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The weekly newspaper for air cargo professionals Volume: 18

Issue: 48

7 December 2015

Agreement on CWA close between Cargolux and unions


argolux International Airlines continues negotiations with unions over a new collective work agreement (CWA), but a deal could be on the horizon to end the 15-month dispute. The all-cargo carrier said on 1 December it achieved a “major breakthrough” over crew related items with ground staff and pilots represented by the OGBL and LCGB unions and had come to a “pact”. The previous CWA expired on 1 December. But according to reports, despite ground staff agreeing on terms, pilots are less happy and have concerns about their rest day and possible outsourcing to Cargolux Italia from the Luxembourg hub. An agreement between Cargolux and the unions had to yet to be ratified when Air Cargo Week went to press on Thursday, 3 December. Cargolux and the unions have reportedly exchanged their proposed CWA’s, which they will study before meeting again for talks. A date has still to be set. The carrier says the two days

of talks clears the “road to growth and financial sustainability, sealing a strong pact for the future of the Cargolux Group where all parties underline that they share a common vision for stability, sustainable growth and prosperity at Cargolux”. “The perseverance of the negotiating teams yielded a principle agreement with both unions on the new CWA terms that sends a strong signal on the company’s commitment to job security for our staff and an increased support towards maintaining the competitiveness of Luxembourg as the prime air freight hub in Europe,” Cargolux adds. The airline says the parties are expressing commitment to move forward, boosting plans for growth in Asia through implementation of the Luxembourg – Zhengzhou dual hub strategy. The LCGB explains in a statement: “Although no final agreement could be reached, and the LCGB can not sign the overenthusiastic press release by Cargolux, the parties involved have come today to advance negotiations for a new

africa needs a single airspace not unhappy following a record breaker

collective agreement for Cargolux. Over the coming days, the management and unions will continue negotiations with the intention of finding a solution acceptable to all parties concerned.” The LCGB pilots union has already balloted to take industrial action if talks collapse without an agreement. News of the CWA breakthrough came after Cargolux announced expansion plans, made at a board meeting on 25 November. The carrier says it is to replace two Boeing 747-400 Freighters with three nose-door equipped 747-400F, boosting its freighter

fleet from 25 to 26 747 until the third quarter of 2016. Management has also approved 100 additional pilot jobs, part of 120 extra staff to be hired in 2016 in Luxembourg. The airline says: “Despite the challenges of a potential industry action by one of its unions, Cargolux is confident that the above investments in flexibility and reliability for its customers as well as work-life balance for our crews will bring sustainable benefits for all stakeholders.” The LCGB and OGBL unions represent about 1,500 workers at Cargolux and most of its 450 pilots.

Outlook for industry difficult, but still optimism in the air

Airfreight volumes continue to flatline and the outlook is difficult, according to the International Air Transport Association (IATA). The association has released October data for global airfreight markets, which show volumes measured by freight tonne kilometres (FTK) rose year-over-year (YOY) by 0.5 per cent in the month compared to a year ago. YOY expansion fell back from September’s faster growth rate, and total cargo volumes in October stand 1.1 per cent lower than the peak of the uptrend at the end of 2014. IATA says European carriers have driven recent improvements in air cargo growth, but they ran out of steam in October with a rise of just 0.2 per cent and other regions also underlined the weak October trend. The most significant decline in cargo activity

e-freight the exception rather than norm

was experienced by North American carriers, who reported a 2.4 per cent fall in volumes. Latin America and Africa, fell 8.1 per cent and 1.1 per cent respectively, but Asia-Pacific was up slightly, with a rise of 0.3 per cent. Growth in the Middle East, although a robust 8.3 per cent, was some 4.3 percentage points down on the average performance for the year to date. IATA’s director general and chief executive

officer, Tony Tyler (pictured) says: “The outlook for air cargo continues to be very difficult. While there was some optimism from third quarter growth it has all but disappeared as the industry basically flat-lined. Cargo capacity has grown largely in lock-step with the continued robust demand for passenger travel. As a result, freight load factors have sunk to the 44 per cent range - a level not seen since 2009. “Early signs of improvement in export orders may bode well for trade and air cargo but this is unlikely to prevent air cargo finishing 2015 on a low note.”

Brussels investing to secure prosperity





Pay deal for Lufthansa staff LUFTHANSA has signed an agreement with services union, ver.di on pay for about 30,000 ground personnel. The carrier has agreed a pay increase for its ground personnel and for staff at Lufthansa-Systems, Lufthansa-Service, Lufthansa Technik and Lufthansa Cargo of 2.2 per cent from 1 January, 2016. There will be a one-off payment of 2,250 euros ($2,380) per full-time employee. This will be followed by another 2.2 per cent increase one year later in 2017. The collective bargaining agreement will expire at the end of 2017. However, Lufthansa remains embroiled in disputes over pay and retirement benefits with pilots and cabin crew that has resulted in numerous strikes. Lufthansa Cargo has also expanded its joint venture with All Nippon Airways (ANA) Cargo in Japan by adding services on 1 December to Fukuoka, which will be followed by one to Sapporo. Lufthansa Cargo area manager for Europe and Africa, Carsten Wirths says the joint venture allows it to connect the European network of Lufthansa Cargo, with direct connections of partners to Japan and continental de-feeder flights of ANA.

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Rise in yields in October, WorldACD reports


ields improved in October over September, but by less than the same month last year, according to market data by WorldACD. The industry data analyst says for the second month in a row, the worldwide average US dollar yield improved month-over-month (MoM), this time by one per cent, but below last year’s MoM figure of 1.7 per cent. WorldACD says the year-on-year (YOY) yield change is a different nature and for the first 10 months of the year it has fallen 17.5 per cent. However, it says this deterioration should be viewed against two important developments in 2015 – a drop in fuel prices going back over a year and a rise in the use of all-in pricing structures. Volume wise in October, WorldACD notes was “not spectacular” either, for the more

than 60 airlines in its database, as total chargeable weight grew by 1.8 per cent, slightly better than the comparable YOY figures for the past three months. The overall figure was dragged down by the Americas, where volumes fell two per cent in the North and over 10 per cent in Central and South America. WorldACD says other regions showed growth - Asia Pacific by two per cent, Africa and Europe four per cent each, and the Middle East & South Asia 7.5 per cent. Countries seeing strong growth were


Australia, Bangladesh and Vietnam, while Turkey and Norway did well, and Myanmar, Lebanon, Djibouti, Algeria and Balkan countries, showed very high YOY growth. As for market segment performance, pharmaceuticals saw growth of 14 per cent and perishables five per cent. WorldACD explains: “Approaching the end of the year, the time has come to put the 2015 yield developments in perspective. A lot is being made of the stark worldwide yield decreases we have witnessed. “However, the yield developments of the past 12 months are truly one-of-a-kind: they simply cannot be equated with an extremely serious downward trend in air cargo, as some industry observers seem to want us to believe.” WorldACD concludes the weakness in 2015 has been insufficient volume rather than adverse yield developments.

Meridiana contract win for ECS

ECS GROUP is now representing Italian carrier Meridiana as its worldwide general sales and service agent. From 1 November, ECS says it will offer cargo on widebody services as part of a new three-year contract focusing mainly on the prime cargo routes to and from Mexico, the US and Dominican Republic. Meridiana operates widebody Boeing 767 aircraft and narrowbody Boeing 737 aircraft, with a capacity of about 10 tonnes. ECS expects to generate about 4,000 tonnes per annum by transporting a vast amount of dangerous goods and perishable commodities.

Terminal to be sold by Finnair

FINNAIR is to sell its cargo terminal at Helsinki Airport to Finavia, but freight operations will continue at it until it moves into a new state-of-the-art facility in 2017. Finnair’s strategic objective is to double its Asian traffic by 2020 from the level of 2010 and to enable its growth, Finnair has ordered 19 new Airbus A350 XWB aircraft and capacity will increase by 50 per cent. Finnair Cargo is aiming to double the amount of cargo it handles by 2020, as part of its investment in its widebody fleet and construction of a new freight terminal. In 2014, it handled 149,000 tonnes and is aiming for 300,000 by 2020. Cargo made up 17 per cent of revenues last year.

WorldNews CATHAY PACIFIC AIRWAYS has agreed to pay 6 million Canadian dollars ($4.5 million) to settle an antitrust case in Canada involving its cargo operations. Cathay made a filing to the local stock exchange. The settlement is pending approval by the Canadian courts. FRAPORT CARGO SERVICES has appointed, HansGeorg Emmert as its new managing director (MD). The appointment became effective on 1 December and he takes over as MD from Andreas Helfer. CHANGI AIRPORT has seen volumes rise 1.8 per cent in October to 162,500 tonnes, the second monthly increase in a row after it suffered a mid-year slump.



NEWSWEEK Burundi mission for Panalpina

PANALPINA has transported 70 tonnes of medical care goods to Burundi for UNICEF as the East African country plunges into another violent crisis. The shipment included antibiotics, analgesics, infusion sets and hospital equipment, provided by UNICEF and flown on a charter flight to Burundi’s capital, Bujumbura.

The violence started in April when the president, Pierre Nkurunziza wanted to stand for a third term resulting in violent protests, killing at least 200 people and causing at least 200,000 more to flee to neighbouring countries. Since then aid has been withdrawn by donor governments. Panalpina chief executive officer, Peter Ulber says: “This is the third time that Panalpina is partnering with UNICEF to address a crisis in Africa. And again we hope that our contribution will bring some respite to those who are less fortunate than us, especially the many affected children in Burundi.” UNICEF Swiss committee executive director, Elsbeth Mueller says: “These relief goods can save the lives of thousands of children. On behalf of UNICEF, I deeply thank Panalpina for their help.”

E-freight the exception rather than norm THE biggest change in airfreight will come from the changing relations between shippers and freight forwarders, says CHAMP Cargosystems business development manager, Bart Jan Haasbeek (pictured). He explains to Air Cargo Week digitising processes and new technology in the supply chain will “stimulate change and make disruptive initiatives”, as in other industries. In Haasbeek’s view, the industry has to ask itself whether it has digitised the paper trail, rather than looking at business process change to make working without paper more effective. There is still resistance to ditching paper, Haasbeek says: “It is not only the technology itself but fear around ‘who will do what with which data’.” “It is also about having the confidence to operate with paper-free procedures, processes and supportive technology platforms to help eliminate the ‘hard-wired’ habit of depending on paper.” Adoption of electronic air waybills (eAWB) and other systems is critical in his opinion: “The answer is simple - no technology means no e-business and having to rely on paper, but it is also about having the right technology to do the job.” “Companies who will remain passive and not willing to look at the benefits or invest in new technology will eventually pay the price.” “E-business supported by electronic communication is not just a monetary cost saving, but will primarily improve data quality, reduce irregularities and increase efficiencies by helping to reduce the paper-overload throughout the supply chain.” CHAMP has launched Logitude, a transport management system for small and medium sized forwarders. Haasbeek says

it enables forwarders to manage paper-free consignments to International Air Transport Association (IATA) e-AWB, and e-freight standards. He feels many airlines still have to centre their strategy around e-business and support paper-free operations. “There have also been the arguments from some within the forwarding community that e-freight has been designed by airlines, for airlines,” Haasbeek notes. He says eliminating paper from the supply chain will benefit carriers, but also drive efficiencies and better technologies to support e-business. Haasbeek feels the reasons e-AWB statistics are not meeting IATA targets is a lack of strategy and awareness of available systems. He feels adoption of e-AWB has been too slow: “There is a gap of clear information of e-AWB within many markets. Although many markets e-AWB is legally allowed and MC99 has been fully ratified, many airlines still requests original AWB copies. We have to ask why, as this situation creates a duplication of work which has probably impacted the take-up of e-AWB, making the transition period taking longer than expected. “The business has not fundamentally changed since e-freight started in 2008. We believe the right blend of technology, standards transformation, business process change, willingness to change and regulatory enablement will see ‘e’ be the norm rather than the exception it is today.”

Royal Mail agreement penned by Norwegian


orwegian Cargo has continued its expansion and signed a two-year framework agreement with Royal Mail’s Gatwick Air Mail Unit (GAMU). This deal will see the carrier support international shipments between the UK, Scandinavia and the US. Norwegian has increased capacity this year


ACW 7 decemBER 2015

and in 2016 it will operate daily flights from Gatwick Airport to New York. Services to Los Angeles will also increase to four times a week from Spring 2016. From May 2016, it will also launch Gatwick-Boston flights with further long-haul routes from the UK also in the pipeline. Norwegian’s long-haul destinations are operated by Boeing 787 Dreamliners with each aircraft able to carry up to 15 tonnes of cargo. The carrier offers freight capacity to destinations in Scandinavia and European destinations in addition to Bangkok, New York, Orlando, Oakland, Los Angeles and Fort Lauderdale. Norwegian’s GSA is Wexco Cargo. Norwegian head of cargo Bjørn Erik Barman-Jenssen says Norwegian’s huge expansion in the UK is not just about passenger growth but cargo as well.

AFRICA Ambitions high at Astral


stral Aviation has ambitious growth plans for Africa after marking its 15th anniversary this year. It will expand its freighter fleet and intends to more than double its offering of scheduled routes. “From 2016 to 2018 we will be setting up of new hubs in Lagos and Johannesburg to meet the requirements of customers shipping to West and Southern Africa,” says the carrier’s marketing manager, Peter Kamile. Astral will begin to restructure its fleet in 2016 with the acquisition of the first of up to six Boeing 737 Freighters in the next two to three years. “Our intention is to create the largest cargo network in Africa by increasing our intra-Africa schedule footprint from the existing 10 scheduled routes to over 24,” Kamile says. Kamile tells Air Cargo Week (ACW) that other plans include diversifying into an integrator-style express service and experimenting with un-manned cargo aircraft, details of which will be revealed in the new year. Astral has experienced good load factors on most of its African routes especially Juba, Mogadishu, Mwanza, and Dar-es-Salaam (both


ACW 7 december 2015

The perishables battle

Tanzania), though a dip in the oil and gas sector has resulted in lower volumes for Pemba (Mozambique). “The Nairobi-London sector has been consistent with very good load factors,” adds Kamile. “In 2015, we have operated a number of relief flights from our Nairobi and Djibouti hub into Yemen and also into Bangui in the Central African Republic, as well as to Juba, South Sudan and Mogadishu, Somalia.” According to Kamile, Africa is not without its share of challenges for the future. “Many relate to a lack of a liberalised framework which causes restrictions on traffic rights, market-access and connectivity. Protectionism still exists in certain regions. Taxes on fuel and ground-handling, along with cargo taxes and royalties, all increase the cost of airfreight,” he explains. Poor infrastructure at over two thirds of African airports poses additional challenges and whilst African carriers dominate the intra-African market - thanks to the efforts of Ethiopian Airlines Cargo, South Africa Airways Cargo, Kenya Airways Cargo and Astral - foreign carriers still account for 85 per cent of airfreight to and from Africa.

AFRICA’S air cargo market has for a long time been driven by perishables dominated by commodities such as fruits, flowers and vegetables, in particular beans and peas, as well as mangoes and other stone fruit. But the lucrative global perishables business has also attracted others and when it comes to maintaining market share the African airfreight market is facing stiff competition from Latin American countries. IAG Cargo’s deputy regional cargo manager in the Middle East & Africa, Lotte van Rooij tells Air Cargo Week (ACW): “It goes without saying that global competition will continue to be an influence on airfreight. For the African market this largely means competition from Latin America, as both regions are now exporters of perishables. “With similar growing conditions in South America and Africa, we are seeing identical products being produced by both regions, providing buyers with a great range of sources for key perishable products.” The choice now extends to airfreight itself, where infrastructure and supply chain options have become an increasing factor in to a buyer’s selection of where to do business. “This is where we believe our network of 350 destinations and aligned product

standards become a real advantage,” says van Rooij. “Whether goods are moving out of South America or Africa, customers need to know their products will always be moved to a consistent standard.” Another influence has been a steady increase in bellyhold capacity which is causing IAG Cargo to focus on what he terms “sensible capacity management”. This has included removing its wet lease freighter capacity in the region, as well as trying to maintain differentiation through premium products and customer service. “We are investing heavily to give customers the network and products they need through fleet modernisation, additional capacity and the addition of new services. In particular, the global pharmaceuticals market is strong and is proving to be one of the fastest-growing areas of our business, therefore our Constant Climate programme is of great focus,” he adds. Van Rooij asserts to facilitate growth in trade businesses require fast connections with key international markets whereas as some African markets still offer more limited infrastructure and facilities. “Infrastructure development in Africa must keep up with the expectations of global businesses,” he says.

Kenya vibrant as growth rolls on


rowth forecasts are well over five per cent annually at Kenya’s airports, and the cargo picture is one of a vibrant sector with expanding potential. Airfreight is one of the key business and revenue drivers for Kenya Airports Authority (KAA), says marketing and business development manager, Bernard Mogambi. Of three airports managed by KAA, Nairobi’s Jomo Kenyatta International Airport (JKIA) handles over 95 per cent of all cargo, while Eldoret and Moi airports carry small volumes. Some 250,000 tonnes of cargo was handled in 2014/2015, the majority (80 per cent) comprising exports made up of cut flowers (45 per cent) and fresh produce (28 per cent) with the remainder being general cargo. “This makes Kenya one of the leading exporters of horticultural produce to Europe and Middle East markets,” Mogambi tells Air Cargo Week. “The sector is mainly privately led with the airport providing key facilities, services and general coordination.” Mogambi cites the influence of the private

sector as a major factor in the growth of Kenya’s vibrant airfreight sector, which is anticipated to maintain growth of around five per cent a year. “Whilst the authority has provided suitable land with easy access to the air side more than half of the capacity is being developed by the private sector on flexible lease arrangements,” he says. JKIA is evolving into a leading cargo regional hub with airlines led by Kenya Airways Cargo consolidating freight here before onward export to worldwide destinations. “For many years Europe was the main market for our produce. This position has changed more recently and we now have dedicated carriers serving the Middle and Far East out of JKIA,” says Mogambi. Building on the role of the private sector, KAA has earmarked a site for the development of a freight consolidation and warehousing area within the existing airport master plan. Some 72 acres of land have been identified for a special economic zone with emphasis on warehouses, cold-rooms, exhibition halls and other facilities for development and growth of cargo traffic through the airport. “The biggest challenge facing users at JKIA is the ongoing runway rehabilitation,” admits Mogambi. “This has put severe operational restrictions on airlines and, efforts are being expended to ensure work is completed in late spring 2016, it remains the main challenge.” “Generally the African market is poorly serviced and has low uptake capacity,” he adds. “There are few airports with dedicated facilities and intra-African traffic is poor. There is need for more working together to generate economies of scale when developing cargo facilities.”

AFRICA Africa needs a single airspace WEAK legislation in some African countries, particularly covering common flying areas, has placed limitations on the expansion of the region’s airfreight business. Siginon Aviation’s divisional manager, Jared Oswago (pictured) admits to Air Cargo Week the pursuit of a single African airspace to provide a favourable operations environment for carriers remains illusive. “Unlike Europe, where airspace policies support airfreight business, Africa suffers from non-integrated policies which has made it expensive and erratic on a country-to-country basis. There is a need for a single African airspace,” he says. For the coming year, Oswago cites high fuel costs as adding to the challenges. “As the African market opens up there is also a need for more infrastructure investments to extend airports and facilities,” he says. Kenya’s position as a key East African airfreight hub was boosted last year with the opening of Siginon Aviation’s new air cargo terminal adjacent to the apron at Jomo Kenyatta International Airport (JKIA) in Nairobi. Construction of the $10 million facility was in response to customer demands for a safe, secure and optimally operating terminal airside at JKIA. Oswago says the design and structure was guided by global standards of optimal cargo handling, underlined with a focus on safety, security and efficiency: “The move to the JKIA airside was a commitment by Siginon to offer customers better service.” Features of the 5,000 square metre air

cargo terminal includes a general cargo warehouse with capacity for 60,000 tonnes annually, and specialised storage areas for dangerous goods, temperature sensitive and oversized cargo. The terminal also includes a perishables centre with 2,000 square metres of cold room floor space. Oswago says it was structured to ensure flowers are moved from farm to market in perfect condition. “Our move to the airside of JKIA is a testament we have heard our customers’ needs and aligned our products and services to deliver to these demands.” Kenya’s export market is dominated by perishables, such as flowers and vegetables, as well as project relief consignments. Most of the fresh produce is destined for Europe.Flowers are exported to the Middle East. Imports are mainly from South Africa such as fruit, automotives, pharma, chemicals and spare parts for machinery.

ACW 7 DECEMber 2015



Not unhappy following a record breaker


msterdam Airport Schiphol is remaining optimistic about the strength of its business despite the challenges 2015 has posed so far. In the first nine months of 2015, Schiphol has seen volumes fall by 1.4 per cent to just under 1.2 million tonnes, because of the economic slowdown in China and the weakness of the Russian rouble hitting the Dutch flower market. The third quarter was an improvement, down fractionally to 409,034 tonnes, despite Asia dropping by five per cent and Europe falling by 10 per cent. Amsterdam Airport Schiphol director of cargo, Jonas van Stekelenburg (pictured) tells Air Cargo Week (ACW): “Overall, we are not unhappy: it was always going to be difficult to beat or even match 2014, which was a record year. Schiphol is still some 6.5 per cent above 2013, which is probably a more meaningful

Schiphol will continue to consolidate and develop its position while showing gentle but steady growth.” Flowers remain a large part of Schiphol’s business, helped by its proximity to the FloraHolland auction house. High tech products are of great importance to the airport, van Stekelenburg says about 50 per cent of US and Far Eastern manufacturers have their European distribution centres in the Schiphol catchment area. Pharma and life sciences is a small but growing area. Despite its value, pharma only represents about five per cent of total volume.

indicator.” Van Stekelenburg is optimistic about the rest of the year. He says: “Recent weeks have shown growth, and unless the industry encounters any unexpected problems next year, we believe

Development projects

Schiphol is continuing to expand its business with various development projects close to the airport and on site. Van Stekelenburg explains to ACW: “A unique feature of Schiphol among major European airports, is having plentiful land available for development immediately surrounding the airport.” In the next 18 months the airport will develop Business Park Amsterdam Osdorp, a 43,110 square metre area eight kilometres from the airport, the 25,500 square metre PolanenPark

business park located 12 kilometres from Schiphol, Schiphol Logistic Park based one kilometre from the airport, covering 47,660 square metres, President, a 16,694 square metre area three kilometres from the airport, and GreenPark, based three kilometres from Schiphol’s cargo area, covering 132,522 square metres. Van Stekelenburg says: “We are encouraging the development of mixed-use areas that combine offices, light manufacturing and logistics facilities. This is good for businesses, and is also environmentally responsible by reducing transportation activity and emissions – something we Dutch are passionate about.” On the airport site, the Joint Inspection Centre will open in 2016. Van Stekelenburg says: “This will revolutionise regulatory checks by bringing all inspection bodies under one roof, and by remote scanner monitoring to reduce the incidence of time-consuming physical inspections.”

Maastricht looking into 2016

MAASTRICHT AACHEN AIRPORT (pictured) is expecting double digit growth in 2016 after a stable year. The airport’s chief executive officer, Sander Heijmans tells Air Cargo Week (ACW) that volumes in 2015 are expected to remain at around 80,000 tonnes but the arrival of Ethiopian Cargo means next year is looking very positive. Heijmans says: “We are very optimistic for 2016; the fact that Ethiopian Cargo started operations to and from Maastricht as from October this year will boost our growth figures in the high double digits next year.” “[Our] main imports are perishables and high tech. Exports is mainly general cargo, automotive and med-tech. Med-tech is a growing segment, the perishable market to Maastricht has grown stronger.” For Maastricht, South America and Africa are very important markets, as well as the Middle East and Turkey. Heijmans tells ACW: “Perishable imports



originate from Africa and South America, this has not really changed over the years, but the imports from Ethiopia are new. High tech originates of course from the Far East.” “And with Royal Jordanian Cargo and Turkish Cargo having their main Western European hub at Maastricht, Turkey and the Middle East are very important markets for us.” Heijmans believes Maastricht has great growth potential. He says: “Two new platform positions for Boeing 747-800 will be built in the beginning of 2016. A further 9,000 square metres of cargo terminal capacity, including coolchain facilities and office space for forwarders, will be added in 2017 together with another two new platform parking positions for B747-800s.” He adds: “At Maastricht we regard speed, quality and flexibility in the handling process against a competitive price as our USPs [unique selling proposition]. When we keep meeting these high standards, there will be ample opportunity to expand our business further.”

WORLD AIRPORTS Brussels investing to secure prosperity in the years ahead


russels Airport is confident that its continued investments in real estate, its IT cargo community platform, air cargo community organisation and projects for pharma will allow the airport to continue growing in the future. Brussels Airport head of cargo, Steven Polmans (pictured) says 2015 has been a very good year, with strong growth and development projects progressing well. Polmans tells Air Cargo Week (ACW): “2015 was so far a good year for us. For the first 10 months of this year, we have seen an increase of 10 per cent in our volumes with several new full cargo customers adding Brussels to their network.” Polmans is expecting the start of 2016 to see a decline because of Ethiopian Cargo leaving in early November, due to lack of traffic rights. He says: “The start of next year will be negative, especially compared to the good growth figures of this year.” “But in the second half of the year, I am positive we can recuperate some of the traffic resulting in a status quo in terms of volumes for 2016 compared to 2015.”

pharma. One thing Brussels can offer over its rivals is the fact it is an International Air Transport Association (IATA) Centre of Excellence in Pharmaceutical Logistics. Polmans tells ACW: “The most important benefit of the certification programme is the trust we get from the shippers. When we started developing the programme together with IATA, the shippers were very much involved from the beginning. So they know the programme and participated in the development of the different checklists.”

Commitment to pharma

Polmans says certification shows greater commitment than just getting the airport Good Distribution Practice certified, demonstrating to shippers Brussels can be trusted to handle pharma products in a safe manner. He tells ACW: “The proof is in the eating, in this case, the growth we see in pharma shipments passing via our airport and the business gained by the different participants in the programme.” Polmans believes airports across while Europe face individual challenges, they all have to contend with issues including a general lack of volume growth and increasingly difficult regulatory frameworks.

Despite the challenging operating environment, Polmans believes Brussels has a good future. He tells ACW: “The benefit we have as a combination airport is that although cargo is not doing so well, passenger volumes continue to grow and support the overall business model so we can continue to invest for the long term.”

Long term investments

“In the long term, we remain very positive about our business plan so we continue to invest in real estate, an IT cargo community platform, an air cargo community organisation as well as in different pharma related projects.” In October, Japanese carrier, All Nippon Airways (ANA) started flights between Tokyo and Brussels, giving it the first direct link between the cities since Sabena went bankrupt. The ANA flights have seen good cargo loads so far. Polmans says: “With the start of a second hub in Brussels by Finnair, we were already able to offer good connections to and from Japan to our cargo community.” “The start of All Nippon Airways means a shift from mainly trucked cargo to flown cargo, not so much a shift from one carrier to another.” Brussels handles similar goods to its neighbours, such as general cargo, automotive, electronics, spare parts, perishables and

War of words continues in UK

Heathrow Airport (pictured) and Gatwick Airport are continuing their war of words while the UK government considers which one should receive an additional runway. In July this year, the government appointed Airports Commission released its report on UK runway capacity, concluding Heathrow should build a third runway. The other options were lengthening Heathrow’s Northern runway or a second runway at Gatwick. The government is expected to formally respond by the end of this year or the start of 2016. To make its case for expansion, Heathrow announced £180 million ($270 million) was to be invested in improving cargo facilities. Gatwick responded by saying Heathrow already breaches air quality limits and the extra vehicles on the road caused by the expansion would make the siutation even worse. In response, on 30 November, Gatwick claimed Heathrow’s plans would cause major breaches in air quality levels, as it says Heathrow is already breaching legal limits. Gatwick says it could increase freight capacity tenfold without breaching European Union (EU) air quality limits. Gatwick Airport chief executive officer, Stewart Wingate says: “Given Heathrow already breaches EU air quality limits, increasing the number of heavy vehicles using its roads must have a significant impact on emissions – to argue otherwise is just another Heathrow smokescreen.”




Competition high but pharma and automotives strong


ufthansa Cargo is seeing strong performance out of Germany in pharmaceuticals and automotives, but continues to battle competition from additional bellyhold capacity from Middle Eastern and Turkish carriers. The carrier’s vice president for area management in Germany, Florian Pfaff tells Air Cargo Week business has been driven by pharma and car business, while specialist product markets have also developed strongly. Pfaff says routes to North America are doing well, boosted by the better economy in the US and in the last few weeks China and India have performed well. The pilot strikes have impacted Lufthansa Cargo and Pfaff says it did all it could to prevent customers from any inconveniences caused. “However, we of course would have preferred to dedicate these additional efforts to additional customers,” he adds. This year has been a challenging one for

Lufthansa as it has realigned its business, dealt with pilot strikes, while the Germanwings tragedy impacted the Lufthansa Group as a whole, but Pfaff says it has maintained its market share in a “challenging market environment”. Lufthansa Cargo’s earnings before interest and taxes (EBIT) halved to 35 million euros ($37 million) between January and September. In the third quarter (Q3), between July and September, it made an EBIT loss of 22 million euros. Freight and mail handled fell by 0.9 per cent in the nine-month period to 1.2 million tonnes, but dropped 4.3 per cent in Q3 to 400,000 tonnes. In the first nine months the load factor fell by 3.2 percentage points to 65.8 per cent, with Q3 seeing a decline of 4.7 percentage points to 62.4 per cent. But the last quarter has picked up for Lufthansa Cargo, Pfaff says: “The start of the last quarter was not fully matching our expectations, however we saw a slight recovery in the market during the last weeks. Load

factors have also been improving over the last months.” The carrier has reaped the rewards of the peak season, he says: “We definitively see a seasonal uplift in the fourth quarter of 2015.” There are challenges and opportunities in equal measure in Pfaff’s opinion: “The market environment remains challenging while capacities are increasing. To make things easier for our customers and to meet the continued demand for transporting temperature-sensitive goods we have widened our offer by providing CSafe containers now directly.” As for 2016, Pfaff says the main target is to further improve efficiency and optimise load factors: “To gain optimised load factors, we will adapt the size of our MD-11 fleet to 12 operative freighters plus five Boeing 777 Freighters. “In addition with the growing capacity of the bellies in the dense Lufthansa network and our continuously enhanced product portfolio we are positive on the upcoming year.”

Good times keep rolling at

PILOT strikes and competition are failing to dampen growth at Europe’s fifth busiest freight hub Leipzig/Halle Airport. In October, cargo volumes grew 10.1 per cent to 88,336 tonnes compared to the same month last year, driven by express tonnage from the likes of DHL. For the first 10 months of the year, volumes are up 8.6 per cent to 812,060 tonnes and the gateway is edging closer to passing the magical one million figure. Mitteldeutsche Airport Holding is the operator and head of business development cargo logistics, Mario Patyk tells Air Cargo Week the airport is optimistic this significant growth will continue in 2016. “Our largest customer DHL is continuing to grow and the developments in the general cargo business sector are positive too (eg. the scheduled service operated by AirBridgeCargo Airlines to Moscow and on to Asia). Here, we have been able to record significant growth of nearly 200 per cent in comparison with 2014. ‘We are also delighted the maintenance activities and the portfolio of Aircraft Maintenance and Engineering Service, a subsidiary of the Volga-Dnepr Group, has developed well too; it has its home base at our airport,” Patyk says. He explains Leipzig is expecting a “major in-


ACW 7 december 2015

Leipzig/Halle crease” in handling operations as it approaches the end of the year, driven by express cargo at the turn of the year. Patyk says Asia is driving growth: “Handling operations for textiles to and from Asia have developed in a particularly positive manner; most of these goods are finished here in the region or elsewhere in Europe.Export volumes consisting of industrial goods and machine parts are developing well, particularly those heading for Asia.” The airport has had to deal with pilot strikes this year, which Patyk says has had a “huge effect” on passenger flights so bellyhold cargo has been hit. “At times, we had to cancel as many as 12 daily flights to and from Frankfurt and Munich. But the strikes did not affect cargo flights,” he adds. Next year looks set to be another bumper one for Leipzig, as the 24/7 cargo flight operations pays dividends. Patyk says it now has adequate reserve capacity in terms of flight movements and for attracting companies linked to airfreight within and outside the security area. “The tri-modal networking of road, rail and air services will also contribute to the strengthening of the logistics base for freight traffic at Leipzig/ Halle Airport,” Patyk adds.

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ACW 07 December 15