Page 1

Sponsored by


Sponsored by


The weekly newspaper for air cargo professionals Volume: 18

Issue: 19

18 May 2015

Antonov AN-178 flies for customers

A

ntonov’s latest transport aircraft, the AN-178, made its first successful test flight on Thursday 7 May and the Ukrainian company announced on 8 May that Silk Way Airlines (not Silk Way West Airlines)is the launch customer and that it had ordered 10 for an undisclosed sum. The 7 May test flight lasted for one hour and was from Antonov’s own airfield near Gostomel (Ukraine). The twin engine aircraft was flown by two pilots, Andrii Spasibo and Sergii Troshyn, along with flight test engineer, Mykola Sydorenko. According to Antonov, the AN-178 has a capacity of 18 tonnes, with a pressurised cargo compartment, a digital glass cockpit and can use unpaved runways. Antonov also states that the AN−178 is equipped with a cargo ramp. The landing gear also has a kneeling system to reduce the angle when moving up on to the ramp. No performance data for the AN-178 is available beyond its

maximum altitude of 40,000 feet and comparisons with the Antonov AN-12, a four engine turboprop. The AN-178’s maximum speed is 121 knots (225 kilometres per hour) faster than the AN-12, but the fuel consumption is the same. Antonov is promoting the AN-178 as a replacement for the AN-12. Antonov emphasises the maintenance savings of two jet engines, compared to the AN-12’s four turboprops, and the fact that the AN-178 has a crew of three, half the number of the AN-12. Silk Way Airline’s president, Zaur Akhundov, says: “This aircraft is universal. It is very attractive by

technical characteristics. It is a very good replacement of the AN−12. We will actively use the AN−178 for cargoes transportation”. As well as the Silk Way order for 10 AN-178s, on 7 May an agreement was signed between Antonov and Beijing A−Star Science & Technology Company for joint serial production in China and purchase of two aircraft. Beijing A−Star Science & Technology director general, Wang Hongliang, says: “We think that the AN−178 is a very good aircraft and it has big perspectives at the Chinese market. We are going to purchase two aircraft, and then to

organise production of the AN−178 in China”. The week of the AN-178 test flight, Antonov also signed an agreement with Saudi Arabian firm, Taqnia Aeronautics, to, “develop and manufacture,” in Saudi Arabia the AN-132, described as a light cargo aircraft. Production of the AN-132 will be under a joint venture and Antonov engineers will train Saudi workers. The AN-132 will be a development of the existing Antonov AN-32, which is a twin turboprop. The AN-32 has a payload capacity of 6.7 tonnes, a 780 kilometre range, a 270 knots cruise speed and maximum altitude of 26,000 feet. Antonov, Taqnia and the King Abdulaziz City for science and technology, a government scientific body, will collaborate to give the AN-132 better payload, range and take-off performance. The AN-132 will use US navigation equipment and flight deck avionics. Saudi Arabia will own the intellectual property and the engineering designs for the aircraft.

IATA: Net and operating profits improving Airline financial performance is, “improving strongly,” at both an operating and net profit level, according to the International Air Transport Association (IATA). Last week, the association published its March-April Airlines Financial Monitor report, in which it sampled the initial first quarter (Q1) financial and operating performances of 25 airlines across the globe. The carriers sampled posted a combined operating profit of $5.7 billion and net post-tax profit of $3.9 billion in Q1. This compares with operating profit of $256 million and a net posttax profit of minus $1 billion in Q1 2014. IATA says: “This was driven by North American airlines, where consolidation and cost cutting has resulted in a significant boost to

profitability and lower fuel costs. Asia Pacific airlines have also improved on a year ago. Chinese carriers have recorded solid Q1 2015 profit results, owing to strong demand and improved operational efficiency.” The 12 North America airlines sampled had a net post-tax profit of $356 million. The six carriers in Asia Pacific had a net post-tax profit of $230 million. But, the two airlines sampled in Latin America had a net post-tax profit of minus $35 million and the five carriers in Europe had a net post-tax profit of minus $1.5 billion. The report says, worldwide, airline shares fell 1.5 per cent in April, which was in response to the strength of the US dollar, but are still up 23 per cent on a year ago. IATA says crude oil prices also rose 20 per cent in May, com-

pared to the March low of around $50 a barrel, which has impacted financial performance. As reported last week in Air Cargo Week, the monitor report says volumes rose steadily in March after a surge in February due to temporary factors, but still above the figures in January. IATA explains that in March, freight tonne kilometres (FTKs) rose by 1.6 per cent compared to March 2014. This was a significant drop on the 11.7 per cent rise in February this year. The association says capacity decreased in March, which was consistent with the moderation in FTK volumes. Available freight tonne kilometres increased 3.2 per cent on March 2014 compared to the 7.4 per cent rise in February.

outrunning the challenges turkish eyes expansion handling situations

optimism high as volumes grow

12

14

16

18

TIACA’s new leadership THE INTERNATIONAL AIR CARGO ASSOCIATION (TIACA) has appointed Delhi International Airport head of cargo, Sanjiv Edward, as its chairman, and Jan de Rijk Logistics chief executive officer, Sebastiaan Scholte, as vice chairman. Edward and Scholte will take over from chairman, Oliver Evans, and vice chairman, Enno Osinga. The chairman and vice chairman are elected by the TIACA board for two year terms. They are standing down at the TIACA annual general meeting in Miami (US) on 21 May. Evans is Swiss International Airlines chief cargo officer and Osinga is senior vice president for cargo at Amsterdam Airport Schiphol. Both are retiring in September. Edward says: “I am delighted to be taking up this position.” Scholte says: “TIACA has a vital role to play representing all sectors of the air cargo supply chain.” The next TIACA air cargo professional development workshop is to take place in Cologne (Germany) from 22 to 24 June 2015.


NEWSWEEK First quarter fall across Europe’s airports

A

irfreight volumes fell by 0.4 per cent across the European airport network in the first quarter (Q1) of 2015, compared to the same period in 2014, the Airports Council International (ACI) Europe reports. In Q1, the continent’s busiest cargo airports for volumes saw mixed results. Frankfurt Airport (see picture) handled 482,909 tonnes, a fall of 2.7 per cent. Paris Charles de Gaulle Airport handled 445,429 tonnes, a drop of 3.7 per cent. Amsterdam Airport Schiphol handled 385,842 tonnes, a decline of 1.8 per cent. Heathrow Airport saw a rise and handled 370,936 tonnes, an increase of 4.5 per cent on Q1 in 2014. ACI Europe director general, Olivier Jankovec, says: “The negative result for freight traffic has been brought on by a

mix of factors from still underlying economic weakness in the [European Union] to degrading conditions in Russia and slowing growth in emerging economies overseas.” The biggest increases in Q1 were at Brussels Airport, which grew volumes by 10.1 per cent to 112,978 tonnes, Dublin Airport by 21.5 per cent to 30,510 tonnes, Munich Airport by eight per cent to 74,480 tonnes and Barcelona-El Prat Airport by 8.2 per cent to 26,724 tonnes.

Russian airports continue to suffer as the economy struggles and the country is impacted by the economic sanctions placed on it by the European Union. Sheremetyevo International Airport handled 30,561 tonnes in Q1, a fall of 24.5 per cent compared to the first quarter of 2014. Cargo at Moscow Domodedovo Airport was down 21 per cent to 28,113 tonnes in Q1. St Petersburg-Pulkovo Airport handled 4,479 tonnes, a 22 per cent fall on Q1 2014. The airport trade body says in March, airfreight volumes fell by 1.8 per cent across the European airport network. This compares with the 2.9 per cent rise in February. In January, volumes fell by 0.5 per cent. ACI Europe says airports saw falls in March, compared to the same month in 2014. Frankfurt, Paris Charles de Gaulle, and Schiphol all saw declines.

UKIP win means Manston buyout MANSTON AIRPORT is expected to be subject to a compulsory purchase order (CPO), but no timetable for the purchase has been set, folllowing the Thursday 7 May Thanet District Council (TDC) election win for the United Kingdom Independence Party (UKIP). UKIP’s election campaign included a pledge to carry out a CPO, which the previous Labour controlled TDC had deferred last year. Manston Airport closed on 15 May 2014, despite local campaigns to keep it open and RiverOak Investment offering the owner, Manston Skyport, £7 million ($11 million). RiverOak subsequently made an offer to the TDC to be a CPO partner for the council. The Labour Thanet council deferred the CPO because it did not accept RiverOak’s offer. TDC leader elect, and leader of UKIP on the council, Chris Wells, tells Air Cargo Week (ACW): “I want Manston reopened as soon as possible. UKIP supports the concept of the CPO. I believe the judgement made by the previous [Labour TDC] administration was flawed.” However, Wells could not give ACW a timetable for a Manston CPO, but RiverOak tells ACW, it “remains committed,” to it. On 7 May, the UK held national parliamentary and local council elections. The Conservative party won the national election and its member of parliament, Sir Roger Gale, for Thanet North, where Manston is located, has supported a CPO; Gale was unavailable for comment.

Demands for UK runway decision LET BRITAIN FLY is urging the UK government to make a decision on runway expansion, as the Airports Commission carries out further consultation on air quality. The government appointed Airports Commission is carrying out the consultation until 29 May, analysing the air quality impact of expanding Heathrow Airport or increasing capacity at Gatwick Airport. Campaign group, Let Britain Fly sent a report to all newly elected members of parliament and members of the Government on 7 May, urging them to make a quick decision on airport expansion. The options for expansion are a third runway at Heathrow, lengthening an existing Heathrow runway, or a second one at Gatwick. Let Britain Fly director, Gavin Hayes, tells Air Cargo Week (ACW): “Given the urgency, the government must do all it can to ensure there is a parliamentary decision within a year of the publication of the Airports Commission’s final report and do everything in their power to get spades in the ground by 2020.” The group says Heathrow is full, Gatwick will be at capacity by 2020 and so will London’s other major airports by 2030. Hayes tells ACW: “Airports expansion should be the Government’s top infrastructure priority if we are to avoid an air capacity crunch.” The report, titled The Importance of Domestic Connectivity says expanding runway capacity in London will provide the rest of the UK with better links to the world. It cites Scottish salmon exports to China increasing from nothing to £64 million ($99 million) in five years to 2014 and that demand for the product to the Middle East is rising.

2

ACW 18 MAY 2015


NEWSWEEK

2018 goal for cargo facility at Lambert 32m euro terminal for Ethiopian

L

ambert St. Louis International Airport is to have a new cargo terminal by 2018 as Bi-National Gateway Terminal has taken a 20-year lease on a 49-acre site on the edge of one of the airport’s four runways, where it will build the handling facility. Bi-National Cargo Terminal plans to begin construction around July this year and expects to complete phase one within 30 months. The facility will consist of 500,000 square feet (46,451 square metres) of terminal, and one million square feet of cargo ramp and support infrastructure for airlines. Once completed, it will be equipped to handle perishables, live animals, high value shipments, express and general cargo. It will mainly focus on cargo to and from Mexico and Latin America. The airport says the aim of the facility will be to put an end to, “delays and congestion experienced by importers and exporters

between Mexico and the US”. The airport’s cargo development director, David Lancaster, says the terminal fits with the strategic plan and region’s focus on growth in the logistics sector. “This expansion will help us to attract new cargo services to the airport and expand upon the region’s logistics footprint.” Bi-National Cargo Terminal’s founder and president, Ricardo Nicolopulos, says the aim is to improve cargo flow between Mexico and the US, but ultimately to provide a link between the Americas and all major world markets. Nicolopulos explains: “In addition to developing the new terminal facilities, we are working closely with the Mexican authorities to introduce fast–track pre-clearance and security functions for exports from the US.” In March 2015, Lambert-St. Louis handled 4,550 tonnes of cargo. In February, it handled 4,300 tonnes, down on the January figure of 4,600 tonnes.

ETHIOPIAN AIRLINES is to invest 32 million euros ($36.5 million) in a cargo terminal at Addis Ababa Bole International Airport. The airline has commissioned German firm Unitechnik to build the facility, which will have separate refrigerated and dry storage areas. Cargo handled will include, dry products and fresh goods, such as meat, flowers, and salads. Once completed it will be the largest cargo terminal in Africa and able to handle around 600,000 tonnes of cargo a year. Ethiopian says it plans on further expanding the facility in the future so it can handle 1.2 million tonnes. Unitechnik designed and built the terminal that Ethiopian now uses at Addis Ababa, which can process 120,000 tonnes a year. The German company says it is building a facility that will, “meet the needs of the future,” and explains: “The combination

of automatic and manual systems ensures a high throughput with maximum availability.” The terminal will be divided into two different and separate temperature controlled zones designed to meet the storage requirements of different items. The zones will be largely identical in structure. The refrigerated zone will be able to handle temperature sensitive products ranging from two to 10 degrees Celsius. The other zone will be for dry goods. Both zones will consist of an automatic high-bay racking store for unit load devices (ULD). Around 1,000 ULD storage locations will be there. Unitechnik says the terminal is designed to handle ULDs up to 20 foot (six metres) in size. “Once a cargo aircraft lands, it must be unloaded as quickly as possible. For perishables, preservation of the cold chain is also a top priority,” Unitechnik explains.

LAN Cargo ULD win for CHEP CHEP AEROSPACE SOLUTIONS is to repair and maintain LAN Cargo’s unit load device (ULD) fleet of containers and pallets at Miami International Airport. The companies say the agreement will give LAN Cargo access to CHEP’s repair centres and resources, including repair management software, ACTIS, at LAN’s hub centres. ACTIS is available at 29 CHEP repair stations, and at subcontracted stations around the world. CHEP Aerospace Solutions president, Ludwig Bertsch says: “Our recent contract

wins with renowned airlines including Cathay Pacific, Singapore Airlines and Air France demonstrates the value of our asset management expertise and global repair network and we look forward to our new partnership with LAN Cargo.” LAN Cargo operational support senior manager, Orlando Gaete says: “As we work towards our corporate goals to improve operational efficiency and further reduce CO2 [carbon dioxide] emissions, repairing our damaged ULDs in the United States ... will help us increase cargo capacity and reduce fuel burn and carbon emissions.”

Jan de Rijk claims EBIT boost

JAN DE RIJK LOGISTICS has seen earnings before interest and tax rise to 5.7 million euros ($6.4 million) in 2014 compared to 3.3 million in 2013. The company reported revenue of 184 million euros. It says the improvement is because of cost cutting measures and diversifying its business. Jan de Rijk Logistics says it has increased its healthcare logistics business and its airfreight road feeder services. The logistics company, which has 600 vehicles, also says warehousing has seen strong growth. Jan de Rijk Logistics says: “The outlook for 2015 is moderately optimistic. The weak euro will mainly affect the import volumes. Furthermore there are still uncertainties in the euro area.” So far in 2015, Jan de Rijk Logistics has signed two road feeder service for airlines. In January, it signed a contract with Iberia,

4

ACW 18 MAY 2015

to extend its business dealings with the parent company, IAG and its cargo division, IAG Cargo. This deal had followed the IAG Cargo Connector service contract in Frankfurt (Germany) to transfer shipments of less than 300 kilogrammes, signed in October 2014. In April, Jan de Rijk Logistics signed a three year contract with Virgin Atlantic Cargo, extending the carrier’s delivery network to more than 50 airports across Europe. Cargo arriving in the UK with Virgin already goes to Amsterdam, Brussels, Frankfurt and Paris. Jan de Rijk says the three year deal will provide better services to Europe and Scandinavia. Jan de Rijk Logistics chief executive officer, Sebastiaan Scholte, has been appointed as vice chairman of The International Air Cargo Association (see page one). Delhi International Airport’s head of cargo, Sanjiv Edward is to be chairman.


NEWSWEEK

Rising volumes for Heathrow

H

eathrow Airport says that cargo volumes rose by 3.9 per cent in the first four months of 2015 and increased by 2.2 per cent in the month of April. The airport says it handled 493,816 tonnes of cargo in the first four months of the year. In April, it processed 122,879 tonnes. From May 2014 to April 2015, it has handled 1.5 million tonnes, up 5.6 per cent on the previous 12 months. Heathrow says that cargo rose despite overall UK exports remaining, “sluggish”. The

increase in April, it says, was fuelled by rises in cargo to emerging markets, such as 61.5 per cent to Mexico, 27.5 per cent to Turkey, 18.5 per cent to Brazil and 9.9 per cent to India. These four countries, along with North America, have boosted growth this year at Heathrow, as volumes to them all have increased significantly every month in 2015. April’s total was the second highest this year. In March, Heathrow handled 136,842 tonnes, up 2.9 per cent on the same month last year. In February, the airport handled 118,248 tonnes, up 7.7 per cent on the second month of 2014. In January, it processed 115,847 tonnes, up 3.3 per cent on the beginning of 2014. Heathrow will find out later this year if it is recommended for more runway capacity. The Airports Commission, set up by the UK government to examine runway capacity, will produce its final report later this year. The commission has already shortlisted Heathrow and Gatwick Airport.

April volumes fall 11% for Gatwick GATWICK AIRPORT saw an 11.2 per cent fall in airfreight volumes in April, compared with the same month in 2014. The airport handled 6,727 tonnes in the month, a decline on the 7,577 tonnes that was recorded last April. The moving annual total from May 2014 to April 2015 was 87,549 tonnes, a 6.1 per cent fall on the 93,282 tonnes that was posted from May 2013 to April 2014. The April figure was the second highest monthly total at Gatwick this year. In March, it handled 7,891 tonnes. In February, it handled 6,411 tonnes and in January it handled 5,796 tonnes. The only month this year that the airport has registered growth in volumes compared to the same four month period last year was in March, as January, February and April all saw falls. Last year, the total cargo volumes handled at Gatwick was down by eight per cent

to 88,737 tonnes, more than 8,000 below the 96,939 tonnes that was achieved in 2013. The UK government’s Airports Commission will produce its final report later this year on whether Gatwick or Heathrow Airport should have its runway capacity increased. Gatwick chief executive officer, Stewart Wingate, says: “Investment can only take us so far with our growth strategy. Now is the time for a final decision on extra runway capacity. Decades of debate must now turn to action. The fact remains, a new runway at Gatwick can be delivered quicker, cheaper, more simply.” Wingate says the first decision by the commission after the UK general election on 7 May to consult on air quality was, “highly significant,” as it shows the issue has now become, “fundamental to the choice that lies ahead”.

DOUBLE-DIGIT BUMP FOR FRAPORT AIRPORT owner Fraport has seen first quarter profits increase to 10.6 million euros ($11.8 million) year-on-year (YOY), despite cargo volumes falling by 1.6 per cent to 673,194 tonnes at Frankfurt Airport from January to April. The first quarter result is up from six million euros in the same period of 2014. Throughout 2014, profit rose to 85.7 million euros in the second quarter, peaking at 127.9 million in the third, before falling to 32.2 million in the final period. Revenue in the first quarter was 575.9 million euros, up from 519.7 million during the same period of 2014. Fraport says revenue was helped by consolidation of the subsidiaries, AMU Holdings and Aerodrom Ljubljana. Fraport executive board chairman, Stefan Schulte, says: “Our positive first quarter results were supported by ongoing growth in the retail segment and by strong performance from our international business.” For other airports in the Fraport group, two of them, which handle cargo, made a loss in the first quarter of 2015. Group companies, Ljubljana, which operates Ljubljana Joze Pucnik International Airport, made a loss of 600,000 euros, and the Hannover Group, which runs Hannover-Langenhagen Airport, lost four million euros. But, this was slightly down on 4.1 million euros in 2014. Lima Group company, which operates Jorge Chavez International Airport increased its profit by 52.2 per cent to 10.2 million euros in the first quarter.

B

Demand up 6% at Brussels

6

ACW 18 MAY 2015

russels Airport has seen cargo volumes increase by six per cent in April, the slowest year-on-year (YOY) growth seen in 2015. In April, Brussels Airport handled 41,105 tonnes of cargo, up from 38,771 tonnes in the same month of 2014. January saw YOY growth of 9.4 per cent to 37,869 tonnes, followed by the largest rise of the year, in February of 11.7 per cent to 38,463 tonnes. Cargo volumes were highest in March, at 43,785 tonnes, a YOY increase of 8.2 per cent. Year-to-date (YTD) cargo volumes rose by 8.7 per cent to 161,221 tonnes. Brussels Airport says: “Cargo volumes at Brussels Airport increased by six per cent in April, with the share of full freight in particular making strong headway, thanks to the arrival of various new companies in the last year.” Freighter tonnage was up by 15.9 per cent YOY to 12,196 tonnes. In January, freighter tonnage was up by 3.8 per cent to 10,786 tonnes, followed by a YOY increase of 19.2 per cent in February to 11,355 tonnes. Freighter tonnage was highest in March, at 13,323 tonnes, a YOY increase of 9.1 per cent. Freighter volumes were up YTD 11.7 per cent to 47,659 tonnes. Integrator traffic in April was up 3.4 per cent to 16,729 tonnes. In January, it grew by 18.3 per cent, YOY to 15,706 tonnes, followed by a 6.8 per cent rise in February to 15,550 tonnes, and an 11.4 per cent rise in March to 17,420 tonnes. Integrator traffic was up by 12 per cent YTD to 48,676 tonnes.


NEWSWEEK April volumes down 19% at Finnair Double-digit drop for AF-KL-MP

F

innair has seen cargo volumes decline by 15.1 per cent in the first four months of 2015, and volumes fall by 19.2 per cent in April alone. The carrier has handled 40,662 tonnes so far this year and processed 10,233 tonnes in April. The April figure compares poorly to March, when the airline handled 11,298 tonnes, up from 9,345 tonnes in January and 9,785 tonnes in February. Each month of 2015 has seen a large year-on-year (YOY) decline, with March down by 16 per cent on 2014. January down by 17.1 per cent YOY, while February declined by 6.8 per cent YOY. The biggest market for Finnair in April was Asia, which accounted for 6,705 tonnes, down 0.7 per cent. In the first four months of the year Asia saw 25,363 tonnes, up 1.7 per cent. The next biggest region in April was Europe with 1,840 tonnes, a fall of 14.1 per cent and for the

first four months of 2015 it made up 6,796, down 17.2 per cent. In April, North America totaled 480 tonnes, a 29.3 per cent drop, and for January to April, 2,660 tonnes, a fall of two per cent. Finnair says: “The cargo overall figures reflect a structural change from the comparison period, as Finnair withdrew from the use of leased Nordic Global Airlines freighter aircraft capacity in Asian traffic. In April, the cargo traffic consisted almost entirely of belly cargo on scheduled flights.” In April, Finnair’s cargo capacity in available freight tonne kilometres grew by 2.7 per cent and revenue tonne kilometres decreased by 4.2 per cent YOY. The cargo load factor was 55.1 per cent, four percentage points down on April 2014. For the first four months of the year, the cargo load factor is 52.2 per cent. This was a fall of 7.8 percentage points on the same period last year.

AIR FRANCE-KLM MARTINAIR (AF-KL-MP) has seen the biggest fall in revenue tonne kilometres (RTK) of 2015, dropping by 14.9 per cent in April to 703 million. Every month of 2015 has seen a year-onyear (YOY) fall, but April was the first double digit drop. January started off with an eight per cent YOY in RTK to 713 million. This was followed by a YOY fall of 8.2 per cent to 726 million in February and an 8.7 per cent YOY drop to 822 million in March. Year-to-date (YTD) the RTK has fallen by 10 per cent to 2.9 billion. Capacity has also been cut, but has not fallen as fast as RTK. Available tonne kilometres (ATK) in April fell by seven per cent to 1.1 billion, from 1.2 billion a year ago. Capacity has fallen in every month of 2015, but not as quickly as RTK. In January, ATK was down by 1.7 per cent to 1.2 billion, followed

by a YOY drop of 3.1 per cent in February to 1.1 billion. March saw the smallest capacity drop, of 0.9 per cent to 1.3 billion. From January to April, ATK was down by 3.1 per cent to 4.9 billion. The load factor fell by 4.6 percentage points from January to April to 60.2 per cent. April saw the largest YOY fall in the load factor, down by 5.5 percentage points to 59.3 per cent. The April result follows a YOY 3.8 percentage point drop to 56.6 per cent in January. The load factor was highest in February, at 62.8 per cent, but that was a YOY decline of 3.4 percentage points. The March load factor was down by 5.3 percentage points to 62.4 per cent. These results follow Air France-KLM’s first quarter financial figures, which saw cargo making a loss of 63 million euros ($71 million), up from 34 million euros in the same period of 2014.

RTK falls 11% in April for LATAM LATAM AIRLINES has seen revenue tonne kilometres (RTK) fall by 11.2 per cent, yearon-year (YOY), in April, which it blames on the continuing weak economic situation in Latin America. The airline’s RTK fell to 320 million in April, from 360 million in the same month of 2014. This continues the decline LATAM has seen throughout 2015. In January, RTK was down by 8.1 per cent YOY to 322 million, February declined by 9.7 per cent, YOY to 308 million and March dropped by 10.8 per cent to 381 million. Year-to-date (YTD), RTK has fallen by 10 per cent to 1.3 billion,

from 1.4 billion in the same period of 2014. The load factor fell by 6.7 percentage points to 54.4 per cent in April. This continues the trend of every month of 2015 seeing a YOY fall. January was down 2.9 percentage points to 52.7 per cent. February was down by 3.5 percentage points to 55.1 per cent. The load factor was highest in March, at 56.8 per cent, but that was a YOY decline of 5.1 percentage points. The YTD load factor was down 4.5 percentage points to 54.7 per cent. Available tonne kilometres was down by 0.2 per cent in April to 588 million, the smallest drop this year.

United up 12% since January

UNITED AIRLINES has seen cargo revenue ton miles (CRTM) increase by 12.2 per cent to 874.6 million in the first four months of 2015. In April, CRTM was down from the highs seen in February and March, but was above January. The CRTM was 212.5 million in April, up from January when it was 200.6 million, but down from February, when it was 221.5 million and March at 239.9 million. United Airlines saw year-on-year (YOY) growth of 9.3 per cent in April, up from the

8

ACW 18 MAY 2015

YOY growth in March of 8.1 per cent but down from January and February, which saw YOY increases of 11.2 per cent and 21.1 per cent, respectively. In the first quarter of 2015, United Airlines cargo revenue was up by 15.8 per cent to $242 million, from $209 million during the same period of 2014. Throughout 2014, cargo revenue rose in each quarter, increasing to $232 million between April and June, $237 million from July to September and $260 million in the final period. United Airlines made a profit of $508 million in the first quarter of 2015, compared to $609 million in the same period of 2014. In 2014 the airline made a profit of $789 million in the second quarter, and $924 million in the following period. Profit fell to $28 million in the fourth quarter.


NEWSWEEK $153m profit for Turkish Airlines

T

urkish Airlines recorded a net profit of $153 million in the first quarter (Q1) of 2015, compared to the Q1 net loss of $86 million in 2014. The airline saw sales revenue decrease by four per cent to $2.2 billion on Q1 last year, producing an adjusted operating loss of $18 million, outperforming the first quarter of 2014 by 77 per cent. Turkish Airlines explains: “Active risk management strategies and a balanced debt composition had an impact on these outstanding results.” The airline adds it has continued its, “sustainable growth,”

10

ACW 18 MAY 2015

despite the difficult operating conditions due to fuel prices and currency fluctuations. In 2014, Turkish Airlines increased sales revenue by 13 per cent compared to 2013, reaching $11 billion. Operating profit for the year was $638 million, more than doubling the previous year’s total. The airline’s net profit in 2014 was $845 million. Turkish Airlines took delivery of its 125th Boeing aircraft on Tuesday 12 May, when it received a Boeing 737-900 extended range. The carrier says it will take delivery of seven more Boeing 777 and five Boeing 737 in 2015. This year, the airline is targeting an increase

in its capacity by 15 per cent. It now operates 274 aircraft, which includes 62 widebody, 202 narrowbody, and 10 freighters. By the end of 2015, its fleet is set to reach 293, with 68 widebody, 214 narrowbody, and 11 freighters. Turkish Airlines announced on Wednesday 13 May a 12th route to the Americas, to Miami (US). It will start the service from 25 October and operate it seven times a week in both directions. The airline says it is planning to add two domestic and seven international destinations to its network in 2015, bringing the total number of routes to 273.

ST Aerospace sees profits drop 5% ST AEROSPACE has seen profits in the first quarter drop by 5.3 per cent to 57.3 million Singapore dollars ($43 million), because of falling revenue in the US. Aerospace revenue was down by 2.4 per cent 491 million Singapore dollars. US revenue fell by 25.6 per cent to 142.3 million Singapore dollars though all other areas were up, Asia remained the largest at 264.7 million Singapore dollars, up 3.1 per cent. Europe saw the largest increase, of 67.9 per cent to 38.6 million Singapore dollars and the rest of the world rose by 42.6 per cent to 45.2 million Singapore dollars. ST Engineering, which owns ST Aerospace, saw revenue fall by three per cent to 1.5 billion Singapore dollars. Commenting on the whole group, ST Engineering president and chief executive officer, Tan Pheng Hock says: “Barring unforeseen cir-

cumstances, the Group expects to achieve comparable revenue and profit before tax for 2015 when compared to 2014.” For ST Aerospace’s different business sectors, revenue from aircraft maintenance and modification fell by 13.7 per cent to 242.5 million Singapore dollars in the first quarter. Component, engine repair and overhaul revenue increased by 2.5 per cent to 150.2 million Singapore dollars. Engineering and material services saw revenue rise by 30.2 per cent to 98.1 million Singapore dollars. The aerospace division says in the first half of 2015 it will set up Boeing 787 maintenance capabilities and will start building a second hangar in Guangzhou (China). It says it won contracts worth 298 million Singapore dollars, for heavy maintenance, Boeing 737 landing gear repairs, 737 maintenance and multi crew pilot license training.

German expansion for IAG Cargo with Vueling help IAG CARgo is expanding its airfreight capacity in Germany by 18 per cent, compared to last year, through bellyhold space on additional routes to be operated by Vueling. The capacity will be introduced on narrowbody aircraft services from Barcelona to Düsseldorf, Hannover, Stuttgart, Berlin Tegel, Frankfurt, Munich and Hamburg. As a result, IAG’s network in Germany will cover 47 more direct flights from Barcelona into European cities. IAG says the capacity provides a boost to its EuroConnector service, which deliv-

ers loads of fewer than 300 kilogrammes within either 24 or 48 hours. The carrier says it, “aims to deliver its customers with a greater array of options for shipping goods in Europe.” In addition, it explains the Vueling flights will then be used to connect to Madrid and from there, to destinations in Latin America. IAG says it provides an important trade route for businesses wanting to connect to these high growth markets. The services will be operational by the end of May with the exception of Munich and Frankfurt, that will start later in 2015.


AIR CARGO EUROPE REVIEW Outrunning the challenges the industry becomes more digitised in its processes soon, as this improves both the transparency and quality of the process. Lufthansa Cargo, he explains, is putting digitisation and innovation at the top of its agenda in its growth strategy with the emphasis on quality for customers. “Change and innovation at Lufthansa Cargo we are really focused on as we are not a cheap operator and we cannot compete on price with everyone. The way to compete for us is to differentiate in quality and innovation,” he says. Earlier this year in January and February, Lufthansa Cargo personnel spoke publicly about the IT changes. The carrier’s director for Japan and Korea, Michael Stoermer, spoke to Air Cargo Week (ACW) in Japan. According to him, e-freight penetration for the German carrier was about 20 per cent last year and Lufthansa is aiming for 30 per cent in 2015. Lufthansa Cargo has been commissioning its IT system for electronic air waybills (e-AWB).

T

he air cargo industry is not moving fast enough on e-commerce, delegates were told at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Wednesday 6 May. At the trade show’s conference, Lufthansa Cargo board member for product and sales, Alexis von Hoensbroech, gave this view during a keynote interview called, Future of Air Cargo, where public relations firm Maresch’s owner, Bernd Maresch, asked him questions on a oneto-one basis, (von Hoensbroech pictured above left, with Maresch). Von Hoensbroech’s took

12

ACW 18 MAY 2015

over the role at Lufthansa five months ago, and says he was, “negatively surprised,” to see at what stage the industry was at, in regards to the use of technology and innovation for processes such as bookings, quotations and tracking of cargo. “It is obvious that the industry is not moving fast enough on e-commerce and in implementing technology. It is time for this industry to move on into the 21st Century,” he explains. Lufthansa is implementing a new IT system as part of its 2020 strategy to make the airline more competitive. Von Hoensbroech says it important that

World rankings

Figures from the International Air Transport Association monthly report in December 2014 show that Lufthansa Cargo ranks 12th worldwide for e-AWB take up. Stoermer told ACW: “Forwarders explain to me IT systems are adapted for e-freight. We are working very closely with them, there are growing e-freight shipments from these freight forwarders.” The German airline’s European and Africa vice president, Carsten Wirth, spoke at the Nordic Air Cargo Symposium in Stockholm, in late January, saying: “Twenty five [Lufthansa Cargo] stations worldwide are e-AWB ready. The IT sys-

tem rolled out a couple of days ago in Frankfurt and worked fine.” Von Hoensbroech feels the air cargo industry needs to have clear common goals and have a more coordinated strategy in the adoption of technology. However, he warns: “Innovation has to be developed with our customers. We have to satisfy our customers.” He also feels the industry’s supply chain processes have to be more user-friendly so that shippers want to do business with air cargo operators rather than sea freight or other transport modes.

The future

As for the months and years to come, in his view the industry has a promising future and, he says, forecasts by business analysts that it would shrink have been proven wrong. Von Hoensbroech says air cargo has a positive future due to globalisation and the types of products flown, but it must digitise and innovate at a faster pace, even though it may take decades for it to be adopted by all operators. “There are commodities that need air cargo, such as goods that are needed in a short space of time or perishables that cannot be moved using sea freight,” he adds. Von Hoensbroech concludes that Lufthansa Cargo sees a great future for not only bellyhold cargo, but also freighter aircraft too. The German carrier’s home base is Frankfurt Airport. Both carrier and airport are members of the Air Cargo Community Frankfurt, and here too the message is one of digitisation. Its a process Lufthansa is leaping ahead with and its experience could offer lessons to the rest of the industry about moving to a paperless operation.


AIR CARGO EUROPE REVIEW

Electronic future for all

O

perational efficiency at Lufthansa Cargo will be further improved by more use of electronic air waybills (eAWB) and construction of the Lufthansa Cargo Centre Neo (LCC

Neo). Both are essential to boosting operational performance, according to the carrier’s operations director, Karl Rupprecht, who spoke to Air Cargo Week (ACW) at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on 6 May. “The eAWB is improving operational performance and helps efficiency. We need more data and information,” he says. Rupprecht also explains to ACW he was “shocked” when it was announced in April the LCC Neo project was to be put back a few years. “We will now have to make a new approach to

further improve efficiency over the next few months. A new facility forms a major part of our strategy,” he says. Rupprecht says Lufthansa Cargo is also planning on introducing specialist services for certain cargo to improve operational efficiency, such as dangerous goods. “We have to have better services for dangerous goods and improve the quality from a handling perspective,” he tells ACW. As for how operations are performing at the moment, Rupprecht feels the five Boeing 777 Freighters have helped drive efficiency and he expects Lufthansa Cargo to take up options it is has on the aircraft in the future. The Boeing MD-11 fleet it has were also performing well, he adds. Rupprecht concludes: “We need cargo fast, reliable and at quality to move it (operational efficiency) forward.”

Turkish eyes expansion TURKISH CARGO is looking forward to additional US routes this year and further ahead, the opening of Istanbul’s as yet unnamed third airport. Speaking to Air Cargo Week (ACW) at the seventh Air Cargo Europe exhibition and conference in Munich (Germany), Turkish’s senior vice president for cargo, Ali Turk (see picture below), and the carrier’s marketing and sales’ cargo vice president, Halit Anlatan, outlined some of the plans. On 22 April, Turkish announced a new route to Chicago (US). Anlatan tells ACW that because of the, “euro, US dollar exchange rate most people want to export to the US, and we are aware of this.” Turkish has also announced that it will be flying to Chicago via Shannon Airport. The airport is being used as a stop over between Turkey and the US, where flight times are more than 10 hours, for capacity and range reasons. “Shannon is the nearest point to Istanbul and some times we are thinking of some cargo going to Europe.” The cargo for Europe would be trucked from Shannon (Ireland) to continental destinations. Turkish expanded its routes to include Lahore (Pakistan). Anlatan explains that the freight is not one way with Lahore and that his carrier expects traffic in return, as there is, “good potential,” for the sector. He adds that Lahore can link freight with Hanoi and other Far East destinations. As well as routes, at the beginning of the year Turkish started to operate its new 70,000 square metre cargo terminal at Istanbul Ataturk Airport. The terminal was formally opened with a ceremony in February. Turk says that the terminal is

14

ACW 18 MAY 2015

a, “huge relief for us, because previously we tried to generate yearly business of almost 700,000 tonnes of cargo with only 20,000 square metres, but with this new facility total capacity will be 1.2 to 1.3 million tonnes annually, and this capacity will cover our growth expectation to 2018.” What the new facility also means, according to Turk, is that Turkish Cargo, “will focus on different products in the market.” He explains that the new terminal has 39 different special cargo rooms, dangerous goods rooms, for valuables and temperature controlled rooms. Turk adds that the new capabilities mean the airline has more to sell. “We were very conservative, but right now we are more capable to be more proactive, to penetrate those [markets].” For Turk, it is all about optimising the product portfolio. The expansion is unlikely to stop as Turkey’s government, Turk explains, has the goal of $500 billion in exports annually by 2023, and today the country has $130 billion.


AIR CHARTER REPORT

Handling situations

T

he charter business is hit and miss, and can rely on events which cannot be planned for, such as earthquakes or port strikes. Events such as these have provided spikes of demand which charter brokers have been taking advantage of. The seaport strikes on the West coast of the US and humanitarian aid for the Kathmandu earthquake have caused increases in demand. Air Partner business development manager for freight, Stuart Smith, says: “The Kathmandu earthquake was not something you can predict, in the charter business it is a distress sell.” Air Charter Service (ACS) has also been providing charters to help out in Nepal. Group commercial director, Justin Lancaster, says: “One of the biggest problems is that the only international airport in Nepal is Kathmandu, which is a very small airport, with the cargo ramp only capable of handling two or three widebody aircraft at any one time.” Charters to Kathmandu have required the use of smaller aircraft such as the Airbus A320. Chapman Freeborn group cargo director, Reto Hunziker, says: “In Nepal, we stacked charters between the Middle East to Kathmandu on smaller aircraft, you need to be very flexible and fast.”

Good years

Both companies had good years in 2014. ACS saw revenue increase by 14 per cent to £286 million ($448 million) and profit doubled to £5 million. Air Partner saw freight revenue increase by 105 per cent to £24.1 million and it made a profit of £0.4 million compared to a loss of £0.1 million in 2013. For the company as a whole, revenue was down from £211.5 million in 2013 to £192.5 million in 2014. Despite this, profit was up from £1.9 million to £2.8 million. Hunziker says Chapman Freeborn had a good 2014 and this year is starting well. He tells ACW: “The commercial business was very good compared to 2013, we are very happy with the result. The first quarter of 2015 out of Asia into the USA was the main driver for growth.” Chartersphere managing director, Paul Bennett, says: “Like a lot of players in the market, for us, 2013 and 2014 both threw up their fair share of ups and downs. But, by the end of 2014 we were delighted to have recorded our most profitable month in our history.” He tells Air Cargo Week (ACW) 2015 has started off well and he is expecting a strong year. “The year got off to a very strong start and we are looking forward to, hopefully, more settled trading conditions over the summer and beyond as the global economy continues to grow.” There has been higher demand for charter flights because of the US West coast port congestion, which has now cleared, though it gave

16

ACW 18 MAY 2015

companies a boost. In March, ACS reported the strike had resulted in more than $25 million of business, with over 40 flights using large aircraft such as the Boeing 747 Freighter. The broker said it had to fly experts from its European offices to aid colleagues out in Hong Kong. Bennett says: “There continues to be reports of knock on effects from the West coast port strikes, which caused months of disruption to global supply chains. Although things are getting back to normal, labour relations remain unsettled at some of the biggest ports in California.” Away from disaster zones and seaport strikes, one area providing demand for charters is oil exploration. But, the fall in oil prices is proving to be both good and bad. On the one hand it reduces costs, on the other, it reduces demand for charters in the exploration business. Bennett says the Chinese government’s stimulus package and interest rate cut could help demand and mean oil prices recover. He tells ACW: “Analysts hope it might eventually lead to a long term recovery in the price of oil and kick start new phases of exploration and production, although it is still too early to tell. The North Sea looks to have been particularly badly hit by the historic lows and that could prove significant to whatever happens in Scotland.” For 2015, Smith says: “The freight business in the US had a really good start to the year, in North America, the automotive time critical cargo market has a lot of room to grow.” In other parts of the world, Hunziker says Chapman Freeborn has projects in Australia, but cannot say more until later this year. He says other regions have potential, such as Asia and Africa, adding: “Asia has big potential on the Pacific lane, the Middle East to Africa sees some potential. Latin America is a difficult market.” Bennett thinks Africa has seen a slowdown due to the oil price slump and Chinese industrialisation slowing, though Latin America is doing well. With airfreight volumes recovering, demand for cargo charters is increasing. But, events such as earthquakes cannot be predicted, so charter brokers have to show their worth by reacting as quickly and efficiently as possible.

bennett The year got off to a very strong start and we are looking forward to more settled trading condition


SPAIN/PORTUGAL REPORT

Optimism high as volumes grow

E

conomies in Spain and Portugal are slowly recovering, albeit at slow paces, but both countries are seeing positive trends in airfreight volumes. In Spain, demand is being driven by exports and operators saw growth in 2014 with more this year. The Airports Council International (ACI) Europe says the busiest by volumes, Adolfo Suárez Madrid–Barajas Airport, handled 90,788 tonnes in the first quarter (Q1) in 2015, a year-on-year (YOY) rise of 1.1 per cent on 2014. Barcelona-El Prat Airport handled 26,724 tonnes in Q1, a YOY increase of 8.2 per cent.

Spanish airport operator AENA’s head of cargo development, Tomas Vazquez Gallego, tells Air Cargo Week (ACW) that in 2014, cargo grew in Spain by 7.2 per cent to 685,000 tonnes. “Air cargo is working well in Spain, as exports are increasing strongly. In recent months the performance has been excellent. The weak euro also strengthens European exports and in particular for the Spanish. 2015 is going to be a good year as there are a number of companies that want to operate in Spain,” he explains. Gallego says exports and imports make up an equal 50 per cent of volumes and goods are mainly textile garments, pharmaceuticals and perishables such as fish and tomatoes. He sees further growth, despite the import market being slow. “There will be an increase in the number of frequencies in flights operated for bellyhold cargo. I also predict there will be more frequencies of freighters operating into Spain too.” He says, AENA is investing in cargo infrastructure, such as a 120,000 square metre facility at Madrid, and is developing cargo infrastructure at Zaragoza Airport, to help drive cargo volumes. Spain is important to IAG Cargo and its head of global key accounts, Camilo Garcia, explains to ACW the carrier’s volumes grew by six per cent in 2014, compared to 2013. He explains

Spain plays a key role in cargo growth, as Madrid is one of if its network hubs, where Iberia Cargo is based. “In Spain we have seen two good years of growth, and [the network] benefits from the hub we have there. Madrid is fundamental for IAG,” he says. Garcia says Madrid allows it to use the bellyhold network capacity it has, in particular, for routes to Latin America from Spain, to Peru, Brazil, Argentina and Chile. Cargo is then flown to the key regions of Asia and the Middle East and back to Europe. Iberia added a route from Madrid to Montevideo (Uruguay) this year, and later in 2015 will service Havana and Medellin and Cali, both in Colombia, Garcia explains. The key markets are fashion garments, perishables, automotive parts and pharma. He says Spain is seeing strong growth in pharma exports, which aligns with IAG’s strategy of focusing on pharma and specialist cargo. “We are seeing a very positive export market as Spain is very attractive to do business in. The strong US dollar has also benefitted the export market,” Garcia says. As for the future Garcia adds: “Our investment in infrastructure, network and products reflects the optimism we have that the market will continue to improve for the remainder of the year.” In Portugal, there has been a rise in airfreight volumes at the start of 2015 as the economy steadily improves. ACI Europe says the busiest by volumes was Lisbon Airport, which handled 22,737 tonnes in Q1, up 6.2 per cent on Q1 in 2014. Volumes at Porto Airport surged 14.4 per cent in the first quarter, compared to Q1 in 2014, reaching 7,572 tonnes.

Improving economics

Carriers such as Air France-KLM Cargo are benefitting from the improving economic environment and rising exports. The airline tells ACW that in 2014, it performed better than the market average and expanded at just over eight per cent compared to 2013. It operates two freighters to Porto Airport, which fly to Paris Charles de Gaulle Airport and Mexico City International Airport. “For the last first three months of 2015, we did our best to keep improving our market share. As from April, we only operate a direct freighter from Porto to Mexico when there are very specific shipments like horses for example,” the airline explains to ACW. Air France-KLM Cargo says in the first quarter of 2015 there has been a slight downward trend in weight and in revenue terms forwarders are looking for the lowest rates they can get. The airline adds: “Portugal, for airfreight, is really a concentrated market, the first 10 destinations represent more than 55 per cent of the weight and volume moved.” These include Luanda Airport, which represents 20 per cent of the market and New York, makes up five per cent of total airfreight volumes. The carrier says 57 per cent of airfreight it handled from April 2014 to March 2015 was from exports and 43 per cent was imports. Air France-KLM Cargo says the weak performance of the euro and continued economic struggles have impacted the Portuguese market: “The weak euro performance penalises imports, but should make exports more competitive. The bottleneck of Portugal is its difficulty to export and to find financial support to develop its capacity to export.” Garcia says Portugal benefits from Iberia’s network capacity in Madrid, being so close to Spain. Cargo is easily trucked by road. Portugal and Spain remain important growth target markets for IAG, Garcia says: “We see growth in airfreight volumes, but we want to achieve that in a controlled manner.“ As the economies of Spain and Portugal both slowly recover, their airfreight markets are growing and operators are looking to make the most of the opportunities they present.

GARCIA In Spain we have seen two good years of growth, and [the network] benefits from the hub we have there. Madrid is fundamental for IAG.

18

ACW 18 MAY 2015


TRADEFINDER Freight Forwarders

Airlines Turkey

Hong Kong

Italy

Freight Forwarders Iraq

Freight Forwarders Spain

United Arab Emirates

USA

USA

Industry Events

ACW 18 MAY 2015

19


ACW 18 May 15