Wonderland to sum up the dilemma: “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

Prices were under pressure and CAL needed to sell its services outside of Israel. It had one flight a week to the US but in 2011 signed a block space agreement with an integrator to buy half the space on a daily B747-400F out of Liege to New York.

Having established a US presence, Gilboa looked closely at the Liege Air Cargo Handling Services (LACHS), which is owned by the CAL Group. “It looked strange to me, as to why does an airline own a ground handler?” he says.

Gilboa concluded that it gave CAL “a great opportunity” to pull together the strategy of the airline and the handling company as one. 

“It gave us a seamless vertical operation that is talking the same logistics language and giving the service level we required.

“That became one of the pillars of our group strategy: to be the specialist in special freight. Non-standard cargo is our standard. LACHS became a very important part of this approach because if we were to really give excellent service to verticals they would need seamless operations from start to finish.

“Our strategy was to focus on the verticals and to give, where possible, a door-to-door solution, to be the FedEx of complicated cargo.”

Those verticals include pharma goods, energy charters and equine transport. The latter premium sector saw LACHS, together with Liege Airport Authorities, set up the Horse Inn for valuable bloodstock cargo three years ago.

Year by year, CAL added more destinations, starting with New York, then Larnaca, as a stopover on the way to Israel, then Oslo for the salmon trade to Israel. Atlanta was added two years ago and more recently Mexico City.

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