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The weekly newspaper for air cargo professionals Volume: 20

Issue: 20

22 May 2017

Noise fines lead to 2nd cargo carrier exiting Brussels

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oise fines handed out to airlines operating into Brussels Airport have led to the exit of a second freighter carrier in three months and a third could be set to follow. Air Cargo Global is stopping all operations because of the fines, which follows the departure of Chinese carrier Yangtze River Express in February. Brussels Airport says Magma Aviation has also indicated that it will leave if the uncertainty is not removed in the next few weeks. The gateway says of the six freighter carriers operating with Boeing 747 aircraft - only four are left and there is a real risk more carriers will leave and move their cargo services to other airports. Air Cargo Global is leaving due to the legal insecurity and financial risks caused by the decision of the Brussels Capital Region to drop the tolerance margin of the noise fines. Air

Cargo Global will now operate from Amsterdam and Prague. Magma Aviation has also informed of its intention to leave in the next few weeks if the operating restrictions imposed continue to exist. The carrier has identified two alternative airports where it can operate services. Brussels Airport Company chief executive officer, Arnaud Feist says the need for a stable legal framework and a permanent solution is “more urgent than ever”. Feist explains: “Just like we argued at the end of April, the decision by the Brussels government to postpone the actual collection of the fines is no solution. “This decision may have been made with good intentions, it actually creates a period of uncertainty of one and a half to two years. The carriers make their decision based on the tickets they receive today, not on the basis of the fines the Brussels

government makes known two years later. “This is what makes airlines decide to relocate their operations abroad which for Belgium results in a loss of jobs and economic value. I call on all political parties concerned to halt the downward spiral that destroys the local and regional economic fabric in Belgium and reach a solution as soon as possible.” The news has soured the positive April figures at Brussels Airport when it posted its best air cargo tonnage month of April in eight years as cargo rose year-on-year by 11.9 per cent to 45,983 tonnes. Airport chiefs say the growth path and development in volumes it has recorded in the last few years is under threat, due to the uncertainty regarding noise limits and the lack of a stable legal framework. Meanwhile, DHL Global Forwarding Belgium has expanded its Brussels facility, with the temperature controlled area growing to 5,300 square metres. Brussels Airport head of cargo, Steven Polmans says: “Brussels Airport welcomes this initiative, which increases and pushes forward industry standards. This investment is completely aligned with the strategic focus of Brussels Airport on offering a best in class service for pharmaceutical shipments.” Brussels was the first airport in the world to implement the IATA CEIV Pharma certification across its air cargo community.

and Amsterdam, allowing Oman Air Cargo to consolidate cargo volumes and create a strong customer base in the Benelux market. Oman Air senior vice president for commercial cargo, Mohammed Al Musafir says: “Oman

Air Cargo is committed to an aggressive expansion plan, and the Benelux region is of interest to us as we look at expanding our network to better serve our clients worldwide.” Globe Air Cargo Netherlands managing director, Mariet Zollner says: “We are confident that our customers will support Oman Air due to their customer friendly approach and the opportunity its network offers to them.” Oman Air Cargo says it will service customers who are interested in dedicated ULDs to Muscat and to its other destinations across the Middle East, India and Asia. General cargo of industrial goods will be the main commodity, but GAC will help Oman Air develop special and premium products including perishables and pharma.

ECS wins contract with Oman Air Cargo in Benelux region Oman Air Cargo has chosen ECS Group as its sales partner in Europe’s Benelux region in a contract to be serviced by ECS subsidiary Globe Air Cargo (GAC). The airline plans to improve its market presence in the Benelux region and the partnership, which started on 1 April 2017, will provide the carrier with overnight transit cargo volumes to its gateways in Paris, London and Frankfurt. ECS will market Oman Air’s cargo network from its Muscat hub with flights to destinations in the Middle East, India and Asia, and the airline utilises Airbus A330s across Europe. Through GAC, ECS Group will represent Oman Air Cargo as an offline sales partner and coordinate the trucking and handling of cargo on behalf of Oman Air from Brussels

CHALLENGES AHEAD FOR EMIRATES E-COMMERCE AND TECHNOLOGY FOCUS FOR HACTL AMAZING START TO THE YEAR AS DNATA UPGRADES DELTA AND AEROMEXICO START JCA

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AAPA: 2016 cargo revenue fall of 9.8% PROFITS across Asia Pacific carriers were $6.9 billion in 2016 helped by strong air cargo markets negating yield pressures, while falling fuel prices reduced operating costs, the Association of Asia Pacific Airlines (AAPA) says. Operating revenue dipped 0.3 per cent to $165.3 billion and cargo revenue fell 9.8 per cent to $16.2 billion as air cargo yields declined 11 per cent to 22.9 US cents per freight tonne kilometre. AAPA director general, Andrew Herdman says: “The strengthening of the US dollar against many Asian currencies affected revenue performance and increased the burden of dollar obligations for a number of carriers. “Continued growth....and the pick- up in air cargo markets, with significantly higher load factors during Q1, give some cause for optimism for the remainder of this year. The operating environment remains challenging, against a backdrop of stiff competition, higher oil prices and other cost pressures.”

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NEWSWEEK Qantas and Sai Cheng ink China-US airmail deal

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antas Freight has entered a one year agreement with Sai Cheng Logistics International to fly airmail weekly out of China to the US. Sai Cheng is a joint venture company between Australia Post and China Post to provide integrated logistics solutions for Chinese customers to overseas markets including Australia, New Zealand, Asia, the US, Europe and South America. The new agreement builds on the longstanding Australia Post and Qantas relationship including contracts for transporting Australian international outbound mail as well as a dedicated domestic airfreight network. Airmail from China Post will be flown from China Post’s hubs of Shanghai and Hong Kong to various points in the US by Qantas Freight using its Boeing 747-400 Freighter network from Shanghai and belly capacity out of Hong Kong via Australia. Qantas Freight operates four freighter services per week from Shanghai to the US including stops in Los Angeles, New York, Chicago and Dallas Fort Worth. Qantas Freight, Catering and Australia Airports executive manager, Alison Webster says: “We’ve been flying freight between

China and the US for the past 14 years with a triangular freighter route that operates four times per week between Australia – China – the US – Australia. “The uplift of China Post airmail is a welcome addition to our network and reinforces that the routing we operate is aligned to our customer needs.” Sai Cheng general manager, Jonathan Qiao adds: “We collect more than fifty tonnes of airmail each week across China bound for the US. Our customers seek a fast and reliable service and Qantas’ service frequency and freight network to the US allows us to deliver just that.”

Dumont chosen as Unilode CEO

BENOIT Dumont is to take over as chief executive officer (CEO) of Unilode Aviation Solutions - replacing Dr Ludwig Bertsch - who is joining the board of directors. Dumont has worked at a number of companies including McKinsey & Company focusing on the transport and logistics sector, before joining DHL Express Europe in 2004 and DHL Supply Chain EMEA in 2009, where he held the positions director of operations, managing director, senior vice president of operations and CEO Germany, Alps & Nordic. Dumont says: “Ludwig and the management team have executed a strategy that has positioned the Company well for continued success and I am committed to capturing the enormous opportunities in front of us.” Dumont and Bertsch will take up their new positions on 1 September 2017.

Airlander 10 returns to the skies

THE Airlander 10 returned to the skies on 10 May for its first flight since it was damaged in a heavy landing on 24 August last year. It took off at 17.28h and flew for a total of 180 minutes before landing again at 20.15h and being secured safely on the mast at 20.20h. It completed its test objectives of conducting a full test flight; establish basic handling characteristics and collecting flight data. Airlander’s two test pilots, chief test pilot Dave Burns and experimental test pilot Simon Davies where on board, and Burns commented afterwards: “It was truly amazing to be back in the air. I loved every minute of the flight and the Airlander itself handled superbly. I am eager to get back into the cockpit and take her flying again.” The Airlander 10 is being developed to conduct a number of roles including cargo transportation, particularly in remote areas where it can land on unprepared sites in desert, ice, water or open field environments.

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NEWSWEEK TIACA to work with Indonesia to grow cargo Saudia striving to be even better

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he International Air Cargo Association (TIACA) will work with the Indonesian National Air Carriers Association (INACA) and other freight companies in Indonesia to support the region’s growing airfreight industry. The announcement was made at the start of the two-day Indonesian Air Cargo Summit in Jakarta, which brings together over 200 industry leaders to explore opportunities and the latest trends and challenges in Indonesia. TIACA secretary general, Vladimir Zubkov was joined by INACA chairman of cargo flights, Boyke Soebroto, who is also president and chief executive officer of Cardig Air, and Garuda director of cargo, Sigit Muhartono, to pledge cooperation. Zubkov says Indonesia has a developing air cargo community and TIACA will work closely with the industry to help it grow. He says: “TIACA is focused on growing membership in the region and we are pleased to meet with our colleagues here to find ways of

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reaching out to the growing air cargo community here.” Zubkov, who was one of 20 industry leaders sharing insight and expertise at the summit to explore issues including using smart data, the future of unmanned cargo aircraft, creating world class air cargo hubs and updating security legislation, adds: “We are focused on helping the industry to improve and have a number of initiatives around quality and e-freight which we will be sharing with our colleagues here in Indonesia.” Muhartono says: “We look forward to collaborating both with industry members that share the same vision regarding operational excellence, particularly in terms of reliability and quality, and also, and importantly, work with TIACA to build this industry.” Indonesia’s gross domestic product grew about 5.6 per cent in 2016 and the airfreight sector expanded by 3.5 per cent last year, driven by the increased consumer demand for imported goods.

SAUDIA Cargo executive director for commercial, Rainer Mueller (pictured above left) says the award it picked up at the Air Cargo Week World Air Cargo Awards in Munich on 10 May will make it “strive” even harder in the future. The Saudi Arabian airline won the Air Cargo Industry Achievement Award at the awards, which took place at The Westin Hotel and was attended by more than 500 people. Saudia beat off intense competition to win the accolade from Emirates SkyCargo, United Cargo and Virgin Atlantic Cargo.

Mueller says: “We share this momentous occasion with our customers for their continued trust and confidence on our products and services. This award also goes to every Saudia Cargo employee for their relentless commitment to serve with utmost care and excellence. “This award also sets precedence for us to strive harder and perform even better as the digitalisation trend sets in, changing the face and the pace at which cargo is moved around the world.” Saudia is one of the pioneers of use of the electronic air waybill (eAWB). Mueller adds: “It was a busy year for us. We thank our customers for putting their trust to us all these years. We pledge to keep on serving them with utmost care and dedication. Their cargo is in good hands no matter how and where they want it.”

Major global expansion for Rhenus

RHENUS Group will add new business sites across a number of regions of the world including another consolidation point later this year for airfreight customers at Frankfurt. It has already opened six new offices, two in the Philippines in Subic and Clark, one in South Korea in Busan, one in the Indonesian city of Semarang, Rayong in Thailand and Singapore. Rhenus plans business sites in China, Vietnam, Malaysia, Indonesia and the Philippines, and board member Tobias Bartz says: “We’re involved in a long-term growth course. We’re

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now continuing this process with our new business sites.” The logistics service provider is planning to consolidate its air, sea and overland services this year and offer new, routes, and it says cross-border trucking will become increasingly important. Bartz adds Asia is not the only area of interest, saying: “Germany, France, Scandinavia, Eastern Europe and South and Central America are also interesting markets for us.” The company says it will connect air and sea freight sites more closely with Rhenus overland traffic network.


NEWS WEEK LHR and LGW volumes rise in April

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K gateways Heathrow Airport and Gatwick Airport continue to see growth in their cargo volumes postBrexit as the weaker pound helps drive exports. Heathrow saw strong growth in April with cargo growing 8.6 per cent to 137,979 tonnes. Exports grew by 12 per cent in April, with Latin America seeing the strongest growth at 27 per cent, Asia up 19 per cent, with Europe up 11 per cent, while North America, the most important market, grew 14 per cent. Cargo volumes have grown 7.6 per cent to 537,461 tonnes in the first four months of 2017 and by 5.1 per cent to 1.58 million tonnes on a rolling 12-month basis. Heathrow Airport chief executive officer, John Holland-Kaye says the strong growth shows why it needs a third runway, saying: “Britain’s exports outside the EU are thriving and with Heathrow expansion opening up to 40 new long-haul trading links, the scale of the opportunity across the globe is tremendous. “We’re working around-the-clock to deliver Britain’s new runway and secure the country’s

future as a global trading powerhouse.” Heathrow will be gaining a new Chinese link in the summer with flights to Qingdao, operated by Beijing Capital Airlines, providing about 4,000 tonnes of cargo capacity a year. Meanwhile, over at Gatwick Airport new longhaul routes boosted cargo volumes and in April the gateway saw a 27.2 per cent increase on the same month last year. The airport says this demonstrates Gatwick’s key role connecting Britain to important growth markets when these links have never been more crucial. In April, Gatwick handled 7,142 tonnes, up on the 5,615 tonnes in April 2016. On a rolling 12 month basis, cargo tonnage is up 20 per cent to 82,666 tonnes, a rise on the 68,891 in the previous 12 months. Gatwick Airport chief executive officer, Stewart Wingate says: “Our booming long-haul routes have driven a huge cargo increase and at this crucial time for the country and the economy, Gatwick continues to stand ready and offers the UK Government a credible and deliverable option for runway expansion.”

E-commerce drives Cathay Pacific

CATHAY Pacific Airways and Cathay Dragon carried 163,473 tonnes of cargo and mail in April between them – an increase of 10.7 per cent on the same month in 2016 with e-commerce and key Asian markets driving the surge. In April, the cargo and mail load factor rose by 2.2 percentage points to 65.7 per cent and capacity – measured in available cargo/mail tonne kilometres, was up by 2.6 per cent while cargo and mail revenue tonne kilometres (RTKs) increased by 6.2 per cent. In the first four months of 2017, tonnage rose by 11.2 per cent to 633,468 tonnes, against a 1.9 per cent increase in capacity and an 8.6 per cent rise in RTKs – while the load factor was up four percentage points to 65.7 per cent. Cathay Pacific general manager of cargo

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sales and marketing, Mark Sutch says: “Our cargo business continued to show encouraging year-on-year tonnage growth. Demand from Hong Kong and key Asian markets to North America, Europe and India remained buoyant. “Intra-Asia movement was boosted by strong e-commerce traffic as well as capacity reduction in the market. Yield has continued its upward trend.” “We recently announced an agreement with Atlas Air Worldwide to wet-lease two Boeing 747-8 Freighters, which will supplement capacity on our existing network. “This will enable us to provide our customers with increased options and services from June, when most market indicators are suggesting a solid year for air cargo,” Sutch adds.

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NEWSWEEK

RTW 747F service launched by National and Navitrans USA

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ational Airlines and Navitrans USA are to launch round-the-world (RTW) Boeing 747-400 Freighter services connecting several key global airports. The service will start on 1 June, operating all year round on a Chicago O’Hare – Liege – Baku – Hong Kong – Tokyo Narita – Anchorage – Chicago O’Hare route in addition to another twice weekly scheduled operation by the carrier exclusively for Navitrans between the US and China.

Navitrans USA president, Martin Zhu explains: “This RTW route will connect five key gateways throughout North America, Europe, Mid-Asia and Far East in around 36 hours. “With the dedicated B747-400F aircraft, Navitrans has positioned itself to meet importer’s and exporter’s needs all over the world.” National Airlines president, Mark Burgess says National’s global reach, ability and flexibility enabled it to customise the operation to meet the needs of Navitrans using its scheduled authorities and the carrier is “very excited to build on our relationship to launch this new routing”. National Airlines manager of charter sales, Rob Hotchkiss adds: “Our entire team at National is very excited about this operation and we very much look forward to operating these scheduled flights for Navitrans along with developing new routes utilising Nationals authorities.” Navitrans has a global network spanning markets throughout Asia, Europe and North America, with offices in Shanghai, Beijing, Chengdu, Zhengzhou, Hong Kong, Frankfurt, Moscow and New

York, with more than 100 staff. Last month, Navitrans chief executive officer, Shen Hong (pictured above) told Air Cargo Week 2016 was a challenging year, but he was hopeful a move into the perishables market and a global focus will lead to a better 12 months in 2017. Hong explained it came under under pressure in terms of rates and volumes last year, but it had excellent results in the last quarter of 2016 and the first quarter of this year has started strongly. He also said there was strong demand for fresh fruit and seafood from China while it was looking to grow the company’s global presence.

RFS-Cool service started by Lufthansa

LUFTHANSA Cargo is developing its coldchain logistics with “Road Feeder Service Cool” (RFS-Cool), ensuring temperature sensitive cargo is actively and passively cooled or warmed on road links. It says customers can make binding further onward travel reservations within Europe on the new “Road Feeder Service Cool” for sensitive medication that has been flown into Frankfurt and thereby ensure that the goods remain inside the specified temperature range on this part of the journey.

Lufthansa Cargo is expanding facilities at its Frankfurt Cool Center, making 8,000 square metres available for cool chain cargo, compared to 4,500 square metres when it opened in December 2011. There will be four chiller rooms for 2 to 8 degrees Celsius, 5 to 15, 15 to 25 and minus 12 to minus 20 as well as a deep freeze room and direct access to the apron. The airline also gained International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics certification in 2016.

Mother’s Day mission for Western Global WESTERN Global Airlines flew over 100 million flowers across 76 flights to Miami so the essential products reached the shops in time for Mother’s Day. The South American flowers, mainly exotic roses and carnation variations originate primarily from Ecuador and Colombia, were flown on a temp- controlled Boeing 747-400 and MD-11 Freighters to Miami International Airport. The cargo was then processed by customs officers, then once cleared prepared for delivery to flower wholesalers and flower stalls, florist shops and grocery stores all

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over the US. Western Global Airlines chief executive officer, Jim Neff says shipping agricultural goods can provide added challenges, especially given their short shelf-life. The airline also flew aircraft full of Mother’s Day flowers from growers in Africa to Europe for distribution to mothers throughout Europe.


NEWS WEEK

Challenges ahead as Emirates Group profits fall 70%

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mirates Group profits have fallen by 70 per cent in the 2016-17 financial year to 2.4 billion dirhams ($653 million) due to lower yields, weaker consumer confidence and on-going geopolitical instability. Emirates SkyCargo was affected by the fall, with revenue down five per cent to AED10.6 billion with yield per freight tonne kilometre declining eight per cent due to a downward trend across the industry and the weakening of major currencies against the US dollar, though tonnage was up three per cent to 2.6 million tonnes. The freighter fleet remained unchanged at 15 aircraft, with 13 Boeing 777Fs and two 747-400Fs, and Emirates SkyCargo launched freighter flights to Phnom Penh as well as Dubai – Oslo and Delhi – Hong Kong links. Emirates SkyCargo also inaugurated the 4,000 square metre Emirates SkyPharma facility at Dubai International Airport and

launched White Cover Advanced, a protective solution for temperature-sensitive cargo. Emirates Group and airline chairman and chief executive officer, His Highness Sheikh Ahmed bin Saeed Al Maktoum (pictured) says: “Emirates and dnata have continued to deliver profits and

grow the business, despite 2016-17 having been one of our most challenging years to date.” Describing the outlook, he says: “We remain optimistic for the future of our industry, although we expect the year ahead to remain challenging with hyper competition squeezing airline yields, and volatility in many markets impacting travel flows and demand.” Dnata revenue grew 14.6 per cent to AED 12.2 billion and profits by 14.8 per cent to 1.2 billion, while volumes were up 38.3 per cent to 2.8 million tonnes. Emirates is continuing to upgrade its network, with new routes, extra flights to existing destinations or using different aircraft. Among the destinations to receive upgrades in the coming months is Australia, with extra flights to Brisbane and fleet changes in Melbourne. Emirates will operate a third daily flight to Brisbane from 1 December using a Boeing 777-200LR with 14 tonnes of bellyhold cargo capacity. The third daily Melbourne flight will be upgraded to an Airbus A380 from 25 March 2018, replacing the Boeing 777-300ER it operates.

KLM to launch Mumbai flights

KLM is to launch Amsterdam – Mumbai flights on 29 October as part of its 2017-18 winter schedule, providing up to 20 tonnes of cargo capacity. The three Boeing 787-9 Dreamliner flights a week will depart on Mondays, Thursdays and Sundays from Amsterdam at 13.00h, arriving in Mumbai at 01.55h, and the return will leave Mumbai at 04.00h, landing in Amsterdam at 08.45h. Air France KLM Martinair Cargo executive vice president, Marcel de Nooijer (pictured) says: “By introducing Mumbai, the economic heart of India, to our schedule from Schiphol we are able to further increase our already existing network presence in India. “Together with our flights operated from Paris Charles de Gaulle we will offer the market a total of 28 services to/from the Indian subcontinent.” Mumbai, on the West coast of India, is the capital of the Maharashtra state, and is the most densely populated city in the country.

AEI modifies third Kalitta 737 AERONAUTICAL Engineers (AEI) has inducted its third 11 pallet Boeing 737-400SF freighter conversion for Kalitta Charters, and will re-deliver it at the beginning of September. The aircraft, MSN 25849, arrived at Commercial Jet’s Miami facility and modification is underway. AEI says its 737-400SF is the only passenger to freighter conversion offering operators 10 full height 88×125” container positions, which is achieved by the main deck cargo door being located 40” further back than the competition. It says this increases volumetric carrying capability by a further 10 per cent. The aircraft will provide Kalitta with a highly flexible Ancra CLS capable of carrying multiple ULDs including 10 88×125” in P1 to P10, or 10 96×125” in P1 to P10 and 1 53x88x64” pallet or AEP/AEH or 60.4×61.5” AKE/LD3 or 61.5x88x56” AYY in P11.

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NEWSWEEK

Revenue surges 7.3% in Q1 at the Deutsche Post DHL Group

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eutsche Post DHL Group increased revenue significantly in the first quarter (Q1) of 2017 and says it had the strongest quarter in its history with all four divisions showing growth. Group revenue climbed 7.3 per cent more than €1 billion to €14.9 billion and operating profit improved to €885 million compared to Q1 in 2016, up 1.4 per cent. Chief executive officer, Frank Appel (pictured) says: “Following a record year in 2016, the upward trend has continued at Deutsche Post DHL Group this year. We reported growth in all four divisions in the first quarter. Our strategy is working, and we are confident that we will achieve our targets for 2017.” The Express division saw revenue rise by 13 per cent to €3.6 billion - driven by solid growth in the international time-definite (TDI) delivery business, where daily volumes rose eight per cent in Q1, supported by successful yield management. EBIT increased by 11.5 per cent to €396 million. This strong performance was attributed to further network enhancements, rapid international growth and pricing initiatives. In the Global Forwarding division, revenue climbed by 6.6 per cent to €3.5 billion in Q1. In line with the positive market trend,

DHL says the division registered significant growth in revenue and volumes in both the airfreight and ocean freight businesses. But DHL notes the price situation remains “challenging overall” although market freight rates increased significantly in Q1, it was not possible to pass on the higher buying rates in full to end customers in the short term. The division’s gross profit margin declined as a result, while operating profit decreased from €51 million to €40 million. Airfreight volumes were up 13.9 per cent to 952,000 tonnes in

Q1, up on the 836,000 tonnes in Q1 last year, driven by new business wins from 2016. However, airfreight gross profit fell 1.4 per cent despite the higher volumes. In Q1, revenue in the Post - eCommerce - Parcel (PeP) division increased 6.4 per cent to €4.5 billion in Q1 - attributed mainly to growth in volumes and revenue in the eCommerce - Parcel business unit, which increased revenue by 17.5 per cent to €2 billion DHL forecasts that earnings before interest and tax (EBIT) for the full year to increase to approximately €3.75 billion and operating profit to rise by eight per cent annually during the period from 2013 to 2020. The company says it is seeing good results at the half-time mark for its Strategy 2020, which it introduced in 2014. Appel says: “Our team has managed the first half of Strategy 2020 very successfully. Our strategic measures are already clearly paying off. At the same time, we continue to work hard to expand our global market leadership. “We are developing trend-setting innovations, moving into new fields of business and leveraging the opportunities presented by digitalisation. Our company is already ideally positioned to achieve its strategic and financial targets for 2020.”

Critical in Europe for UPS

UPS Express Critical service has launched in Europe for time-critical shipments that require special handling, such as an aircraft part needed for a flight or a surgical tool needed in an operating room. A UPS team will assess the shipping request through a round-the-clock contact centre, identify transportation alternatives and implement a delivery solution that meets time and cost requirements. UPS Express Critical options include a personal courier who can carry the shipment by hand from origin to destination on a commercial flight. UPS vice president for logistics and distribution in Europe, Africa and the Indian Subcontinent and the Middle East, Boris Dobberstein says: “With the launch of UPS Express Critical service, our customers in Europe can quickly find a way to get their critical shipments to their destination, balancing speed and cost. “For many of our customers, speed to market determines how successfully they can reach customers and grow their business.”

Silk Way makes IT move

CHAMP Cargosystems has signed up Silk Way West Airlines to its Weight & Balance load planning software for its Boeing 747 freighter fleet. CHAMP says the carrier was searching for a credible IT solution that would allow staff perform their load planning faster, with greater accuracy, whilst optimising the fuel burn of their aircraft. Silk Way chief executive, Kamran Gasimov says: “The breadth of functionality and ease of use made it a simple choice to incorporate CHAMP’s Weight & Balance solution into the suite of products we already use.” CHAMP vice president global sales and marketing, Nicholas Xenocostas adds it will help its client “further enhance their operational excellence”. Silk Way uses CHAMP’s Traxon Global Customs, Cargospot Airline and Cargospot Revenue applications.

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NEWS WEEK TAP inks container deal with va-Q-tec Emirates signs pharma agreements

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AP Cargo – the cargo division of TAP Portugal – has signed a global container rental agreement with va-Q-tec for temperature-controlled transport of pharmaceuticals. The deal was announced at air cargo europe, which was held in Munich from 9-12 May. The two companies say the combination of TAP Portugal’s routes and va-Q-tec advanced passive container rental services will provide benefits to pharmaceutical customers enabling deviation-free transportation of temperature-sensitive pharma goods. Va-Q-tec business development director, Katharina Leibacher (pictured in the centre) says: “The partnership with TAP is important for va-Q-tec and our customers serving the pharmaceutical market in Brazil. TAP Cargo provides a direct and unique gateway from Europe to Brazilian pharma hubs, like Brasilia, which is strongly demanded by the market.”

The transport containers, called ‘va-Q-tainer’ deployed by va-Q-tec, provide temperature controlled solutions for six temperature ranges from -70 degrees Celsius to +25 degrees Celsius in five sizes, taking up to two US pallets inside. These advanced passive thermal containers made by va-Q-tec offer constant temperature control for several days without using external energy sources and enables deviation-free shipments of temperature sensitive goods worldwide. TAP Cargo’s Rita Costa Silva (pictured left), who is responsible for business development, says: “Brazil is a big pharma consumer market, importing high value pharmaceuticals from Europe and other markets. “The container rental agreement with va-Qtec marks a milestone to providing customers with advanced options for the safe transport of cool chain airfreight.”

EMIRATES SkyCargo has increased its services available to pharmaceutical customers by signing agreements for global container rental services with SkyCell and va-Q-tec - adding to its existing cooperation with Envirotainer. Both deal were signed at air cargo europe in Munich from 9-12 May. The carrier says both will allow it to offer its customers a variety of specialised temperature controlled containers for pharma, or life sciences products. SkyCell’s containers are designed to maintain products at  +2 degrees Celsius to +8°C and +15°C to +25°C safely even under extreme outside temperatures such as –35°C to +65°C. The containers use innovative material technology to recharge in Emirates SkyCargo’s cool chain network enabling “door to door” for a closed supply chain and have close to real-time temperature monitoring capability.

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Pharma customers can now also choose to have their temperature sensitive shipments transported in va-Q-tainer’ containers – advanced passive containers providing temperature controlled solutions for six temperature ranges from -70°C to +25°C in extreme ambient conditions. The agreements with SkyCell and va-Qtec supplement existing in-house pharma offerings which include the Emirates SkyPharma Cool Dolly, which transports cargo from aircraft to storage areas in Dubai maintaining temperatures as low as -20°C and the ‘White Container’- a container coated with insulators to counteract high external temperatures. In 2016, Emirates SkyCargo launched Emirates SkyPharma - a solution for transporting temperature sensitive pharma shipments and also inaugurated a new state-of-the-art facility at Dubai International Airport dedicated to the transport of pharma shipments.

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AIR CARGO EUROPE REVIEW

Digitisation still too slow but change is coming

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igitisation was on everyone’s lips at air cargo europe in Munich from 9-12 May and it was the theme at the first conference session. Lufthansa Cargo executive board member for products and sales, Dr. Alexis von Hoensbroech (pictured left), hailed the positive impact the digital world can have on air cargo. He was the keynote speaker at the conference session ‘The age of the digital and the connected – the end of traditional LSPs (logistic service providers)?’ During a one-to-one interview with moderator Bernd Maresch (pictured right), von Hoensbroech said the rate at which digitisation is happening is still too slow. “The industry is on the edge of a very dramatic change and this change is clearly slow, but this industry has developed much faster than two years ago,” von Hoensbroech explained.

He added: “We have different players in this industry, which makes it very, very slow to develop.” Von Hoensbroech said technology can speed up the whole supply chain process and will “massively” improve quality and it is “very likely that digitisation will change the industry”. He said when it comes to technology you have to be a “driver” and you have to digitise your own business and processes first, which is what Lufthansa Cargo is itself doing. “We have to talk about having an entirely transparent supply chain and we must have data consistency, ” noted von Hoensbroech. “What the industry needs is a consistent system like a cloud or a block chain which gives consistent data and the sharing of information. “We have to find a way to get a cloud up and running. There is no obligation for innovation, but there is for survival,” von Hoensbroech said.

But the performance of the air cargo supply chain is still too slow in general in the view of von Hoensbroech: “40 years ago it took six days to move cargo, but today it is still six days and

it is still very slow, especially as cargo is only in the air for an average of 12 hours and 10 out of 100 shipments go wrong, which is still a very poor performance.”

Data cloud race the dream

A standardised logistics data system that can be used across the air cargo supply chain will be hard to develop but is not a pipe dream, the first conference session at air cargo europe heard. Panelists speaking in the age of digital and the connected discussion moderated by Maresch owner, Bernd Maresch, said it would provide a huge boost to the industry and meet future needs of shippers, but due to the fragmentation of the chain it would be hard to create. Oliver Wyman partner, Joris D’Incà explained: “The question is can we bring all the supply chain together and build the transparency. It is very fragmented with many players.” Some air cargo airport communities such as Brussels and Frankfurt are developing their own systems for use across freight stakeholders within their own individual communities. Brussels Airport’s cargo development manager, Sara Van Gelder said that Brussels is in its first phase of rolling out the platform, but questioned how it is possible to get everyone moving in the same direction across the industry while it was more likely to happen within airport communities. “Starting communities one at a time is a good approach because everyone works on developing a data cloud and they are open minded about keeping it inter-operable with other data clouds,” she said. Van Gelder believed it will be hard to start with a global initiative, but there could be a way of connecting community to community, adding: “Keeping these community data clouds inter-operable is the most important part and making sure they can form a network in the end.” Developing a platform for use across the supply chain and not just for separate communities is vital in the view of Lufthansa Cargo’s executive board member for products and sales, Dr. Alexis von Hoensbroech, but he felt it will happen one day. “In these communities it is creating value, but the real value will only be unlocked when it involves the entre supply chain and there are IT players that are pushing this. “We saw in the passenger chain a concept from the 80s when airlines and airport developed at platform by Amadeus. Maybe this will be the way for the industry,” he said. Von Hoensbroech said maybe one day some big airlines, forwarders and shippers will join forces to create a system, which will help pull the rest onboard. He was upbeat about one standard platform being developed despite the challenges as said the race is on among operators across the air cargo supply chain: “Eventually we will have it and someone will make the race.”

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AIR CARGO EUROPE REVIEW

Give the customer more choice as to how to interact

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iving the customer the choice of how they want to interact may be the key to customer satisfaction, delegates were told at air cargo europe on 11 May. In the session ‘Reorganizing sales and customer service to match today’s new customers’, co-host Dr Joachim Ehrenthal, who is the owner of software company joe.systems said customers have a greater choice in how they interact with him or his firm. He believes it is important to give customers the choice as to how they want to interact, and it is more complicated than putting everything online. Ehrenthal says: “When I started my company I thought I had to put everything online and be done, but people want people, they want personal interaction.” Describing the new generation, he says: “The new generation are more open about receiving comments, they trust peers, they are a bit different, they always talk to a person but maybe the entire world is listening.” Ehrenthal was co-hosting the session with Bernd Maresch, and they were joined for a panel discussion by Accenture director, Dominik Dieckmann, CEVA vice president business development Germany, Christian Stingl, Swiss WorldCargo cargo head of area and contribution management, Alexander Arafa and The International Air Cargo Association secretary general, Vladimir Zubkov. Dieckmann says customer expectations have changed tremendously, saying: “It is all about innovation and solutions. What I mean is they want to be delighted on any channel.” He says new customers demand more transparency than ever, and want sleek interfaces, and they do not care about the com-

plexity of freight. The digital generation also expect more choice for how they want to interact, and Dieckmann says: “Some people in their

mid 20s have never been to a bank. We need to leverage the cost advantage this gives and free up sales the force.” “New technology can help, it is not about replacing the key account manager bit tasks can be addressed by a chatbot.” Ehrenthal says: “Young people have a choice what they do. They are super interested in the transport logistic supply chain. They want to know how e-commerce arrives but when they learn the detail then they go off. If you want to interact with them then give them a say in how they want to do stuff.” Stingl says: “At the end of the day were are in a people business. There has been a heavy change in freight forwarding in the last couple of years, people sit at the front of the table. You have to sit in front of the customer, you need to specialise in air and ocean freight, automated innovation, tracking and IT.” Arafa, who has extensive experience in the passenger division, says: “As an airline we need to cover our core competency of moving goods, we need partners to do things before and after. A lot of things happen on the ground to bring things up to speed, there is a lot of room for improvement. The passenger division is way in front.”

Future bright for pharma

THE future of the pharmaceutical industry looks bright but challenges are increasing, according to Panalpina global head of healthcare, Andreas Sahli. He was speaking during the session ‘Pharma Logistics in the Air Freight Industry’ on 10 May at air cargo europe, and says many people are going into the field as it is an attractive sector. Sahli was on a panel with Turkish Airlines chief cargo officer, Turhan Ozen, dnata senior vice president cargo UAE, Bernd Struck, Amsterdam Airport Schiphol head of cargo and Jonas van Stekelenburg, while Excelsius Global chief executive, Tony Wright was moderating. Sahli says: “The future will have much more temperature controlled cargo also with a shorter shelf life, there is more personalised medicine, that is a real challenge for us.” He says Panalpina has been investing heavily in staff training, saying: “We trained up to 1,500 people in the first lot, now more than 2,500 have been trained to understand what is required. We need to speak the same language as audit partners, truckers, carry audits at airports, cooperate with partners and guarantee a smooth supply chain.” Struck adds that despite the pharma industry is growing, air cargo’s share is dipping saying: “We can’t afford to be complacent, we must modernise and improve transparency, quality, reliability and scope of services.” He says that according to International Air Transport Association figures, $15 billion of pharma products are lost due to temperature excursions, and dnata is undergoing Center of Excellence for Independent Validators in Pharmaceutical Logistics certification, and all stations should be covered worldwide within the next two years. Struck says he wants all dnata stations to be certified, and says: “I would like airlines to load cargo according to segment, pharma and other stuff. We ask customers to help us to fulfil services to customers.”

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CARGO HANDLERS

E-commerce, technology and pharma focus for Hactl

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017 has to date been a strong year for Hong Kong Air Cargo Terminals Limited (Hactl) as freight flies through Hong Kong and it is expanding services to meet rising demand. This follows from a record-breaking 12 months last year when Hactl handled 1.65 million tonnes of cargo, up 1.7 per cent on the previous 12 months. The ramp handling business was also very busy, setting three new all-time records, including on 23 November when the cargo handler turned around 101 freighters in a single day, beating the previous best of 98 set 19 days earlier. Speaking to Air Cargo Week at air cargo europe in Munich, Hactl executive director, Vivien Lau (pictured) says the first quarter (Q1) of 2017 was really positive: “Cargo has really picked up and Q4 last year was really good. In Q1 this year we consolidated

and if we compare Q1 this year to last year we are up by 12 per cent.” Importantly Lau says this growth is not being driven by one particular sector and it is across the board. “Part of it is e-commerce as we are seeing more mail shipments and parcels coming through and electronic products is rising. In Q1 there was new product launches and that helped and special cargo and perishables – anything and everything really,” Lau explains. She says shipments of imported perishables like fruit are on the rise, which is fuelled by the expanding middle-class population in China and its growing thirst for fresh fruit. “There is a growing demand in China as the middle class are demanding better fresh fruit like cherries from Australia,” Lau notes. Hactl is meeting e-commerce demand through its subsidiary Hacis which is growing its SuperLink China Direct road feeder services (RFS) into China to meet surging demand. Last year Hacis started five new express lanes between Hong Kong and the

e-commerce centres of Jiangmen and Heshan. Its two largest road feeder centres, at Guangzhou Airport and Shenzhen Airport, showed 35 per cent growth in 2016 with this trend continuing into 2017. Lau is also executive director of Hacis and says: “We have been focusing on this as have seen continuing demand from China and Hong Kong and is why we expanded this network.”

The missing link

Hacis now has eight depots in China and runs a range of RFS express lanes, which could be expanded in future to meet rising e-commerce demand. Lau says the SuperLink China Direct was expanded for e-commerce as local agents had a basic set-up but were missing a direct link from Hong Kong and this was the rational for building it up. “We are monitoring closely where the cargo is and where there is demand where will make sure we place ourselves there,” Lau adds. The Hong Kong – Zhuhai – Macau Bridge is due to open this year, and will cut journey times to 40 minutes and will boost RFS services throughout the Pearl River Delta region. Lau says it will strengthen Hong Kong’s role as the region’s main hub airport. Lau says on the Hactl side, the handler will invest in technology and has dedicated resources to building up mobile phone apps and it is putting more emphasis on it. “This is the trend now. The truckers want to access the information through their mobile phones and our staff want to have the handling guidance on a mobile phone so we have developed a new app and it is proving to be very efficient - so technology and innovation will continue to be a strong theme,” Lau says. Hactl handles cargo for more than 100 carriers but actively for 50-60 as some are offline and each Lau says have vastly different requirements, which presents varying challenges. “The industry has been changing fast and freight forwarders and airlines are expecting more and more from the ground/cargo handler and with e-commerce it is changing the handling and it can be more complicated,” Lau says. She adds: “We used to just handle general cargo, which was easy with big pallets and one air waybill, but now with shipments there are a lot of different requirements to ensure the supply chain is properly handled and that is a challenge as we must get keep ourselves updated and motivate our staff to do more. Then at the same time the resources are always limited.”

The CEIV impact

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Pharmaceuticals is also another focus and earlier this year Hactl gained the International Air Transport Association CEIV Pharma certificate – becoming the first handler in Hong Kong to obtain the certification and this has improved its handling standards in the sector. Lau explains: “Through the process of getting the certificate we looked at the process of moving pharmaceuticals and redesigned our operational procedures to make sure we had the shortest possible time for the pharma cargo to be handled from when it landed in HK and collected by the shipper.” And Lau is clear she wants more information to be shared before it handles payloads on an aircraft: “We would love to have more information of the capacity and if we can be provided with accurate information of the cargo it would definitely help us with the handling. “We worry about such things as lithium batteries for example and there are occasions when it is not declared and it poses a risk to us and the aircraft.” Hactl won Cargo Handler of the Year at the Air Cargo Week World Air Cargo Awards in Munich on 10 May, which was held during air cargo europe.


CARGO HANDLERS

Amazing start to year as dnata upgrades facilities

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017 has got off to a strong start for dnata, with senior vice president UAE cargo & DWC airline services, Bernd Struck (pictured) saying March and April were “outstanding”. Speaking to Air Cargo Week at air cargo europe on 10 May, he says the year is young as its business year starts in April but has started well. So far it has grown 12 per cent at Dubai International Airport, which he says is amazing considering the limited facilities. Struck says: “We are in the full process of upgrading our facilities over there in order to grow into the future before the traffic relocates to Dubai World Central.” Dnata has a facility at Dubai World Central (DWC) with 350,000 tonnes of capacity, owned by the airport and leased to dnata, but it has purchased land next to the facility to construct a mega terminal, likely to be in place in phase one in 2019 or early 2020. Struck cannot say what specialist facilities the mega terminal will have, describing it as a “fluid development” saying: “It depends on what happens at Dubai International and how quickly the transit comes. The integrators are still at Dubai International and they have been advised by Dubai Airports to relocate to DWC next year. “They are currently negotiating with the integrators whether they will have their own facilities or whether we will represent some of them in our facilities. This is still fluid at the moment. My understand is there is so much space that they will be looking at building their own facilities.” Dnata is also working on upgrading its Calogi community system. Struck says Calogi gives the business community the opportunity to make business with dnata, particularly helping the small agents. He explains: “We not only have the big agents but almost 2,000 small ones known as ‘Mum and Pop shops’. They have a

telephone, a computer and an internet connection, and they do business with the people they know about.” Struck continues: “They have no storage capacity so they have a virtual business. In order to be able to do so they need access to us and need credit facilities.” He says the credit facility is one of the biggest features of Calogi, as it means they can use the system immediately to fulfil the needs of their customers. Calogi is 10 years old and Struck is doing a study on the future of Calogi, before deciding on a new cargo management system for dnata worldwide.

Looking to the future, dnata is the designated service provider at Dubai International, and will remain so until a certain volume is reached, and this is also the case at DWC. Struck says: “We have the possibility to work with the airport itself on developing the future of the largest airport in the world, which DWC will be at some stage. The requirements that are being built into the airport for a ground handler will be fundamental for the airport.” There are big plans to move facilities underground and automated, not only for transporting cargo but also catering and baggage. Struck comments this is a lot of money to invest and a technical challenge but this is essential for the longer term. He says: “We are doing this for the longer term with Dubai Airports to ensure this can handle the connecting times in spite of the huge space to be managed.” Struck is confident that dnata has a strong future, as part of the Emirates Group, which is owned by the Dubai government. He tells Air Cargo Week: “We have a strong future not only in Dubai but also across the world. I see the future of dnata in a very good shape.”

Kenya warehouse demand high

KENYAN cargo handler Siginon Global Logistics says the warehousing industry in Kenya is seeing increased demand from shippers seeking safe storage of their shipments for distribution or onward transit to neighbouring countries. The company attributes it to various factors including a growing interest in Kenya as a business hub and it being ideally located to be a key transit point for cargo into the local market and region. Siginon says the growth of SMEs in Kenya has exploded and contributed to an increase in logistics services such as warehousing. In addition, a number of importers today have turned to utilisation of leased factors of production which are cheaper for retailers as opposed to the importer absorbing the cost and risk of running a non-core operation. Siginon has invested heavily in warehousing to meet customer demands and has nearly 300,000 square feet of warehouse capacity in its Nairobi and Mombasa operations licensed to handle cargo that is general, bonded, or on transit to regional destinations. Operations manager in Nairobi, Winstone Akweyu says: “The feneral cargo warehouses have the highest demand with customers largely importing shipments such as textiles, pharmaceuticals, spare parts and chemicals among other commodities.” Automation is something set to come into Kenyan cargo warehouses in the future along with other innovations such as robots. Akweyu adds: “There are a number of opportunities of automating warehouse operations through automation of storage, compact picking, zone picking, integrated picking as well as warehouse and AGV systems. Though these systems require high capital investments, the returns on business and customer satisfaction are equally high in the long run.” Logistics services are driven more to meet customer demands for convenience and efficient service delivery and with growth of Kenya’s position as a key business hub in the region, it is likely investments will be made to match global trends in service.

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CENTRAL AMERICA

Delta and Aeromexico launch trans border flights

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elta Air Lines and Aeromexico started their joint cooperation agreement (JCA) to operate trans border flights between the United States and Mexico. Having confirmed with the US Department of Transportation and Mexico’s Federal Economic Competition Commission (COFECE) that all steps have been completed to launch the JCA, the carriers say this is a “new chapter in the history of aviation in the Americas’ and the partnership will

allow them to expand competition and serve new destinations. Delta Air Lines chief executive officer (CEO), Ed Bastian (pictured) says: “Our opportunity to leverage Delta’s experience and our proven record of successful joint ventures, together with a long history of working with Aeromexico, will make this a great JCA. We are now well positioned to provide significant benefits to our customers, our businesses and our employees.” Aeromexico CEO, Andres Conesa adds: “This historic agreement is very important for our customers, who will benefit from a greater choice of flights and connectivity between both countries. For our employees, it represents an extraordinary opportunity for growth and the adoption of best practices that will make us the best alliance in the region. “We are also pleased that this agreement will

help strengthen the relationship between Mexico and the United States by offering greater connectivity between the two countries than ever before.” Delta will provide connections through its hubs in Atlanta, Detroit, Los Angeles, Minneapolis-St. Paul, New York, Salt Lake City and Seattle, and Aeromexico will provide greater access via Mexico City, Monterrey and Guadalajara. Delta and Aeromexico launched their codeshare in 1994, with Delta entering into an advanced commercial agreement with Aeromexico in 2011, and investing $65 million in shares of Grupo Aeromexico in 2012, Aeromexico’s parent company. The two airlines filed an application with the Department of Transportation and COFECE seeking approval for the JCA covering trans border flights, and they both accepted the condi-

tions set by the authorities, then implementing the actions necessary in 2017. In March, Delta increased its stake in Grupo Aeromexico, and holds options to increase this further. The offer was oversubscribed with Delta acquiring 228 million shares representing 32 per cent of the outstanding shares of Grupo Aeromexico and 39.8 per cent of shares tendered. Delta owns 36.2 per cent of the outstanding shares of Grupo Aeromexico and holds options to acquire an additional 12.8 per cent for a total of 49 per cent of the outstanding shares. At the time, Bastian commented: “We are pleased to successfully complete the tender offer. This is yet another milestone that strengthens the Delta- Aeroméxico relationship as we move toward implementing our joint cooperation agreement in the second quarter.”

Aeromexico flies into losses in Q1

GRUPO Aeromexico’s cargo revenue grew by 27.9 per cent in the first quarter of 2017 but the airline flew into a loss. Cargo revenue was up 27.9 per cent in the first quarter to 963 million pesos ($51.1 million), 6.8 per cent of revenue, compared to 753 million in 2016, helped by welcoming four Boeing 787s to the fleet. Total revenue was up 17.5 per cent to 14.1 billion pesos compared to 12 billion in the first quarter of 2016. It made a loss of 258 million pesos in the first quarter of 2017, compared to a

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profit of 161 million in the same period the previous year. From the first quarter of 2016 to the same period of 2017, Aeromexico increased its fleet by six aircraft, adding four Boeing 787s and three 737-800s, and one 777 leaving, bringing the fleet to 69. Aeromexico Connect’s has 64 aircraft in its fleet, with three CRJ-145s and two and two E-170/175s being retired and two E-190s being added in the first quarter, bringing Grupo Aeromexico’s to 133.


TRADEFINDER Airlines

Freight Forwarders

Turkey

India

Freight Forwarders Hong Kong

United Arab Emirates

USA

Industry Events

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