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The weekly newspaper for air cargo professionals Volume: 18
Issue: 32
17 August 2015
Charter firms benefit from Calais
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irfreight charter businesses are reaping the benefits of the ongoing situation at Calais (France) and around the Channel Tunnel. With thousands of heavy goods vehicles stranded and industrial action at French ports expected to continue, an increasing number of manufacturers and freight forwarders are turning their attention to airfreight, according to industry sources. Air charter specialist Chapman Freeborn has seen, “a sharp spike in demand”. “The Calais strike last week had the potential to cripple production for many of our UK-based clients because crucial manufacturing parts were caught up in the shut down. This has resulted in an unseasonable surge in demand
for both charter and on board courier services,” says Chapman’s cargo business development director, Pierre van der Stichele. “The knock-on effect of the strikes has also been felt by our offices across Europe, particularly our team in Germany which is at the centre of the automotive logistics business.”
Manston Airport’s compulsory purchase order (CPO) by Thanet District Council (TDC) has come one step closer with potential CPO partner, US investment firm, RiverOak Investment, providing evidence of financing with £1,325,000 ($2 million). The US firm provided the money to its solicitors after a request for financial evidence by the UK Independence Party (UKIP) controlled TDC. The council is reviewing its position on Manston Airport, an electoral pledge by UKIP before it won control of the TDC on 5 May in local elections. RiverOak wants to return the Manston site to an airport business and would act as the council’s indemnity partner. The TDC would compulsory purchase the Manston site from its owners, if the council decides its return as an airport is viable. Council leader,
councillor Chris Wells, says: “We have to be absolutely certain that the financial evidence is in place. I look forward to receiving the information as promised to provide the assurances we need in order to progress.” In July, Air Cargo Week was informed by the TDC that a decision on reviving Manston Airport could be taken, “in weeks”. The members of the TDC decision making body, the cabinet, agreed on Tuesday 14 July at an extraordinary meeting to review the Labour party controlled TDC December 2014 decision not to revive Manston. Manston Skyport, which owned the airport, closed it on 15 May 2014. The site was then sold to property developers. RiverOak claims that by 2030, Manston could handle 250,000 tonnes if it also specialised in perishables.
Chapman has used freighter aircraft including Antonov AN-12, Antonov AN-26, ATR 72, Boeing 727 Freighter, Dornier Do 228 and Boeing MD-11 Freighters to airlift consignments of time critical cargo to the UK. Bespoke Distribution Aviation (BDA) has also benefited from the
French port chaos. The time critical logistics specialist has more than tripled the number of dedicated charter flights it has provided across Europe over the past month alone. The majority of these were on behalf of automotive original equipment manufacturers needing to urgently move freight across Europe. “Lots of automotive businesses affected by the disruption are being forced to make last minute changes to their delivery schedules and on demand air services like ours are enabling them to continue to deliver sustained levels of service,” explains BDA group managing director, Kevin Turner. In addition to the automotive sector, BDA has deployed time critical flights for a range of sectors over the past two months, among them medical and agricultural clients.
Fraport Group has announced that its first half of 2015 revenues rose 10.6 per cent to 1.2 billion euros ($1.3 billion), compared to 2014, but cargo dropped by 2.1 per cent year on year to about one million tonnes at Frankfurt Airport. For Fraport’s leading cargo gateway, Frankfurt, 2015 could see freight volumes shrink by two per cent, according to the airport operator’s executive board half year interim report. And Fraport is selling 51 per cent of its handling business, Fraport Cargo Services, to Worldwide Flight Services. In its report, Fraport cites what it calls, “preliminary figures,” from Airport Councils International (ACI), that show that from January to May, cargo tonnage, which it defines as airfreight and mail, “saw weak development with an increase of 0.4 per cent and…[it]
was below the global level.” The report also quotes the ACI Freight Flash for 9 July which stated that Europe saw airfreight shrink from January to May by 0.1 per cent. The report says of the decline at Frankfurt that: ““A noticeable decrease in cargo throughput with the Far East and Latin America regions had a negative effect on the cargo result.” The report also says: “Due to economic and political crises, particularly in some emerging countries, the cargo outlook continues to be subject to uncertainty.” Fraport has varying levels of ownership of nine airports. These range from 10 per cent in New Delhi Indira Gandhi International Airport to 100 per cent in Ljubljana Jože Pučnik Airport. During the six months, two airports saw cargo fall, while others had double or triple digit rises.
iag cargo’s partner plus adds china southern
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budapest benefits from chinese, arab interest
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US AIRPORTS SEE DECREASES BUT LAX’s star SHINES
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Freighter needed to save Rhinos
Manston CPO closer $1.3bn for Fraport
RHINOS could be protected from poachers if the air cargo sector heeds the calls of an African charity. The Great Plains Conservation charity’s latest project, Rhinos Without Borders, aims to move 100 rhinos from South Africa to Botswana, the lowest poaching zone in Africa. The first air lift took place in May (see picture above by Beverly Joubert) and the next is scheduled for the fourth quarter of 2015. Great Plains Conservation is seeking a cargo airline to help. The loading airport will be determined by the source of the rhinos. The May consignment of ten rhinos was carried in an Ilyushin IL-76-TD courtesy of ACA Air Charter. This was the largest plane yet to have landed at Maun Airport in Botswana.
NEWSWEEK
IAG Partner Plus adds China Southern
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hina Southern Airlines is the latest member of IAG Cargo’s Partner Plus programme. Partner Plus is an interline agreement where airlines agree to carry each other’s cargo. Membership means that from this month IAG Cargo customers’ freight has access to confirmed space booked on China Southern Airlines aircraft to a range of destinations, including Auckland (New Zealand), Urumqi (China) and the Australian cities of Brisbane, Melbourne and Perth. They will also be able to track shipments from origin to destination via track and trace functionality through Partner Plus. IAG customers can also rely on a recovery guarantee ensuring that their freight will be recovered within 48 hours, in the event of an operational offload. IAG Cargo chief executive officer, Steve
Gunning (see picture), says: “Our Partner Plus programme has allowed us to grow our network reach in an asset light way. IAG Cargo has its sights firmly set on network expansion and Partner Plus is allowing us to meet this goal much more rapidly than would otherwise be possible. “Our focus is now shifting away from adding new members and onto deepening our commercial relationships with
the existing members of the programme.” China Southern joins existing members Qatar Airways, Japan Airlines, the Avianca group, American Airlines and Finnair. China Southern’s cargo senior vice president, Zhao Fengsheng, says: “IAG Cargo has a strong global network reach and will prove an important partner in helping us to connect our customers with markets in Europe, the Americas and elsewhere. We look forward to working with them on what we believe will prove a highly effective and beneficial partnership.” China Southern’s involvement in the programme follows that of Finnair, which signed up to Partner Plus in February. The Finnish carrier has continued to strengthen its links with IAG Cargo, recently announcing a block space agreement for a London-Helsinki route.
United launches ground handling arm UNITED AIRLINES’ latest venture, United Ground Express, will provide ground handling services at a number of airports within the airline’s domestic US network. United Ground Express will begin in the third quarter, providing customer service, station operations, and ramp and cargo services. From 9 December, it will also provide ground handling for United’s new service to and from Kalamazoo, Michigan (US). On Monday 10 August, United announced that perishable shipments requiring cooler refrigeration will be restricted to, from and through Narita International Airport on 19, 20 and 21 August. United is replacing two of the coolers at its Narita warehouses with new units, and an additional new cooler is being installed. While this work is completed, its usual refrigeration capacity will be
unavailable. United says: “We will not accept perishable shipments requiring cooler refrigeration in NRT on August 19, 20 and 21, and we will not transport perishable shipments requiring cooler refrigeration to NRT, whether destined for NRT or transferring, on flights arriving on those dates.” The only perishables requiring cooler refrigeration that will be transported on flights arriving at Narita on those three August dates are transferring shipments scheduled to make quick ramp transfers to an immediately departing flight. On 6 August, Memphis International Airport announced that United would operate Airbus A319 on Denver and Chicago routes from September. The A319s replace Bombardier CRJ700. The last time United operated what Memphis calls “mainline aircraft” was 2001.
E-booking to push eAWB at Air Canada AIR CANADA CARGO has launched a new e-booking service, enabling customers to book and manage shipments online. According to the airline, the new facility, accessed via its updated website, will allow customers to book even specialised services such as cool chain and dangerous goods shipments. The system will also provide estimated quotes for the cost of shipments. Users will be able to view the status of all their shipments, fill out electronic air waybills (eAWB), add to the house air waybill, edit a shipment or print a document pouch, all via the new online tool’s dashboard. E-booking is the latest stage in an Air
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Canada Cargo drive to push its e-AWB use. The system launch will be followed by a campaign. “Our new e-booking system is unique in the industry, and a true game changer for us and our customers,” says Air Canada Cargo vice president, Lise-Marie Turpin. “Our goal is to present our customers with a choice of channels and methods for conducting business with us, enabling them to choose a method that suits their specific needs. “By making this leading edge solution for online bookings available, we’re providing the tools they need to take their business to the next level.”
NEWS WEEK Losses only get worse in Q2 at XPO Logistics
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PO Logistics has announced a net loss of $78.8 million for the second quarter of 2015, compared with a net loss of $13.8 million for the same period in 2014. The Connecticut (US) based firm reported total gross revenue up by 109.3 per cent year over year to $1.2 billion, with net revenue up by 317.2 per cent to $508.6 million. Its latest acquisitions, Norbert Dentressangle and Bridge Terminal Transport, were included in the financial reporting for 22 days and one month, respectively. The company’s transportation segment, which includes its global forwarding business, generated total gross revenue of $861.2 million for the quarter, a 48.2 per cent increase on the same period in 2014. The year on year increase in segment revenue was primarily due to the acquisition of Norbert Dentressangle, and to four per cent organic growth. Its European
business contributed transportation gross revenue of $171.6 million, earnings before interest, tax, depreciation and amortization (EBITDA) of $8.4 million, and operating income of $1.9 million. A reconciliation of EBITDA to operating income for the transportation segment is provided in the attached financial tables. XPO’s logistics segment, which provides contract logistics and related supply chain services, generated gross revenue of $359.6 million, net revenue of $314.0 million, EBITDA of $30.9 million and operating income of $4.3 million in the first half of 2015. Logistics EBITDA and operating income reflect $5.5 million of transaction and integration costs. The company’s European business contributed logistics gross revenue of $177.4 million, net revenue of $133.0 million, EBITDA of $6.2 million and operating loss of $3.8 million. For the six months ended 30 June,
1m tonnes for Hamad
2015, the company reported total revenue of $1.9 billion, a 122.2 per cent increase from the same period in 2014. On a generally accepted accounting principles basis, the company reported a net loss of $93.2 million for the first six months, compared with a net loss of $42.1 million for the same period last year. XPO Logistics chairman and chief executive officer, Bradley Jacobs, says “In the second quarter, we more than doubled our gross revenue year over year, grew our net revenue four-fold, and increased adjusted EBITDA more than five-fold. “We’re in a strong position to act on acquisition opportunities on both sides of the Atlantic, with more than $1.2 billion in cash, an untapped ABL facility, and a highly integrated global platform. Our trajectory puts us on track to nearly triple the size of our company in four years.”
WorldNews ACCELYA KALE SOLUTIONS has announced that Vipul Jain will step down as managing director and be replaced by Neela Bhattacherjee on 30 September. After 15 years with Accelya kale, Bhattacherjee most recent role has been as an executive vice president responsible for product strategy, sales and customer relationships. Jain will stay on the Accelya Kale board as a non-executive director. CORRECTION In a World News brief in the 10 August edition of Air Cargo Week it was written that, Air Partner is expecting its pre-tax profit for the financial year ending 31 July 2015 to be less than £2 million ($3.1 million). The brief should have said Air Partner is expecting its pre-tax profit for the financial year ending 31 July 2015 to be not less than £2 million.
HAMAD INTERNATIONAL AIRPORT in Qatar has handled more than one million tonnes of cargo in its first year. According to the airport, this represents a 12 per cent increase on tonnage handled annually at Doha International Airport, Qatar Airway’s previous hub. Hamad airport’s cargo building covers 55,000 square metres. It is self-contained, with 11 widebody aircraft stands and 42 loading docks, and has the capacity to handle 1.4 million tonnes per year, a 75 per cent increase on its predecessor. The first Qatar Airways shipment, from Qatar Petroleum, was received at Hamad on 1 December 2013. Airports Council International Asia Pacific figures published last month show that Hamad was one of the few airports in the region to show significant growth. Volumes were up by 14.7 per cent year on year, the best performance in the Middle East. “Our future development strategy will focus on increased capacity and additional facilities,” says the airport’s chief operating officer, Badr Mohammed Al Meer. “We have created processes and management structures to manage and deliver our multi-million dollar future investment programmes strategically.”
LATAM rebrands, cargo falls
LATAM, formerly LATAM Airlines Group, saw cargo traffic fall by 12.6 per cent in July. The Brazilian market, both domestic and international, was particularly badly hit, the group reports. The group-wide cargo load factor fell seven percentage points to 50.4 per cent. LATAM is continuing to adjust its cargo capacity through a reduced freighter operation, which resulted in a decline of 0.4 per cent of cargo available tonne kilometres in July. LATAM Airlines Group came about in 2012, following the merger of LAN Airlines and TAM Airlines. Having spent the first three years of its life focusing on network optimisation and fleet restructuring, the group has turned its attention to branding. LATAM will bring together all of the LATAM Airlines Group carriers, including LAN CARGO, LAN CARGO Colombia, ABSA (TAM Cargo) and Mexico-based Mas Air. Changes to the corporate image will occur over the next three years, LATAM says.
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NEWSWEEK New and expanded routes EMIRATES’ eight daily flights to London will use Airbus A380s from 1 January 2016. Emirates will offer 70 A380 flights per week to the UK, including its double daily A380 service to Manchester (UK). CHINA SOUTHERN has added a Boeing 777 Freighter, its twelfth, to its Guangzhou-Paris-Vienna-Guangzhou route. The new freighter entered service from Beijing on 6 August. China Southern launched two new weekly freighter routes, Guangzhou-London-Frankfurt-Guangzhou and Guangzhou-Paris-Vienna-Guangzhou in June. This brings China Southern’s network to six freighter routes and six foreign destinations including Amsterdam, Vienna, London and Paris. This year, China Southern has introduced four 777F. The 777F are operated on long range routes to America and Europe. FROM November to February, Qantas will add more than 140 flights between December and February to New Zealand, Jakarta, and Singapore. This is in addition to the 15 seasonal services from Sydney (Australia) to Christchurch and Queenstown (New Zealand). OMAN AIR and Cargolux Airlines International will jointly operate a second freighter frequency from Muscat to Chennai (India) from 11 August.
Stansted has modest July rise CARGO tonnage through London Stansted Airport rose by 4.4 per cent year on year in July, to 20,732 tonnes. This growth means that 233,239 tonnes have been shipped through Stansted in the last year, an increase of 9.4 per cent on the previous 12 months. July’s results were helped by the addition of flights by carriers keen to ease the supply chain problems caused by the backlog at the Channel Tunnel, the airport says. “It’s great to see a growing airport and over the last few months we have been growing at double the rate of Heathrow [Airport] and Gatwick [Airport]. It’s a real boost for the airport and it’s a great reflection on the East of England region and its economic vibrancy,” says the airport’s managing director, Andrew Harrison. Stansted is undergoing a £260 mil-
lion ($405.3 million) investment programme to improve airport facilities and services. In the final July report of the UK government’s Airports Commission, one recommendation was that Stansted be considered for a future runway after a proposed third runway for Heathrow Airport became operational by 2030.
Chicago sees 30% hike for Virgin
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irgin Atlantic Cargo recorded a 30 per cent increase in tonnage from Chicago in June. The growth took the amount of cargo transported to more than 860 tonnes. Shipments in June ranged from general cargo to printed matter, works of art and Corvette racing cars heading to the Le Mans 24 hour race in France, Virgin says. The airline operates its Chicago route all year round. The UK is Virgin’s top destination from Chicago, accounting for 53 per cent of freight carried. Traffic from London to Chicago rose by more than 16 per cent in the first six months of 2015. This was due in part to a 100 per cent load factor outbound from the UK. Goods carried ranged from perishable shipments such as fresh fish, flowers and vegetables, to art and clothing. A further 29 per cent of Virgin freight originating in Chicago connects over London to
India. Virgin Atlantic also carries cargo from Chicago to Australia, South Africa and destinations across Europe and the Middle East. In 2014, Virgin Atlantic achieved a seven per cent increase in tonnage from Chicago. The airline further strengthened its position in the US mid-West market this year with the introduction of daily Airbus A330 flights to and from Detroit, offering more than 16 tonnes of capacity in both directions. Virgin Atlantic Cargo vice president for sales, Nick Jones, says: “Chicago is one of our strongest and most consistent routes and the introduction of Detroit has increased our ability to provide the additional capacity our customers want. “Over 65 per cent of the cargo on our Detroit-London flights originates in Chicago. Our trucking services in the US means that cargo leaving Chicago every evening arrives in Detroit by 08.00h the next morning.”
Finnair falls by 16% in July FINNAIR CARGO tonnage fell by 16.2 per cent in July, echoing the airline’s year to date performance, which saw tonnage slip by 16 per cent. Changes to the airline’s cargo operation are reflected in its latest results. Finnair says: “The overall cargo figures reflect a structural change from the comparison period, as Finnair withdrew from the use of leased NGA [Nordic Global Airlines] freighter aircraft capacity in Asian traffic. In July, the cargo traffic consisted almost entirely of belly cargo on scheduled flights.”
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In July, the cargo capacity in scheduled traffic, measured in available tonne kilometres, grew by 8.9 per cent. Revenue tonne kilometres fell by 4.1 per cent year on year. The cargo load factor in scheduled traffic was 56.3 per cent. Europe saw the most significant changes. Tonnage in July fell by 19.6 per cent year on year. It fell by 4.9 per cent in Asia and by 8.9 within Finland, in the same period. Finnair’s best region was the North Atlantic, where tonnage in July rose by 23.3 per cent, but it is down 0.8 per cent for the year to date.
AIR CARGO HANDLING CONFERENCE PREVIEW
Cargo handlers to discuss the industry in Bangkok
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argo handling will be in the spotlight when the 7th Air Cargo Handling (ACH) Conference takes place at the Shangri-La Hotel in Bangkok from 1-3 September. The conference will be held outside of Europe for the first time, in the heart of Thailand’s capital, on the banks of the Chao Phraya River. This year, there will be scheduled one-to-one meetings, panel discussions, workshops and presentations, covering airport cargo operations and freight handling. Among the topics will be security, processes and technology, interfaces between cargo handlers, ramp handlers, customs authorities and other parts of the chain, emerging markets, and case studies on how to optimise efficiency. On Tuesday, 1 September, working groups will take place discussing unit load device (ULD) management, IT messaging bottlenecks,
electronic air waybill (eAWB) implementation case studies, the International Air Transport Association’s (IATA) Centre of Excellence for Independent Validators pharma certificate and training, recruitment and people development programmes. The last 12 months has been turbulent for cargo operators and the conference will discuss how the industry has performed. Hermes Cargo chief cargo officer, Steve Montgomery, tells Air Cargo Week (ACW) there has been positive change in the last 12 months despite the tough times with, “more investment in new systems, along with a slow move towards eAWB”. He feels other positive developments are the continuing push by the cargo operations advisory group (COAG) to standardise and move the industry forward. The central themes at this year’s conference, Montgomery expects, are best practices, eAWB and new technology that
can be implemented and support the air cargo industry supply chain. Conference sessions begin on Wednesday 2 September, after event chairman and Worldwide Flight Services (WFS) executive vice president for business development, John Batten (pictured on page 7), and chief moderator, Saudi Airlines Cargo vice president for operations, Chris Notter, welcome delegates. Batten will then review the highlights and progress made in the industry since last year’s conference. He explains to ACW that nothing has changed in terms of outputs from the last ACH in Milan and asks the question, is it because the industry is slow to adopting change, or just nothing has been done? “Lets hope this conference gives us some more real hope that change is good and happening,” he explains. Batten feels the handling community needs to get closer to the International Civil Aviation Organization and World Customs Organization following the progress with COAG. He adds: “But that said, can IATA change cargo or does the governance need to change in this dinosaur of a business?” WFS chief executive officer and president, Olivier Bijaoui, will then join Batten for a review of air cargo handling in the last 12 months. They will discuss the latest industry developments and give their views on the last year.
Closing the loop
In Batten’s view, the most interesting industry development is Swissport International being acquired by the HNA Group this month: “This closes the loop on the circle. It is been roughly 35 years of fighting for independence and now this happens.” He also questions if it is the last chance for change, and warns if the industry does not adapt, the new e-commerce platform will go to integrators, as airlines are slow to move. After Batten and Bijaoui speak, a presentation will be given by ULD Care president, Urs Wiesendanger, about the latest Unit Load Devices, and the latest technology developments in the marketplace. Following this will be a review of COAG by Bangkok Flight Services general manager for cargo, David Ambridge, and IATA’s manager for cargo and mail operations and standards, Andre Majeres. They will discuss the tasks, challenges and the progress made by COAG over the past 12 months. IATA established COAG in 2012 to bring together members from airlines and ground handlers to attend to concerns on cargo operations. Batten explains to ACW that he is looking forward to what COAG reports, and discussing whether the industry will ever take forward initiatives that have been introduced and whether technology will be applied for the good. The first conference session will be Emerging from
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the crisis: The changing needs of airlines. A panel comprising of Cathay Pacific Cargo general manager for cargo services, Alan Glen, Turkish Airlines Cargo vice president of cargo operations, Serdar Demir, and Etihad Cargo head of cargo handling, Robert Fordree, will look at whether airlines’ handling needs have changed post the financial crisis, what their priorities are and how well cargo handlers are fulfilling them. The operational challenges of e-freight and eAWB will also be under scrutiny and how cargo handlers can help support eAWB implementation. After lunch is a session called Handling change, which will be led by LUG air cargo handling managing director, Patrik Tschirch (pictured below). He will look into what handlers have changed in the last year to help meet their customers’ needs and how efficiency and productivity have been improved. Tschirch tells ACW the recent acquisitions in the industry of Swissport and Fraport Cargo Services creates an environment for independent, national, small and medium sized enterprises like LUG, that is, “even more demanding”. Tschirch adds: “Many airlines still individually tender, negotiate and manage contracts for each station. In addition, the trend among airlines to outsource more and more operational processes, except sales, continues,” . Tschirch feels that the air cargo handling sector has continued to improve productivity and efficiency in response to cost pressures, although there has been no, “spectacular innovations”.
AIR CARGO HANDLING CONFERENCE PREVIEW
E-commerce and technology high on the agenda
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he adoption of technology in the airfreight industry has been slow compared to other transport modes, such as seafreight, and the future use of new platforms and the latest technological advancements is seen as critical to achieving growth. The session Technology challenge will attempt to address this much talked about subject area. CHAMP Cargo Systems will look at where technology has moved on in the industry over the last 12 months and what is in the pipeline for adoption. There will also be a focus in the session on which cargo handlers have successfully implemented technological advancements. A second part entitled Best practice in eAWB implementation will ask what is holding up the use of electronic air waybills (eAWB)? Worldwide Information Network managing director, John DeBenedette, will discuss what worldwide carriers have achieved success in using eAWB, and why the air cargo industry is underachieving in introducing eAWB. The first day will be brought to a close with a presentation by Heathrow Airport’s head of cargo, Nick Platts. He will talk about the evolving plans at the London airport, how cargo volumes will be grown, what the airport’s future priorities are and what role the community can play in the airport in the future. In the evening, a gala dinner will take place at the Royal Navy Convention Hall, where there are views across Bangkok’s Grand Palace and the Chao Phraya River. The final day on Thursday 3 September will start with a question and answer session and see six senior air cargo operations heads taking questions from delegates. Topics likely to feature include how can the air cargo handling chain be made faster and more seamless, what would it take to have pre-clearance of airfreight as integrators have, how progress can be made with eAWB and can the industry’s costs be reduced and quality improved. Joining moderator Bangkok Flight Services general manager for cargo, David Ambridge, will be Emirates SkyCargo’s cargo operations worldwide senior vice president, Henrik Ambak, Amsterdam Airport Schiphol’s head of cargo, Jonas van Stekelenburg and Glyn Hughes, head of cargo at the International Air Transport Association (IATA).
ity, transparency and duration of the air cargo process will play a major role at this year’s conference. “The requirements of the shippers continuously grow. Therefore, the air cargo industry has quickly to find an answer in order not to lose territory against other modes of transport. In this context, the air cargo industry has to overcome its hesita-
tion towards paperless processes and intensify the collaboration between the industry partners,” Kreutel explains. Kreutel says that in comparison to developments on the passenger side related to e-commerce, the industry has to, “wake up”. He expects this development will take up speed and has to be faced within the next few months. In the last conference session, Ambridge, and IATA’s manager for cargo and mail operations and standards, Andre Majeres, will round-up the three days and ask what more the cargo operations advisory group can do to support development of operational excellence, quality standards and sharing best practice. The event will be brought to a close by Worldwide Flight Services (WFS) executive vice president for business development, John Batten, and Saudia Cargo vice president for operations, Chris Notter, who will give their closing remarks, outlining a list of industry action points from the event’s discussions and give three cargo handling goals to be hit by the time of the 2016 ACH conference. An exhibition will feature, Bangkok Flight Services, Jettainer, ULD Care, Vienna International Airport, Brussels Airport, dnata, Consolidated Aviation Services, ALHA Group and SACO Airport Equipment.
e-commerce
A presentation will then be given by Inholland University of Applied Sciences lecturer and research fellow, Giovanni Douven. He was commissioned by Air Cargo Netherlands to undertake a six month investigation of handling agents at Schiphol, such as KLM Cargo, Menzies, AviaPartner, WFS, Skylink and Swissport. Central to the research is the use of eLink, a tool allowing the optimisation of processes for export shipments at the airport. Douven will detail to delegates the results of this study. A panel discussion session called A viable e-commerce platform for the air cargo industry? will then take place. Panelists will ask why the industry does not have an e-commerce product? Strategic Aviation Solutions International’s senior executive director, Stan Wraight, and WFS executive vice president for business development, John Batten (pictured below), will discuss what the next steps are to making this happen. The customer will be the focus, when a panel of forwarders and shippers discuss their latest needs, frustrations and observations, along with any wishes of the air cargo handling chain and its constituent parts. German airport operator Fraport will then lead a session Airports: Streamlining cargo operations – best practice examples, looking at what airports and airport cargo communities in Asia are leading the way in streamlining and supporting cargo operations. Other discussions will be on what best practice initiatives they are pursuing and what more could they do, using examples from around the world. Fraport vice president for cargo and logistics, Felix Kreutel, tells Air Cargo Week the reliability, qual-
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EASTERN EUROPE
Instability, political and economic challenge growth
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urkish Airlines Cargo has had a rough ride so far in 2015. Turkey’s proximity to the conflict in Syria alongside the political and currency problems experienced by some of its neighbours in Eastern Europe have not helped. Turkish Airlines’ vice president of sales and marketing for cargo, Halit Anlatan, lists a catalogue of negative influences that have added challenges to an already competitive and margin-driven market. “Cargo movement in the region, foreign currency devaluations against the US dollar, cyclical economic conditions, plunging oil prices and regional instabilities and geopolitical risks have all been negative factors and challenged our business in the first half of the year,” he tells Air Cargo Week. “As for the start of the second half of the year, Turkish Cargo has begun to recover but the effect of currency devaluation is still having
some negative effects on export cargo volumes from the region. We are optimistic, however, that everything will turn around.” Anlatan says Istanbul’s unique geographical position means Eastern European destinations are a natural part of its network and future business strategy. “Istanbul, located at the heart of world’s airfreight business, offers us quick access to both East and Western Europe, along with links to the Middle East and Far East,” he says. “Recently, the airfreight business of Eastern Europe has faced serious political and economic problems following the events we have witnessed in Greece, Russia, Hungary and the Ukraine,” he explains. “Nevertheless, Turkish Cargo is continuing to grow its share of the East European market, having also opened freighter services to Sarajevo, Belgrade [and] Tallinn. This demonstrates the importance of those
regions to us.” Anlatan says Turkish Cargo cooperates closely with customers in Eastern Europe to overcome wherever possible any political and economic difficulties that may impact airfreight deliveries. “Many shippers from the automotive business, foodstuff and electronic sectors, as well as pharma manufacturers, are located in those countries and so rely on our expertise. “We are also increasingly concentrating on highly sensitive product shipments like live ani-
mals, valuable and perishable cargos. Recent investments in our Istanbul hub have given us the necessary facilities to handle such products,” he adds. Turkish Cargo’s main export products from East European countries include pharmaceuticals, car parts, machinery and aircraft spare parts, engines, foodstuff, textiles and electronics. “In the first half of 2015, we had a trend of single-digit gains, whereas many of the major European carriers suffered from shrinking cargo volumes,” says Anlatan. Between the start of the global financial crisis around 2008 and now, Anlatan describes the gains of between 20 and 35 per cent made by Turkish Cargo as, “phenomenal”. “It is inevitable that the gains of the past could not go on forever and now we are seeing gradually diminishing returns,” he says. “But, Turkish Cargo is still one of the only major carriers in Europe to post gains in first quarter of 2015. We recorded double-digit increases by the end of May 2015 and plan to keep it that way until the end of the year.” Anlatan is realistic, however, in his assessment that further growth in Eastern Europe for Turkish Cargo will likely be heavily influenced by future developments, particularly if any restrictions on civil aviation are introduced.
Bulgaria, Romania, Serbia for UPS UPS announced in mid-July the second expansion this year of its UPS Worldwide Express Freight service, adding eight new origin and five new destination countries, including three in Eastern Europe. The service is designed for time sensitive and high value international heavyweight shipments and the expansion adds three countries in Eastern Europe, Bulgaria, Romania and Serbia and five in Latin America, El Salvador, Guatemala, Honduras, Nicaragua and Panama. UPS now offers the guaranteed service, which it says is aimed at product launches, inventory shortages or equipment failure replacement parts, to 58 origin and 56 destination countries and territories. “The service offers faster guaranteed pal-
letised shipments in more lanes than any other carrier, with delivery is door to door and day definite. Saturday deliveries are available to select US and Canadian postal codes,” says UPS vice president of international marketing, Nick Basford. “Eastern Europe is experiencing growth in the manufacturing and automotive industries and Latin America is undergoing rapid expansion of general industrial, healthcare, apparel and high tech businesses,” he adds. “We expanded the number of countries we serve due to consumer requests and anticipated future demand. UPS’ reputation for both reliability and speed, which is critical for urgent shipments, resonates with customers. We are working constantly to meet customer needs for global trade.”
UIA expands to Kutaisi, Georgia UKRAINE INTERNATIONAL AIRLINES (UIA) began a three times a week service connecting Kiev with Kutaisi (Georgia) and Jordan, Amman, in June. “We expect our new services to enjoy strong demand,” says UIA. The non-stop scheduled service to Jordan is
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part of UIA’s strategy for an East-West transit carrier model. On scheduled flights, UIA transports various cargo, including, perishables, valuables and dangerous goods. UIA carried more than 5,000 tonnes between October 2014 and the end of March.
EASTERN EUROPE
Budapest benefits from Chinese, Arab interest
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ungary’s Budapest Ferenc Liszt International Airport has seen air cargo volumes rise by more than six per cent. Following years of stagnation, the economic upturn has lifted the cargo business with Budapest benefitting from the cargo needs of not just Hungary, but also other East European countries in the region. In terms of investment, Budapest is just about to finish a three million euro ($3.3 million) construction project of a new aircraft maintenance hangar and will hand it over to Wizz Air as tenant and Lufthansa Technik as aircraft maintenance service provider. The airport’s international reach through its air cargo network continues to expand. Last year, Azerbaijan’s Silk Way West Airlines opened a new cargo route between Baku, the capital of Azerbaijan, and Budapest, operating a Boeing 747 twice a week. Other capacity expansions, in the widebody aircraft operation market, with belly cargo capacities, were introduced when Emirates started Budapest to Dubai daily flights with an Airbus A330-200 in October. It has 12 tonnes of belly cargo capacity. Emirates plans to introduce Boeing 777s on the route from this December. Air China started four flights per week with an A330-200 in May and the direct service to China has reported good load factors right from the beginning, according to Budapest. Cargo operators such as Cargolux fly from Hong Kong and Turkish Cargo flys to Istanbul, connecting Budapest to their worldwide cargo networks. “We see a growing market and an increasing demand for air cargo in the region as the industries that need air cargo services are developing,” says Budapest airport property director, René Droese (see picture). “Integrator business increases year on year
and in 2014 total volume rose by more than six per cent with DHL, Fedex, TNT and UPS operating daily flights to their Western European hubs. “All the conditions are in place to develop Budapest as a lead-
ing air cargo hub for central and Eastern Europe, and we want to realise this potential as soon as possible.” Budapest boasts an enviable location. Some 20 different countries are accessible by road or train within the 1,000 kilometre cargo catchment area of the airport. “We have a good basis for air cargo business development and, in line with external factors and market trends, we have already taken steps to ensure additional support for cargo operations,” says Droese. “The aviation operational environment, which includes no night curfew and available slots, is favourable and we have implemented a very strong incentive scheme of landing charges,” he adds. “On top of this we need to improve and expand our cargo relevant infrastructure and we worked hard last year on the implementation of three major elements to ensure an integrated multi-modal concept.” After delays resulting from the collapse of the Hungarian airline Malév in 2012, Budapest’s new 15,000 square metre air cargo “city” is now planned to be ready in 2017. Construction of warehouse and office infrastructure is set to begin this December.
US military goes East
US military reserves and equipment heading for Eastern Europe have signalled an upturn in business for Atlas Air Worldwide which increased its freighter capacity from the start of August after reporting second quarter net profits of $28.4 million. The outsourced cargo aircraft operator is gaining share in military airfreight for the US government’s Department of Defense after some competitors reduced or ceased their contributions to the Department’s Civil Reserve Air Fleet programme, which uses civilian jets to carry troops and cargo. President and chief executive officer, William Flynn, says military demand is better than the carrier had expected and there is now a, “stable outlook,” for the business for the next two years. Based on customer demand and an improving airfreight environment, Atlas Air Worldwide is to acquire a new Boeing 747-8 freighter (like aircraft pictured below) from Boeing with delivery scheduled for November 2015. Prior to that aircraft’s expected placement in long term aircraft, crew, maintenance and insurance service, the company intends to deploy it in charter operations, taking advantage of the aircraft’s fuel efficiency, range, capacity and loading capabilities. To meet additional charter demand, Atlas is also returning an owned and unencumbered Boeing 747-400 converted freighter to active service. It has also entered into a short term operating lease from late June for a second Boeing 747-400 converted freighter. “Our approach to business growth remains disciplined. We have managed our fleet aggressively and we will use proceeds from our recent convertible note issuance to refinance higher cost debt, which will enable us to reduce aircraft ownership costs and increase fleet flexibility,” says Flynn. The US military is seeking approval to send a company’s worth of equipment, enough for about 150 soldiers, to each of the three Baltic nations of Lithuania, Latvia and Estonia. In addition it has plans to locate a battalion, about 750 soldiers, in Poland, Romania, Bulgaria and possibly Hungary.
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LOS ANGELES
US airports see decreases, but LAX’s star shines
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os Angeles International Airport (LAX) is on course to set a new record for annual cargo tonnage as it continues to out perform rivals on the West coast of the US. Research by Michael Webber, of Webber Air Cargo consultancy, shows 13 of the top 20 US airports suffered net decreases in tonnage between 2000 and 2014. “Los Angeles International [Airport] and John F. Kennedy [International Airport], two of the most notable legacy gateways for international air cargo, recorded net decreases of 11 per cent and 28 per cent for the period,” he tells Air Cargo Week (ACW). “But, compared to its West coast rivals, Los Angeles’ performance was relatively admirable with its closest international rival, San Francisco [International Airport], experiencing a 54 per cent decrease for the same period,” he says. Los Angeles’ 1.8
million tonnes of cargo in 2014 roughly surpassed the combined tonnage of the next four largest cargo airports, Oakland International Airport, Ontario International Airport, Seattle-Tacoma International Airport and San Francisco airport. After a, “trough,” of 1.5 million tonnes in 2009, LAX’s annual tonnage has been steadily increasing and year to date tonnage to June is up 10.7 per cent over that of the same period in 2014. “Should that trend be maintained through the end of the year, Los Angeles could establish a new record for annual tonnage,” says Webber. While tonnage data may give the impression that LAX has simply replicated or slightly exceeded its historical peak in 2000, a considerable transformation has occurred in terms of the composition of LAX’s air cargo operations, according to Webber. “In its past peak year, 2000, domestic cargo accounted for 57 per cent
of total cargo at Los Angeles, compared with 43 per cent for international cargo. International cargo passed domestic cargo for the first time in 2004 and in the year to date, international cargo has accounted for 61 per cent of annual tonnage, compared with 39 per cent for domestic tonnage,” he says. Los Angeles’ dominant position means the only reason for forwarders to ever truck to or from LAX to another Western gateway would be if all the payload capacity became exhausted. This gives LAX operator, Los Angeles World Airports (LAWA), and its commercial partners the luxury of focusing more on facilities and other infrastructure improvements, while competitor airports are still trying to close air service gaps. “Recognition that the air cargo industry has changed dramatically has precipitated an assessment to consider improvements to warehouses, aircraft parking apron, as well as truck parking and roadway access,” says Webber. Reflecting his analysis, some 93 per cent of members of the Los Angeles Air Cargo Association (LAACA) said in a recent survey that they anticipate business to grow in the 2015 peak season. LAACA president, Amy Grat (pictured here), says around 84 per cent anticipated increases of five per cent or higher, but concerns
were also raised. Challenges to growth include maintaining efficiency and speed, especially during peak seasons. Grat has welcomed the appointment in mid-July of LAWA executive director, Deborah Ale Flint, previously aviation director for Oakland airport, who will oversee an $8.5 billion modernisation of LAX.
American goes down under BELLYHOLD capacity for airfreight will be created when American Airlines (AA) launches a Los Angeles (US) to Sydney, Australia, service on 17 December. The non-stop route, announced as part of an enhanced business relationship with Qantas, expands American’s global network by adding a fifth continent to its network. Using a Boeing 777-300 extended range, the Sydney route will offer 44 cargo positions in and out of American’s Los Angeles hub, which is home to a 60,000 square foot (5,574 square metre) cargo facility that
includes cooler spaces for time and temperature sensitive AA ExpediteTC products. “Expanding our global footprint to another continent is an important step for American as we continue to invest in our network to provide the best possible experience for our customers,” says American’s chief marketing officer, Andrew Nocella. The Sydney flight will operate on a daily departing Los Angeles at 21.50h (all times local) and arriving Sydney at 07.55h two days later before depart Sydney at noon and arriving Los Angeles at 06.50h on the same day.
Lufthansa sees modest growth at LAX LUFTHANSA CARGO reports increased airfreight volumes through Los Angeles International Airport with year to date exports showing growth of around three per cent, compared to 2014. Lufthansa Cargo’s regional director for the Western US, Mexico and Central America, Uwe Glunz, says growth is generic rather than being driven by a specific type of cargo. “The vast majority is standard cargo, yet dangerous goods, cars and tem-
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perature controlled goods have all seen a healthy increase,” he tells Air Cargo Week. “We also expect that year over year the exports of perishables will grow.” The carrier wants to grow volumes through Los Angeles which ranks third after Chicago O’Hare International Airport and John F. Kennedy International Airport, in Lufthansa’s league table of US gateway airports. It has also just extended a lease on its warehouse facility at Los Angeles for another five years.
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