Sony books Russian cargo jets to airlift PS2s
By Bloomberg News
January 25, 2001, 1:40 p.m. PT
Ruslan, a mythic warrior, sounds like he belongs in a computer game. For Sony, a giant jet by that name might prove to be its savior.
To stay ahead of its rivals and deliver millions of PlayStation 2 game consoles to eager consumers in Europe and North America, the company has enlisted Ruslan cargo planes, the world's biggest commercial air freighters, operated by Russia's Volga-Dnepr Airlines.
Sony shipped 2.5 million of the consoles in 2000 after its U.S. and European debuts in the fall. To reach Sony's own goal, that leaves 3.5 million units to be delivered by the end of March. Plans by Nintendo and Microsoft to release rival machines later this year are also raising the pressure on Sony.
"They'll do whatever they need to do to get the product to market," said Scott Foster, a senior analyst at Lehman Brothers Japan.
A boxed and packaged PlayStation 2 console weighs about 9 pounds. To get 3.5 million units, or 14,000 metric tons, to overseas distributors by air, Sony would need to charter the equivalent of 140 Boeing 747 cargo jets.
In December, Sony used "two or three" of Volga-Dnepr's Soviet era jets to haul game machines, with each flight carrying up to 90 tons, the Ulyanovsk, Russia-based company said. The airline has 10 Antonov An-124 Ruslan jets, which can carry up to 120 tons of cargo, compared with about 100 tons for a 747.
Closely held Volga-Dnepr declined to say how much it charged Sony per shipment or how many additional flights the Tokyo-based company has chartered.
Sony has accelerated production of the PlayStation 2, which is built only at its domestic plants, to overcome delays caused by a shortage of advanced graphic chips. The company has promised to deliver a total of 6 million units to Europe and the United States by the end of March.
"The shipment won't be easy, but we want to get the product to the market as quickly as possible at the best price," Sony spokesman Koichiro Katsurayama said.
Merrill Lynch Japan analyst Hitoshi Kuriyama estimates that shipping by air costs Sony as much as $13 more per PlayStation 2 compared with transporting by ship.
Lower-cost shipments by sea may be limited because routes to the United States take two weeks and those to Europe almost a month.
"Up to now, we have mostly shipped them by air," said Katsurayama, who declined to elaborate.
Copyright 2001, Bloomberg L.P. All rights reserved.
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