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The weekly newspaper for air cargo professionals Volume: 20
Issue: 45
13 November 2017
SIA Cargo and Emirates SkyCargo turn figures around
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ingapore Airlines (SIA) Cargo has turned around a loss of S$45 million (US$33 million) last year to an operating profit of S$32 million in the first half of the 2017/18 financial
year. The carrier’s revenue improved S$122 million as freight carriage growth of 6.1 per cent was further supported by a 6.7 per cent improvement in cargo yield. Expenditure was up $45 million, partly due to higher handling costs from increased carriage and higher aircraft maintenance and overhaul costs. The cargo load factor rose by 3.2 percentage points to 64.8 per cent. The SIA Group as a whole reported a net profit of S$425 million in the first half of the 2017/18 financial year, S$103 million (+32 per cent) higher than last year. Cargo revenue was up $123 million on higher freight carriage (+6.1 per cent) and yield (+6.7 per cent). In the second quarter (Q2) alone, SIA Cargo reported an operating profit of S$26 million, reversing its loss of S$11 million in Q2 last year. Revenue grew S$65 million as freight carriage grew 5.4 per cent, further lifted by a 9.1 per
60 SECONDS WITH SONER AKKURT
cent improvement in cargo yield on the back of improved trade conditions. SIA Cargo operated a fleet of seven Boeing 747-400 Freighters as at 30 September 2017. As for the future, SIA Cargo says it will continue to pursue charter opportunities and deploy capacity to match demand. In Dubai, profits have rebounded for Emirates, rising by 111 per cent in the six months up to 30 September, hitting $452 million. Revenue increased by six per cent to $12.1 billion, while revenue for the Emirates Group was also up six per cent to $13.5 billion, with profits growing by 77 per cent to $631 million. Cargo volumes at Emirates SkyCargo increased by five per cent to 1.3 million tonnes and yields improved by eight per cent, which the airline says is due to recent investments in
products and services tailored to key sectors and the recovery in the global airfreight market. Emirates Airline and Group chief executive officer, His Highness Sheikh Ahmed bin Saeed Al Maktoum says: “Our margins continue to face strong downward pressure from increased competition, oil prices have risen, and we still face weak economic and uncertain political realities in many parts of the world.” Dnata also had a strong 2017-18 half year, with revenue up seven per cent to $1.7 billion and profits increasing 20 per cent to $180 million. Cargo handled rose by 25 per cent to 1.5 million tonnes helped by the global upturn in volumes, entering the US cargo market with the acquisition of AirLogistix USA and opening a new cargo facility in Adelaide.
special features to help us grow our business, especially in the airfreight market where shipments are larger and heavier. “The 72-600F will play an important role in our global network by helping us deliver fast, economical service to small and medium sized markets.” ATR CEO, Christian Scherer adds: “ATRs in cargo configuration deliver an outstanding service, both serving small communities and feeding larger freighters. “We are convinced that, with its use by FedEx Express, it will become the new benchmark for regional air cargo operations.”
Atlas Air Worldwide has seen losses increase to $24.1 million in the third quarter (Q3) despite significant growth in revenue and volumes. The losses are up from $7.9 million in the same period of 2016, though revenue rose from $448 million in 2016 to $535.7 million this year. Year to date profits were up from $13 million in 2016 to $14 million this year. Revenue increased from $1.3 billion in 2016 to $1.5 billion. Atlas has placed 10 Boeing 767-300 Freighters with Amazon as of October. Meanwhile, Air Transport Services Group’s (ATSG) revenues increased $60.8 million on Q3 last year, or 31 per cent, to $254.1 million for Q3 ending on 30 September. Revenues increased $49 million, or 29 per cent. Q3 earnings included non-cash after-tax charges totaling $43.1 million for revaluation of the warrants granted to Amazon Fulfillment Services. EBITDA increased 27 per cent to $65.9 million versus a year ago.
FedEx signs deal for 30 ATR 72-600s Atlas on the up in Q3 FedEx Express has signed a contract to purchase 30 ATR 72-600s with the option for 20 more, with deliveries starting in 2020. The aircraft will be the first new ATRs to be directly delivered from the factory in a freighter configuration, and will feature a brand new windowless fuselage and is equipped with a forward large cargo door and a rear upped hinged cargo door. The ATR 72-600F features a class E main cabin for cargo operations, and support both bulk cargo and unit load device configurations. It will have a bulk capacity of 74.6m3, and when in ULD mode, can accommodate up to seven LD3 containers, or five 88×108 or nine 88×62 pallets, and the aircraft is also equipped with reinforced floor panels. FedEx Express president and chief executive officer (CEO), David Cunningham says: “ATR aircraft have been successfully operating in FedEx service for many years. We worked with ATR to develop this new aircraft, which include
C H A RT E R S
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IATA DEMANDS BREXIT AND LHR CLARITY
BRUSSELS AIRLINES SEEING STRONG DEMAND INDUSTRY MUST ADAPT TO CHANGES
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Qatar buys 9.61% stake in Cathay Pacific
QATAR Airways has acquired a 9.61 per cent stake in Cathay Pacific Airways Limited – adding to stakes it already has in IAG, Meridiana and LATAM Airlines Group. Cathay and Qatar already collaborate together as members of the oneworld alliance. Air China Limited and Swire Pacific Limited together continue to hold 74.99 per cent shares of the airline. Qatar Airways Group chief executive, Akbar Al Baker says: “Qatar Airways is very pleased to complete its financial investment in Cathay Pacific. Cathay Pacific is a fellow oneworld member and is one of the strongest airlines in the world, respected throughout the industry and with massive potential for the future.” In September, Qatar took a 49 per cent take in Meridiana, while it also holds a 20.1 stake in IAG and a 10 per cent stake in LATAM Airlines Group. Cathay Pacific chief executive officer, Rupert Hogg says: “Qatar Airways is one of the world’s premier airlines. We already work together closely as fellow members of the oneworld alliance and we look forward to a continued constructive relationship.” In August, Cathay posted a loss of two billion HK dollars ($255 million) in the first half of 2017, compared to a HK$353 million profit in 2016.
R E M E M B E R
13:RECORD BREAKERS
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NEWSWEEK
IATA demands Brexit and Heathrow clarity
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he International Air Transport Association (IATA) is urging the UK government to focus on a cost effective expansion of Heathrow Airport and providing clarity on post-Brexit issues. Director general and chief executive officer, Alexandre de Juniac was addressing the UK Aviation Club, where he highlighted the issues the UK could face following its departure of the European Union in March 2019. He warns that when the UK leaves the European Single Market, it will also leave the European Common Aviation Area, which could throw all traffic rights associated with Europe into question. De Juniac says: “The basis of international aviation is bilateral air services agreements. There is no WTO agreement to fall back on. For that reason, I don’t see any alternative to a negotiated agreement.” The UK government is being urged to address the capacity constraints in the Southeast of the UK by expanding Heathrow, saying the economic value of £200 billion and creation of 110,000 jobs from constructing a third runway means it is essential in a postBrexit world. Though de Juniac describes the original cost estimate of £17 bil-
Air Cargo Global picks ATC as its GSA
ATC Aviation Services has been appointed as general sales agent for Air Cargo Global in Germany, starting 6 November. Air Cargo Global operates scheduled direct flights from Brussels Airport and Prague Airport to Hong Kong International Airport with a Boeing 747-400 Freighter. The airline was founded in 2013 and is a Slovakian limited liability company, based at Bratislava Airport with an Air Operator Certificate, and has two 747-400Fs with
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payloads of 107 tonnes. Its head office is in Bratislava, with a German branch office in Frankfurt along with a sales office, as well as an office in the Czech Republic at Prague Airport. ATC has its head office in Frankfurt and was established in 1971, and has offices in Argentina, Austria, Brazil, Ecuador, France, Germany, Hong Kong, India, the Netherlands, South Africa, Spain, Switzerland and the USA.
lion as “completely unacceptable”, measures to reduce this are a step in the right direction. De Juniac adds that a successful airport needs sufficient capacity and quality, aligned with airline operational needs and affordable costs. He says: “In delivering the third runway, Heathrow’s capacity issue will be resolved for now. But achieving the right quality at the correct price requires consultation with the airlines.“
CargoLogicAir launches flights to Tel Aviv CARGOLOGICAIR (CLA) has added Tel Aviv in Israel to its growing network of scheduled freighter operations – the third route it has launched this year. It started on 10 November 2017, with the London Stansted Airport based carrier operatinga weekly Boeing 747-400 Freighter service to Tel Aviv via Frankfurt. The flights depart Frankfurt for Tel Aviv on Friday evenings before returning to Frankfurt on Saturday morning. In December, the
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outbound service ex Europe will switch from Frankfurt Hahn Airport. CLA has appointed Rom Top Aviation as its general sales agency partner in Tel Aviv and chief executive officer, Dmitry Grishin explains: “We expect to carry a diverse range of cargoes on this route, including regular shipments of pharmaceuticals, hitech products, aerospace components and perishables.” CLA added routes to Mexico and Hong Kong earlier this year.
Miami launches real-time online flight tracker
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iami International Airport (MIA) has launched its its MIA Cargo Flight Tracker – the first real-time online cargo flight information display system in the US. The gateway unveiled the tool at the Air & Sea Cargo Americas conference and exhibition in Miami on 2 November. The tracker allows shippers, freight forwarders, customs brokers and logistics providers to easily view real-time cargo flight information on their mobile devices while on the go. Previously, cargo flight data was only available by contacting or researching individual airlines. Now, cargo handlers have MlA’s minute-by-minute schedule of daily cargo flights in the palm of their hands – saving time and fuel costs when planning freight pick-ups and deliveries. As the busiest US airport for international freight, MIA’s cargo activity generates a local workforce of nearly 8,000 freight forwarders and couriers, and is the primary supporter of 425,344 cargo-related jobs in the Florida economy. Miami-Dade Aviation Department (MDAD) director, Emilio T. González (pictured testing the new product) says: “The MIA Cargo Flight Tracker is the latest example of how we are leveraging tech-
First cool Jettainer customer
NEWS WEEK WORLDNEWS 1GSA has appointed Transviet Promotion Limited as its exclusive member for Vietnam. Transviet Promotion was launched in 1996 and has five bases in Ho Chi Minh, Hanoi and Da Nang, and 55 of its 350 staff are employed in cargo, representing nine major carriers. It provides the Vietnamese air cargo market with access to destinations throughout Asia, USA, Europe, Middle East and Africa.
nology to streamline and optimise our cargo operations. “Thanks to this new tool, our local cargo industry can spend less time and money waiting in traffic for cargo shipments, because now they have real-time flight information at their fingertips.” MDAD has launched a variety of cargo logistics improvements at MIA recently, including: the e-AWB 360 campaign; Florida’s firstever ocean-to-air perishables trans-shipment programme; and a multi-million dollar facility improvement programme launched in 2016 that includes new surveillance cameras and lighting throughout the airport’s cargo area.
E-CARGOWARE – has appointed former IATA head of cargo, Des Vertannes as its non-executive chairman of the board. e-Cargoware’s cloud-based platform is used by ground handlers, GSAs and airlines to manage their sales, operations and management of cargo. Vertannes held a number of senior industry roles before leaving IATA in 2014, including head of cargo at Gulf Air and then Etihad Airways. He was also inducted to TIACA Hall of Fame last month.
JETTAINER has welcomed Lufthansa Cargo as its first custumer for its ‘Cool Management’ service. The ULD firm is not only managing the temperature-controlled ULDs for its parent company, but also units leased by Lufthansa Cargo. Additionally, Jettainer is also upscaling its services at Abu Dhabi International Airport with a new Center of Excellence for the management of temperature-sensitive airfreight. Lufthansa Cargo global handling performance manager, Marcus Bezold says: “The new service by Jettainer will help us to reduce holding time of units, which will reduce our costs for the leasing of additional ULDs.” Jettainer managing director, Carsten Hernig explains: “The management of cool temperature ULDs is a small but very complex part of our business. Any mistakes do not only have financial repercussions, but also lead to a loss of reputation for our clients. “At the same time it is of the essence for airlines to become more efficient in this field. That is why we have upgraded our services and are optimistic that we can meet any challenges in this field.“
AF-KLM continues to recover
CARGO at Air France KLM continues its turnaround with revenue increasing by 3.2 per cent in the third quarter, with tonnage remaining stable. Total cargo revenue was up 3.2 per cent to €493 million ($572 million) though was down 1.1 per cent in the first nine months of 2017 to €1.5 billion. Tonnage increased 0.1 per cent to 279,000 tonnes in the third quarter and remained at 837,000 tonnes in the first nine months, while load factors improved by 0.5 percentage points in the third quarter to 57.1 per cent and by 0.7 percentage points to 58.8 per cent in the first nine months. Air France KLM chairman and chief executive officer (CEO), Jean-Marc Janaillac says: “The strong operating performance achieved by the Group in the third quarter reflects a sustained execution on our strategic priorities, as well as a robust business environment translated into solid traffic and unit revenue trends.” Revenue for the group was up 5.1 per cent to €7.2 billion in the third quarter and 4.1 per cent in the first nine months to €19.5 billion. The net result for the group was up 1.5 per cent to €552 million in the third quarter and by 63.5 per cent to €703 million in the first nine months.
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ACW 13 NOVEMBER 2017
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60 NEWSWEEK
Seconds with
Justin Burns, ACW: How close to completion is construction work? Akkurt: 64.5 per cent of the construction for the first hase of INA has been completed. 31,000 people currently work on the construction site, who make sure that INA will open on time.
SONER AKKURT
Istanbul New Airport (INA) is set to open in the fourth quarter of 2018 and the gateway is set to be one of the globe’s megahubs and help grow freight into and out of Istanbul. The operator is the IGA Airport Operation and Air Cargo Week spoke to chief commercial officer, Soner Akkurt about how the project is coming along and its freight plans.
Justin Burns, ACW: When will it open? Akkurt: The airport will open on 29 October, 2018 (in the fourth quarter).
Justin Burns, ACW: How important is cargo? Akkurt: Cargo is set to play a central role in the development of INA. IGA is constructing a
huge Cargo City beyond calling it a cargo terminal. The airport will have a space for ground handling services of 150,000 sqm and space of 1.4 million sqm for cargo services, which includes several facilities serving cargo businesses. There is available space for further expansion in the Cargo City. Moreover, IGA will be including an extra cargo area in parallel with the construction of the second terminal. The ultimate area will consolidate İstanbul New Airport as an important cargo hub.
Justin Burns, ACW: How will INA boost air cargo in Istanbul and Turkey? Akkurt: Turkey is becoming an ever-more crucial centre for air cargo. INA will make Istanbul the new centre of international transportation through its Cargo City. The existing airports in Turkey are heavily congested and that creates a huge cost for the country. Turkey has been very successful in establishing Istanbul as a hub for passenger flights. But the lack of slots for cargo planes has prevented the same to happen in terms of cargo. Therefore, the new airport is absolutely needed and especially the logistics industry can strongly benefit from that. Justin Burns, ACW: How much cargo will be handled? Akkurt: In the first phase of construction, IGA plans to build a cargo/logistics centre over an area of 1.4 million square metres and expand the area to 1.6 million square metres in later phases. In the first 12 months, the annual cargo forecast to be handled is around 1.45 million tonnes a year. In 2025, our forecast for cargo handled at the İNA is around 2.40 million tonnes. After all phases are completed, the cargo capacity will be five million tonnes a year.
Justin Burns, ACW: What freighter operators will be servicing INA? Akkurt: Turkish Cargo and other Turkish operators like MNG, ULS etc. will definitely be servicing INA. In addition, leading freighter industry companies will be serving İNA. Justin Burns, ACW: Are you looking to add freighter carriers to ones servicing Ataturk?
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SONER AKKURT Akkurt: Having no any limitations on landing slots and night curfew, and available space and very challenging airport cargo and handling charges make the new airport one of the best cargo hubs. And surely, this will attract many other freighter operators. In addition, Turkish Airlines will also help other freighter operators to have better market penetration.
Justin Burns, ACW: Do you see INA becoming an important transit hub? Akkurt: The airport will make Turkey one of the most important transit centres in the world and will turn over a new leaf in the Turkish aviation sector. The geographical location of Istanbul has a great advantage for transit flights between Europe, the Middle East, Asia and Africa. It makes INA an excellent hub for transit passengers. And there is indeed a large number of transit passengers. That is why Turkish Airlines has already increased its activities. Justin Burns, ACW: Is the aim to rival and take business away from the likes of Dubai? Akkurt: No, definitely not because INA will follow its own strategy. Nevertheless, it is already foreseeable the new airport will provide global routes, reduce flight times and offer a high flexibility to use a variety of aircraft of diverse capacity. Justin Burns, ACW: How entwined are the future growth of Turkish Airlines and INA? Akkurt: It is already clear that Turkish Airlines will be one of the most important drivers in INA. As one of the key stakeholders, Turkish Airlines is very happy that the new airport will be their new main hub without any limitations. Due to this good starting situation, Turkish Airlines will pursue to grow and will have a positive effect on INA. Justin Burns, ACW: What will happen to Istanbul Ataturk Airport? Akkurt: INA will be the main airport when it will be opened next year. The capacities of Ataturk are not sufficient anymore, that’s why it will be replaced by INA. After the opening of the new airport, Ataturk will be utilised as an airport for general aviation and training. It will be also used as an exhibition hall.
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AFRICA Brussels Airlines Cargo seeing strong demand across Africa
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frica is a key region for Brussels Airlines Cargo and a major growth market for the belly carrier. The airline operates a fleet of six Airbus A330s daily to Africa offering an average capacity per flight of 10 tonnes to Africa and 12 tonnes out. It serves 17 sub-Saharan Africa routes in 77 weekly frequencies. Vice president of global cargo, Alban Francois (pictured) estimates it will end 2017 with 15,000 tonnes to Africa, an increase of nearly 25 per cent year-on-year (YOY). Francois says: “This is the result – mainly – of the implementation in 2016 of our new commercial strategy and implementation of improved capacity management allowing us to increase the transported freight on every single flight by 1,000 kg in average, while at the same time reducing drastically the number of offloads thanks to an optimised capacity forecast.” He notes the importance of a trade lane in term of volumes depends generally on the number of frequencies operated weekly and the export market at destination. The strongest lanes for the carrier are Cameroon, Democratic Republic of Congo, Ivory Coast, Senegal and Uganda – destinations served daily, or six times a week. Volumes are up YOY by 25 per cent with rises in all commodities, but it is seeing the biggest growth in special products where it has invested heavily in over the last few years. Brussels Airlines Cargo has seen a nearly 35 per cent increase in pharmaceuticals and from Africa, the volumes are increasing by nearly 15 per cent YOY perishables growing nearly 25 per cent. Francois adds it has nearly dou-
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bled volumes of sensitive freight such as valuable (VAL) and dangerous goods (DGR). He says the market out of African destinations (West, Central and East Africa) remains quite stable with nearly 80 per cent consisting of perishables and it sees an overall trend of increased export of VAL and DGR, but overall no big evolutions outbound. He notes inbound, there is a strong growth of freight from Asia Pacific (+30 per cent YOY) and when analysing the commodities of goods, e-commerce is also emerging in sub-Saharan Africa - mainly driven by the rise of new payment methods in Africa (mainly mobile) and Internet penetration. Francois says: “I believe this is only the start of the e-commerce era and that also people in Africa will, once solutions are implemented to safeguard the ‘last-mile logistics’ (through a grid of fulfillment centres, or using geo-localisation of the mobile phone) and for customs clearance, purchase more goods through the Internet than in physical stores. “This is the reason why Brussels Airlines is looking into solutions allowing same-day connection and dispatching of small parcels from flights inbound Asia towards our different African flights through our Brussels hub.”
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Africa is a vital region for its growth strategy along with connections to the US, Asia and Europe, which are key for expansion of services into Africa. He notes this is one of the reasons it started a route to Mumbai earlier this year. Next year will bring new opportunities with the arrival of seven A333s to replace A330s, meaning a capacity increase of nearly 50 per cent. Francois adds: “On a longer term and to assure our competitive positioning in Africa, we are looking into consolidating our current network by offering more direct flights (and thus more cargo capacity per station) and increase frequencies. Finally, we are also looking into opening new routes.” Francois says the export and import volumes are more or less the same but expects a bit more in the south direction this year. However, he says this does not mean the volumes per destination are in balance as on the southbound the cargo load factor’s are high and stable across all routes, the story is completely different northbound as half of the origins (eight on 17 stations) represent nearly 80 per cent of volumes and the top four origins more than 50 per cent of volumes. 80 per cent of the African volumes it carries are perishables. In three origins, Francois says export volumes are very limited (nearly nil) and the carrier is working with local growers and authorities to help them set up export flows as this is crucial for local economies. Francois notes there are challenges and opportunities: “The political instability in some countries and lack of appropriate and/or sustainable infrastructure (especially when focusing on commodities requiring dedicated handling) makes it even more interesting to operate in Africa as it forces us to be agile. “According to me, e-commerce will be a game changer for Africa. Outbound-wise it’s bringing local grower in contact with importers in Europe what is necessary to allow certain countries to start exports.”
AFRICA
NAM and Astral sign B747F deal with Air Atlanta
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etwork Airline Management (NAM) and Astral Aviation have signed a long-term wet lease with Air Atlanta Icelandic adding a factory-built, nose-loader Boeing 747-400 Freighter to their existing managed fleet of three MD11Fs. This will enable NAM, which is a division of the Network Aviation Group - to develop their presence in Africa, and especially the Kenyan perishables market, adding capacity for flowers and vegetables from Nairobi to the UK. NAM Group chairman, Andy Leslie says: “We are excited to enter into this agreement with Astral Aviation and Air Atlanta Icelandic and look forward to a long and successful partnership enabling us to further expand our network.” Astral Aviation founder and chief executive officer, Sanjeev Gadhia says: “The newly acquired B747-400F from Air Atlanta Icelandic will strengthen our position as a market-leader in perishable exports from Kenya to the UK market. “Furthermore, the B747F will feed its intra-African network in Nairobi with cargo, which will be consolidated in its Liege hub
RAM starts B737 FRA route
originating from Europe and the US.” The B747-400F made its inaugural flight from London Stansted Airport to Nairobi’s Jomo Kenyatta International Airport on Tuesday, 7 November expanding NAM’s capacity to East Africa. The group expects to handle around 33,000 tonnes of perishable exports from East Africa to Europe per year.
The nose-loader B747F will also enable the group to attract out-sized oil, gas and mining equipment for West and East Africa, which is expected to increase following the high oil prices experienced during the past week. Gadhia adds: “While most foreign carriers are reducing their capacity to Africa, Astral Aviation remains ‘cautiously optimistic’ of positive growth in perishable exports to Europe and a strong south-bound demand from Europe to West and East Africa, fuelled by the growth in consumer demand for e-commerce and oil and gas equipment due to the improved fuel prices.” He concludes, “According to IATA, African carriers had the fastest growth in year-on-year freight volumes. However, growth is set to remain in double digits for the remainder of 2017.” Air Atlanta Icelandic vice president of sales and marketing, Baldvin M. Hermannsson says: “We are thrilled to start this new chapter in our wet leasing with our new, highly respected partners, Astral Aviation and NAM, and are pleased that our services and technology will further improve their offerings to the industry.
GENERAL sales agent (GSA) ATC Aviation says its long-standing partner Royal Air Maroc (RAM) Cargo started operating its Boeing 737 Freighter twice weekly from Frankfurt to Casablanca on 2 November. The freighter is set to benefit customers from RAM’s extensive network within North and West Africa, as well as South America. In the first quarter of 2018, RAM Cargo will also operate a new B767F, followed by two additional freighters within the next five years of operations. With these additional capacities, RAM Cargo is expected to improve its offer to and from Casablanca, as well as on the entirety of its network, including North and West Africa, as well as South America with daily flights to Brazil. ATC Aviation, is RAM’s GSA in Germany, Austria and South America, where it manages the airline’s cargo sales. RAM Cargo moves about 25,000 tonnes of freight a year.
Presidential job for Volga
VOLGA-Dnepr Airlines has used the special two-tier car racking system developed for its An-124-100 Freighter fleet to deliver 30 Mercedes vehicles to Luanda in Angola for the inauguration ceremony of newly-elected president, Joao Lourenco. The 90-tonne payload was transported from Leipzig/ Halle Airport on behalf of the Angolan Embassy in Germany. It consisted of a fleet of Mercedes cars comprising 25 luxury sedans, three police cars and two heavy armoured G-class vehicles. Including tooling, the total load exceeded 110 tonnes. Volga’s two-tier platform enables cars and 4x4s to be driven onboard the An-124-100. Deputy head of its load planning centre, Alexander Prokofiev says: “The vehicles were carefully loaded inside the An-124-100 freighter with minimum clearances. “This was completed by our expert drivers who have special experience of loading vehicles using our two-tier racking system, with the assistance of staff from Volga-Dnepr’s operations base at Leipzig and the airport authority.”
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ACW 13 NOVEMBER 2017
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AIR CARGO AMERICAS REVIEW
Industry must adapt to changes to avoid extinction
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he rise of e-commerce is rapidly changing the logistics industry, but is continuing to provide challenges that must be overcome. In the first session of the Air & Sea Cargo Americas conference on 1 November titled ‘Trade trends in the Americas’, SeaLand chief executive officer (CEO), Craig Mygatt; Estafeta international business manager, Diana Najera; UPS president for the Americas region, Romaine Seguin; and Atlas Air executive vice president & chief commercial officer, Michael Steen (pictured right), who is also Titan Aviation president & CEO; explained to delegates how logistics has changed in recent years and what may happen in the near future. E-commerce was a major talking point, especially as consumers want products and expect them to turn up immediately. Seguin explained: “E-commerce has radically changed logistics, it has created last mile challenges. Customers expect free shipping but nothing is free in shipping, there is a cost there somewhere.”
Consumers want it now
Session moderator Richard Roffman, who is the publisher of Cuba Trade Magazine, agreed, saying a few years ago consumers expected to wait a few days for delivery but now expect to be able to order products on their phones and to receive constant updates such as who packed it and other information.
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She says: “We have enhanced our business, pharma is very strategic for us. My advice is work out how to integrate into changes.” Steen says the main change Atlas Air has experienced over the past 10 years is the type of customer it provides aircraft for.
Integrate changes
Steen commented that improvements in the global economy bring both good and bad news, saying: “The global economy is doing great and this is fuelling purchasing, but this brings challenges for the supply chain. Technology is there to support industry but regulations are going to be the biggest challenge. Cross border is one of the biggest challenges we face.” Seguin pointed out that Latin American customs processes are not advanced or automated and UPS is working with government officials to show them what it should look like, with consis-
tent tax and duties. She says: “It is all manual south of Miami, there are delays whether it is for cargo or express. We spend a lot of time explaining what technology can do. When we explain to finance ministers that they will get consistent revenue they use it.” Embracing new technology is essential to being successful in the future, and Seguin believes whichever company can provide last mile services that satisfy the customer will be the winner.
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In the past it primarily dealt with scheduled airlines but now 70 per cent of the market is for express and e-commerce. He says: “A lot of companies have different specialities, adding value to consumers. Looking ahead there are tremendous opportunities ahead.” Najera says while air cargo operators plan their fleet up to seven years in advance, in e-commerce this is every year, and Estafeta is consistently adding new trucks. She explained: “In terms of e-commerce you have to have a lot of contact with customers, you must understand how they behave. We are doing a lot in online marketing, a lot of research into what customers wants for planning how to serve them in the future.” Moderator Roffman described the need to change by saying: “If you don’t adapt then you’re a dinosaur and you will become extinct.”
AIR CARGO AMERICAS REVIEW
Shippers should support efforts to improve services
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f pharma shippers are not going to support the air cargo industry’s efforts to improve services then they should stop complaining, Brussels Airport Company head of cargo, Steven Polmans believes. He says the industry has been making a lot of effort to improve services for pharmaceutical shippers in recent years and they need to recognise this. Polmans made his comments at the Air & Sea Cargo Americas conference on 2 November during the session ‘Pharma Air Shippers Forum: Meeting the Pharma Shipper’s Expectations’. Brussels Airport was the first airport in the world where stakeholders were fully IATA CEIV Pharma certified. He told delegates: “Pharma shippers have been complaining for a long time, if they are not going to support us then they should stop complaining and take responsibility.” He adds Brussels started three years ago and is still gaining momentum, saying: “We do it for the shippers as we want to meet their needs so they should support those who make investments if they want improved standards.” Polmans explained that shippers complained sending pharma was like gambling as sometimes it would work but other times not, even when using the same airline at the same airport. Companies would have no idea what happened at the airport so Brussels wanted consistent standards.
Transparent experience
He said: “We are trying to make the experience transparent, coming to a kind of standard that if you send by Brussels you can expect this service, a minimum requirement. This is what started it and the whole CEIV process, training, infrastructure. There has been a big improve in the mind set towards pharma.” Despite what people believe, CEIV was not developed by IATA but by pharma companies, and it was so successful that IATA adopted it. As Polmans pointed out it really came from the shippers. Brussels Airlines Cargo vice president of global cargo, Alban Francois believes everyone in the supply chain is trying their best to improve matters but if they are not aligned then there can be problems. Information is very important, he says: “It all starts if you have the right data measuring and understanding is happening. We did that at Brussels for the ramp transportation because we needed a solution for ramp. When you start to measure and understand where issues are you can start to solve it together.”
Review own operations
American Airlines Cargo manager for cold chain strategy, Tom Grubb said GDP was the gold standard by manufacturers but CEIV established definite guidelines all companies can follow. He comments: “It gives individuals a way to look at operations so you are all doing it the same way to meet the need of the shippers. The benefit and challenge of CEIV is it gives you the opportunity to evaluation your own processes and work out where are the gaps.” Francois points out: “CEIV is not the end goal, it is the first step to create awareness” and that being certified is a guaranteed awareness to continuously improve processes and look into issues. Miami Dade Aviation Department chief of staff, Joe Napoli says CEIV is resource intensive, explaining: “You risk having to dedicate resources and time, we expect we will be required to be CEIV certified. There is an expectation on demand that it will be there in the future.” Polmans describes CEIV as an investment, saying: “Cost is always an issue, the pharma shipper must be willing to pay for quality.” Grubb adds: “To handle these products you have to make investments but you can’t absorb all the costs, you pass costs to customers in terms of day to day costs. When customers want a rate reduction there is a problem making the math work.” Session moderator Miami Dade Aviation Department section chief aviation marketing, Jimmy Nares ended the discussion saying: “Collaboration is key, communication is important, as it forming strategic partnerships. You need open dialogue, it is important to be transparent to gain the trust of shippers. They need to trust the products to build confidence.”
aircargoweek.com
ACW 13 NOVEMBER 2017
9
INDIAN SUBCONTINENT
Jet ups cargo weekly capacity into Heathrow by a third
J
et Airways has upped belly capacity to London with the launch of a third daily service from Mumbai International Airport to Heathrow Airport on 29 October. The carrier is operating a Boeing 777-300ER aircraft on the route and says it is in response to rising demand between the UK and India. The new flight will augment cargo capacity on the route, strengthening its presence in both the UK and Indian market and allowing it to offer the maximum frequency and capacity between London and Mumbai. Key commodities such as perishables, pharmaceuticals, engineering goods, garments & fabrics, foodstuffs, as well as specialised medical equipment, among others. By helping expand connectivity, the flight will promote greater access for cargo, from Heathrow to destinations in India, as well as the SAARC and ASEAN regions. From Mumbai, cargo customers can connect on Jet Airways’ network across India to the likes of Ahmedabad, Bangalore, Kolkata, Delhi, Goa, Hyderabad, and Chennai.
Jet Airways chief executive officer, Vinay Dube says the third daily, non-stop service between Heathrow and Mumbai will further drove growth on the rapidly growing route. Forecasts supplied by Morgan Stanley suggest that India is likely to become the world’s fastest-growing economy in the next 10 years and the UK Government has recently announced its intention to secure a new trade deal between the two countries. Jet Airways recently confirmed that it has placed an order to buy 75 Boeing 737 MAX aircraft. It has introduced three new major international services to its extensive global network this
winter, as well as reinforced six existing routes with additional frequencies to meet the growing travel demand. Jet Airways has started a daily Airbus A330 service between Bengaluru International Airport and Amsterdam Airport Schiphol boosting its cargo traffic into the Netherlands. It will enhance Jet’s cumulative daily capacity to Europe by as much as 15 tonnes facilitating increase in trade of various commodities such as flowers, perishables, pharmaceuticals, heavy machinery, garments, electrical and medical equipment, auto parts as well as exotic food items. The carrier has also started an A330 daily service from Southern india at Chennai International Airport to Paris Charles de Gaulle Airport, further boosting its European cargo traffic. The new service will boost cargo capacity by up to 17 tonnes, strengthening its presence in India and European markets. This opening up of Chennai allows Jet to offer additional capacity for commodities such as perishables, pharmaceuticals, engineering goods, garments & fabrics, foodstuffs, as well as specialised medical equipment, among others.
JAL signs with Starlight
STARLIGHT Express – the Nepalese independent freight forwarder and agent of the U-Freight Group (UFL) – has been appointed general sales agent (GSA) for Japan Airlines Cargo (JAL Cargo). As an official representative for JAL Cargo, Starlight Express says it has committed to selling cargo space on the airline’s flights between Japan and Nepal, and will be working closely with U-Freight’s subsidiary in Japan to secure regular bookings. Starlight Express provides customised transportation solutions for clients with special handling needs, and represents a number of international airlines around the world for cargo and passenger sales. Established in 1995, the independent freight forwarder has a service network covering more than 100 countries and over 150 cities. It has been U-Freight’s partner in Nepal since 2001 and enables the Hong Kong-based group’s global network of offices and partners to provide logistics services to companies that trade with the landlocked central Himalayan country. Starlight Express managing director, Sundar Dahal says: “We are pleased to be supporting JAL Cargo, and appreciate the trust it has placed in Starlight Express.”
Visakhapatnam starts air cargo LOCAL media in India has reported that the launching of air cargo operations from Visakhapatnam International Airport last week will give a boost to exporters from the region. Visakhapatnam has gained clearance to start operations, after securing the go ahead from the Ministry of Civil Aviation. Business in the area have reportedly been urging completion of work on an airfreight complex for the last few years saying it would help drive exports. The new facility at Visakhapatnam is expected to benefit pharma, apparel and seafood (tuna and shrimp) exporters, but it will also boost imports, which are growing. Until now, seafood has been transported through either Chennai or Hyderabad airports, but exporters can now use Visakhapatnam, boosting their earnings as they can get products to market quicker and save on trucking costs. Much of the seafood is exported to the US, European Union and Japan. Along with pharma and seafood, local media also say the new air cargo facility would boost export of alloys, metals, machinery and apparel to the US and Europe.
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ACW 13 NOVEMBER 2017
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