ACW Freighter and Aircraft Leasing Supplement 25th January 22

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ACW Freighter & Aircraft Leasing Supplement is sponsored by

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Your guide to the latest developments in the international airfreight industry

A CENTURY OF MAINDECK CAPACITY Leasing trends to expect in 2022

THE RISE AND RISE OF THE PREIGHTER

‘super passionate’ people are the key to sucess

AIRLINE ON A MAINDECK MISSION 25th January 22

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A CENTURY OF MAINDECK CAPACITY While aircraft were put to use carrying air mail as a cargo as early as eight years after the Wright brothers took to the air in 1903, the first aircraft were primarily designed to take passengers. In 1911, a US retailer organised the carriage by air of some material as a stunt.

It would be two decades after the Wright brothers before aircraft manufacturers were designing and building dedicated cargo aircraft. In the UK during the early 1920s, the need was recognised for a freighter aircraft to transport troops and material quickly to pacify tribal revolts in the newly occupied territories of the Middle East.

The Vickers Vernon, a development of the Vickers Vimy Commercial, entered service with the Royal Air Force as the first dedicated troop transport in 1921.

It was a further two decades before the World War II German design, the Arado Ar 232, was credited with being the first purpose-built cargo aircraft. The Ar 232 was intended to supplant the earlier Junkers Ju 52 freighter conversions, but only a few were built. Most other forces used freighter versions of passenger airliners, most notably the C-47 Skytrain version of the Douglas DC-3, which served with practically every Allied nation. One important innovation for future cargo aircraft design had been introduced in 1939, with the fifth and sixth prototypes of the Junkers Ju 90 four-engined military transport aircraft, being the earliest known example of a rear loading ramp. This aircraft, like most of its era, used tail-dragger landing gear which caused the aircraft to have a decided rearward tilt when landed. These aircraft introduced the Trapoklappe, a powerful ramp/hydraulic lift with a personnel stairway centered between the vehicle trackway ramps, that raised the rear of the aircraft into the air and allowed easy loading. A similar rear loading ramp even appeared in a somewhat different form on the nosewheel gear-equipped, late WW II era American Budd RB-1 Conestoga twin-engined cargo aircraft.

Post-1945 freighter developments Postwar Europe served to play a major role in the development of modern maindeck operations. There is little question that the most significant operation was the Berlin Airlift at the height of the Cold War. A massive mobilisation of aircraft was undertaken by the West to supply West Berlin with food and supplies, in a virtual around the clock air bridge, after the Soviet Union closed and blockaded Berlin’s land links to the west from June 1948 to May 1949.

To rapidly supply the much-needed number of aircraft, many older types, especially the Douglas C-47 Skytrain, were pressed into service.

In operation it was found that it took as long or longer to unload these older designs as it did the much larger tricycle landing gear Douglas C-54 Skymaster. The newer Skymaster was easier to move about in when landed. The C-47s were quickly removed from service, and from then on flat-decks were a requirement of all new cargo designs.

From the 1950s through to the present day, new custom-built cargo aircraft were introduced, often including experimental features. For instance, the US’s C-82 Packet featured a removable cargo area, while the C-123 Provider introduced the now-common rear fuselage/upswept tail shaping to allow for a much larger rear loading ramp. It was the introduction of the turboprop that allowed the class to mature, and even one of its earliest examples, the C-130 Hercules, in the 21st century as the Lockheed Martin C-130J, is still the yardstick against which newer military transport aircraft designs are measured. Although larger, smaller and faster designs have been proposed for many years, the C-130 continues to improve at a rate that keeps it in production.

Strategic cargo aircraft became an important class of their own starting with the Lockheed C-5 Galaxy in the 1960s and a number of similar Soviet designs from the 1970s and 1980s, and culminating in the Antonov An-225, the world’s largest aircraft. These designs offer the ability to carry the heaviest loads, even main battle tanks, at global ranges. The Boeing 747 was originally designed to the same specification as the C-5, but later modified as a design that could be offered as either passenger or all-freight versions. The ‘bump’ on the top of the fuselage allows the crew area to be clear of the cargo containers

sliding out of the front in the event of an accident or for easier loading and unloading.

Types of freighter aircraft Nearly all commercial cargo aircraft presently in operation are derivatives or transformations of passenger aircraft. However, there are three other methods to the development of cargo aircraft: derivatives of non-cargo aircraft; dedicated civilian cargo aircraft; and, joint civil-military cargo aircraft.

The first group, such as the Boeing 737-300 converted freighter, can be converted from airliner to freighter by installing a main deck cargo door with its control systems; upgrading floor beams for cargo loads and replacing passenger equipment and furnishings with new linings, ceilings, lighting, floors, drains and smoke detectors. Specialised engineering teams rival Airbus and Boeing, giving the aircraft another 15–20 years of life. Aeronautical Engineers Inc convert the B737-300/400/800, MD-80 and Bombardier CRJ200. Israel Aerospace Industries’ Bedek Aviation convert the 737-300/400/700/800 in about 90 days, 767-200/300s in about four months and 747-400s in five months, and is looking at the Boeing 777, Airbus A330 and A321.

Voyageur Aviation Corp located in North Bay, Ontario converts the DHC-8-100 into the DHC-8-100 Package Freighter Conversion.

The second group are dedicated air freighters that can be designed specifically for airfreight demand, providing the type of loading and unloading, flooring, fuselage configuration and pressurisation which are optimised for its mission. Moreover, it can make full use of NASA’s ACEE (Cargo/Logistics Airlift Systems Study) results, with the potential of significantly lowering operating costs and fuel usage. Such a high overhead raises the price of the aeroplane and its direct operating cost, because of depreciation and insurance costs, and increases the financial risks to investors, especially since it would be competing with derivatives which have much smaller development costs per unit and which themselves have incorporated some of the cost-reducing technology.

The last group, joint civil-military cargo aircraft, can benefit from combined development in that the development costs can be shared by the civil and military sectors. There are some possible drawbacks, as the restrictions executed by joint development, the punishments that would be suffered by both civil and military aeroplanes and the difficulty in discovering an organisational structure that authorises their compromise. Some features appropriate to a military aircraft would have to be rejected, because they are not suitable for a civil freighter. Moreover, each aeroplane would have to carry some weight which it would not carry if it were independently designed.

This additional weight lessens the payload and the profitability of the commercial version. This could either be compensated by a transfer payment at acquisition or an operating penalty compensation payment. Most important, it is not clear that there would be an adequate market for the civil version or that it would be cost-competitive with derivatives of passenger aircraft.

“There is little question that the most significant operation was the Berlin Airlift at the height of the Cold War”

Unpiloted cargo aircraft The demand for rapid delivery and growing e-Commerce growth is stimulating R&D into UAV freighter development. The primary difference from manned aeroplanes is the lack of need for a cockpit area and its windows. However some types are adapted from piloted examples, or are designed for optional piloted or unmanned operational modes. Air safety is also less of a critical requirement for unmanned aircraft, allowing the designer greater freedom to experiment. These two factors have led to a great variety of airframe and engine configurations in UAVs. For conventional flight the flying wing and blended wing body offer light weight combined with low drag and stealth and are popular configurations. Larger types which carry a variable payload are more likely to feature a distinct fuselage with a tail for stability, control and trim, although the wing configurations in use vary widely.

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LEASING TRENDS TO EXPECT IN 2022 “Last year saw the merging of the lessor giants, AerCap and GECAS, a nod back to both of their early GPA days”

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UK-based aviation industry trend and business consultancy IBA’s head of advisory Geoff Van Klaveren and chief revenue officer Stuart Hatcher have shared their expert opinion on the outlook for the aviation industry in 2022, identifying eight key trends across utilisation, fleets, orders, airlines, lessors and the environment.

Last year saw the merging of the lessor giants, AerCap and GECAS, a nod back to both of their early GPA days, say Van Klaveren and Hatcher. With the emergence of this “super lessor”, we may start to see larger differences emerge amongst the traditional top 10 as pricing advantage and market influence comes with size. This “AerCas” entity will have a very busy few years ahead as they shed non-core and non-performing assets. Traditionally this would be done by selling down smaller packets of aircraft to emerging lessors, (not to be confused with intra-lessor trading to soften asset/operator exposure), but on this scale we could see new medium size lessors emerging overnight. Despite this, creating new lessors does nothing to help stabilise lease rates which remain low owing to a mix of cheap capital and too many lessors competing. Current yields surely are not sustainable when measured against the risk!

There are also a number of other lessors partially or wholly up for sale. These range from medium sized lessors to large lessors who feel that buying in the secondary market is more profitable than buying directly from the OEMs (albeit some of those for sale have order books too). In 2022, some lessors will disappear as they become part of other groups, and new lessors will emerge. These will be fronted by experienced professionals looking to combine assets sold down from mergers and growing sale and leaseback activity, Van Klaveren and Hatcher conclude.

Market size Freight aircraft leasing involves the use of a lease by airlines and other aircraft operators to obtain an aircraft from either another airline or from a leasing company. A necessity to lease is born by a need to operate an aircraft without the financial burden of having to buy them.

Aircraft leasing may also be used by an airline company in providing a temporary increase in capacity.

The global commercial aircraft leasing market is predicted to reach $47.1 billion by 2027 in the Global Commercial Aircraft Leasing Market Report 2020-2027 - Improvement in Trading Activity to Fuel Demand for Leased Freight Aircraft, published by ResearchAndMarkets.com.

Its authors write that amid the COVID-19 crisis, the global market for commercial aircraft leasing estimated at $33.7 billion in the year 2020, is projected to reach a revised size of $47.1 billion by 2027, growing at a CAGR of 4.9% over the period 2020-2027.

Long haul and medium distance aircraft, one of the segments analysed in the report, is projected to record 5.1% CAGR and reach $42.8 billion by the end of the analysis period. After an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the regional/short haul aircraft segment is readjusted to a revised 3.2% CAGR for the next seven-year period.

The US market is estimated at $9.9 billion, while China is forecast to grow at 4.6% CAGR. The commercial aircraft leasing market in the US is estimated at $9.9 billion in the year 2020. China, the world`s second largest economy, is forecast to reach a projected market size of $8.3 billion by the year 2027 trailing a CAGR of 4.6% over the analysis period 2020 to 2027. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 4.7% and 3.8% respectively over the 2020-2027 period.

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THE RISE AND RISE OF THE PREIGHTER Just weeks after the first major global pandemic shutdown in 2020, a new airfreight word was coined that neatly summed up how the industry was to become the keystone to the global supply chain’s effort to beat the virus. In May 2020, Lufthansa went public with its conversion of passenger aircraft to ‘freighter’ aircraft and the word it had created for its burgeoning passenger-cargo business: the ‘preighter’.

The immediate closing of borders to passengers at the beginning of that year had grounded thousands of commercial passenger aircraft around the globe. The existing freighter capacity was suddenly overwhelmed.

Preighters became the answer. Then, more and more carriers jumped on the passenger-cargo bandwagon with the most simple of ideas - keep grounded passenger aircraft flying so as to earn vital revenue.

Lufthansa CEO Carsten Spohr said at the time, there was “only high demand for air freight [not passengers]. In addition to our entire [regular] cargo fleet we have operated 70 cargo flights using A330 passenger aircraft. We call these “Preighters” a combination of passenger aircraft and freighter.”

Air Cargo Week reported at the time on the significance of the first flight: “In an effort to utilise resources in a time when passenger demand is at an all-time low, Lufthansa has flown its first-ever passenger aircraft full with cargo rather than passengers,” Yasmin Turner, a staff writer at the time, reported.

The 11 hours 6 minute journey from China to Germany was completed in a Lufthansa A330, D-AIKI (Jena). The aircraft landed in Frankfurt on March 25, 2020 at 14:14. Both the belly-hold of the aircraft and the cabin storage were utilised, carrying mostly medical supplies, including masks and other protective equipment.

“The Lufthansa Group and Lufthansa Cargo are looking into the possibility of operating further flights exclusively for cargo transport on passenger aircraft. Lufthansa has emphasised: ‘Especially in emergency and crisis situations, logistics and airfreight are of particular importance.’”

Hong Kong’s Cathay Pacific started passenger-cargo flights using one or more B777-300ERs taking urgent medical supplies. Korean Air flew the longest nonstop flight in the company’s history as a preighter service in June 2021 operating for over 14 hours between Seoul and Miami. The Boeing 777 was carrying 15 tonnes of COVID-19 diagnostic supplies headed for the Dominican Republic and made use of both the cargo and passenger areas onboard. Saudia’s first-ever commercial flight to Denmark was operated as a preighter service. In February 2021, British Airways used a Boeing 777 aircraft to deliver 1.7 million masks to Germany.

Some carriers may even operate preighters beyond 2021.

More and more

Combi memories

No sooner had ACW started to report on Lufthansa’s initiative then fellow Lufthansa Group member Swiss started operating a multitude of similar flights while another member, Austrian, operated daily cargo flights between Vienna and China to collect medical supplies.

In order to create its preighters, Austrian removed 270 of the 306 seats from two B777-200s to give a 35% increase in cargo capacity.

Like most of these aircraft, they were soon being deployed to bring medical supplies from Asia to Europe.

Emirates started operating B777-300ER passenger-cargo flights on a scheduled basis to no fewer than 58 worldwide destinations while KLM has started a Shanghai-Amsterdam service with B777-300ER as “Cargo-in-Cabin” flights. Ethiopian Airlines converted four B777300ERs to bring in medical supplies from China for distribution to 54 African countries. The airline has operated over 5,600 flights carrying cargo in passenger cabins. The airline’s use of preighters helped keep Ethiopian’s entire fleet of 16 A350-900 jets flying throughout the pandemic.

US legacy carrier United operated some 21 passenger-cargo flights weekly using B777-300ER and B787-10s from Frankfurt to seven US destinations including New York, Chicago and Los Angeles while

Older ACW readers, who may have been in the industry since the 1970s, may ask what is the difference between a preighter and a ‘combi’ aircraft? Indeed, Azura Interantional director and aviation industry veteran Norman Bamford recalls flying on a “combi” in September 1972, a UTA DC-8 from Paris to Colombo.

Combi aircraft in commercial aviation are aircraft that can be used to carry either passengers as an airliner, or cargo as a freighter, and may have a partition in the aircraft cabin to allow both uses at the same time in a mixed passenger/freight combination. The name combi comes from the word combination, and is thought to be derived from the famous Volkswagen Type 2 van, often called the “Kombi” van, specifically the Kombinationskraftwagen (combination motor vehicle) variant, with side windows and removable rear seats, which is both a passenger and a cargo vehicle combined.

Combi aircraft typically feature an oversized cargo door, as well as tracks on the cabin floor to allow the seats to be added or removed quickly.

Typically, configured for both passenger and cargo duty, the passenger compartment is pressurised to a higher pressure, to prevent potential fumes from cargo entering the passenger area.

Operations Preighters can be operated either by temporarily removing seats or, in some cases, packing cargo onto existing seats. During the disruption of COVID-19, at least 200 passenger aircraft around the world were modified to serve as preighters by removing most or all of the cabin seating. Cargo can also be stored securely between seats, in luggage bins or strapped down if seats are partially or completely removed.

Limitations on where and how cargo may be safely transported in a passenger cabin may vary by the type of cargo.

Carrying cargo by methods not originally designed, especially when it involves reconfiguring an aircraft, requires approval of the appropriate regulatory bodies for the regions where the aircraft operates. The International Air Transport Association (IATA) further advises that a comprehensive safety assessment be completed in all cases. In 2021, European regulators set a limit on total flight hours for preighters out of concern that carriers might underestimate possible increased fire risks.

Loading and unloading a preighter aircraft often requires more time and work by airline staff than would a dedicated freighter aircraft. As there is no dedicated system for loading, most of the process must be completed manually by airline or airport staff. In some cases, this can take a significant physical toll on ground handling agents.

“The Lufthansa Group and Lufthansa Cargo are looking into the possibility of operating further flights exclusively for cargo transport on passenger aircraft”

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‘SUPER PASSIONATE’ PEOPLE ARE THE KEY TO SUCCESS

“The current market dynamics are driven by available feedstock and conversion slots.

Companies that have them are controlling the market and will be the winners”

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Mike Berger, chief commercial officer of Ohio-based leading provider of air cargo transportation and related services, Air Transport Services Group (ATSG), considers there is more to the success of a company than its bottom-line. He says: “Our success is a true reflection of the teams of super passionate people we have working at all great companies. Our focus is simply to exceed our customer commitments.

For ATSG it is not about being good but finding out how good we can be. There is a difference!”

His confidence is being repaid in spades in a competitive and opportunistic market.

He says: “The current market dynamics are driven by available feedstock and conversion slots. Companies that have them are controlling the market and will be the winners. While the industry has capitalised during the pandemic, the market will normalise in the next 12-24 months. That’s when you will see who really took advantage of what has transpired since 2020.”

Significant player As the world’s largest lessor of freighter aircraft, ATSG is ahead of its rivals in terms of fleet numbers, notes Berger. If the reader focuses on the medium widebody freighter market “our leasing company, Cargo Aircraft Management (CAM), leases twice as many aircraft as the next four competitors combined. The gap gets closer when you analyse the overall freighter market, but we still lead GECAS, VX Capital Partners and Titan Aviation Leasing,” he says.

The average age of the aircraft in ATSG’s current fleet of 112 aircraft is surprising to many industry outsiders.

Berger says: “Our business model has provided us the expertise to keep aircraft well maintained during their service through our airline maintenance operations and our MRO locations in Wilmington and Tampa. The average age of our current in-service fleet is 31 years.

We are always looking for opportunities to extend the life of these aircraft especially throughout the pandemic when freighter capacity was needed to deliver necessary items to consumers across the globe.”

The growing e-commerce business around the globe is proving a bonanza for ATSG. He says: “This is a substantial portion of our business due to the growth in that market segment over the past five

years but most recently the pandemic acceleration. However, our business is much more diverse than just e-Commerce facilitation; many don’t realise that our largest customer segment is the US government/Department of Defense. There are many emerging markets around the globe where we continue to grow our freighter leasing footprint and we are seeing a surge in cross-border e-Commerce which is consumer driven growth for e-tailers. Consumer expectation is also the driver for their focus on air cargo. Their customer has a delivery expectation and to consistently meet that expectation e-tailers depend on air cargo. So, facilitating e-Commerce will continue to be a substantial part of our business.”

Fleet numbers ATSG’s main aircraft in its fleet are Boeing 767-300s but recently it announced that it would be adding A330 freighters with a 20-slot agreement with EFW. There is also a joint-venture with Precision Aircraft Solutions which has developed the STC (supplemental type certificate) for an A321 converted freighter. Have ATSG had any issues moving from a Boeing-based operation by introducing Airbus products?

He says: “We are just starting to make this move with our first induction of an A321 at our Pemco Conversions facility in Tampa. We do not anticipate any issues because even though our fleet doesn’t currently have any Airbus aircraft our MRO business has been performing maintenance on Airbus. This provides us with a unique set of insights and capabilities during the conversion process and later during maintenance checks. We are also looking forward to future opportunities to operate A321 and A330 freighter aircraft for customers due to the cockpit continuity between the two aircraft; this transition should be seamless.

“The A321 is a very important part of our future. The joint venture with Precision that we entered a number of years ago is validation of just how important this aircraft is to us. The A321 is a natural replacement for the ageing 757 and is a great upsale to the 737-800. The aircraft is very efficient and provides our customers flexibility during the most critical seasonal peak periods. The commonality with the A330 is also something that will bring value to ATSG. Both Airbus aircraft complement each other very well.”

SUPPLEMENT Next five years In terms of general business confidence, how does ATSG think the next five years will treat the company? Berger says: “We are very bullish on the next five years. We have told the markets we have 70 conversion slots over this period and plan to utilize every one of them. The 70 is made up of 767s, A330s and A321s. Our balance sheet is excellent, and we continue to be able to fund our growth through our free cash flows. Our business model and go to market strategy is very unique. Our ability to lease airplanes through CAM, maintain them through AMES, have ABX, ATI, or Omni fly them if needed, and then do any other needed services through our LGSTX business separates ATSG from anyone else.”

Can belly-hold ever return to its pre-pandemic volumes, robbing main-deck of its current commercial advantage? He says: “The latest numbers on trans-Atlantic belly capacity show it is close to 2019 levels with the changing US sanctions. However, with the Omicron surge the recovery could be slowed which makes it very difficult to predict a full recovery. We believe that the demand for full freighter capacity will remain strong even after recovery due to the growth of e-Commerce and the delivery expectations of the e-commerce consumer.

“Due to our fleet containing medium widebody freighters that serve e-commerce integrators the impact of the decline in availability of belly cargo has been minimal on our business domestically or internationally.

“We have grown all our companies over the last two years. I am not saying that it hasn’t been challenging but I believe the opportunities for growth that we offer have kept our pipeline full. The ATSG companies offer new employees the opportunity to learn from industry experts who have been in their roles 20+ years. That type of interaction and on-the-job training makes roles at our airlines, maintenance, and leasing companies a great way to quickly expand your skill set.”

demic has changed consumer buying and expectations. We will someday reach the new normal, but I don’t believe it will ever be quite like the old normal.”

Social media What importance does a social media presence hold for Berger and ATSG? In his opinion, can a company generate real, profitable business using digital media? He says: “I believe it is part of the toolbox to generate business and recruit top talent. Your brand integrity and promise are important factors in how people perceive the service and quality they will experience during the leasing process and social media is a perfect tool to communicate that message. It drives leads and inquiries through our website and at in-person exhibitions because it has become the first source of information for many.

“We have 35 different social media profiles that allow more than 100,000 people to interact with our message. Each one of those interactions has the chance to be a customer or an employee. We believe that all digital marketing channels are important to our future growth and expansion.”

“We are already using AI powered predictive software for our airline operations”

Future for AI Berger notes: “We are already using AI powered predictive software for our airline operations. The amount of data that is being collected must be analysed for our maintenance and procurement teams to react and the best way to the analysis is through programming that utilises AI insights. I see this evolving over time as we have a deeper understanding of how it can be used. I believe AI will be a part of every position and task across many industries soon.”

Despite the rise of technology such as Smartphones, in Berger’s opinion some ‘old fashioned’ business values and transactions survive.

He says: “In fourth quarter, we returned to attending some shows and meetings in person. I will say that after a year-and-a-half of not being able to meet it was great to be back out with our customers and peers in person. From my point of view, face to face will always be a part of the transaction process. ATSG has become the global leader in freighter leasing by delivering value to our customers and part of that value is trust. Trust is developed first through personal relationships and second by delivering on your promises.

“I don’t believe it will ever be business as usual again. The pan-

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AIRLINE ON A MAINDECK M “Ecommerce increased tremendously since the onset of the pandemic and with buying trends continuing to be online, we will be seeing ecommerce soar in 2022 and the next years too”

Guillaume Halleux, chief officer cargo, Qatar Airways is a man on a mission. His mission, to create freight business that will fully utilise the airline’s extensive freighter fleet comprising of 2 Boeing 747-8 freighters, 26 Boeing 777 freighters and 6 Boeing 777-300ER mini freighters.

He says: “We also have the large passenger fleet at our disposal where cargo is transported in the belly of the passenger planes. Given the growing demand for airfreight, there are plans to expand our freighter fleet.

“With an average aircraft age of six years, the state-of-the-art fleet at Qatar Airways continues to be one of the youngest and most modern in the industry. Our aim is to reduce carbon emissions and our fleet strategy is planned keeping this in mind as we work towards achieving a carbon neutral status. Our newest aircraft (in terms of average age) are the A350s, while the oldest are the A330s – some of which are nearly 16 years of age.

“On an average, a passenger aircraft stays in the fleet for 12 years and a freighter stays in our fleet for 18 years. We also took delivery of three brand new Boeing 777 freighters in January 2021.”

Like many carriers worldwide, e-Commerce traffic for Qatar Airways has increased tremendously since the onset of the pandemic and with buying trends continuing to be online, Halleux is convinced he will be seeing e-Commerce soar in 2022 and the next years too.

Because of this, there will be more demand. Airlines must continue to be agile and adapt their business, he feels, to the needs of the customers, mostly around quality of service, agility, flexibility, innovation and sustainability and to deal with unprecedented situations.

Halleux says: “We are very confident for the short term as the industry does not expect passemger capacity to resume to pre-Covid-19 levels before 2024 to 2025. However we do expect that at some point the balance between belly-hold and full freighter capacity will come back to some sort of normality. At that time the airlines that have accomplished their digital transformation will come out stronger.”

Preighters When the pandemic started, there was a massive reduction in belly-hold capacity due to airlines cutting down routes and frequencies

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and aircraft being grounded. Due to the high demand for cargo services for urgent aid, PPE, pharmaceuticals and medical kits, airlines converted a number of their passenger planes to mini freighters or preighters as a short-term solution. It has been almost two years since the pandemic started and Qatar Airways still continues to use the mini freighters.

“Most airlines have started to rebuild their passenger network and at Qatar Airways, as of today, we fly to over 140 belly-hold destinations. Based on the data we see, year to date global widebody belly capacity has grown by around 40% with major growth in the West.

However, compared to 2019, belly-hold capacity is still substantially lower and will take few years to return to pre-pandemic levels. The freighters will be crucial in the coming years,” notes Halleux.

The shortage of belly-hold planes is never an advantage for Qatar Airways as the carrier uses both the belly-hold planes and freighters as part of its operating model.

“At the peak of the pandemic, when belly capacity was short, thankfully, we had our extensive freighter fleet of 28 freighters plus 6 Boeing 777-300ER mini freighters to the rescue. They played a pivotal role in air transport during the pandemic. We also used passenger planes as passenger freighters to transport cargo and thus maintain global trade,” Halleux says.

Hiring staff Qatar has been hiring throughout the pandemic. Halleux says: “We are proud to be able to attract the best and diverse talent in the industry and we are continuously adapting our HR policy based on understanding the needs of our employees, personalised performance reviews and opportunities of evolution within the Group. Due to this, our attrition rate has remained low. Reinforced by the QTalent programme, we are able to attract the best talent of tomorrow, and train them to become the leaders of the future.

“Our QTalent programme is a world-class graduate development experience. Through the programme, graduates gain a well-rounded cargo business and leadership experience which sets them up for success as future leaders in Qatar Airways. The programme provides

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er, being easy to deal with - also digitally, selling and marketing USPs and special services correctly, being efficient, cost-effective, reliable, and ultimately coming out of the pandemic more sustainable and with even higher quality.

“As air cargo carriers continue to invest in digitalisation, airfreight will keep playing a key role to maintain world trade and ensure distribution of vaccines globally. Due to this demand, the preighters/ passenger freighters and mini freighters trend will continue in 2022 as well as the demand for more freighters.

“Social media serves as a platform for us to interact and engage with our followers. Through various social media platforms, we can create our brand voice and increase our brand awareness. They provide an instant messaging platform through which we can reach a large number of audiences. Furthermore, more than half of the world’s population is on social media so all the more important to have a presence. We can definitely attract customers on the platforms and hence this is also an opportunity to generate business.”

Editor:

James Graham

Feature Editor:

Yasmin Turner

Director of Operations:

Kim Smith

International Sales Director:

Rosa Bellanca

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Ian Barrett

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Michael Sales

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Directors: Norman Bamford • William Carr • Dawn Jolley

The views and opinions expressed in this publication are not necessarily those of the publishers. Whilst every care is taken, the publishers cannot be held legally responsible for any errors in articles or advertisements. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by electronic, mechanical, photographic or other means without the prior consent of the publishers. USA: The publishers shall not be liable for losses, claims, damages or expenses arising out of or attributed to the contents of Air Cargo Week, insofar as they are based on information, presentations, reports or data that have been publicly I N T E R N AT I O N A L disseminated, furnished or otherwise communicated to Air Cargo Week.

AZURA

MISSION multiple opportunities and exposure through rotations and projects within the core areas of the cargo business such as operations, sales and network planning, revenue management, pricing and others.”

Hiring talents during the pandemic has been a mammoth challenge for the organisation. However, it has a team of resilient Talent Acquisition professionals who have been hard at work deploying out-of-the-box tactics in sourcing, hiring, and onboarding talents for the business.

‘Old fashioned’ values Halleux says: “We have seen almost the death of face-to-face meetings during the pandemic. While there was hope for a short while, things are changing again with the Omicron variant and fourth or fifth waves in countries worldwide. The way we do business has changed. Air cargo carriers must embrace digitalisation or they will be left behind as customers are asking for transparency and availability of real time information. If the processes were digital earlier, we would be faced with smaller disruptions. However, along with concerns is also the opportunity to be the shining light during these critical times. Luckily for us, a few of our digitalisation initiatives were completed before the pandemic and a number of them during the pandemic.

“Throughout the crisis, we have been in constant communication with our customers, either through phone or web meetings. For a brief time towards the end of 2021, we also met with many of our customers and managed to invite our key global accounts to Doha.

However, with the current scenario, all appointments will have to be done digitally.”

New normal The pandemic has caused many changes in the way Qatar Airways does business. Halleux says: “What we are now operating in is the new normal. To continue to grow and develop the business post-pandemic, we have a 5-pillar strategy called the “Big Five.” Quality, Customer Centricity, Products and Services, Digital Future, and Set an Example. It comes down to always being available for our custom-

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