The weekly newspaper for air cargo professionals Volume: 20
Issue: 37
18 September 2017
Freight volumes in Europe continue upward trajectory
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he European air cargo market continues to power on with non-European Union (EU) gateways in particular seeing strong volume growth in July. In its latest monthly report, the Airports Council International (ACI) Europe reports volumes rose 10.5 per cent year-onyear (YOY) in the month at hubs across the region. Non-EU airports posted a YOY surge of 23.3 per cent while EU hubs were up YOY by 8.5 per cent in July. ACI says in Europe in the first seven months of 2017 from January to July, freight volumes at the region’s hubs were up YOY by nine per
cent with EU airports growing 7.8 per cent and non-EU gateways 15.8 per cent. Strong European performance has been driven by high demand on the Europe-Asia trade lane, although analysts forecast the strengthening of the Euro may begin to weigh upon the region’s exporters, and volumes may not see such a strong uplift in the rest of 2017. Earlier this month, the International Air Transport Association (IATA) said airlines in Europe posted a 12.1 per cent increase in freight demand for July while double-digit growth in international demand has now been recorded in nine out of the past eleven months.
IATA said the European market had a 23.5 per cent share of the global air cargo marketplace. In July, non-EU hubs leading the way were Istanbul Ataturk Airport (pictured) with 32.2 per cent YOY growth to 92,596 tonnes and Moscow Sheremetyevo International Airport saw a 35.5 per cent uplift to 19,384 tonnes. For the first seven months of this year, Istanbul’s volumes are up YOY by 17.4 per cent to 578,350 tonnes and Sheremetyevo’s 33.2 per cent to 122,281. Western Europe’s largest cargo hubs also posted strong surges in July and Heathrow Airport was the fastest growing with volumes increasing 15.1 per cent to 143,258 tonnes. Frankfurt Airport retained its place at the top and grew 4.8 per cent to 178,921 tonnes, followed by Paris Charles de Gaulle Airport with 4.3 per cent growth to 164,239 tonnes and Amsterdam Airport Schiphol in third with an increase of 6.5 per cent to 148,761 tonnes. Frankfurt’s volumes have grown 5.6 per cent in the first seven months of 2017 to 1.2 million, Paris Charles de Gaulle by 2.7 per cent to 1.1 million tonnes, Amsterdam by 8.4 per cent to one million tonnes and Heathrow by 10 per cent to 966,578 tonnes. Other European gateways are also growing strongly such as Brussels Airport and Budapest Airport (see page five).
the cargo carrier’s European hub in Luxembourg, but also link trade businesses in Asia and Middle East through Doha. Qatar Airways Group chief executive, Akbar Al Baker says: “Our business strategy is based on consultation and building productive relationships with local government and business leaders, to provide global airfreight connectivity that benefits the city, region and state. “In doing so, we support the regional econ-
omy, create jobs, help grow local businesses and increase export capacity. We look forward to connecting Pennsylvania to the rest of our global network.” Products expected to be transported into and out of Pittsburgh include heavy electronics, high-value manufactured goods and pharmaceuticals. Qatar Airways chief officer for cargo, Ulrich Ogiermann says the Americas is a significant market for the carrier. and through the Pittsburgh route it has taken its commitment to the business community, freight forwarders and shippers in Pennsylvania to a “new level”. Pittsburgh International Airport chief executive officer, Christina Cassotis says it is the first time the region has had a dedicated international air cargo service.
Qatar to become the 1st carrier to start Pittsburgh freighter Qatar Airways Cargo has become the first cargo carrier to launch a freighter service to Pittsburgh – bringing its Americas all-cargo route network to 13. The Qatari airline will start a twice-weekly Boeing 777 Freighter service on the route from 11 October. Pittsburgh is the fifth freighter destination in the Americas it has launched during 2017. Qatar Airways Cargo already moves over 100 tonnes of belly cargo each week on the daily widebody Airbus A350 passenger flights to Philadelphia, the largest city in Pennsylvania. The freighters to Pittsburgh will add an additional 200 tonnes of weekly capacity. The new Doha-Luxembourg-Atlanta-Pittsburgh-Luxembourg-Doha route will not only connect Pittsburgh with European markets via
PANALPINA COMPLETES ACQUISITION MULTI-PRONGED STRATEGY FOR THAI AIRWAYS FINNAIR EXCITED ABOUT COOL NORDIC HUB CORRADO ELECTED AS NEW COO AT ATSG
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Irma hits Miami hard CARGO activities of Miami International Airport (MIA) and other Florida gateways were hit hard by Hurricane Irma which pounded the area from 10-11 September as winds reached 135mph. MIA was closed on Monday, 11 September and cargo and passenger services were gradually increased from Tuesday, 12 September and were expected to be operating on a full schedule during the weekend. On Tuesday there were 158 arrivals and passenger 100 departures and 147 freighter flights, but 526 flights were cancelled. On Wednesday a 402 flights were cancelled – about 50 per cent of MIA’s normal schedule. Hurricane Irma caused the closer of the Federal Aviation Administration tower, which was closed and flights were being operated with pilot-to-pilot communication. Airlines were also heavily affected in Miami with United Airlines Cargo and American Airlines Cargo especially hit. FedEx Trade Networks also closed its Miami office during Irma while other industry operators were affected. Other airports hit were Fort Lauderdale, Palm Beach International, South West Florida International, Jacksonville International, Orlando Airport, Tampa International, Charleston International and Hartsfield-Jackson Atlanta.
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NEWSWEEK Turkmenistan looking to develop airfreight hub
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he International Civil Aviation Organization (ICAO) has backed plans by the Turkmenistan government to develop an airfreight and regional transit hub for Central Asian states in Ashgabat. The new Ashgabat International Airport, formerly known as Saparmurat Türkmenbaşy International Airport, is located 10 kilometres northwest of the Turkmenistan capital. In a meeting with the President of Turkmenistan, Gurbanguly Berdimuhamedov, ICAO Council President, Olumuyiwa Benard Aliu pledged support for the state’s goal to develop Ashgabat. He also highlighted a number of priorities it should pursue to effectively manage future air traffic growth while optimising the resulting socio-economic benefits. Aliu explains: “Turkmenistan is making good progress in support of its air transport sector today, and I have encouraged President Berdimuhamedov and his government to help ensure that its continuing progress proceeds in line with ICAO’s global provisions for safe, secure, efficient and environmentally sustainable air transport. “Effective ICAO compliance is the most important foundation any state can establish as they seek to improve local prosperity
through aviation’s unique global connectivity.” President Aliu’s also requested Turkmenistan work in partnership with ICAO to deliver technical assistance, training and capacity building to Central Asian states in accordance with the UN agency’s ongoing No Country Left Behind initiative, and in particular to Afghanistan. He also encouraged the state to establish suitable commitments and coordinate investments for its air transport infrastructure expansion and modernisation. Aliu also noted that the country could count on ICAO’s support towards the development of its new State Action Plan for air transport carbon emissions reduction to help sustainably guide the growth it is planning.
1st equine guests arrive
THE ARK at New York’s JFK International Airport has received its first equestrian guests after the Equine Import Quarantine facility opened its doors. Approved by the US Department of Agriculture top-class horses were welcomed over Labor Day weekend. Three Irish horses named Sandy, Jackson and Polly, were originally flying from Liege in Belgium on a CAL Cargo charter service that arrived on 1 September for their 3-day quarantine and were released on 4 September. The US shipper was Horse America, the originating shipper Peden Bloodstock and Brookledge was the ground transportation for all three horses. The ARK at JFK is located at New York’s JFK on 14.4 acres and is opening up in three phases in 2017 and is part of a $65 million investment by ARK Development. As part of Phase 1, The ARK Pet Oasis and Equine Export Center opened on 2 January, 2017. Phase 2 includes the Equine Import Quarantine (now open) and The ARK Aviary Quarantine, which is complete and awaiting final approval of the USDA. Phase 3 services will include a long-term pet boarding facility in late 2017.
Peru-US perishables service
ASPARAGUS and blueberries are set to be flown directly to New York and Miami in the US from Capitán FAP Carlos Martínez de Pinillos International Airport (TRU) in Peru. Peruvian publication La Republica, says they will be shipped on an Airbus A300 with 43 tonnes of capacity. TRU serves Peru’s third largest city, Trujillo, and is the main hub in northern Peru. The planned new perishables service has come about after a meeting between La Libertad’s Regional Government, through the Foreign Trade, Tourism and Handicrafts Management (Gercetur), with representatives of SUNAT and Customs, Strike Aviation, Senasa, Pacific Airlines, Chamber of Commerce, Group Pro Region, Ransa and Frio Aéreo. Airport operator, Aeropuertos de Perú will reportedly rent a 300 square metre space for the boarding area installation, as well as the operating company’s commitment. Gercetur reportedly now only needs to extend the airport certificate issued by the Ministry of Transport and Communications (MTC) so the company that will be in charge of the pre-shipment area installations has the permit to operate in the city.
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NEWS WEEK KN BatteryChain launched for battery powered vehicles
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uehne + Nagel has launched KN BatteryChain, the first integrated supply chain solution addressing the increasing global demand for lithium batteries driven by battery-powered vehicles. KN BatteryChain is fully compliant with international dangerous goods regulations and certified against ISO9001. It spans transportation by sea, air, rail and road from the manufacturer to the assembly line to warehousing for production logistics and aftermarkets as well as returns of used and faulty batteries from dealers. Kuehne + Nagel International chief executive officer, Dr Detlef Trefzger says: “KN BatteryChain demonstrates Kuehne + Nagel’s leading role in global automotive logistics and our capability to anticipate industry trends from which we derive industry-specific solutions in time.” “I am convinced that this innovative solution developed in close cooperation with our customers and partners will set industry standards for the supply chain along the entire battery life cycle and support our automotive customers and the aftermarket to grow their businesses.” Government regulations to meet CO2 emission targets and
increased customer demand encouraged by increased battery performance are driving up the worldwide production of battery electric vehicles, and the stock is expected to triple in five years, boosting demand for demand and production of lithium-ion batteries. Large-format lithium batteries used for electric vehicles require a high level of handling detail and expertise to comply with international dangerous goods regulations and restrictions. KN BatteryChain is specifically designed to offer safe, reliable and efficient mass transportation as well as storage of lithium cells and batteries.
WORLDNEWS
AIA Cargo has appointed Jaime Salguero as worldwide network & commercial vice president, reporting to the company chief executive officer, Mark Andrew. Salguero has 24 years of professional experience in the air cargo industry and significant corporate strategy and global business management experience involving cargo GSSA and airline management across the world. CARGOLUX has moved all of its cargo handling on flights to and from Dubai World Central (DWC) over to Emirates SkyCargo. The move follows the cooperation agreement that the Luxembourg-based carrier signed with Emirates in May 2017 at Air Cargo Europe. Cargo flights to Luxembourg are already handled by Cargolux’s partner Luxair Cargo. Emirates SkyCargo operates a weekly freighter service to Luxembourg Airport and Cargolux runs a thrice weekly freighter service to DWC.
X2 member moves fuselage
A member of the X2 Logistics Network has moved a fuselage for an Airbus A320 from the UK to Spain. Active Transport moved the wing section, which weighed six tonnes and had dimensions of 6.2 x 4.4 x 3.9 metres, from Kemble to Pamplona, a distance of 1,500 kilometres. The fuselage wing section was picked up from Air Salvage International at Cotswold Airport, in Gloucestershire, and the shipment was sent by ship via Portsmouth to Bilbao. The most time consuming part of the move was gathering necessary data to determine alignment, grading, and earthwork quantities for the move, so as not to have any issues during the move, which meant having to undertake route surveys at both ends to ensure the proper clearance with the local police and other local authorities in the UK and Spain.
WFS doubles handling operation at Boston Logan WORLDWIDE Flight Services (WFS) has more than doubled its cargo handling operation at Boston-Logan International Airport to cater for new contracts with Lufthansa, SAS and Swiss International Air Lines. WFS established its presence in Boston 12 years ago and had been operating from a 30,000 square foot facility on behalf of three major customers; American Airlines, British Airways and Iberia. Following the successful bid for the new Cargo Building 62 in the South Cargo Area, it has added a further 22,500 square feet of warehousing plus over 26,000 square feet of truck docking, equipment storage and office space. When seeking a tenant for the new building, Massachusetts Port Authority said the successful bidder needed to demonstrate their commitment to safe and efficient use of the facility and the ability to deliver timely customer service using advanced systems and technologies. WFS chief executive officer for the Americas, Michael Duffy says: “We are proud that Massachusetts Port Authority awarded us the lease to this impressive new cargo facility and to be welcoming three such prestigious airline customers to Cargo Building 62. “We have a well-established business in Boston already and this new investment reinforces our position as one of the largest cargo handlers at the airport.”
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NEWSWEEK
Panalpina completes acquisition of Kenya’s Air Connection
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analpina has completed the acquisition of Air Connection, a specialised forwarder of flowers and vegetables following approval by the Competition Authority of Kenya. Air Connection was founded in 1993 and has operations close to Jomo Kenyatta International Airport in Nairobi and in Mombasa, specialising in the export of flowers and vegetables from Kenya to destinations including the Netherlands and the UK. The move follows Panalpina’s acquisition of Airflo in 2016, and the perishable business of Air Connection will be merged with Panalpina Airflo.
Panalpina chief executive officer, Stefan Karlen (pictured) says: “The acquisition of Air Connection is another important step in building our Perishables Network. It further strengthens our existing global footprint and positions us as a clear market leader in perishables in Kenya.” He adds: “It will also allow us to develop our perishables presence in the neighbouring countries of Tanzania and Uganda, where we see a lot of potential.” Air Connection managing director and owner, Manjit Brar says: “Being part of a major logistics company which is focused on becoming the preferred global supplier of perishables logistics means we can now offer our customers end-to-end solutions and grow the perishables business out of Kenya.” Panalpina Kenya and Panalpina Airflo managing director, Conrad Archer adds: “By
combining Panalpina’s global network with Air Connection’s expertise in direct shipments, we can now offer our customers an unequalled service including direct shipments to over 150 destinations worldwide.” The combined business boosts Panalpina
Airflo’s existing cold storage capabilities to 4,200m2 dedicated to perishables and will handle around 70,000 tonnes of perishable airfreight a year, and construction has already begun to significantly increase cold storage for perishables, which will be completed in 2018.
CARGO volumes at Heathrow Airport continue to soar with the 13th consecutive record month in August. Volumes climbed 13 per cent year-on-year to 139,000 tonnes, with Latin America proving the fastest growing trading market with growth of 30 per cent. North America grew by 13 per cent to nearly 50,000 tonnes as American Airlines, United Airlines and Air Canada increased cargo, and East Asia was up 12 per cent with strong growth to China, Hong Kong and Singapore. On a year-to-date basis between January and August, cargo volumes grew 10.3 per cent passing 1.1 million tonnes, and were up 8.7 per cent to over 1.6 million tonnes on a
rolling 12-month basis. Heathrow Airport chief executive officer, John Holland-Kaye says: “Heathrow is firing on all cylinders and showing the world our country is open for business.” The airport welcomed an additional 700 Boeing 787 flights in August compared to last year, the fastest growing aircraft type at the hub.
Heathrow keeps breaking records
Gatwick expands long-haul network GATWICK Airport’s expanding long haul network has helped cargo volumes grow by 25.6 per cent in August to 8,035 tonnes. Gatwick Airport chief executive officer, Stewart Wingate says the hub will be adding more long-haul destinations with routes to Denver, Seattle, Austin, Chicago, Taipei and Singapore in the near future. He says: “We have worked closely with our airlines and ground handlers to help ensure that more planes depart on time and I am pleased with the improvement we’ve made during our busiest ever summer.” Wingate adds that Gatwick is ready and
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willing to build a second runway instead of or in addition to a third runway at Heathrow Airport, if the government approves it. Cargo volumes also grew 19.5 per cent to 88,183 tonnes on a moving annual total between September 2016 and August 2017.
NEWS WEEK
Near 20% tonnage increase at Budapest so far this year
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udapest Airport has handled a record 72,161 tonnes of cargo from January and July, up 19.6 per cent on the same period of 2016. The hub serving the Hungarian capital processed 49,420 tonnes of air cargo in the first half of 2017, an increase of 16.7 per cent, and 22,741 tonnes of trucked cargo, up 26.5 per cent from the previous year. Cargo grew 16 per cent in July to 10,729 tonnes, of which 7,432 tonnes was airfreight, up 15.5 per cent, and 3,297 tonnes was trucked freight, an increase of 17.2 per cent. Budapest Airport cargo manager, Jozsef Kossuth says inbound cargo made up 47 per cent of volumes and outbound 53 per cent. He says: “The high export volumes are testament to the continued industrial development of the Central European region. All segments of our community, including freighters, belly cargo, and integrators enjoyed volume increase in this period compared to 2016, which was already a record cargo year at Budapest Airport.” The Central European hub grew thanks to new belly cargo flows from long-haul passenger routes, from operators including Emirates and Air China, in addition to volume increases from freighter partners including Qatar Airways Cargo, Cargolux and Turkish Cargo. Budapest Airport property and cargo director, Rene Dro-
ese explains that the gateway benefits from an extensive road network to 20 European Union (EU) countries and non-EU countries within trucking distance. He says: “Together with the airline development team at Budapest, we have leveraged a strong belly cargo network, with Air Canada having already commenced seasonal flights to Budapest, and American Airlines scheduled to launch a daily service from
Philadelphia, USA, to Budapest in the summer of 2018.” LOT Polish Airlines will launch six direct flights per week from Budapest to New York and Chicago in May 2018. Budapest is transforming cargo facilities as part of the BUD:2020 Development Programme, which will include two state-of-the-art express facilities, and a dedicated freight centre called Cargo City.
Noise issue still stunting Brussels growth
MAG gateways on the rise in August
TRAFFIC at Brussels Airport rose 1.8 per cent in August, but full freighter volumes continue to fall as companies depart due to stricter noise standards at the Belgian gateway. Total tonnage was 40,558 tonnes in August, with the freighter segment registering a 0.9 per cent decline to 29,245 tonnes. Freighter volumes were down by 18 per cent to 11,526 tonnes, with stricter noise standards causing several companies to leave, though integrator traffic increased by 14.6 per cent to 17,719 tonnes.
MANCHESTER Airports Group (MAG) operated hubs are continuing to boost the role they play in international trade with growth across all three airports in August. Manchester Airport saw the strongest growth with a 22.7 per cent increase in August to 12,027 tonnes, with East Midlands Airport up 11.3 per cent to 29,229 tonnes and Stansted Airport (above) by 1.4 per cent to 20,508 tonnes. MAG corporate affairs director, Tim Hawkins says: “As Heathrow and Gatwick fill up, Manchester and Stansted still have substantial capacity for growth. MAG is investing in
Exports grew 15 per cent due to the strength of Belgium’s economy, particularly the pharmaceutical sector, while the fall in freighters meant imports were down 20 per cent, and truck transport increased 20 per cent. Belly traffic increased 9.4 per cent to 11,313 tonnes as Brussels welcomed new long-haul services including Brussels Airlines flights to Toronto and Mumbai, Delta Air Lines restarting Atlanta flights, RwandAir starting services, and growth from Hainan Airlines, Emirates and Ethiopian Airlines. Year-to-date volumes in the first eight months are up 12.9 per cent to 350,065 tonnes with all sector posting double-digit growth. Freighter cargo increased 16.8 per cent to 112,472 tonnes, integrator by 10.8 per cent to 147,118 tonnes and belly by 11.7 per cent to 90,475 tonnes.
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new facilities and infrastructure so that its airports can play an even bigger role over the next 10 to 15 years before a new runway in the South East.” He adds: “The figures for August demonstrate that demand for flying to a wider range of global destinations has never been greater and MAG airports will play a critical role in this. “It’s now critical that Government focuses on developing an aviation strategy for the next 10-15 years that helps airports like ours create a prosperous and outward facing Britain.”
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THAILAND
Multi-pronged strategy for Thai as it looks to develop business
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hai Airways (TG) International is pressing on with multi-pronged plans to further develop its cargo operations, senior officials have said. The strategy starts from the ground up, Thai’s managing director of cargo and mail department, Dumrungchai Sawangcharoen (pictured) told reporters on the inaugural flight of Thai’s new Airbus A350-XWB from Toulouse. The new aircraft will not bring much extra capacity to TG – very much in keeping with Thai’s overall strategy. Among the upgrades planned is one to acquire Good Distribution Practices (GDP) certification for pharmaceuticals which it expects to have by the end of 2018, Sawangcharoen said. The hope is this will strengthen both TG’s postion as carrier of value-added products, but also Bangkok Suvarnabhumi Airport’s (SBIA) as a hub.
This links to improvements currently being put in place at its three cargo terminals at Suvarnabhumi, Chiang Mai and Phuket. “We are focusing on HR such as training and improving working space environment in our warehouse at SBIA,” said Sawangcharoen. Line management, he added later, will make Suvarnbhumi, a more efficient hub. Another development it follows up on is more, and better, use of information technology. Efficient revenue management, via web-based tech is a key part of this. Thai introduced a new IT system including a mobile app back in 2015 which gives it “more message earlier” as Sawangcharoen put it. This has helped with the bottom line, but not fundamentally recast Thai as a cargo carrier – something that is unlikely to change in the future as well.
“We have been profitable, coming back from 1.3 billion baht ($39 million) loss in 2014 by the end of 2016 we record 2.8 billion baht of profit. The revenue contribution from cargo department is approximately 13 per cent of the corporation’s total revenue,” Sawangcharoen said. This has been done by Thai moving only a small amount more of cargo as the carrier was helped by jet fuel prices. This year for the January to July period it has already shipped 253,842 tonnes and is expecting a year-end total of between 435,000 tonnes and 450,000 tonnes, or growth of three to four per cent. In turn this is consistent with the previous year when Thai moved 419,477 tonnes, approximately three per cent more than in 2015.
Consistent payloads
Also consistent is what it moves. This ranges from machinery, household goods, industrial equipment and products, perishables to special cargoes such as live animals, dangerous goods and valuables. This is similar to its competitors as explained by Etihad Cargo senior vice president, David Kerr (pictured right): “We predominantly transport general cargo comprising electronics, household appliances, automotive parts, and garments and shoes; perishables; valuable cargo; live animals and airmail.” What Thai is also seeing and here the consistency is with other countries as well as its own track record is some “slight changes on cargo commodities,” as Sawangcharoen put it. As manufacturing has shifted out of Thailand into other countries in upper Southeast Asia, Vietnam being a good example, but Cambodia as well deserves a mention, Thai has noticed “the import of machineries and industrial equipment
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has decreased. The export of garments and fabrics has also shrunk,” said Sawangcharoen. Offsetting this, Thai like every other carrier on the planet is noticing “IT goods and supplies, including e-commerce items have been growing especially on the import sector.” Again this has been confirmed by other carriers’ with Etihad’s Kerr reporting it was “seeing shifts in consumer patterns towards e-commerce. We are currently developing plans for the huge growth expected in this area.” Etihad also has identified two other opportunities which fit with Thai’s plans. “We see development opportunities in the perishables sector and are focusing on developing this business with local partners and multinationals,” said Kerr. “We have also seen growth in electronics and automotive segments, particularly into the European Union.” None of this is likely to force Thai’s plans to either offload its two freighters, “We are parking Boeing 747-400BCFs for economic reasons,” Sawangcharoen said, or step up new acquisitions. Thai has 78 widebody aircraft and will have 81 by the end of the year. According to other officials within the carrier, this is enough. There are no plans to expand the roster of destinations, which costs time and money, said one senior official. Thai buys new aircraft to replace its old fleet as passengers, unlike cargo, complain about interiors and entertainment and the carrier needs to think more on issues such as fuel efficiency and emissions.
THAILAND
Infrastructure to be expanded across Thailand
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hailand’s logistics infrastructure is being upgraded and this is an area Thai Airways International is focusing on and is a key part of its strategy to expand and improve its cargo operations. The mothership of what is being planned in Thailand is the Eastern Economic Corridor (EEC). Basically, the North East Gulf of Thailand is to become a new industrial hub, but one of high-tech value adding industries which need air cargo support. This will be provided by the development of the airport at U-Tapao. Thai is aware of the opportunity and the work it involves and again the approach it is taking is multi-pronged with some infrastructural and some strategic initiatives already underway. “We are going to be building up the small warehouse….The first one is going to be one third of the Suvarnabhumi warehouse,” Thai’s managing director of cargo and mail department, Dumrungchai Sawangcharoen said. There are two things to note here. U-Tapao as a facility is owned
by the Royal Thai Navy whose ownership, might, even under a military government complicate things. There is also some feeling U-Tapao and the entire EEC is complicated by the government pushing it through under Section 44 – its special powers legislation. Within Thai two specific problems have arisen. The govern-
ment wants a study on what Thai plans for U-Tapao and fast. The government would like it finished by the end of this year and implemented next, one Thai official, who asked not to be named, said. “I’m not sure we can do it,” added the official. Another part of this is Thailand’s complicated Public Private Partnership process, the step after, which the official said was “quite hard” and “long”. That said by one official others are looking at Thai needs to do to tap the market there well might be although Thai acknowledge they won’t win it by right. “We have to build up the demand at U-Tapao,” acknowledged Sawangcharoen. On the cards is not a package of incentives but a strategic alliance with other freight companies with overseas carriers very much to the fore. This is very much fresh territory for Thai. “We have to look at freighter airlines that want to fly into U-Tapao and carry goods from the EEC,” said Sawangcharoen who added that Chinese firms were very much on the top of the list. “We have talked to Lazada –but its very early stages,” he added.
Logistics training ramped up
ONE of the major headaches for logistics in Thailand, with air cargo being no exception, the lack of human resources, is to be tackled with the setting up of a formal programme at Suan Sunandha Rajaphat University, a senior industry source has said. “The challenge is how to build our own people,” Thai International Freight Forwarders Association president, Kettivit Sittisoontornwong said. “We have just made an agreement with one of our universities in Thailand to create our own curriculum that will help our association to find a new way of building human resources (so we have a steady supply),” Sittisoontornwong added. Suan Sunandha Rahaphat University was chosen because they already have a Logistics Institute “within their umbrella,”’ he explained. And it has for a long time worked in the field helping companies. What the two sides are proposing is a collaboration between the university and a number of Thailand’s leading private sector companies such as Charoen Pokphand Foods PCL, tool and home improvement chain, Power Buy as well as mall group Central Retail and a clump of catering firms. “We will co-design the programme with the university so that when students finish they can work in the company right away,” Sittisoontornwong said. Each class will start at 40 students and may be as large as 60. They will be needed. Thailand, whilst its economy and especially its exports are weak at the moment, there is a limited labour pool and on top of several decades of growth that labour, or at least some parts of it, are a bit picky. Simply put, air cargo like other transportation sectors needs not only more trained staff, but staff with more idea about what they are letting themselves in for. Another part of the problem is the role of Bangkok - Thailand’s political and commercial centre, which has a virtual monopoly on all air cargo being moved in the country. For some potential recruits the cost of Bangkok as well as the challenge such a move can be to someone from outside, remember this is for new, young entrants into the industry is a discouragement that the association hopes the course will tackle. Not only do the companies pay the student, as well as the universities something like 150,000 baht ($4,500) for the course, but they are encouraged by the association to give the students a travel and meal allowance. Students are expected to work for the company for three days each work and study for two so those allowances help. “Our challenge is not just to find people to work in Bangkok,” Sittisoontornwong added.
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FINLAND
Finavia profits grow to €21m in first half of 2017
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inland’s airport operator, Finavia made a first half profit of €21.4 million ($25.7 million) compared to €12.7 million in the same period of 2016. Revenue increased from €186.7 million to €189.3 million in the first half and operating profit excluding non-recurring items was up from €23.9 million to €29.6 million. Finavia chief executive officer, Kari Savolainen says separating the air navigation business into a separate company curbed revenue growth at 1.4 per cent but comparable revenue increased 9.1 per cent due to positive traffic development and the success of commercial services at Helsinki Airport (pictured). Savolainen says: “The first half-year has been very successful for Finavia Group due to strong growth in air traffic and purposeful develop-
ment work. Access to Finland from different parts of the world is at top level thanks to persistent sales and cooperation with Finnair and other airlines in route development. “18 new routes from Finland to different locations around the world were launched during the first half of the year.” He also says: “Despite the largest investment in the history of the company in the terminal expansion at Helsinki Airport, we have been able to keep our costs in check. We have carried out the construction contracts in schedule and within the budget, supported also by Finavia’s good financial standing.” Finland’s Ministry of Transport and Communication was responsible for ownership of Finavia until the Prime Minister’s Office took control on 1 April 2017.
Maki chosen as new Finavia CEO
KIMMO Maki (pictured) has been picked to take over as chief executive officer (CEO) of Finavia, taking over from Kari Savolainen. Maki will start the new role at Finland’s airport operator on 1 January 2018. He has extensive experience of the service and logistics industry, having served as CEO of the Port of Helsinki for the past six years, and prior to that working at Steveco and Stockmann, among other companies. Finavia chairman of the board of directors, Harri Sailas says: “Kimmo Mäki has strong experience of leading a service business and
the successful implementation of largescale investments. Finavia’s result is at a top level, air traffic is growing strongly and Helsinki Airport is going through the greatest investment programme in the company’s history.” “I believe that with Mäki leading us, we can develop Finavia into an even more customer-oriented company and ensure the company’s profitable growth also in the future.” Maki adds: “It’s great to get the chance to work in a company that is significant for the competitiveness and accessibility of Finland. I can’t wait to start developing the services of Finavia and the airports. “A reliable and customer-oriented operating method, responsible approach and competent personnel will be the cornerstones of Finavia’s success also in the years to come.” Savolainen will continue as an adviser to the management until his retirement next year.
Renovation work completed at Oulu Airport OULU Airport has reopened for regular services following the renovation of its runway. The work was completed on 31 August and regular traffic restarted on 1 September. The renovation included resurfacing the runway, taxiways and the apron. The lighting system serving the runway and taxiways was modernised, and the taxiways at the ends of the runway were upgraded for wide-bodied aircraft. Oulu is the second busiest airport in Fin-
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land after Helsinki Airport. It is about six miles south of the city of Oulu in the Northern Ostrobothnia region, which is the most populous city in Northern Finland.
FINLAND
Finnair excited about prospects of COOL Nordic hub
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innair Cargo has benefitted from the upturn in airfreight volumes, and is very excited about the prospects of its COOL Nordic Cargo Hub at Helsinki Airport when it becomes fully operational in January 2018. The perishable area of the €80 million ($95.6 million) terminal will open for fish shipments in October and the facility will be fully operational in January 2018. The terminal contains a number of systems to ensure cargo is handled correctly and exactly as the shipper requested. Finnair Cargo head of global sales, Fredrik Wildtgrube (pictured) says: “As we are creating the most modern air cargo terminal concept in the world, we are entering a new territory with enormous potential and thus need to take time to streamline our processes and ways of working to fit the new environment.”
market development in general.” Wildtgrube believes airfreight is a key element to speed up a company’s supply chain, and reaching customer demand much more quickly is becoming more and more important in a market where product lifecycles are getting shorter and customer demand is harder to predict.
Faster supply chains
New ecosystem
The cargo management system, SkyChain will be connected to the warehouse automation systems and the integration of these systems will provide the airline with a new ecosystem that will enable proactive planning and steering of cargo flows and resources. Wildtgrube says: “It will also enable active monitoring and immediate actions, if needed e.g.
in the terminal’s dedicated temperature controlled areas featuring ambient monitoring sensors connected to SkyChain - to prevent any deviations from shipper’s instructions.” The warehouse automation and cargo management system will provide improved capabilities in response to customers’ demand for supply chain transparency. The air cargo market has been picking up globally, and this has also been noticeable in Scandinavia though overcapacity remains an
issue. The business model at Finnair Cargo is based on its connections between Europe and Asia via Helsinki, and demand has been strong on these routes. Wildtgrube says: “Our performance has been fuelled by the growing air cargo demand between Europe and Asia. This is both ways but especially certain lanes from the megacities in Asia have been developing exceptionally well and our experience supports also the data and analysis IATA has published on the air cargo
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Wildtgrube says: “With our expansive route network and new cargo handling capabilities we believe there is a lot of potential to be discovered in terms of improving the supply chains of companies in Finland and elsewhere, and closer collaboration between all stakeholders in the transport chain would enable us together to design faster supply chains that can become real and tangible competitive advantages for our customers.” Air cargo customers expect a fast and reliable service that preserves product integrity, and Wildtgrube explains: “We think that continuous process development combined with investments in modern facilities and new technology bringing improved monitoring and reporting capabilities will be essential in future to provide great customer experience for our customers both in Finland and abroad.” Finnair has also reported cargo revenue improving 7.8 per cent in the first half of 2017 to €88.6 million. The Finnair Group also returned to profit, with a result of €58.8 million compared to a loss of €16.1 million in the same period of 2016.
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SECURITY
Global events increasing threat to air cargo security
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he threat to air cargo security has never been higher and investments in the latest screening technology are a top priority for industry operators. On 15 July, two terrorists were foiled in Australia and police allege components for an improvised explosive device (IED) were sent to Sydney Airport in an airfreight shipment from Turkey via Isis operatives in Syria. HAE Group director, Neville Karai believes the threat has increased due to the world events that have taken place, but is sure that industry has responded: “Air cargo has taken its obligations seriously and we have also seen a very positive support role played by the regulator, particularly in the UK.” Karai says security of the supply chain is any cargo handlers’ main objective and HAE Aircraft and Cargo Handling is no different, noting it carries out constant training and focuses on new forms of threat detection. He does though feel support from regulators is key to everyone operating together. Karai feels the general security of facilities and processing of cargo has increased across its own global network over the last year based on the global threat.
To combat any threat, HAE carries out its own internal audit and does not wait for the regulator to check how it operates. Karai says it has a dedicated security management team that reports into its board on security, who are constantly making recommendations and checking training records of the staff. The company also does many of its own unannounced visits to “test the robustness” of security processes.
Even more though has to be done and he feels there has to be an even more alignment between compliance and new industry traffic flows such as e-commerce. “In the UK we are lucky that our regulator is open to dialogue and consultation. “The pressure will always be on cut-offs of acceptance to processing and exports. But cargo must be checked and never compromised,” Karai adds. He says HAE has had examples and processes of where attempts have been made to compromise security through density of banned items, but it is pleased this was picked up through standard operating procedures and the material was then handed over to the authorities. Operators now have new innovative technology to help counter any security threats and Karai says as well as the use of X-Ray, HAE is increasing the use of explosive trace detection (ETD) and other methods to enhance security and speed up processes in the supply chain. He adds: “We are seeing increased use of ETD in our warehouses and its associated protocols.” The global threat to air cargo security looks like it is here to stay, but the industry looks for now to be winning the fight.
Screening investments rising
THE global air cargo security and screening systems market is set to reach more than $1.6 billion by 2024, according to Transparency Market Research, as use of the technology continues to rise to combat an ever growing threat. In 2015, the research company says the global market was valued at more than $900 million and in terms of value, the market is expected to post a compound annual growth rate (CAGR) rise of 6.1 per cent to $1.6 billion by 2024. The report says vendors of screening systems are offering advanced technology with innovative designs, which is driving demand for air cargo screening systems globally. Transparency Market Research says the increasing threat of terror-related activities has urged airport authorities to adopt explosive detection technology and this is expected to drive growth of the explosive detection application segment. Currently, air cargo security and screening systems are primarily used for detecting explosives and narcotics. Airport authorities worldwide have implemented advanced security systems to detect explosives in cargo and to trace narcotics in large and small pallets of cargo. The explosive detection segment of the global air cargo security and screening systems market is the biggest sub-segment and was valued at more than $350 million in 2015 and is expected to reach nearly $700 million by 2024. The metal and contra band detection segment was valued at more than $300 million in 2015 and is expected to reach nearly $700 million by 2024 end. The narcotics detection technology segment is expected to witness significant growth.
All cargo shipments into US from Turkey to be screened THE US Transportation Security Administration (TSA) announced on Thursday 7 September that all air cargo payloads coming to the US from Turkey must now be screened. According to reports by international publishers and broadcasters such as CNN, the move has been made to address and enhance emerging threats to cargo and raise the level of global aviation security. Before the new guidance came into effect, screening of all air cargo shipments from Turkey to the US had been carried out on a voluntary basis at airports.
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Industry Events
aircargoweek.com 11 18 Sept 2017.indd 1
ACW 18 september 2017
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NEWSWEEK DHL adds seafood flights from Oslo to Seoul and Shanghai
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slo Airport is continuing to gain new routes with DHL launching two flights a week to Seoul and Shanghai. The Boeing 747-400 Freighter service was launched on 8 September, and will operate on Tuesdays and Fridays. The hub serving the capital of Norway has seen cargo growth of 32 per cent this year, and has been working with DHL Global Forwarding to establish new flights to cater for demand for Norwegian seafood and provide links to the different regions of Norway. Avinor director of cargo, Martin Langaas says close cooperation with DHL has resulted in several new routes such as Lakselv and Seoul,
increasing the competitiveness of Norwegian seafood export and strengthening the position of Oslo as the leading freighter hub in the Nordics.” Norway’s minister of transport and communications, Ketil Solvik-Olsen says the popularity of Norwegian seafood means it is essential to have good international transport links. He says: “The market has been trying to find a way to transport seafood from northern Norway to Asia for some time. “Earlier this year DHL opened a cargo route from Lakselv to Oslo. A new service from Oslo to Seoul and Shanghai will make it possible to transport fresh seafood all the way from Lakselv to Asia in a fast and efficient manner.
Corrado elected as new COO at ATSG
AIR Transport Services Group (ATSG) has elected Richard Corrado (pictured) as chief operating officer. He has served as chief commercial officer since 2010, and president of its Cargo Aircraft Management (CAM) and Airborne Global Solutions (AGS) subsidiaries. He will continue to report to ATSG president and chief executive officer, Joe Hete in his new role, while maintaining his AGS responsibilities on an interim basis.
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Hete credits Corrado with helping ATSG develop its capabilities in midsize freighter leasing and operating services for rapidly growing regional express networks including Amazon Prime Air, which supports 20 leased Boeing 767s, crew and maintenance and logistics. Hete says: “During his more than seven years with ATSG, our externally leased portfolio of Boeing 767 freighters has more than tripled to 47 today, including the 767s we now lease to, and operate for, Amazon and DHL in the US. I am confident Rich will be just as effective in the future running our... airline, maintenance and service businesses as I focus more on strategic opportunities and overall performance.”
“The service is starting out as a series of charter flights, which will be the basis for scheduled flights if the service is economically viable.” DHL Global Forwarding senior vice president and global head of network carrier management,
Henk Venema says DHL’s aim is to be the leading seafood logistics provider in Norway. DHL Global Forwarding head of airfreight in Norway, Trond Orjan Olsen adds it will also up the Lakselv route from one to two flights a week.
Belly traffic drives Frankfurt surge FRANFKURT Airport’s cargo volumes continue to grow with an increase of 5.4 per cent in August to 181,102 tonnes. Airport operator, Fraport says the growth was helped by a more favourable distribution of week days compared to August 2016, with one fewer weak Monday and one additional higher volume Thursday. It says development of air cargo traffic is in line with the economic situation, with international trade increasing as exports improve. Fraport says: “The impressive upswing of the industrial sector in the euro zone continues in August due to a higher domestic demand and booming exports. At Frankfurt Airport one sees these dynamics in form of
increasing inbound and outbound amounts of cargo.” In August, belly cargo increased 10.3 per cent and by 2.3 per cent on freighters. Cargo on passenger aircraft to the two biggest air cargo markets, USA and China reported double-digit growth, with freighter traffic via Moscow remaining the main growth generator. Frankfurt’s cargo and mail volumes were up 4.8 per cent between January and August to 1.4 million tonnes.