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The weekly newspaper for air cargo professionals Volume: 19
Issue: 33
22 August 2016
Enforce regulations on lithium batteries, groups urge
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ndustry associations last week wrote to governments demanding stricter enforcement of international regulations on the transport of lithium batteries. The International Air Transport Association (IATA) was joined in making the call by the PRBA, the US Rechargeable Battery Association, RECHARGE, the European Advanced Rechargeable and Lithium Battery Association, the Global Shippers Forum (GSF) and The International Air Cargo Association. They signed a joint letter to Government Ministers of Trade, Industry and Transport, and directors of civil aviation in the world’s largest lithium battery manufacturing and export countries. The letter called for safety regulations to be enforced at the point of origin including the initial shipper and battery manufacturer - to prevent rogue producers and exporters from shipping them. Associations also urged implementation of cooperative enforcement initiatives between jurisdictions to address situations,
where lithium batteries manufactured in one state are driven over a border to be flown from another state. They also pressed the need for significant fines and custodial sentences to be imposed on those who circumvent the regulations. IATA’s director general and chief executive officer, Tony Tyler says: “Airlines, shippers and manufacturers have worked hard to establish rules that ensure lithium batteries can be carried safely. But the rules are only effective if they are enforced and backed-up by sig-
nificant penalties. “Government authorities must step up and take responsibility for regulating rogue producers and exporters. And flagrant abuses of dangerous goods shipping regulations, which place aircraft and passenger safety at risk, must be criminalised.” PRBA represents most of the world’s manufacturers of lithium batteries and executive director, George Kerchner says: “Lack of enforcement is increasing pressure on airlines and regulators
to unilaterally ban all forms of lithium battery shipments from aircraft. This would add to the cost of global supply chains and consumer goods, and encourage those who flout the law to increase mislabelling of batteries, further increasing safety and security risks.” Earlier this year, the International Civil Aviation Organization Governing Council banned shipments of lithium batteries as cargo on passenger aircraft. The ban came into force on 1 April and will continue until a new packaging performance standard is brought in - expected by 2018. Lithium batteries can still be shipped on freighters. GSF says strict enforcement of existing regulations should be a priority rather than an outright ban on shipping aboard aircraft and believes the ban is putting lives at risk by slowing delivery of life-saving medical equipment, and also jeopardises security. The Federal Aviation Administration, Boeing and Airbus have advised carriers about the dangers with carrying lithium batteries.
Onno Boots leaves the helm as CEO of Celebi
Celebi Aviation Holding Group chief executive officer (CEO) Onno Boots (pictured) left his position last week, which he has held since 2014, becoming the latest high-profile change at the top within the industry. The Turkish ground handling firm’s chairman, Can Celebioglu says the board of directors respect Boots’ decision. He will continue to act as a consultant to Celebi for its planned initiatives in the Asia Pacific region. The board of Celebi Havacılık Holding has started a search to identify a new CEO and expects that transition to take place in the near future. During this process, Dave Dorner will assume the leadership responsibilities and act as interim CEO of Celebi Havacılık Holding effective from 16 August. Dorner is an operating partner at Actera and has been a member of the board of Celebi Havacılık Holding since 2013. The board of directors thanked Boots for his contribution as Group CEO and wished success to Dorner for this interim assignment. In recent years, Celebi has expanded its portfolio internationally and in 2006 started operations at Budapest Airport before entering the Indian market with ground handling services in Mumbai, India in 2009, and then in Delhi in 2010, Ahmedabad in 2015, and in Vienna, Austria in 2011. Another business segment in which Celebi initiated its international operations is cargo and warehouse management. Celebi is now providing cargo and warehouse services in Delhi since 2010, and in Budapest and Frankfurt, since 2011.
low oil prices causes ‘domino effect’
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chapman remains flexible in mini-peaks
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More freighter routes for Qatar airways
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Portland route added by Cathay Pacific
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Chinese carriers on the rise in July TWO of China’s biggest air cargo carriers China Southern Airlines and Air China has both posted positive growth in July as the recent trend of growth among Asian airlines continues. China Southern’s freight tonne kilometres (FTK) were up 9.16 per cent year-on-year (YOY) while capacity, measured in available freight tonne kilometres (ATK) rose by 4.7 per cent. The carrier’s freight load factor also saw a surge by 2.16 percentage points to 52.86 per cent. The airline is growing its bellyhold fleet to meet increasing demand and has taken delivery recently of four Boeing 737-800s, one 777-300 and three Airbus A321s. Meanwhile, fellow Chinese heavyweight carrier Air China has seen its cargo traffic increase YOY in July by 3.2 per cent to 142,500 tonnes and by 4.4 per cent in the first seven months of 2016 compared with the same period of 2015, reaching 977,200 tonnes. These figures match with similar performance for Asian carriers, which had seen a slowdown this year with flat growth and it seems they are back on track again. Cathay Pacific Airways (see page 4) also posted good cargo numbers for July.
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NEWSWEEK
Boeing and Nok Air team up for humanitarian flight
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oeing and Nok Air partnered up on 17 August to launch a humanitarian cargo aid mission to Thailand with the help of the international nonprofit organisation Vital Voices. A Boeing Next-Generation 737-800 transported nearly 30 boxes full of relief items including clothes and school supplies to the Southeast Asian country. The items are headed to The Children’s Advocacy Center Thailand (ACT), a nonprofit organisation dedicated to better the lives of abused children and youth in Thailand. Representatives from ACT will deliver the aid to impacted children and youth throughout Thailand. Nok Air chief executive officer, Patee Sarasin says: “We are honoured to play an important role for the well-being of our children and youth. Providing timely supplies to those in need will affect the lives of many in the region. Nok Air is proud to continue playing a vital role in cultivating the well-be-
ing of our community.” As part of the Global Corporate Citizenship program, Boeing says it is committed to building better communities worldwide. Boeing Commercial Airplanes director of global corporate citizenship, Sam Whiting explains: “We are honoured that Nok Air partnered with The Boeing Company to deliver humanitarian aid to the many
children in Thailand who are in need. We look forward to working closely with Nok Air and non-profit organisations like ACT in Thailand to identify future opportunities.” Nok Air has two additional Next-Generation 737s on order with Boeing after today’s delivery. Nok Air also has eight 737 MAX aircraft on order.
Tough July for Brussels Airport
BRUSSELS Airport has seen cargo volumes plunge year-onyear (YOY) by 8.8 per cent in July to 39,689 tonnes, down on the 43,539 tonnes that it recorded in the same month last year. The gateway says volume of all-cargo flights fell by 9.8 per cent compared with July 2015 and put the downturn down to various factors, including certain cargo companies ceasing operations, the cancellation of several flights as a result of business decisions and the economic climate in Asia. Freighter cargo reached 29,861 tonnes in July, which was a YOY fall of six per cent – down on the 31,772 tonnes in the same month last year. Of this full freighter cargo was 12,799 tonnes (-9.8 per cent) and integrator/express traffic was 17,063 tonnes (-2.9 per cent) – mainly due to the Asian economic situation. Bellyhold freight was 9,827 tonnes in July, a significant 16.5 per cent YOY drop on the 11,767 tonnes in July 2015. So far this year, Brussels has handled 270,197 tonnes, a 6.3 per cent YOY fall on the 288,481 tonnes after the same seven months last year. Full freighter cargo is down 5.7 per cent YOY to 82,240 tonnes so far this year. Integrator/express cargo is up 0.6 per cent YOY to 117,307 tonnes and bellyhold freight has fallen YOY by 16.5 per cent to 70,649 tonnes.
Maltese firm targets express market
MALETH Aero has placed its first cargo capable aircraft into service as it looks into entering the express market. The aircraft, a Boeing 737-300QC has been flying ad-hoc summer passenger charters around Europe but the Malta based company hopes to use it in the express cargo market. Maleth Aero says Malta’s position makes it a natural gateway for connecting North Africa and Europe. Maleth Aero chief executive officer, Michael O’Brien says: “We are very pleased to have taken delivery of our latest Boeing 737 Classic and our first QC variant. While we have initially operated the QC in a passenger configuration, we are actively seeking work for her in the express cargo market going forward. “In addition to this unique asset, we are looking at bringing into play a dedicated -400F unit later in the year. With our growing Boeing fleet, cargo is expected to play a very important part of our future business plans.”
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Industry to meet in the US to discuss issues facing air cargo
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ertinent issues within airfreight will be on the agenda from 4-5 October at the US Air Cargo Industry Affairs Summit taking place at the Capital Hilton in Washington D.C. Topics covered will relate to regulatory requirements, upcoming changes in the US administration and the importance of promoting air cargo across the US. US Secretary of Commerce, Penny Pritzker has been invited to make the keynote address ahead of the first session The Economic Importance of Air Cargo and its Role in e-commerce. A panel will discuss the importance of air cargo in the future growth of e-commerce and the impact it has on the US economy. Issues to be discussed include needed regulatory and IT changes, the growth of US exports and the jobs created by the air cargo industry. Next up is the session The Automated Commercial Environment (ACE) and It’s Vision for the Future - where a panel will explore the issues
Muller the main man for Dachser
the system has gone through and what it will do for trade and the government once it becomes fully online as originally designed. After lunch a session entitled Air Cargo and It’s Social Relevance will take place focusing on the industry’s role in ensuring aid is provided for emergency reliefs around the globe
and ensuring the survival for wildlife and endangered species. Next will be Future Course for Improving the US Air Traffic Control System and how many see a need of change and modernisation in the system. A session The Real World of Air Cargo at Airports will then see a panel discuss the challenges facing airport officials, airline operators, forwarders and handling agents. Other topics covered are entitled Safety on the Transportation of Special Cargo, Cross-Border Harmonization and Government Partnering in Aviation Security. Last up will be a political overview with Washington in the middle of one of the most interesting Presidential election years in modern history, which will debate what might the new administration from November 2016 – Democrat or Republican - hold in store for commerce and particularly for the air cargo industry.
NEWS WEEK WorldNews AGILITY has appointed industry veteran Frank Guerra to be chief executive officer for Australasia, giving him responsibility for operations in Australia, New Zealand, and Papua New Guinea. Guerra has over 30 years of experience in the logistics industry. He joined Agility in 2010 as general manager for contract logistics in Australia. Most recently, he was responsible for both contract logistics and network freight forwarding. CEVA Logistics has appointed Willie Parra Fonseca as country manager for the growing market of Costa Rica in Central America. He will be based at the logistic firm’s San José office reporting to Mike Wilson, senior vice president and head of the Central America cluster.
JOCHEN Müller (pictured) will take over from Thomas Reuter as chief operations officer (COO) of the Air & Sea Logistics business arm at Dachser from 1 January 2018. The 52-year-old will replace Thomas Reuter as COO and during the transition period, Müller will work on developing projects, which he will start on 1 October this year. Reuter will remain on the executive board of the German logistics firm, in his role as head of Air & Sea Logistics through the transition period until he retires on 31 December, 2017. Müller was previously on the executive board of Schenker, where he was in charge of air freight and sales (air/sea) for Central Europe, and prior to that, served as chief executive officer (CEO) of Schenker’s British country organisation, where he was responsible for land, air, and sea freight as well as the trade show business.
Southco signs up DHL again
DHL Global Forwarding has had its contract renewed by Southco for another four years to continue to be the firm’s sole global logistics provider. Southco develops engineered access hardware and DHL will work over air, ocean, domestic and customs brokerage services on various trade lanes. DHL Global Forwarding ships a variety of its latches, hinges and engineered access hardware products between Southco’s 17 engineering and manufacturing locations in the Americas, Europe and Asia Pacific. DHL Global Forwarding senior vice-president for marketing and sales in Asia Pacific, Piak-Hwee Tan says: “Their renewal of the DHL contract for another four years is testament to their confidence in our track record of delivering to their expectations. “Our experienced team will continue to optimise their supply chain between South China and the US.” Southco’s global supply chain director, Paul Smith says the relationship it has developed with DHL has been crucial to the success of manufacturing facilities “maintaining a continuous production flow, allowing it to get products to the market faster”.
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NEWSWEEK SEKO targets e-commerce in HK
SEKO Logistics has added 100,000 square feet of warehousing and fulfilment capacity in Hong Kong as it continues to build an ‘e-commerce gateway’ for retail and hightech customers targeting China’s online consumer market - forecast to exceed $1 trillion in 2017. SEKO has opened a new 50,000 square foot warehouse on the border of Shenzhen in southeastern China, which links Hong Kong to mainland China.
It is located 30 minutes from the Port of Hong Kong and 45 minutes from Hong Kong International Airport. In November 2015, SEKO also opened another 50,000 square foot e-commerce warehouse to provide order fulfilment services as well as same-day and next-day deliveries. The new location has 10 dock doors and employs 50 staff. SEKO also has the opportunity to double the size of its facility as volumes increase.
Revenue down 17.2% in 1st half for Cathay
THE Cathay Pacific Group’s cargo revenue plunged year-on-year by 17.2 per cent in the first half of 2016 due to falling yields – reaching 9,415 million Hong Kong (HK) dollars ($1.2 billion). Cargo capacity of Cathay Pacific and Dragonair rose 0.6 per cent while the load factor decreased by 1.9 percentage points, to 62.2 per cent. Tonnage carried decreased by 0.2 per cent. The Group says overall market was weak during the period, although tonnage stabilised in the second quarter. The Group says yield fell by 17.6 per cent to 1.59 HK dollars reflecting strong competition, overcapacity and the suspension (from April) of fuel surcharges. Demand on European routes continued to be weak and demand on transpacific routes weakened, while India was one of the few routes where it strengthened. The Group says it managed freighter capacity in line with demand and carried a higher percentage of cargo in bellies. Overall profit in the first half of the year was down 82.1 per cent to 353 million HK dollars, down on the profit of 1,972 million HK dollars for the same period in 2015. Cathay notes the operating environment in the first half of 2016 was affected by economic fragility and intense competition and there was sustained pressure on revenues, reflecting suspension of fuel surcharges, and
weak currencies in some markets. Cathay Pacific says one parked Boeing 747-400 Freighter aircraft was delivered to Boeing in July and another aircraft of this type in August. The remaining two will be delivered to Boeing in August and September. Cathay Pacific took delivery of its final 7478F freighter in August. Cathay Pacific chairman, John Slosar says: “We expect the operating environment in the second half of the year to continue to be impacted by the same adverse factors as in the first half. The overall business outlook therefore remains challenging. We expect passenger yield to remain under pressure. Overcapacity and economic fragility will dampen cargo demand.” Last week Cathay reported its results for July and says cargo rose seven per cent on the same month last year, driven by strong perishable exports from the the Americas. Cathay Pacific and Dragonair carried 158,022 tonnes of cargo and mail in July, an increase of 7.1 per cent on the same month in 2015. The load factor rose 2.9 percentage points to 64.7 per cent. Capacity rose 1.2 per cent while cargo and mail revenue tonne kilometres (RTKs) were up 5.8 per cent. In the first seven months of 2016, the tonnage carried rose by 0.8 per cent against a 0.7 per cent increase in capacity and a 1.1 per cent drop in RTKs.
Key trade lanes lift Hong Kong
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argo throughput at Hong Kong International Airport (HKIA) in July rose year-on-year (YOY) by 4.7 per cent to 380,000 tonnes – driven by growth in key trade lanes. The gateway says a robust 15 per cent YOY growth in transshipments led to respectable growth in cargo volume last month. The airport explains that traffic to and from the key trading regions in North America,
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mainland China and Southeast Asia, rose most significantly in the month compared to July in 2015. For the first seven months of the year, HKIA handled 2.46 million tonnes of cargo during the period, which remained flat compared to the same period last year. On a rolling 12-month basis, freight handled in the past 12 months at HKIA remained stable at 4.38 million tonnes.
NEWS WEEK Ethiopian well on its way to achieve Vision 2025 goals
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thiopian Airlines says it is well on its way to achieving its Vision 2025 goals, as it becomes the first African operator of an Airbus A350. Speaking at a press conference at its hub at Bole Addis Ababa International Airport attended by publications including Air Cargo Week on Monday 15 August, Ethiopian Airlines told journalists it had almost surpassed its aims and was well on its way to achieving goals including $10 billion of revenue, $1 billion profit and 820,000 tonnes of cargo. As part of Vision 2025, Ethiopian Cargo is building a cargo terminal with a capacity of 1.2 million tonnes and plans to serve 37 destinations with 18 freighter aircraft. In addition, it will increase its fleet from 77 at present to 140 and fly to 120 international destinations and 26 domestically. At the same press conference, director global cargo sales & service, Berhanu Kassa explained what Ethiopian Cargo; the largest cargo operator in Africa was doing, and its plans for the future. He says: “When it comes to warehouse facilities, we are building a new cargo terminal, an expansion with 1.2 million tonnes of capacity. We will build it in two phases, the first is 70 per cent completed and the second will be done sometime how soon when
Capacity the main A350 benefit
we need capacity.” The existing Ethiopian Cargo terminal in Addis Ababa covers 14,000 square metres and has the capacity to handle 350,000 tonnes a year. It also has a 2,000 square metre cold room with storage capacity for 130 tonnes of palletised cargo at a time, and different temperature areas varying from -23C to +4C. Ethiopian’s freighter fleet will also be upgraded with the addition of Boeing 737s and 767s to fill the gaps where its existing Boeing 757s and 777s are either too large or too small. It will also benefit from additional passenger aircraft with bellyhold capacity, including the first Airbus A350, which it flew from London’s Heathrow Airport to Addis Ababa on 14
August, which will give it on average 15 tonnes of cargo space per flight depending on passenger load. Ethiopian handles about 150 tonnes of cargo a day in the bellyhold of passenger aircraft. Becoming the first A350 operator in Africa added to the firsts throughout Ethiopian Airlines history, including first African jet service in 1962, and the first African airline to use a Boeing 787 Dreamliner in 2012. Ethiopian has ordered 14 A350s, with the remaining 13 to join the fleet in the near future. It has 41 aircraft on order consisting of five Boeing 787 Dreamliners, two 787-9s, 20 737 MAX 8s and one Boeing 777 Freighter as well as the remaining 13 A350s.
Ethiopian Airlines will receive up to another five tonnes of capacity by upgrading London – Addis Ababa services to an Airbus A350, director global cargo sales & services, Berhanu Kassa tells Air Cargo Week (ACW). Speaking to ACW in Addis Ababa following the inaugural A350 flight between Heathrow Airport and Bole Addis Ababa International Airport, Kassa says the main improvement the new aircraft will bring is increased capacity. Ethiopian Airlines is the first African operator of an A350 and it flew from London to Addis Ababa on 14 August. He says though the decision to use the A350 on the Heathrow route was mainly driven by the passenger side, cargo will also benefit. “It can give a capacity of 20 tonnes for freight, from Addis we have perishable products like flowers, vegetables and products of that nature. Up to now, the average traffic is not more than 15 tonnes so this aircraft can give us an additional five tonnes.” The extra capacity is also an upgrade for exports from the UK to Ethiopia and beyond into other African countries. In addition to increasing the number of passenger aircraft with bellyhold capacity, Ethiopian Airlines will increase the number of Boeing 777 Freighters to eight as well as adding a Boeing 737 and one Boeing 767 to its fleet. Kassa says the 767 is expected to have a capacity of 55 tonnes and the 737 will carry 20 tonnes. He says: “By having these two aircraft we can cover medium range destinations with the 767 and short haul one to two hours we are going to use the 737.” The nature of business in cities nearby such as Juba, Kigali and Nairobi means they do not have large volumes but there is consistent traffic to be catered for. Kassa says: “In order to provide competitive services we prefer to have the 737 so we can immediately transfer the cargo to destinations within one hour and 30 minutes.” Over the coming years, intra-African cargo will grow as economies see growth but Kassa says this requires African skies to open for African carriers Yamoussoukro Declaration. “All African countries have agreed to open their skies to any African operator but this declaration has not been complied with well so any African carrier operating to another African country must have a bilateral agreement and has to file for an operating permit, which is subject to approval.” Connecting Africa with the world is the main aim, but traffic has been negatively impacted by economic slowdown in major African countries, particularly oil producers hitting their imports: “This is the situation, I’m sure this situation will change and their economies will pick up and with that in mind Ethiopian Airlines will take the maximum share of freight movement into Africa from Europe and vice versa.”
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AIR CHARTER
Low oil prices causes ‘domino effect’ on other industries
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ow oil prices are causing projects to be cancelled or delayed, having a ‘domino effect’ on other industries, but Volga-Dnepr Airlines regional sales manager, Georgy Sokolov (pictured) says he is hoping for a strong end to the year. As well as projects being cancelled or delayed, which has caused a knock-on effect of stricter budgets and tighter cost controls, the start of 2015 received an artificial boost from events such as the US West coast seaport strike. Sokolov tells Air Cargo Week (ACW): “This generated massive demand for airfreight services and enabled us to reach better than expected results in the first half of last year.” He adds aerospace, Volga-Dnepr’s key industry has remained strong, partially compensating for other sectors such as oil & gas
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and government work dropping. Sokolov says he hopes the end of the year will be stronger than the start, commenting: “There are some medium- and long-term projects in the pipeline, and we are looking very closely into cost optimisation these days. We have cautious expectations of a higher level of ad-hoc demand towards the year end.” In addition to serving industries such as aerospace, oil & gas and power & energy, Volga-Dnepr is known for transporting space equipment and outsized cargo. Sokolov says recent shipments have included transporting equipment and materials for the ExoMars space exploration project (pictured right), welding equipment for a power station in Malaysia, the payload module of a spacecraft, a cable spool for an offshore gas drilling vessel in Bulgaria, and an 85-tonne ‘runner’ for the new
hydroelectric power station in Magadan, Russia. Late last year, Volga-Dnepr also started flying equipment and supplies as well as scientists and tourists to exploration stations in Queen Maud’s Land, Antarctica onboard a specially equipped and certified Ilyushin IL-76TD-90VD (pictured below). Sokolov says: “Operating to our seventh continent and landing on Antarctica’s ice runway is definitely among the most interesting projects we’ve completed recently.” The IL-76 and the Antonov AN-124 are very useful aircraft for Volga-Dnepr, as the aircraft helped to create the outsize and heavyweight air cargo market. “Before these aircraft came along with their unique cargo loading and carrying capabilities, very time critical and highly sensitive cargoes faced spending weeks being transported by sea as well as long journeys over land. Today, we move cargoes like these within a matter of hours’ flying time.” As well as using aircrafts that can carry large loads, Volga-Dnepr’s in-house Engineering & Logistics Centre provides customers with solutions for complex cargoes. This can include designing and fabricating special frames to load the cargo onto the aircraft, organising documentation, trucking from a factory to the airport, gaining authority from local authorities to transport outsize cargo on public roads and special cranes to lift the cargo onto the aircraft. For example, Volga-Dnepr has invested in a new ‘Wing Lift’ system, which can load 20, 30
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and 40-foot containers in about 30 minutes compared to four hours previously. Sokolov explains: “It is often said that when it comes to moving unique, outsize and heavyweight air cargo we have earned a global reputation for ‘making the impossible possible’.” “We always encourage customers to talk to us at the earliest stage of their production planning because the advice and expertise we can offer will ensure their cargo can be transported as planned and without any unexpected additional costs.” Though Volga-Dnepr, like other charter companies, handles long-term projects, which makes it easier to plan and allocate resources, much of the business is ad-hoc and difficult to forecast. Sokolov says: “A very large chunk of charter business, by its nature, is ad-hoc, where any planning is largely an expert extrapolation exercise rather than exact science.” While this is challenging, it can also be an opportunity. “We have a charter operation geared up accordingly, with planes and crews always ready to mobilise, operations and ground handling departments able to make flight arrangements at very short notice, and with a 24/7 customer service and sales network covering the globe.” Sokolov tells ACW that Volga-Dnepr is set up to react and adjust quickly for spikes in demand, and to help customers in emergency situations. He says: “It is not an easy business to be in, but very exciting.”
AIR CHARTER
Chapman Freeborn remains flexible during sudden mini-peaks
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ecent years have been all about sudden mini-peaks in demand, as the traditional Asian ‘peak season’ has not materialised, Chapman Freeborn group cargo director, Reto Hunziker (right) tells Air Cargo Week. Alongside the sudden mini-peaks, Hunziker says project-based work has been one of Chapman Freeborn’s key focuses and he is pleased how 2016 has gone so far. Charter companies have to contend with the same challenges as the whole industry such as the overcapacity, economic challenges and other events, such as Brexit adding to the uncertainty in Europe. The rest of the year will be challenging, he says: “The traditional ‘peak season’ out of Asia hasn’t really be a reality for a few years – not in the same way it was maybe a decade ago where companies could predict the demand with a much higher level of confidence.” Despite this, demand for Asia to Africa services are rising, as Hunziker explains: “We’re also seeing a rise in demand for flights to Africa out of Asia – with China being a major investor in infrastructure projects there.” India is also an interesting market for Chapman Freeborn, both for charters and onboard courier (OBC) services. Chapman Free-
born has been established in India for a number of years but has noticed a renewed focus on investment in manufacturing industries during the last 12 months. Hunziker says: “Sectors like automotive and high-tech are
a natural fit for our services with lots of time-critical requirements. We’ve also benefitted from India’s growing reputation in the pharmaceutical industry.” He adds: “India is an exciting market for us at the moment – but we’re also looking to further strengthen our position in other emerging markets across Asia, Africa and Latin America.” Air charter is an exciting business to work in, and Chapman Freeborn projects this year have included coordinating use of the Antonov AN-225 and supporting the Solar Impulse 2 round-theworld flight (pictured). Hunziker tells ACW: “This IL-76 project required all of our global charter market expertise as we were working around Si2’s changeable flight schedules - with support solutions required in Asia, North America, Europe, and North Africa.” Hunziker says wherever it is operating in the world, flexibility is vital, saying: “As a charter specialist it’s always about being flexible and ready to respond to the changing demand as and when it occurs – rather than being able to neatly schedule it.”
Market picks up after slow summer for NeWay The charter market is picking up again as the slow summer period is coming to an end, NeWay Logistics general manager Erwin Burger tells Air Cargo Week. He says 2016 started well but fixed flights declined in the first quarter, though charter requests have remained steady: “Reason for this could be that shippers are shopping around more and more as we see the same requests coming in from various agents and brokers. We now see the charter market picking up again, the slow summer period is almost coming to an end and we are hoping that there will be an old fashioned fourth quarter peak season.” Like all charter companies, NeWay deals with a number of interesting charters. Burger says one that stood out was chartering four Boeing 747-8 Freighters to move Ferra-
ri cars and equipment from Milan Malpensa in Italy to Sochi in Russia and back for the Ferrari Challenge. Burger says: “This was an extremely tough and detailed operation which we prepared and worked on for more than three months prior to the flights entering the skies.” In addition to being a charter broker, NeWay is also a charter general sales agent (GSA) for several airlines including DHL Aviation EEMEA and are a flight services agent. Burger says: “We arrange permits, aircraft/ cargo handling and fuel in all airports of Libya, we do this for several cargo operators who are very satisfied with our services and set up in Libya.” Burger adds rising competition means having to come up with better solutions to get business: “Finding the niche within the niche as how I like to call it.”
2016 a year of consolidation for ACS HAVING opened so many new offices in recent years, Air Charter Service (ACS) will focus on existing ones before opening any more, group commercial director, Justin Lancaster tells Air Cargo Week. ACS has added Sydney in Australia and now has coverage in all continents, and Lancaster says 2016 will be a year of consolidation: “There are no plans for future offices, probably not this year. We have opened so many offices we will focus on those before we look in new areas. There are no obvious areas we are not covering.” Overall 2016 has been a good year, especially as last year the US West coast seaport
strike and the Nepal earthquake, gave 2015 a boost and Lancaster says underlying business has been strong. One investment giving ACS is focusing on is the onboard courier (OBC) business, having invested heavily last year. Cargo charters included in May this year, ACS moving three bear cubs to a bear sanctuary in Greece. The animals had been found wandering the streets of Tbilisi, Georgia following devastating floods. Lancaster tells ACW: “This is what I love about this business, you can be moving spare parts for cars, you get projects like this involving animals. It is nice to do stuff family and friends can relate to.”
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WORLD ROUTES
Fresh freighter services see a focus on Cambodia
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ew freighter routes over the last month or two have seen somewhat of a focus on all-cargo services into Asia. AirBridgeCargo Airlines (ABC) increased its coverage in South East Asia with Boeing 747 Freighter services to Phnom Penh from last month. The weekly service to Cambodia’s capital will operate on a Moscow – Singapore – Phnom Penh route before returning to Sheremetyevo International Airport. The 747F will offer more than 100 tonnes of capacity, accommodating trade lanes from Cambodia to Europe and the US. ABC senior vice president, marketing & sales, Robert van de Weg says while China’s export growth is slowing, Cambodia is growing at double-digit rates and has ambitious airport development plans. He says: “By establishing our footprint in this
country, not only do we open up new destinations for our customers, but we also strengthen our position in Southeast Asia – the main driver of world trade.” Van de Weg says textile and garment exports will benefit the most from the new service and the extra capacity in and out of Singapore will strengthen ABC’s position in the region. ABC has also introduced another new freighter destination to its expanding international network with the launch of flights to Chongqing, one of the leading commercial centres in China. The new service operates from Moscow Sheremetyevo two times per week, every Wednesday and Friday, and will be linked with ABC’s Shanghai flights returning to Moscow, complementing its Shanghai frequencies and accommodating cargo flows from the central part of China.
With the launch of Chongqing services, ABC’s customers will have access to and from this important Chinese economic area and the guarantee of seamless and reliable connections to consumers in Russia, Europe and the US via ABC’s international hub in Moscow, which provides numerous connectivity options and delivery solutions. “Chongqing is our sixth point in China, which makes our footprint in this country stronger and guarantees the coverage needed to ensure we are meeting our customers’ needs,” says van de Weg. Meanwhile, K Mile Air has launched an airfreight service between Bangkok and Phnom Penh, according to the online edition of The Phnom Penh Post. The Cambodian newspaper claims according to a spokesman from Cambodia Airports, the Thai carrier will serve to deliver shipments for
German integrator DHL. K Mile Air adds to the growing cargo route network into Cambodia, which has seen in recent times the likes of AirBridgeCargo Airlines, Cathay Pacific Cargo and Emirates SkyCargo start operating services. The Bangkok-based cargo airline will use a Boeing 747-400 with a cargo capacity of 15 tonnes, five days a week, while newspaper claim the charter flights could eventually lead to scheduled service. The surge in cargo traffic to Cambodia’s improving economy and political stability is said to have given investors and airlines more confidence in the market. Cambodia Airports, the operator of three international airports, reports that cargo volumes in Phnom Penh grew to 16,848 tonnes in the first five months of 2016, a 14.6 per cent increase over the same period last year.
Ashgabat added to the Cargolux network
CARGOLUX Airlines International has added a once-weekly service to Ashgabat in Turkmenistan, complementing its existing flights to Turkmenbashi started last year. Since then, Cargolux has expanded its Turkmenistan services to eight per week and last month it boosted frequencies to 11 per week. Ashgabat is the carrier’s latest destination in Central Asia which, besides Turkmenbashi, also includes Baku, Novosibirsk, Almaty and Tbilisi. Cargolux says there is a growing demand for air cargo services into the region, which
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shown an impressive growth rate and it holds many opportunities for the Luxembourg carrier. Ashgabat has invested in the development of a new airport that is scheduled to open in September and a modern cargo centre that became operational on 4 July and the city will also host the Asian Games in 2017. Cargolux also co-operates with Turkmenistan Airlines to enhance the number of cargo destinations both carriers can offer to their customers and can now better serve surrounding markets such as Kazakhstan and Uzbekistan.
WORLD ROUTES
More freighter routes for Qatar to JFK and Halifax
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atar Airways Cargo continues to expand its network – this time with focus on a lobster and seafood exports to Europe, Middle East and Asia. The world’s third largest international cargo carrier has launched new freighter services to New York’s JFK International Airport and Halifax Stanfield International Airport in Nova Scotia (Canada), brining its total dedicated cargo routes to 54. Services to New York and Halifax are scheduled with a frequency of one flight per week every Wednesday from Luxembourg, its new European hub, operated with a Boeing 777-200 Freighter with 103 tonnes of cargo capacity. In addition to regular cargo goods, the carrier says these new flights will allow Qatar Airways Cargo to transport much lobster and seafood, major exports from both cities, to Europe, the Middle East, South and North East Asia via Doha. The new cargo service complements existing bellyhold cargo its moved on passenger flights, which recently doubled.
Increasing passenger demand to America’s financial centre, New York prompted Qatar to add a second daily service with an Airbus A350 XWB to the Big Apple from 1 March this year. The airline’s double-daily passenger flights to New York currently offer 125 tonnes of bellyhold cargo capacity each week. The commencement of service in Halifax will increase Qatar Airways’ presence in Canada and adds to the three services it already operates - three passenger flights weekly from Montreal to Hamad International Airport in Doha, while it has offices in Montreal (Quebec) and Toronto (Ontario).
Qatar Airways chief officer for cargo, Ulrich Ogiermann (pictured) says: “We are very happy to add New York and Halifax to our growing list of new freighter routes. “From their strategic geographical positions, not only will the new service provide our customers with great access to the Americas’ marketplace, it will allow us to share one of region’s most sumptuous exports with the world.” Qatar Airways Cargo recently took delivery of its 10th Boeing 777 Freighter, taking its freighters fleet in operation to 20 and further increasing its capacity.
Portland route for Cathay
CATHAY Pacific Airways will add to its freighter services in the Americas with the addition of a twice-weekly scheduled service to Portland in Oregon on the West coast of the US from 3 November 2016, subject to government approval. Portland will be Cathay Pacific’s 18th cargo station in the Americas and it will operate on a Hong Kong - Anchorage - Los Angeles - Portland - Anchorage - Hong Kong routing every Thursday and Saturday, using Cathay Pacific’s newest and biggest freighter, the Boeing 747-8 Freighter. The carrier says the service will meet growing demand to move a wide range of commodities from the Pacific Northwest and the US to various parts of Asia, providing shippers with greater choice and flexibility when connecting to its international cargo network through its Hong Kong hub. The 747-8F offers more cargo space to carry the anticipated high volumes of semi- finished footwear and apparel, electronics, and perishables from Portland and its catchment area into Asia. Portland is also one of the fast growing hubs for e-commerce related shipments for the Pacific Northwest region. Cathay Pacific currently has 13 747-8Fs in its cargo fleet. The Boeing 747-8F employs innovative technologies which is set to bring significant efficiency improvements to the airline’s ultra long-haul freighter services, particularly on North American routes, and at the same time reduce the environmental impact of its operations. Cathay Pacific director of cargo, Simon Large (left) explains: “The Americas is a very important market for Cathay Pacific and we are delighted to add Portland to our expanding freighter network. We are committed to providing the best cargo services connecting Asia to this important manufacturing region, and at the same time boosting Hong Kong’s standing as one of the world’s key international airfreight hubs.”
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NEWSWEEK
DIRK SCHUSDZIARA Justin Burns, ACW: How has business been so far in 2016? Schusdziara: In the first half of 2016, cargo volumes grew 0.7 per cent to 1.05 million tonnes. While the worldwide cargo market started slow into 2016, we saw signs of recovery at FRA in the second quarter of the year. German exports are picking up again and the Far East is finally doing better. Freight volumes on routes to/from China and India even recorded dynamic double-digit growth. Our airmail figures grew by 6.2 per cent, representing the highest volume for a first half for seven years.
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Frankfurt Airport (FRA) is one Europe’s air cargo powerhouse hubs, but it like many is encountering challenges due to market softness and weak global trade. The airport’s senior vice president of cargo,Dirk Schusdziara spoke to Air Cargo Week about where FRA is making investments to help it grow and how business is.
Justin Burns, ACW: Where are you making investments? Schusdziara: A top priority for us is the ongoing digitalisation of our processes via our FAIR@Link cargo community system. We actively supported the development of the system from the beginning and will also be involved in its future expansion. Another big project is our Terminal 3, which is being built in the southern part of FRA. When complete, the new terminal will add cargo capacity and improve access to our cargo areas thanks to a new autobahn interchange. Furthermore, we just concluded
the tender process for the allocation of new building lots at our 27-hectare development area. Thus, we can soon enter the planning stage for new cargo warehouses in this area.
Justin Burns, ACW: What are your biggest challenges? Schusdziara: The need to collaborate and the digitalisation of logistics processes will shape the industry in the next years. To stay competitive, we need to adapt to these new opportunities. Furthermore, the dominance of Middle East carriers and the introduction of new aircraft types will certainly have an impact on cargo flows and put some pressure on traditional cargo hubs. With the Boeing B777 and the Airbus A350 finding their way into various airline fleets, this will foster the launch of new airfreight routes, including to remote destinations where freight was trucked in the past.
Justin Burns, ACW: Why is digitisation so important? Schusdziara: Integrators and sea freight are both increasing their market shares in comparison to traditional airfreight. Only by leveraging digital and largely automated processes, airfreight can gain strength again. Through digitising our processes, we can offer faster processes, as well as greater reliability and improved services. Plus, customers are looking for better transparency of the way their products are shipped. This too can only be reached through digitisation. Justin Burns, ACW: How are you digitising processes? Schusdziara: We started pushing forward digitisation at FRA with the launch of FAIR@Link. The system enables the electronic exchange of data between participating companies. It digitally networks the players in the airfreight chain and thus improves the physical processes between them – not just within the CargoCity, but also well beyond its perimeters. FAIR@Link represents one of the most advanced cargo community systems at any airport worldwide.
Justin Burns, ACW: How will FAIR@Link improve efficiency? Schusdziara: Thanks to FAIR@Link, shipments can be preannounced in a standardised manner. This means, for example, a handling agent knows exactly when a forwarding company will arrive and with which goods. The agent can thus have staff ready to accept the shipment. As a result, delivery can be processed more quickly and efficiently. By using FAIR@Link, participants can realise significant time-savings and optimise their resources.
Justin Burns, ACW: What response have you had to FAIR@ Link from your air cargo community? Schusdziara: All users have confirmed FAIR@Link helps to decrease various cost factors as a result of shorter waiting and loading times and higher employee productivity. Word gets around and so the number of new customers is steadily growing ever since the platform was officially launched. Also, government agencies are very interested in obtaining an interface to the system. The German Customs’ system is already linked to FAIR@ Link and we have just begun to integrate the local EU border checkpoints for plant protection and veterinary examinations as well as the German Federal Office for Agriculture and Food.
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Justin Burns, ACW: How important is to have a close community? Schusdziara: It is very important. The air cargo process is very fragmented and characterised by many individual players. We can only increase the overall process efficiency by putting our forces together. To create a framework for close cooperation among all cargo players at FRA, we have founded the Air Cargo Community Frankfurt, dedicated to further optimising the logistics processes and to representing and promoting the interests of air cargo-related companies at FRA.
TRADEFINDER Airlines
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NEWSWEEK Record day for American at LHR AMERICAN Airlines Cargo shipped more than 575,000 pounds (260 tonnes) of freight and mail from Heathrow Airport in a single day on 14 August, setting a new daily record for the station. The previous busiest day for the London cargo team was in October 2015 when 565,857 pounds (256 tonnes) was shipped. Key destinations from Heathrow include Chicago O’Hare, New York, Miami, Dallas/ Fort Worth and Los Angeles – all major transit hubs that support traffic into the US and
through to other parts of American’s expansive global network. 88.2 per cent of all available cargo positions were also loaded. American’s managing director of cargo sales – Europe, the Middle East and Africa, Tristan Koch says: “There was high demand for space from all the origins which support our LHR flights, as well as general cargo from across the UK. Our operations teams did an exemplary job in rising to the challenge, highlighting the great collaboration between the ramp and cargo departments.”
LAX on the up for United Cargo
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usiness is good for for United Cargo in Los Angeles (LAX) and tonnage is up 8.5 per cent year-on-year (YOY) driven by its rising widebody capacity. This the carrier says comes despite 2016 being a year of growing capacity and declining demand in the marketplace. United Airlines senior regional cargo sales manager for the US West, Adam Cooper says: “This is particularly impressive because what we’re comparing against includes Q1 2015, when the port slow down resulted in a huge spike in demand. We’re pleased United Cargo continues to grow our market share in the highly competitive Los Angeles market.” He believes other factors fuelling growth are its improved service performance, competitive pricing, and a cargo team delivering the “best customer service in the business”. The LAX trade lane is crucial to United’s success and trails only Chicago O’Hare (ORD) in originating tonnage with less than one half of the widebody flights that depart from Newark Liberty (EWR), Houston (IAH), ORD or San Francisco (SFO). United’s bellyhold services from LAX include a twice-daily Boeing 777 service to EWR, twicedaily 787 service to IAH, and daily 777 services to Honolulu and Washington Dulles. International widebody departures include a daily 777 service to Heathrow and daily 787 services to Melbourne, Tokyo, Shanghai and Sydney. LAX is critical to the success of United’s SFO hub, its primary gateway to Asia as Cooper says many forwarders have reduced their footprint
in Northern California, but this region still generates large amounts of airfreight. He explains: “These volumes are moved to the forwarder’s gateways in LAX to capitalise on economies of scale and a buyer’s market – due to the excess capacity I spoke of earlier. So LAX plays a vital role in filling our cargo capacity out of SFO as well as out of our own hub.” United has invested significant capital and resources into recent upgrades of Terminals 7 and 8 at LAX and despite some schedule disruptions during the renovation, Cooper says United is starting to see the benefits as completion of new gates increases its widebody capability.. United’s two main commodities it moves are consolidations and perishables. Consolidation range from aerospace equipment to wearing apparel. Cooper says consols are a significant portion of both imports and exports, as LAX is a large market for forwarder consolidations. On the export side, perishables are the dominant single commodity as California and Mexico are massive providers of agriculture, meat and seafood globally and in North America with LAX in a prime geographical position to be a strong export market for commodities. Cooper notes the biggest challenge in LAX is the ongoing disparity between capacity and demand as capacity has been substantially increasing, while demand growth is spotty and not keeping up with capacity boosts. He adds: “Our opportunity is to make the best of the situation by staying connected to what our customers need, adjusting services to meet needs, then delivering on our commitments.”
Significant revenue dive for LATAM LATAM Airlines Group has seen cargo revenue slump by 22.3 per cent in the second quarter due to strike action in Chile, weak imports from North America and Europe, and the Brazilian economy continuing to struggle. Cargo revenue fell to $260 million in the second quarter and total operating revenue was down 12.5 per cent to $2.1 billion. The airline group as a whole saw losses increase by 85.2 per cent to $92 million. LATAM says: “During the quarter, cargo traffic was affected by a strike in Chile, which negatively impacted fresh salmon exports. Additionally, imports from North America and
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Europe continue to show weakness, with Brazil still the most affected market, both internationally and domestically.” In the first half of 2016, cargo revenue fell by 21.7 per cent to $535.9 million though during the period the airline group made a profit of $10.3 million compared to a loss of $89.6 million in 2015. In the second quarter, LATAM’s revenue tonne kilometres fell by 13.3 per cent to 797 million and capacity in available tonne kilometres were cut by 6.1 per cent to 1.6 billion, but the load factor was still down again by four percentage points to 48.8 per cent.