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The weekly newspaper for air cargo professionals Volume: 19
Issue: 41 17 October 2016
UK runway decision set to be made this week
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landmark decision on runway expansion in the UK is set to be made by the Government this week with some claiming it will be announced by ministers on Tuesday (18 October). Reports are also suggesting that as the UK faces up to the challenges of making Brexit a success - that both Heathrow Airport and Gatwick Airport will be given the green light to build runways meaning a third for Heathrow and a second for Gatwick. Heathrow will reportedly be given the nod to build a runway immediately, while Gatwick will be allowed to expand within the next five years. Gatwick’s 40-year agreement with local authorities not to build a second runway expires in 2019. Some reports also claim that the UK Government will also urge Birmingham Airport in the Midlands
to push on with proposals to build a second runway. All three airports are growing strongly and are at capacity, or nearing capacity, and have surpassed predictions made by the Airports Commission last year. The commission recommended to the Government last summer Heathrow should be given the go ahead to build another runway due to the economic benefits and aviation needs it would offer the London area and UK as a whole. Meanwhile, the Scottish Government has added its voice of support in backing a third runway at Heathrow, saying it could create
Volumes surge 6% at Heathrow
up to 16,000 new jobs in Scotland and possibly developing Glasgow Prestwick Airport into a logistics hub. Scotland says it backs expanding Heathrow as it offers significant job creation and major investment opportunities as well as providing Scottish airports with more runway capacity. Scotland’s economic secretary, Keith Brown says Gatwick’s runway plans are highly commended, but Heathrow would bring more benefits for Scotland, adding: “The potential for a logistics hub to be based at Glasgow Prestwick Airport is also an important part of
Heathrow Airport’s cargo volumes soared by a fraction under six per cent in September on the back of strong growth to East Asia and Latin America. The gateway explains freight traffic to was Brazil was up 18 per cent, to China by 13 per cent and to Mexico by seven per cent. Heathrow handled 126,109 tonnes in September a 5.9 per cent rise on the same month last year. In the first nine months of 2016 it handled 1,128,067 tonnes, up 2.1 per cent on the same period last year. On a rolling 12-month basis the hub has handled 1,520,006 tonnes, up 1.2 per cent on the previous 12 months. Heathrow is Britain’s largest port, accounting for almost 30 per cent of all UK exports by value outside the European Union last year, while the hub claims Gatwick Airport served only 0.2 per cent. Heathrow chief executive officer, John Holland-Kaye (pictured) says: “The PM is clear that her Government will step up and do what’s right for Britain. Expanding our country’s largest port will give Britain’s businesses the best connected trading network in the world. We’ll show that we’re confident about our future and determined to make a success of Brexit.”
the Heathrow offer.” And the trade association representing the UK’s freight forwarding and logistics businesses says it is pleased the UK Government appears to be ready to stop its “procrastination” about the expansion of UK aviation capacity. British International Freight Association director general, Robert Keen says the UK’s freight forwarding community, which is the “engine” of Britain’s international trade, believes building more capacity at Heathrow would be “massive sign” the UK is a “confident, outward-looking trading nation”, capable of taking bold decisions to benefit the UK economy, and connectivity. The Freight Transport Association believes the Government must back a third runway at Heathrow if its vision of a global post-Brexit Britain is to “become a reality”.
Gatwick’s cargo soars 17.4%
Gatwick Airport’s cargo volumes continue to recover after a very weak 2015 with a year-on-year increase in September of 17.4 per cent to 6,608 tonnes. The hub, located to the South of London, had a difficult year in 2015, with September 2015 alone posting a 21.5 per cent fall to 5,627 tonnes. Gatwick says the recovery has come through the adding of new long-haul routes operated by the likes of Cathay Pacific and British Airways. These countries include China, Peru, Costa Rica, Nigeria, South Africa and the US. More services to Moscow and Cape Town are also due to start in the coming weeks, which is set to boost freight further. Gatwick chief executive, Stewart Wingate (pictured) says the UK government should give it permission for a second runway, saying: “Gatwick gives the Government the certainty of a competitive solution which keeps costs and impacts low while laying the foundations of an economy that works for everyone.”
cathay and lufthansa move under one roof Kenyan perishables in high demand erskine confirmed as dube ceo nielen named vp for sales at cargolux
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UK and China looking to double flights THE UK and China have agreed to more than double the number of flights between the two countries, following successful negotiations in London. The UK Government’s Department of Transport says the move will boost tourism and trade opportunities for the UK – links which it says will be vital as the UK looks to build a ‘confident, Global Britain’ after Brexit. There will be no limit on the number of all-cargo services, creating new opportunities for UK trade and businesses. Under the new deal passenger flights can now increase from the current maximum of 40 per week for each nation to up to 100. A restriction on the number of destinations that carriers can serve has also been lifted, meaning services can be operated between any point in the UK and any in China. Up until now, airlines could only serve six destinations in each country. Transport Secretary, Chris Grayling says strong connections with emerging markets like China are vital if the UK is to continue competing on the global economic stage. The final decision on additional flights is a commercial one for airlines.
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NEWSWEEK
BCF aircraft agreement penned by Atlas Air
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tlas Air has come to an agreement with Boeing to convert nine 767 passenger aircraft into Boeing Converted Freighters (BCF) (artist impression right). Four were previously announced at the Farnborough International Airshow in July, attributed to an unidentified customer. Boeing predicts in its current market outlook forecast that 400 widebody conversions will be needed over the next two decades, with strong demand for the 767 due to the rise of e-commerce. Atlas Air chief executive officer, William Flynn says: “Boeing has been a longtime and trusted partner as we’ve built our fleet and business. We look forward to continuing to work with Boeing to provide operational excellence and support for our customers.” Boeing Commercial Aviation Services
vice president of sales and marketing, Rick Anderson says: “We look forward to supporting Atlas with our Boeing Converted Freighters as they expand their freighter operations. “With more than 40 years of experience in passenger-to-freighter conversions, Boe-
ing has a deep understanding of the needs of the air cargo industry. “Our freighter conversion program not only provides customers with world-class Boeing platforms, we also offer global support and the assurance of a Boeing-backed program.”
ACS gets capital injection
ALCUIN Capital Partners has taken a minority stake in Air Charter Service (ACS) as the company looks to accelerate growth plans. The investment will bring access to capital and ACS chief executive officer, Justin Bowman says Alcuin’s expertise in corporate acquisition strategy will be “invaluable” for implementing growth plans. He explains: “The fact that this company has grown from the basement of a house to the largest charter brokerage in the world is a huge achievement and testament to our amazing team and corporate culture. However, we are still an ambitious organisation.” “Our growth to date has been entirely organic and whilst we will continue to follow those strategies that have been successful in the past, we wish to accelerate our expansion through capital investments in both technology and through acquisitions of complementary businesses.” Alcuin Capital Partners co-founder, Mark Storey adds: “Air Charter Service is a leader in its field with a strong track record for growth. Their plans going forward are exciting and we are looking forward to working with their management team as they implement them.”
Last antitrust settlement agreed THE last four of 28 settlements with defendants in the air cargo antitrust litigation have been granted final approval. The final settlements were approved by Judge Brian Cogan of the US District Court for the Eastern District of New York on 5 October, including a $100 million settlement with Polar Air and $50 million with Air China, bringing the total to $1.2 billion. The airlines are alleged to have participated in a global conspiracy to artificially inflate the price of air cargo shipping services, and affected nearly every business shipping goods to, from and within the US since 2000. Robins Kaplan represented the plaintiffs, and co-lead counsel, Hollis Salzman says the firm is pleased the court granted final approval to each and every settlement obtained during this litigation. A complaint was filed against three dozen carriers in February 2006. Settlements included $99 million with EVA Airways and in May 2016, Air India and Air New Zealand agreed settlements of $12.5 million and $35 million.
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NEWS WEEK Leipzig hub expanded by DHL
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HL Express has opened its new sorting centre Leipzig/Halle Airport capable of sorting 150,000 parcels per hour following an investment of €230 million ($255 million). The expansion increased capacity by 50 per cent and it can sort bulkier and heavier packages weighing up to 170 kilogrammes on a fully automated basis. DHL has created 1,300 jobs since work started on the expansion, bringing its total number of employees at the hub to 4,900. Deutsche Post DHL Group chief executive officer, Frank Appel says: “The successful launch of our expanded hub and the new sorting facility is a further step that reinforces the importance of Leipzig as our main European express hub. “I am particularly delighted by the many additional jobs that we have been able to create. As a major employer and investor, we are very proud
to be able to carry on supporting the positive economic development in Leipzig and the surrounding region.” DHL Leipzig hub managing director, Ralph Wondrak adds it will increase daily capacity of flights but also further improve efficiency “ensuring Leipzig continues to play a central role in the world of global trade.” DHL Express has invested €655 million in the Leipzig hub including the most recent upgrade. The expansion covers 44,000 square metres.
Cargo on the up at MAG’s UK hubs
THE Manchester Airports Group continued to see strong growth in air cargo tonnage at Manchester Airport, Stansted Airport and East Midlands Airport (pictured) in September. MAG says runway capacity benefited its freight business, as it saw increases in tonnage across its principle three airports. The fastest year-on-year (YOY) growth was
registered by Manchester, which saw an 11.7 per cent uplift to 9,791 tonnes in the month. This was put down to new long-haul bellyhold connections operated to the likes of Beijing in China which boosted volumes. East Midlands and Stansted both also grew strongly YOY in September to 29,492 tonnes (+3.9 per cent) and 21,573 tonnes (+5.4 per cent), respectively.
Etihad to operate fashion freighter
TRINITY Logistics USA has signed a multi-million dollar deal with Etihad Cargo, which will see the carrier operate a weekly widebody freighter service. This will be operated from Colombo’s Bandaranaike International Airport, in Sri Lanka to Rickenbacker International Airport in Columbus, Ohio (US) and to East Midlands Airport in the UK, on behalf of the New York-based freight forwarder. Etihad Cargo operated several charter flights for Trinity over the summer. Trinity Logistics is a North American freight forwarder in the fashion industry, and growing throughout the US and Asia. The Colombo - Columbus - East Midlands
service has been introduced to facilitate the movement of the latest high fashion from Sri Lanka for big box retailers in the US and support the company’s US export growth to Europe, the Middle East and Asia. Sri Lankan apparel exports exceeded $4.5 billion in 2015, according to the Sri Lanka Export Development Board, representing 40 per cent of the country’s total exports. Victoria’s Secret, GAP, Nike, Tommy Hilfiger, Speedo and Abercrombie & Fitch have garments manufactured in Sri Lanka. Etihad Cargo will operate its Boeing 777 Freighter and 747F aircraft, with maximum payloads of 103 tonnes and 140 tonnes respectively, on the route.
WorldNews MALLORY Alexander International Logistics has opened a new office and warehouse in Miami, Florida, to serve the region’s vibrant import and export sector. The facility includes a Foreign Trade Zone (FTZ), as well as a container freight station. AMAZON.COM is facing another fine from the US Federal Aviation Administration (FAA) for breaching hazardous materials regulations, its fourth civil penalty of the year. The FAA is proposing a fine of $78,000 for allegedly offering FedEx a shipment containing flammable liquids from Ruskin, Florida to Algonquin, Illinois on 7 August 2015. The package contained two 14-ounce bottles of ethanol-based Clubman Jeris Hair Tonic. LOGWIN has expanded in South America by opening an office in Lima, Peru, a year after opening in Columbia. The firm says that Peru is an expanding freight market.
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NEWSWEEK Cathay Pacific and Lufthansa Cargo move under one roof in Hong Kong
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ufthansa Cargo and Cathay Pacific Cargo have reached an important milestone in their joint business agreement by moving under one roof into the Cathay Pacific Cargo Terminal handling centre in Hong Kong (pictured right). Under the agreement, both carriers will work closely on network planning, sales, IT and service enhancements, and they expect to transport the first shipments from 1 February 2017 from Hong Kong to Europe with eastbound expected in 2018. Following the move on 1 October, customers benefit from one single location for export dropoff and import delivery arrangement. Lufthansa Cargo chief executive officer and chairman of the executive board, Peter Gerber (pictured left) says: “We are very pleased to share a handling location
in Hong Kong. There will be many advantages for our customers and it represents an important milestone for the start of our partnership at the beginning of the year. “The teams of both airlines can now work on the optimal coor-
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dination of their handling processes.” Cathay Pacific Cargo director, Simon Large (pictured below) adds: “Bringing Hong Kong, the world’s busiest international air cargo hub closer to Europe, and thereby strengthening one of the world’s great trade lanes is what our cooperation is all about. Lufthansa Cargo’s move into the Cathay Pacific Cargo Terminal is an important first step. “Thanks to the strengths of our respective networks, our customers will soon benefit from more direct connections, greater flexibility and time savings.” Hong Kong-based Cathay Pacific has a fleet of 147 aircraft including nine Boeing 747-400 Freighters and 14 Boeing 747-8 Freighters. It also carries cargo on its fleet of passenger aircraft. Frankfurt-based Lufthansa Cargo has a fleet of 12 Boeing MD-11Fs and five 777Fs, and bellyhold capacity on its passenger aircraft, and in March this year it started selling space on long-haul Eurowings flights.
100 more Boeing aircraft for Qatar Airways
Qatar Airways is to spend $11.7 billion expanding its Boeing fleet with 30 787-9s, 10 777-300ERs, and has also signed a letter of intent for up to 60 737 MAX 8s, valued at $6.9 billion. The order will increase its backlog of widebody aircraft from 65 to 105 including 60 777Xs. Qatar Airways was the first Middle Eastern airline to operate 787s and will be the launch customer of the 777X, while the 737 MAX 8s will be the first single-aisle Boe-
ings to join the fleet in more than 15 years. Qatar Airways Group chief executive officer (CEO), Akbar Al Baker says: “Qatar Airways, already one of the fastest growing airlines in the history of aviation, today announces a significant and historic aircraft order that will power our future growth for the years and the decades ahead.” Boeing Commercial Airplanes CEO and president, Ray Conner adds: “We are so very proud that a discerning and market-leading customer like Qatar Airways not only continues to endorse our current products, but also has confidence in Boeing’s new technology that will soon be evident on the 777X and 737 MAX.” Qatar Airways has a fleet of 190 aircraft including 21 freighters, flying to over 150 destinations.
Emirates SkyCargo starts Oslo services Emirates SkyCargo has started weekly freighter services from Oslo to Dubai to cater for rising Norwegian seafood exports, which have doubled in the last six years. The route will be served by a Boeing 777 Freighter with over 100 tonnes of capacity, which brings weekly capacity out of Oslo to 175 tonnes including bellyhold space on the five weekly Boeing 777-300ER flights. The airline says the route will facilitate increasing seafood exports, particularly salmon. It says Norwegian seafood exports have doubled in the last six years due to demand for salmon, trout, cod and crab. Emirates SkyCargo says its Emirates
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SkyCentral facility at Dubai World Central (DWC) is ideal for the transportation of temperature sensitive seafood shipments. It includes over 15,000 square metres of temperature controlled storage space and 12 dedicated reefer trucks operating between DWC and Dubai International Airport (DXB) offering transit times of five hours between arriving at DWC and departing from DXB in the bellyhold of a passenger aircraft. Emirates will also start daily flights to Fort Lauderdale-Hollywood Airport, its 11th US destination on 15 December 2016 using a Boeing 777-200LR with 15 tonnes of bellyhold capacity.
NEWS WEEK 10th 747-8F for Volga-Dnepr Haiti aided by Gatwick flights
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olga-Dnepr Group has welcomed the 10th Boeing 747-8 Freighter to its fleet, as it celebrates launching twice-weekly services to Seattle-Tacoma International Airport. The aircraft, painted in AirBridgeCargo Airlines colours, was received at a handover ceremony in Everett, Washington, increasing its 747 fleet to 16. The handover also celebrated the launch of ABC’s twice-weekly 747-8F services to Sea-Tac to Moscow via Chicago and Europe. Volga-Dnepr Group president, Alexey Isaykin explains: “The addition of Seattle to AirBridgeCargo’s growing international network and the delivery of our latest -8 Freighter is not only strategically important to the development of ABC. “It also allows our Group to fulfill its obligations under the long-term logistics support program agreement with Boeing and its partners for the transportation of aerospace cargoes.
“For Volga-Dnepr Group, we are confident our fleet of An-124 and 747 freighters will enable us to successfully compete and fulfill our commitments to our customers.” Boeing Commercial Airplanes vice president for Russia, Central Asia and Middle East sales, Marty Bentrott says: “We are confident that the 10th Boeing 747-8F delivered to Volga-Dnepr Group will help the company to implement its ambitious plans in the global cargo transportation market.” “In return, the Boeing Company intends to support and maintain this strategic partnership, which combines the strengths of our companies and our unique experience of developing joint solutions in the interests of aerospace industry customers.” Volga-Dnepr confirmed its order for 20 new 747-8Fs in July at the Farnborough International Airshow, and Boeing has delivered five so far and future deliveries will lead to it phasing out the 747-400F.
AIA Cargo has assisted the UK’s aid effort to Haiti following Hurricane Matthew by sending 23 tonnes including shelter kits. Cargo from the UK Government’s Department for International Development left Gatwick Airport including shelter kits for 5,000 people, and further aid will include temporary shelters, equipment to purify and carry safe drinking water and solar lights. The aid is being sent over on a number of Thomson Airways flights. AIA Cargo general manager for Europe, Mark Andrew says: “AIA is proud to have taken part in this relief effort. Haiti is a place close to our hearts having teamed up this year to help provide a new roof for a local charity The Mango Tree Village.
“Mango Tree Village which was started in the wake of the 2010 earthquake provides shelter, food & water, medical attention, clothes and an education for the orphans of Haiti. “We wish to thank all the staff at Thomson, WFS and the Department for International Development who assisted in the seamless lift of this vital cargo from the UK.”
4.2% rise at Munich in first 9 months
MUNICH Airport saw year-on-year (YOY) growth in tonnage of 4.2 per cent in the first nine months of 2016. The Bavarian hub handled 245,700 tonnes during the period, up on the 235,760 tonnes in the same period last year, as it continues
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to grow its freight business. Munich says this included a 2.8 per cent rise in bellyhold freight to a total of more than 200,000 tonnes, while the share of cargo on freighters was up 11 per cent to more than 45,000 tonnes. The gateway says with the start of the new winter timetable period at the end of October, the traffic trend will gain momentum and based on current slot bookings, airlines plan to offer about five percent more flights this year than in the last winter season.
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AUSTRALASIA
Strong growth on Asian lanes for Qantas Freight
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ree trade agreements signed in Australasia are leading to strong growth from Australia and New Zealand to Asia for Qantas Freight. The carrier’s executive manager, Alison Webster says it is seeing particularly strong demand for fresh produce and dairy products. But Webster notes along with these uplifts, Qantas is finding it tough in some trade lanes: “Competition on the China to the US lanes remains strong with a number of carriers adding capacity in the last year. “We continue to be competitive in the China market with our long standing freighter network and local team that knows the market well. “The Australia/Japan market is soft right now and we are looking at ways to use our strong footprint into and out of Japan to stimulate transfer traffic across our Tokyo hub.” Webster notes, 2016 has been a good year
despite global freight markets remaining soft and says key cargo routes are well supported. She says the five-year extension to the contract it signed a few weeks ago to continue to carry international mail and parcels for the Australia Post Group is a “significant win”. Webster says the partnership with Australia Post is performing well and it now operates a customised network tailored to their needs, meaning it can deliver exactly what they want. The Australasian air cargo market is facing many similar challenges to other regions, as Webster observes: “Demand for air cargo continues to grow, yet the challenge is that available capacity is growing at an even faster rate. “We are transforming Qantas Freight to deliver flexible and efficient operations for the changing needs of our customers, and this differentiates us in the market.” There are improvements she would like to see
in Australia to boost airfreight and the main one is at Sydney Airport, which is restricted both in terms of flight operations and expansion. Webster says the country’s main air cargo hub is the only major domestic airport that is subject to evening curfew restrictions, which makes running a 24/7 airfreight operation more complex than it is in Melbourne, Brisbane or Perth. She explains: “We are pleased to see planning progression of Badgerys Creek as Sydney’s second airport site, however operations are not scheduled to commence until 2025. “This presents an operating challenge for us, and we’re keen to work with all stakeholders and the community to review options that consider the operation of alternate freighter aircraft type during curfew periods. “These aircraft offer increased payload but still fit within regulated noise profiles. This will enable us to continue meeting current and forecast industry needs and better serve our customers and the Australian public’s evolving freight, parcel and post needs.” Qantas Freight markets the belly space of Qantas and Jetstar aircraft, giving it a global footprint with network strength across Asia Pacific and for the past 12 years it has operated a successful Boeing 747 triangular freighter
route connecting Australia, China and the US continue to be its core cargo trade lanes. The carrier is planning on investing in its network of airfreight terminals in Australia: “Over the past five years we have been running a major technology upgrade program to help us operate as efficiently and effectively as possible, and we continue to invest in this area of our business.” As for commodities, she says Australia is a reowned source of perishables and with evolution in technology and new free frade agreements with several key export nations Qantas is seeing growth in this market: “There is strong demand for Australian meat, seafood and dairy in the Middle East and China. Exports on these lanes is always strong for us.” There are big challenges for air cargo carriers and Qantas is no exception: “Technology is a key enabler for our industry, and Qantas has made significant investments in our platforms and infrastructure. We’re aware our customer’s expectations are increasing and shippers want seamless digital platforms and real-time access to their supply chain. “Technology has shifted from being a ‘support service’ in our industry to something that can really differentiate carriers and we intend to stay at the front of the pack.”
Change in belly services to Oz ETIHAD Airways and Qatar Airways have changed their bellyhold services to Australia. From 6 February 2017, Etihad will add three weekly flights between Abu Dhabi International Airport and Sydney Airport to operate a double-daily schedule. The additional Sydney flights will be operated by a Boeing 777-300ER. The morning departure from Abu Dhabi and the afternoon departure from Sydney will increase from four to seven flights per week.
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This enhancement to the airline’s Sydney schedule comes with the move by strategic partner Virgin Australia to shift its Australia to Abu Dhabi operation from Sydney to Perth from 9 June, 2017. It’s Australian footprint goes from 42 to 45 weekly flights. Meanwhile, Qatar Airways will start flying an Airbus A380 to Sydney from Doha International Airport after previously operating a Boeing 777-300 from 1 March this year, when it launched the route.
AUSTRALASIA
Wellcamp positioned to become a cargo hub
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risbane West Wellcamp Airport is well positioned to become an Australian air cargo hub as other airports struggle with landing slots and limited land availability, cargo and government relations manager, Sara Hales tells Air Cargo Week (ACW). The airport in Southern Queensland is located in one of Australia’s most productive agricultural regions, and has been receiving a lot of interest from a number of airlines, both domestically and internationally. Cathay Pacific Cargo has already announced it will fly a Boeing 747-8 Freighter to Wellcamp once a week from 21 November on a Hong Kong – Sydney – Melbourne – Wellcamp – Hong Kong route. Hales says the Cathay Pacific deal was one of a number of announcements and more airlines are expected to start services soon. She tells ACW: “We have strong interest from a number of different air cargo companies, and a number of operators are at varying stages of studying both the operational capabilities of the airport, and the business case for cargo services here.” Hales says airlines see the opportunity to operate from Wellcamp fitting their overall business strategy. “The hubbing of domestic freighter aircraft into Wellcamp to connect with international air cargo services is being explored, and offers strong prospects for the growth of high value exports from a number of Australian regions.” The region is known for exports including beef, chicken, pork, eggs, horticultural products and milk powder products, and she says there seems to be a significant scope for live cattle, sheep and goat exports. Hales also believes it can cater for oversized cargo for the mining, oil and gas industries. “The airport’s work in attracting air cargo services has already led to increased interest from value adding and high value manufacturing industries, who are drawn to the prospect of capacity availability out of Australia – and the fact that will give them room to grow their own businesses.” Hales believes Wellcamp can use its location to its advantage, one hour flying time closer to Asia than Sydney and two hours compared to Melbourne, meaning lower costs of operations, reduced flying time and crew hours: “For imports to Australia, overnight or same day road transport to Sydney from our airport is extremely cost effective.”
capacity to cater for future growth. Hales says most other Australian airports are operating at or above capacity due to strong passenger growth, so something new is needed for air cargo, and Wellcamp says it can provide this.
She tells ACW: “Capacity, land-based transport efficiencies, a lower cost of operating into and out of Australia, a strong base of exporters as well as a savvy and ambitious airport partner are proving a winning combination.”
New infrastructure, no limits
As a new piece of infrastructure, Hales says Wellcamp has no limitations on landing slot time availability, meaning operators can take off and land at a time to suit them and meet slot time restrictions at other airports. Wellcamp also has no curfews and has significant land around the airport suitable for development. “The combination of landing and take off time flexibility and availability as well as the availability of developable land means that operators at the airport have few constraints on the growth of their business and operation in Australia.” Hales says Wellcamp is actively involved in developing business for airline customers, explaining to ACW: “Growing our business from a very low base has meant that we are a lot more involved in assisting our airline partners with business development than airports typically are. We know our local market very well, and are able to assist with business development for cargo in a practical sense.” Cargo is often not considered a priority, but it is of equal importance to Wellcamp’s business mix. “The airport’s developers and owners have made significant investments to support the development of cargo operations at Wellcamp, including wide body jet capable aviation infrastructure, a business park surrounding the airport with strong road transport capabilities, and a cargo terminal which supports perishable freight.” Over the coming years, Wellcamp will also build a world class perishables handling facility and cargo terminal and a code F cargo apron adjacent to this cargo terminal. Wellcamp has also been developing the Wellcamp Business Park to compliment the airport to provide businesses such as freight forwarders with room. “Designed to support B double truck operations throughout the business park, Australia’s inbound and outbound air freight no longer has to battle through our major cities in order to connect with air services, but can utilise a new hub – dramatically improving first and last mile efficiencies, and for perishables, cool chain integrity.” Airfreight in Australia is expected to grow as the country signs free trade agreements, and Wellcamp believes this is an opportunity to shift air cargo services to its dedicated facility, which has
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AFRICA
Panalpina blossoming after buying Airflo
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lowers and perishables in general are blooming for Panalpina in Kenya and across Africa and it expects this trend to continue over the next five to six years. Country manager for Kenya, Conrad Archer tells Air Cargo Week growth has been considerable since the acquisition of Airflo last year - Kenya’s second largest freight forwarder, which has operations in the Netherlands and specialises in exports of fresh flowers and vegetables. He notes: “We do expect the positive trend continuing in perishables due to the better professionalism of production of goods across Kenya and Africa.” Among the strong growth areas for Panalpina are vegetables moved to Europe, which is up 16 per cent. This Archer notes is mainly peas, beans, corn and also avocadoes, which he says are doing well due to problems in the production of them in South America.
Archer also says: “On the flower side what has been happening for a number of years (10-15) is we have been seeing Africa taking on production coming out of South America. Flowers have been the strong growth sector, but it is slowing down as it has reached market demand.” Another trend in flowers Archer says is China is importing a lot more from Africa and not exporting as much themselves due to changes in the marketplace, while he also notes the Australian market is growing on the import side. Europe used to be the main importer of flowers from Kenya he says at around 90-95 per cent, but now only represents about 75 per cent of imports, as improving professionalism of flower producers means it is exporting to all corners of the globe and new markets. Archer says while Kenya is still performing strongly for flowers, nearby Ethiopia, where air cargo is thriving due to Ethiopian Cargo’s expansion, is currently the quickest growing
production market in Africa. He says there has also been a modal shift in a positive way in Africa for some perishables such as pre-ripped mangoes, which are now be shipped by air, but previously could not be due to the high costs. There is also a growing demand from Europe and other regions for pre-packed fruit salad and fruit. Archer says it is tapping into opportunities with e-commerce an important part of these markets for Panalpina. Africa as a whole is a continent of opportunity for Panalpina, although due to the constantly changing political landscape it can change quickly and West Africa is proving challenging at the moment. Head of airfreight for the Middle East, Africa and the Commonwealth of Indepen-
dent States, Slavey Djahov says the forwarder has been affected by the slowdown in the oil and gas market in Africa, which has affected West African countries (Nigeria etc) especially. He also observes: “The South African import market has been affected by the currency devaluation and political instability and there have been challenges on the import side.” But Djahov says Panalpina is targeting other African markets and has started operations in Egypt and Morocco, but has had to “tune down” some of its operations in West Africa. He says it is making “substantial” investments in Kenya and Africa as a whole to take advantage of opportunities on offer and it is, and will remain a key region for Panalpina so it will carry on investing now and in the future.
Kenyan perishables in high demand PERISHABLES make up the bulk of cargo handled by Siginon Aviation at Jomo Kenyatta International Airport (JKIA) in Nairobi. This consists of flowers, which are 80 per cent of perishables it handles with the other 20 per cent vegetables and herbs. But aviation divisional manager, Jared Oswago (pictured) says performance has been affected in the third quarter: “In Q3 (June to September) we registered a slight decline in exports due to Brexit and other factors. However, perishables will remain strong and positive until close of the year.” The demand for perishables will grow in Oswago’s view as the offering improves as local industry players adopt best practices in farming, handling, and cool chain, contributing a better product for exporters. He notes: “The emergence of direct new markets such as Russia, CIS, Far East, Middle East, Australia, US has reduced Kenya’s reliance on traditional markets in Europe and with it brought about new opportunities.” In JKIA, exports predominantly comprise of perishables while for import cargo Siginon largely handles fruits and general cargo such as motor vehicles, spare parts and machinery. Oswago anticipates Siginon will grow the number of carriers it handles cargo for from the 10-plus now, which includes Singapore Airlines Cargo, Cargolux and Astral Aviation, while it will in-
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vest more in ground handling facilities. He adds: “Additional belly freighter capacity in and out of Kenya such as Saudia Airlines, Turkish Airlines, Singapore, and Emirates has created greater capacity for both imports and exports for Kenya.” There are operating challenges Oswago says such as increased terrorism, which has made investment in security systems a priority. He adds: “Brexit and international restrictions such as unresolved floriculture tax quotas on flowers from Africa into Europe and Brexit have brought out uncertainty to key players in air cargo.” And in Kenya, the cost of doing business remains high with high costs of electricity, labour and various taxation regions to enable operations, while poor infrastructure in Kenya and Africa remains a concern as hampers the movement of produce from farm to market affecting time and quality. Oswago notes: “2017, being an election year in Kenya, it is likely inbound cargo will drop as most middle men reduce or hoard stock in anticipation of shortage and fetching better prices from the market.” But he says opportunities include more airlines operating in intra-Africa, the discovery of new markets, new multinational firms opening in Kenya, while the discovery of fossil fuels in the region will boost business.
AFRICA
Ethiopian busy with routes, aircraft and MoUs
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thiopian Airlines has been busy launching new routes, both freighters and bellyhold capacity, as well as signing a memorandum of understanding (MoU) for more Chinese flights. It signed the MoU with Guangdong Airport Authorities to increase passenger flight frequencies, launch new routes and promoted Ethiopian cargo. The signing took place at the 2nd Investing in Africa Forum in Guangzhou from 7 – 8 September, attended by a number of officials from Africa and China. Ethiopian Airlines group chief executive officer, Tewolde GebreMariam said at the time: “Our services to and from China have proved an ever growing and multifaceted economic merits both for Africa and China by ensuring swifter connectivity to traders and investor from both points.” Ethiopian Cargo has expanded its intra-African services with Boeing 757 Freighter flights to Akanu Ibiam Interna-
Erskine confirmed as CEO
tional Airport in Nigeria’s Enugu state. Dignitaries welcomed the first flight and the new service is expected to reduce cargo delivery costs and enhance convenience and safety of importing goods.
Ethiopian Airlines was the first airline in Africa to operate an Airbus A350 XWB, and it took delivery of its second unit, which arrived at Addis Ababa Bole International Airport on 16 August 2016. It has 12 more A350s on order, and the latest addition increased its fleet to 80 aircraft. The airline has been expanding its network, having added a fourth weekly flight to New York’s Newark Liberty International Airport on 5 August, via Lome-Tokoin Airport in Togo. On 6 October, it also started three Boeing 737 flights a week to Windhoek, Namibia via Gaborone in Botswana. GebreMariam says: “The addition of Windhoek to our ever expanding network brings our African destinations to 52, the largest coverage unrivalled by any other carrier.” Ethiopian is also finalising preparations for flights to Moroni in the Comoros islands. It will use a Boeing 737-800 when it starts services on 2 November.
Hamish Erskine (pictured) has been selected as the chief executive officer (CEO) of Dube TradePort, following 19 months as acting CEO. Erskine has been at Dube TradePort since its formation in 2003, joining as a project executive. Prior to this he worked at the KwaZulu-Natal Provincial Legislature and the KwaZulu-Natal Economic Council as programme manager where he worked on the team conceptualising Dube TradePort. Following the announcement in September, Erskine said: “It is a continual privilege to contribute to an organisation that is geared to fundamentally impact on unemployment, poverty and inequality through new industrial and manufacturing development and providing a world-class operational environment for international and domestic investors.” During Erskine’s time as acting CEO, Dube TradePort as attracted the international carriers Turkish Airlines, Ethiopian Airlines and Qatar Airways, and between January and July 2016 cargo volumes have increased 25 per cent. Dube TradePort describes itself as “Southern Africa’s premier air logistics platform”, having been designated as a Special Economic Zone geared to promote foreign and local investment. The development, 30 kilometres North of Durban, is the home of King Shaka International Airport, and is the first purpose-built aerotropolis in Africa, destined to become a premier business and trade hub.
A330 joins RwandAir’s fleet
RwandAir has taken delivery of its first of two Airbus A330s, making it the East African launch customer for the widebody aircraft. The aircraft will be used on medium and long-haul routes from its home base in Rwanda’s capital, Kigali, to destinations throughout Europe, Asia and the Middle East. The A330 is powered by Rolls-Royce Trent 772B engines. In addition to the A330, the flag carrier for Rwanda also has two Boeing 737-700 Next Generations, two 737800NGs, two Bombardier Q-400s and two CRJ-900s.
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INTEGRATORS
E-commerce growth in Australia targeted by DHL
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HL eCommerce Singapore has launched a hybrid shipping product – Parcel International Direct Australia – as it looks to grow its e-commerce business. DHL says this enables e-tailers, ranging from small to large online retailers, blog shops or sellers on marketplaces in Singapore, to tap into the rapidly growing cross border e-commerce market in Australia. The market is forecasted to grow more than 150 per cent in online cross-border transactions from 6.5 billion Australian dollars ($4.9 billion) in 2013 to A$16.6 billion in 2018. The express freight firm says Parcel International Direct Australia, means online retailers in Singapore will be able to leverage DHL’s strength in quality commercial delivery and extensive network partnerships in Australia, and tap into the massive e-commerce market and deliver parcels of up to 20kg to their customer base.
DHL believes Parcel International Direct Australia allows e-tailers to achieve performance and cost effectiveness, particularly as e-commerce shipments have changed from low-volume, bulk orders to high-volume, small orders straight to consumers. DHL eCommerce Asia Pacific chief executive officer, Malcolm Monteiro says: “Consumers worldwide are increasingly expecting greater choice and convenience in their delivery options, and demanding greater visibility and reliability during the process. “In a recent DHL study, we found that over 59 per cent of customers consider shipping costs, delivery time and choice of the delivery partner before making an online purchase. “As a result, e-tailing businesses and online sellers require more cost-effective and varied means to ship their products to remain competitive. “Parcel International Direct Australia is a ver-
satile shipping product that will help merchants expand their footprint in the online cross-border market.” With the rise of small and medium businesses selling online, DHL eCommerce says it also offers 24/7 self-service portal, the DHL eCommerce Customer Web Portal allowing e-tailers to prepare shipments individually or upload
them in bulk to print their own shipping labels, track shipment progress and generate shipment reports. The portal also integrates with marketplaces like Amazon and eBay, offering sellers on these platforms a seamless experience of pulling orders and pushing tracking details at a click of a button.
3D printing push by UPS UPS’ partner Fast Radius will open a 3D printing factory in a UPS facility in Singapore by the end of this year. The integrator says it will expand the UPS on-demand 3D printing network to Asia and enable customers to increase their supply chain efficiency with additive manufacturing. UPS explains it will also establish an Advanced Solutions team in Asia to create a ‘Centre of Excellence’ that develops supply chain solutions and promotes wider applicability of 3D printing with customers. Businesses can use the Fast Radius on demand production platform to produce industrial parts, which are expedited for delivery via UPS’s global and intra-Asia transportation network. UPS says firms that virtualise their inventories can not only save costs by reducing the number of parts made “just-in-case” but also can produce smaller quantities cost effectively and with the same quality, in addition to minimising lead-times because parts are produced closer to where they are needed. In May, UPS and SAP also announced a co-innovation agreement to collaborate on a solution that would integrate SAP’s extended supply chain and internet of things solutions with the UPS additive manufacturing and logistics network, to “connect the manufacturing floor to the customer door.” UPS Asia Pacific region president, Ross
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McCullough says: “3D printing will have a significant impact on industrial manufacturing and 21st Century supply chains. At UPS, we are embracing disruptive technologies and integrating them into our global logistics network. “We believe that much like e-commerce digitised and transformed retail, 3D printing will have a similar impact on manufacturing.” “UPS is the first integrated logistics provider to establish an on-demand 3D printing manufacturing and logistics network in Asia,” McCullough adds. “This network will help Asia strengthen its position as a manufacturing hub.” Fast Radius chief executive officer, Rick Smith says the Wohlers Report 2016 predicts the 3D printing industry will grow from $5.2 billion in 2015 to $26.5 billion in 2021, while report says if 3D printing penetrates just five per cent of the world manufacturing economy, it would reach $640 billion annually.
TRADEFINDER Airlines
Cargo Handling
Freight Forwarders
Turkey
United Kingdom
Caribbean
Freight Forwarders Hong Kong
Spain
Freight Forwarders India
Iraq
United Arab Emirates
Forwarder Announcement
Freight Forwarders USA
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NEWSWEEK Finnair on the up in September
FINNAIR’s scheduled cargo traffic grew yearon-year (YOY) by a significant 24.8 per cent in September to 11,972 tonnes and after nine months of the year tonnage has grown YOY by 15.8 per cent to 96,667 tonnes. The carrier saw strong growth on European, North Atlantic and Asian trade lanes last month – up YOY 33.8 per cent, 36.3 per cent
and 22.1 per cent, respectively. Cargo capacity in available tonne kilometres grew by 4.8 per cent in September to 124.3 million. Finnair’s total freight capacity included two weekly freighter flights between Helsinki and Brussels and two weekly freighter flights shared with IAG Cargo between Helsinki and London, both operated by DHL, the latter being replaced by a regular Airbus A350 five times a week in the first week of October. In September the load factor was 63.9 per cent, 10.1 percentage points up on the same month last year and for the nine months of 2016 it is 57.3 per cent, 4.1 percentage points up on the same period last year. Finnair’s chief financial officer, Pekka Vähähyyppä says unit revenues declined, but strong volume growth balanced this partially.
Historic CO2 agreement reached
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historic agreement has been reached by governments, industry and civil society representatives after they agreed on a new global market-based measure (GMBM) to control CO2 emissions from global aviation. They reached it at the International Civil Aviation Organization’s (ICAO) 39th Assembly held from 27 September to 7 October in Montreal, where it was agreed to recommend adoption of a final resolution text for the GMBM. ICAO’s 191 member states agreed to implement a Carbon Offset and Reduction Scheme for International Aviation (CORSIA). ICAO Council president, Dr Olumuyiwa Benard Aliu says: “It has taken a great deal of effort and understanding to reach this stage, and I want to applaud the spirit of consensus and compromise demonstrated by our Member States, industry and civil society. “We now have practical agreement and consensus on this issue backed by a large number of States who will voluntarily participate in the GMBM – and from its outset. This will permit the CORSIA to serve as a positive and sustainable contributor to global greenhouse gas emissions reduction.” ICAO’s CORSIA is designed to complement the basket of mitigation measures the air transport community is already pursuing to reduce CO2 emissions from international aviation. These include technical and operational improvements and advances in the production and use of sustainable alternative fuels for aviation.
Implementation of the CORSIA will begin with a pilot phase from 2021 through 2023, followed by a first phase, from 2024 through 2026. Participation in both of these early stages will be voluntary and the next phase from 2027 to 2035 would see all States on board. Some exemptions were accepted for least developed countries, small island developing states, landlocked developing countries and States with very low levels of international aviation activity. The International Air Transport Association (IATA) congratulated states who reached the agreement. IATA’s director general and chief executive officer, Alexandre de Juniac says: “The historic significance of this agreement cannot be overestimated. CORSIA is the first global scheme covering an entire industrial sector. The CORSIA agreement has turned years of preparation into an effective solution for airlines to manage their carbon footprint. “Aviation is a catalytic driver of social development and economic prosperity - it is the business of freedom making our world a better place. This agreement ensures the aviation industry’s economic and social contributions are matched with cutting-edge efforts on sustainability. With CORSIA, aviation remains at the forefront in combatting climate change.” Airports Council International and ICAO also signed a memorandum of understanding for enhanced co-operation regarding environmental related initiatives.
CARGOLUX Airlines International has appointed Chris Nielen as its new vice president for sales and took over on 3 October. Nielen joins from IAG Cargo where he held the position of regional commercial manager Europe. Nielen has 16 years of experience in the air freight business which have enabled him to build a solid knowledge base about the airfreight market especially in
the Sales and Marketing area. Cargolux executive vice president for sales and marketing, Niek van der Weide says: “We are very pleased to welcome Chris in our sales team. “He is a young dynamic, and extremely sales-focused person with excellent contact with the major customers and industry players. “His outgoing personality and vast knowledge of the industry will undoubtedly help Cargolux to further expand and strengthen the relationships with our worldwide clients.”
Nielen named VP for sales at Cargolux
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