ACW 15th August 22

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WORLD AIRPORTS .COM ACW Digital is sponsored by FREIGHTERS.COM

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The weekly newspaper for air cargo professionals No. 1,193

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15 August 2022

How to transport cats and dogs to safety during crises

Atlas Air Worldwide to be acquired by investor group for $5.2 Billion

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INSIDE IAG CargO BRINGS BOB HOME

IAG Cargo, the cargo division of International Airlines Group, has safely transported award-winning racing pigeon Bob back home after he took a 4,000-mile detour... page 2

Sydney’s new global...

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tlas Air Worldwide, a leading global provider of outsourced aircraft and aviation operating services, has entered into a definitive agreement to be acquired by an investor group led by funds managed by affiliates of Apollo together with investment affiliates of J.F. Lehman & Company and Hill City Capital in an all-cash transaction with an enterprise valuation of approximately $5.2 billion. Under the terms of the agreement, Atlas Air Worldwide shareholders will receive $102.50 per share in cash, representing a 57% premium to the 30-day volume-weighted average trading price per share of Atlas Air Worldwide common stock as of July 29, 2022. Upon completion of the transaction, Atlas Air Worldwide will become a privately held company and shares of Atlas Air Worldwide common stock will no longer be listed on the Nasdaq stock exchange. Atlas Air Worldwide will continue operating under the Atlas Air Worldwide name, be led by John Dietrich and the current executive team and maintain its global

AUSTRALIA’S best airport terminal is coming to life with work continuing on what will be the gateway welcoming traffic from across the world to Sydney’s west... presence. “We believe this transaction will deliver immediate and certain value to Atlas Air Worldwide shareholders at a substantial premium, and we are pleased to reach this agreement with the Consortium,” said Duncan McNabb, chairman of the Atlas Air Worldwide Board of Directors. “The Board’s decision to unanimously approve this transaction follows a careful evaluation and thoughtful review of value creation opportunities for shareholders. We believe this transaction is the right next step to maximise value for our shareholders and the best path forward to accelerate the company’s ability to execute its strategic plan and achieve its long-term growth objectives.” “Over our 30-year history, Atlas Air Worldwide has grown to become a global leader in airfreight, delivering high-quality services to our diverse roster of customers around the world,” said John Dietrich, president and CEO of Atlas Air Worldwide. “Following the closing of the sale to the Consortium, we will seek to leverage their resources, relationships and industry expertise to build on

our strong financial and operational performance. Their investment in our company demonstrates their confidence in our people and our culture as we serve the growing needs of the global supply chain.” “Atlas Air Worldwide is a market leader that continues to set higher standards for excellence within the airfreight industry,” said Apollo Partners Antoine Munfakh and Jason Scheir and J.F. Lehman & Company partner Alex Harman on behalf of the Consortium. “With the strong market demand and long-term secular tailwinds for global air cargo services, Atlas is poised to capitalise on many opportunities for continued growth as a fund portfolio company of Apollo, J.F. Lehman and Hill City. We look forward to leveraging our resources, capital and experience in the sector to support the talented Atlas team, alongside our partners in this exciting next phase.” Atlas Air Worldwide Holdings recorded second-quarter 2022 net income of $88.3 million, compared with net income of $107.1 million in the second quarter of 2021.

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Kuehne+Nagel debutS...

FOR the first time, the Kuehne+Nagel group has been included in the Fortune Global 500 list, which is compiled annually... page 4

Shippers make...

SINCE the beginning of trade, there has been a need to move goods between producers and those who buy them. Where once it was a camel, river boat or donkey... page 6

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NEWS

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IAG Cargo brings Bob home

IAG Cargo, the cargo division of International Airlines Group, has safely transported award-winning racing pigeon Bob back home after he took a 4,000-mile detour to America. In June, Bob took off from Guernsey, he was due to make the 10-hour trip home to Gateshead; however, somehow the pigeon found himself stranded in Alabama after taking a wrong turn. Luckily for Bob, and his owner Alan Todd, the Monroe County Alabama Animal Shelter took Bob in and were able to identify who the pigeon belonged to via his microchip. Over the last month, IAG Cargo and British Airways have worked together to reunite Alan and Bob – and have flown them both back home to the UK. Whilst IAG Cargo has been transporting animals ranging from dogs, to lions, to turtles since 1950 – this was the first pet pigeon that the cargo carrier has ever moved. When transporting animals, it

is important to check the healthcare requirements for pre-entry and re-entry. For example, Bob has been required to quarantine for a minimum of 30 days, a fee that has been waived by Heathrow animal Reception Centre (HARC). Valerie Hadley, products manager at IAG Cargo said: “We are glad to have been able to reunite Bob with his owner Alan. It was an amazing and unique experience to fly out to the US to support Bob’s move back to the UK. I’ve helped fly many animals during my time at IAG Cargo. However participating in a rescue mission for a lost and subsequently found racing pigeon is a first. Although this move wasn’t one we had initially planned for, IAG Cargo’s global network meant we had the capacity and routes available to bring Bob safely back home.” Alan Todd, Bob’s owner commented: “I am delighted to be able to have Bob back with me in Gateshead and that wouldn’t have been possible without the help of IAG Cargo. The cargo staff haven been supportive throughout and have guided me through the process on how they will bring Bob back home.” Bob was unavailable for comment but according to owner Alan “He will be treated like royalty. I will give him a nice hot bath and make sure he has his favourite seed in.” With more than 70 years’ experience in transporting live animals, IAG Cargo has a last on, first off aircraft ethos for animal transit, with a dedicated team of trained staff and animal handlers to ensure adequate care and attention.

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DDC launches DGR transport for university initiative

DRONE Delivery Canada (DDC) has announced the successful approval and implementation of dangerous goods transportation for the University of British Columbia (UBC) Faculty of Medicine’s ‘Remote Communities Drone Transport Initiative’ (DTI). The DTI is currently utilising the bompany’s drone logistics solution to enable a defined two-way delivery flight route, using the Sparrow drone and its DroneSpot™ takeoff and landing zones, to trans-

tions certificates. “This is another significant achievement by the organisation to be the only Remotely Piloted Aircraft System (“RPAS”) operator that has been issued a TDG Certificate. We’re very happy to further support our customer, UBC, with the flexibility of transporting dangerous goods via our drone solutions. This makes DDC the only RPAS operator in Canada to conduct beyond visual line of sight and dangerous goods operations simultaneously,” says

port a variety of cargo for the benefit of the Stellat’en First Nation and the Village of Fraser Lake, located in Central Northern British Columbia, Canada. All operations will be conducted in accordance with the Transportation of Dangerous Goods (TDG) Directorate approvals, the Canadian Aviation Regulations and Transport Canada special flight opera-

Steve Magirias, CEO of DDC. “We want to thank Transport Canada for their continued support to the industry. We continue to demonstrate our leadership and innovative approach by offering the flexibility of transporting any types of goods, including medication and lab specimens classified as dangerous goods, for our customers.”

Jettainer and B2L give a second life to retired air cargo containers JETTAINER and B2L are breathing new life into old unit load devices (ULDs). The robust materials used in ULDs are being turned into fashionable shoulder bags and keychains that are now available for purchase.The bags and keychains are made out of old ULDs that are no longer suitable for aviation, so they have to be taken out of service. These items are manufactured, for instance, from original air cargo container tarpaulins and belts, making them incredibly robust.B2L and Jettainer have previously worked as project partners and are ramping up their cooperation with this new three-year contract.“We have already upcycled more than 145 tonness

of material from aviation since our company was founded 11 years ago. We look forward to expanding our portfolio and giving a second life to Jettainer’s retired ULDs. Along with the bags, we have already come up with lots of other ideas for creative and sustainable items,” Kerstin Rank, B2L’s Managing Director, noted. “The conscientious and careful use of resources is an integral element of our corporate philosophy. So we are really excited that our containers can keep travelling around the globe, even once they are retired, thanks to upcycling,” added Thorsten Riekert, Chief Sales Officer at Jettainer.

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NEWS

Horizon Aircraft enters into binding agreement with Astro Aerospace for reprivatisation AEROSPACE engineering firm Horizon Aircraft has announced that it has entered into a binding agreement with its parent company, Astro Aerospace and several of Astro’s key shareholders. The deal sees Astro agree to sell 100% of the equity of Horizon to the shareholders in exchange for certain Astro public securities and a fraction of the ownership of the newly privatised Horizon Horizon, which describes itself as an “innovative leader in hybrid electric Vertical TakeOff and Landing (VTOL) aerial vehicles,” has built a half-scale prototype of its Cavorite X5 eVTOL and expects hover flights to begin at the end of this month. “This mutually beneficial transaction will allow Horizon Aircraft to accelerate development of our highly innovative Cavorite X-series eVTOL aircraft in the private sector with access to more flexible funding mech-

anisms. Retaining Astro as a key shareholder and partner moving forward represents natural progression of this programme that has seen tremendous success over this last year,” Brandon Robinson, CEO of Horizon Aircraft, said. “Horizon’s progress has been nothing short of outstanding over the last year with several grants, a USAF contract award, and a large-scale prototype ready to fly,” said Astro CEO Bruce Bent, adding that “Astro is grateful to remain a strategic investor and partner as we collectively move towards building a better future.” Horizon Aircraft will continue with rigorous testing of its 50%-scale prototype and detailed design of a full-scale prototype as it pursues the next phases of the AFWERX HSVTOL challenge that could offer up to $35million in non-dilutive financing over the next three years.

Sydney’s new global gateway taking shape

AUSTRALIA’S new airport terminal is coming to life with work continuing on what will be the gateway welcoming traffic from across the world to Sydney’s west in only a few short years. Western Sydney Airport CEO Simon Hickey said the terminal is now coming to life, with the airport’s future customers helping to shape what will be Australia’s new global gateway. This will be the people’s airport, designed from the ground up for our customers and with our customers,” Hickey said. “This terminal will be Australia’s newest and most exciting airport experience, offering a smooth, seamless connection from Sydney to the world.” “Every element of this airport is being designed to deliver the most seamless and reliable experience possible for customers.” Hickey said thousands of Australians have now signed up to the Western Sydney International Panel, regularly contributing their opinions on different elements of the airport experience, from their dream travel destinations to the retail and dining choices they want to see in the terminal. A group of WSI Panel members, as well as some of Australia’s leading airlines, were recently invited to an exclusive viewing of the airport terminal plans, projected in real-life scale at LifeSize Plans in Western Sydney, to hear their feedback on different mock-ups and options for the terminal’s detailed layout. Hickey said the terminal is being designed with the customer at its heart – from passengers, airlines, airport staff and air cargo operators. “Western Sydney International (Nancy-Bird Walton) Airport will set a new benchmark for what Australians will expect when they fly and the input from the WSI Panel members is already helping to bring that to life,” Hickey said. WSI is on track to open to international, domestic and air cargo services in late 2026. ACW 15 AUGUST 2022 02_15 August 2022.indd 3

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Aviator supports Sichuan Airlines on their first flight after lifting Covid-19 restrictions AVIATOR Airport Alliance, a full-range provider of aviation services at 15 airports across the Nordics, has supported Sichuan Airlines on their first flight after lifting Covid-19 restrictions. The companies have been in partnership since 2019, with Aviator providing the airline with full ground handling and de-icing services in Helsinki airport. The airline will operate one flight per week from Chengdu Shuangliu International Airport to Helsinki. Mikko Asikainen, Safety & Compliance Manager at Aviator, commented: “We are delighted to welcome our partners Sichuan Airlines back in Helsinki. Since the beginning of the global pandemic, China was very strict in imposing restrictions to fight the spread of the virus, thus now Sichuan Airlines are returning to Helsinki airport to continue operations.” Aviator is a family member of Avia Solutions Group, providing ground handling services: from passenger and baggage handling, to de-icing, cargo and full-freight handling, to station services.

Kuehne+Nagel debuts on Fortune’s Global 500 list

FOR the first time, the Kuehne+Nagel group has been included in the Fortune Global 500 list, which is compiled annually by Fortune magazine. With turnover of CHF 36,699 billion in fiscal 2021, Kuehne+Nagel ranks 396th on the list globally and 9th for Switzerland. The Fortune Global 500 list is the most recognised ranking for the world’s largest stock-listed companies. Fortune Global 500 companies generated turnover totaling USD 37.8 trillion in 2021, more than one-third of the world’s GDP. Kuehne+Nagel is the world’s largest sea and airfreight forwarder and holds significant positions in road and contract logistics. The group has built its success on implementing its strategic focus on customers, technology and people, and by surpassing its ambitious financial targets. As a result, Kuehne+Nagel recorded a remarkably strong performance in the 2021 financial year and continued its successful course in the first half-year of 2022. Dr Joerg Wolle, chairman of Kuehne+Nagel International AG, says: “Kuehne+Nagel has demonstrated an impressive strategic ability to adapt and proactively responded to the frequent changes around us. The group has proven its worth under these particular circumstances and also managed to demonstrate the essential role it plays for the society at large. The debut on the Fortune Global 500 list reflects the exciting recent development of Kuehne+Nagel as a world-leading logistics Group.” 4 04 15 August 2022.indd 2

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SHIPPERS

Shippers make international trade happen

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ince the beginning of trade, there has been a need to move goods between producers and those who buy them. Where once it was a camel, river boat or donkey that took goods to market; in the 21st century these have been overtaken by aircraft, container ships, trains and trucking. The UK-based Global Shippers’ Forum (GSF) is the global trade body that speaks up for and advises shippers and cargo owners in the conduct of international trade. Members pay an annual membership fee to support the operating costs of the organisation. Any business that arranges for the import and export of their goods by land, sea or air is a shipper, notes the GSF. Shippers organise the flow of goods from country of manufacture or production to the country of consumption or use. They contract with shipping lines, airlines and road and railway operators to deliver their goods at pre-determined times and places so that their customers are able to further use or sell them. Shippers typically include manufacturers, producers, retailers, wholesalers and traders buying and selling goods between countries. Shippers are responsible for the selection and management of logistics providers and ensuring that contracted arrangements are performed to agreed standards. They

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select providers of transport services to move their goods, usually by competitively tendering their expected requirements, and then oversee the performance of the successful bidder against the contracted terms, including costs, reliability and other indicators, such as safety and environmental performance. According to James Hookham, director, Global Shippers Forum, the forum has been around for two decades, neatly providing a forum for shippers throughout this century. He says: “GSF was established in 2001 as an informal network of national shippers’ associations and was incorporated as a notfor-profit company in the UK in 2011, with a governance board and financial reporting. “As an advocacy organisation, GSF works on those issues creating friction in supply chains. As most shippers will work through forwarders to manage airfreight shipments some of those frictions are attenuated but generally airfreight works reliably and transparently. Of course, the past two years have been different, and hopefully unrepresentative of the future. I have highlighted our concerns about digitalisation. The other major concern is cargo safety and the correct declaration of dangerous goods in airfreight, especially electronic goods with lithium batteries. The GSF’s membership comprises national shippers’ associations in over 25 countries.

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FEATURE

Pandemic lessons Like many across the airfreight supply chain, Hookham is certain that GSF’s membership has learned lessons in the last 2.5 years that they can take forward. He says: “The three lessons for us are just how interconnected humanity is by communications, environment and trade; that shippers found their voice as the true owners of the supply chain and found out what ‘customer service’ really meant to their suppliers and carriers; if you want things to change in international trade and transport you have to organise and work at it: market distortions, digital benefits and low ESG scores won’t solve themselves.” The threats and opportunities of digitisation in the airfreight supply chain over the next few years are in the sights of the GSF, notes Hookham. He says: “Digitisation offers immense savings and efficiencies to carriers, but the benefits need to be shared with other parties to secure the necessary engagement and investment of time and money to make the switch. As is becoming clear in the ocean freight sector, this will require a change in the traditional business models and roles for the full benefits to be gained, so there will be winners and losers in that process. “Another issue is data ownership and protection. There are too few protections in place for the privacy of commercially-sensitive information that could be harvested from shipping data, including names, addresses, products and volumes. There needs to be a debate about who ‘owns’ this data and what rights do they have to act on it or sell it on to third parties. What are the liabilities in event of loss or leakage and the obligations on platform operators to report such losses?

Jobs displaced While a major part of logistics involves managing the storage and warehousing of goods, it may not be really a shipper issue, notes Hookham, these facilities are often staffed to the lowest levels thanks to IT. Is this the sort of activity that might de-skill the sector?

“It’s not really a shipper issue, but generally if the job can be done by a robot then is it really a skilled job anymore? Automation and AI will displace jobs but the challenge for logistics businesses will be to secure the skilled people to design and operate supply chains that realise these savings. That’s where the skills shortage lays at the moment – supply chain logistics as a business function needs to attract the next generation of logistics people that will keep supply chains functioning despite the many challenges and developments they encounter from managing world trade in real-time,” he says. “Like many new technologies the pace on drones is being set by the prospective suppliers of assets and services, rather than those that may use them. Intuitively, drones feel like a niche solution, due to the relatively small payloads and the liability exposures. Ultimately, shippers will evaluate drones as they do any other delivery mode, on the basis of a safety case and on the average cost per delivered item. I have yet to hear of promoters of drones articulating their case in these terms.” Environmental concerns Shippers do not work in a vacuum and are aware that many consumers are raising issues around food or air-miles in all modes of transport but especially aviation. Is this being reflected in their thinking? He says: “Some shippers with strong consumer-facing activities do factor in the environmental impact of airfreight on their supply chain emission profiles. This number will rise as more businesses commit to the achievement of corporate ‘Net-zero’ targets for the reduction of greenhouse gases, and third-party emissions (so called Scope 3 emissions) are factored into corporate carbon footprints? “Hopefully, this will coincide with a wider availability of Sustainable Aviation Fuels (SAFs) to allow these emissions to be offset in an accountable and transparent way?

“If you want things to change in international trade and transport you have to organise and work at it: market distortions, digital benefits and low ESG scores won’t solve themselves”

Outlook Shippers may not rely on crystal balls but they are rightly concerned with trend spotting and direction of travel of their industries and transport generally. Hookham shares his thoughts on what matters are concerning shippers at the moment. He says: “It depends where you are in the world but right now for UK and North American shippers, I would list the following front-of-mind issues: 1) How will Peak Season 2022 play out in terms of costs, reliability and capacity, in all modes? 2) Will China-Taiwan-US tensions escalate to the point where trade is affected through closure of shipping lanes and air space? 3) What contingency should I provide in my supply chains for next year as sourcing patterns adapt to changing geopolitical situations and product availability?” ACW 15 AUGUST 2022

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View from the maindeck How to transport cats and dogs to safety during crises

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nimal protection organisation Humane Society International (HSI) has collaborated with the International Air Transport Association (IATA) to publish a list of considerations for governments and the air transport supply chain to facilitate the safe passage of pet cats and dogs that are evacuating or taking refuge with their owners in times of crisis. The considerations are based on the IATA Live Animals Regulations publication, including making documentation more flexibile and relaxing government requirements, assessing ground storage facilities, providing clear and consistent information to pet owners and collaborating with pet shipping companies and crate manufacturers. “In times of crisis, the importance of keeping pets and people together can’t be understated. The special bond we have with our much-loved animal companions is highly important, and during conflicts and crises they provide comfort and a sense of stability for those who have been through so much. HSI’s pet relief aid work with Ukrainian refugees showed the lengths that people will go to in order to get their animals to safety,” Katherine Polak, vice president of companion animals and engagement at Humane Society International and member of the IATA Companion Animal Temporary Task Force, said. “So, we are incredibly proud to collaborate with IATA to help ensure refugees are able to take their beloved four-legged family members with them, so that no matter what the conflict or crisis, wherever in the world, pets and their people

can stay together,” Polak stated. “Aviation is a critical first responder in crises situations. The humanitarian response to Russia’s invasion of Ukraine was no different. Aviation helped people flee to safety and delivered humanitarian aid, and airlines with operations on the front line of the crisis recognised the importance of helping families stay united with their pets. Airlines on the frontline of the crisis —KLM, LOT Polish Airlines and Bulgaria Air —were leaders among airlines introducing measures to help those taking refuge bring their pets with them,” Brendan Sullivan, IATA’s global head of cargo said. “The European Commission also addressed the issue by advising all EU member states to relax veterinary paperwork requirements for the dogs, cats and other companion animals travelling with refugees. Through our work with HSI we have learned from this experience and the industry will be even better prepared for future crises,” he added. Nearly nine million border crossings from Ukraine have been recorded since the start of the war and more than seven million are estimated to be internally displaced. Many Ukrainian refugees decided not to take their pets with them, or postponed their evacuation from the war zone, as they were afraid their trip to safety might be delayed at the border crossings or at airports. There are no official records on the number of pets who have crossed the borders of Ukraine since the start of the war. However, it has been estimated that more than 30,000 pets have entered Poland alone.

UK airfreight sector vital to safeguarding supply lines THE Chartered Institute of Logistics and Transport (CILT) in the UK has released a briefing paper on airfreight in the UK. Produced by the Institute’s Aviation Policy Group, part of the Public Policies Committee, the paper reviews the current nature of the airfreight sector. It aims to highlight areas where policy makers in government and industry with a particular interest can assist with the progress required to support UK cargo aviation. Whilst passenger air transportation is more widely understood, the paper has been produced to help make the UK airfreight industry more visible and less impenetrable. The UK airfreight sector is vital to the functioning of the UK’s import and export markets, and in safeguarding its supply lines. Resilience in the sector is essential to the national interest. The UK is facing a skills shortage, which is affecting a number of sectors including logistics. Increasing the attractiveness of the sector to young people will be key to maintaining competitiveness, not only for aviation but for the resilience of the UK’s overseas trade, CILT warned. Worldwide airfreight traffic, despite dipping during the Covid pandemic, has increased beyond 2019 levels. In 2021, over 66 million tonnes of air cargo were transported worldwide. IATA reported that air cargo transportation, measured in cargo tonne kilometres (CTKs), increased by 6.9% in 2021 compared to 2019 (pre-Covid levels) and 18.7% compared to 2020. Since 1990 when IATA began monitoring cargo performance, this increase is second only to the 20.6% gain in 2010. “The results reflect the surging demand for air cargo capacity as global trade rebounds.” Written by aviation expert Dr Sally Dixon, the paper argues aviation will see radical change over the next century from new modes of transport, increased efficiency, and sustainability. Whilst many opportunities exist in the airfreight market, support for the radical changes that are imminent will be imperative if the UK is to play a leading role.” Dr Dixon said: “The crisis deriving from the Covid-19 pandemic has stimulated rapid growth in air cargo. Unprecedented growth in e-commerce and the need for rapid deployment of PPE, vaccines, medicines, and medical equipment is driving modernisation and innovation in the sector. However, policy issues, labour and skills shortages must be addressed if the UK is to maintain its global competitiveness.”

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