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e-AWB usage hits 34.2% in September

PEGASUS URGINGMORELIBERALISATION

ETIHAD CARGO BUILDSPARTNERSHIPS

JAPAN LOOKING ATNORTH AMERICAFOR GROWTH

FINNAIR CARGO’S NEW HELSINKITERMINAL

The weekly newspaper for air cargo professionals

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ELECTRONIC air waybill (e-AWB) pene-tration was 34.2 per cent in September, with the Middle East leading the way as region of origin, at 61.8 per cent, according to the International Air Trans-port Association’s e-AWB international monthly report.

Asia Pacific handled the most e-AWBs at 127,334, but was ranked fourth for penetration, at 38.4 per cent. Among countries, the US has more than doubled the number of e-AWBs processed in a year, from 31,705 in September 2014 to 68,081 in September 2015. Hong Kong International Airport processed 66,321 e-AWBs in September, the highest by air-port of origin.

By airline, Flydubai had the highest e-AWB penetration, at 99.9 per cent, fol-lowed by FedEx at 71 per cent. Among freight forwarders, Panalpina had the highest penetration at 50.2 per cent, followed by SDV Group at 49.7 per cent. IATA says Cathay Pacific Group handled the most e-AWBs by volume, and had a penetration of 67.7 per cent.

IATA explains in the report it is target-ing e-AWB penetration of 45 per cent by December 2015.

Cargo volumes have remained stagnant and profitability peaked earlier this year, according to the International Air Transport Associa-tion (IATA) business confidence index survey October 2015.

In the survey of chief financial officers and heads of cargo, 50 per cent saw an improve-ment in profitability in the past three months, while 25 per cent say there was no change and the other 25 per cent say it decreased. Of the respondents, 38.9 per cent say volumes did not change in the past three months, 36.1 per cent saw an improvement while 25 per cent say cargo dropped. In the third quarter, 56.8 per cent of respondents said cargo yields fell, 37.8 per cent saw no change and only 5.4 per cent reported an increase.

IATA says: “Passenger volumes were reported to have expanded at a robust rate during Q3, but growth in cargo volumes is now broadly flat on the year ago period, which is consistent with FTK [freight tonne kilometre] data and the lack-lustre demand backdrop.”

The one positive area in the third quarter was 71.8 per cent of respondents reported input costs falling, helped by crude oil prices averag-ing $52 a barrel, down 55 per cent on the mid 2014 highs.

IATA says: “The growth outlook is positive for both passenger and cargo businesses, but not at the strong pace that was expected earlier in the year. This is likely to reflect concerns over weakness in the global business environment and emerging economies.”

For the next 12 months, half of respondents say cargo volumes will improve in the period, 42.1 per cent expect no change and 7.9 per cent predict a drop. Cargo yields are not expected to improve over the next 12 months, with 47.2 per cent predicting no change and 38.9 per cent saying they will decrease.

Legacy carriers will exit market, predicts Al Baker

Qatar Airways Group chief executive, Akbar Al Baker (pictured in the middle) forecasts legacy carriers will

soon exit the air cargo market - on the eve of his airline becoming the third largest cargo operator and outlining expansion plans.

Speaking on 27 October at Hamad International Airport, where the airline held a press event, in Al Baker’s opinion “at least one or two major cargo play-ers will bow out of the industry”.

“Legacy carriers have such high overheads, they cannot compete with efficient airlines like us, there is a shift from legacy to us,” Al Baker says. “Carriers which have been around for the last 50

to 60 years have created an infra-structure incompetent for current market conditions,” he adds.

Al Baker had a pop at European legacy carriers of being more con-cerned with protecting their turfs and looking to squeeze the max-imum from customers “by giving them too little” rather than facing up to competition. He feels they should do business with Qatar like IAG Cargo has: “They should real-ise we are going to exist and not going evaporate, as with IAG it is a win, win. It is in their interests to work with us. Instead of operating inefficiently, they could work with us. I’m open for business with any-body,” he adds. “In the interests of Qatar Airways, I’d even do busi-

ness with the devil.”Al Baker questions why nobody

talks about government owned Chinese, Russian, Indian and Afri-can carriers of being subsidised like they do of Qatar Airways, as many have received private equity through their governments.

He also welcomes a potential merger of China’s big three carri-ers, as it would allow more slots to be released through synergies, and adds: “I hope in future we can partner with the Chinese carriers.”

Al Baker says according to the International Air Transport Association’s freight tonne kilo-metre statistics for July, it has moved into third spot in the rank-ings. “Our cargo capability is a

major component in driving our group success and growth and will remain a focus of our expan-sion in the coming years,” Al Baker says, and adds: “We are aiming for 25-30 per cent of total revenue to come out of the cargo business.”

He revealed construction of a second cargo terminal at Hamad, which is targeted for completion in 2018. The two-storey facility will have capacity for three million tonnes of cargo, over an area of 110,000 square metres, and give it a capacity of 4.4 million tonnes.

Specialist cargo services have also been launched to reap rewards on offer in certain markets, includ-ing QR Equine to transport horses, and QR Express, in response to the rise in e-commerce, as Al Baker says it wants to tap into the “lucra-tive” express freight market, which gives high yields and margins.

Qatar will receive a seventh Air-bus A330 Freighter in December, an eighth in March 2016, a ninth Boeing 777 Freighter in June 2016, a 10th in July 2016, an 11th in October 2016 and another in March 2017.

Airline profitability has peaked and volumes flat

Volume: 18 Issue: 43 2 November 2015

NEWSWEEK

Iraq is undoubtedly one of the most challenging airfreight markets to operate in due to the ongoing political instability and conflict.

Iraqi freight firm Mateen Express has felt the affects and says it has seen “better years” with volumes up and down.

The firm’s chairman, Majid Barzanji tells Air Cargo Week the market is not expanding, and is constantly changing and fluctuating. However, there are opportu-nities: “There is a great potential in both Kurdistan and Iraq, but not conditional. No real opportunities in foreseeable future.

“When the situation normalises and millions of internally displaced people get back to their devastated cities and suburbs. When the oil prices get back to $80-100 a barrel. Then we will witness a huge boom in imports of everything into Iraq and Kurdistan as well, but when is this

going to be!?” Barzanji says.Barzanji notes in addition to normal

business challenges, there is safety and security issues and the unpredictability of the next day, and next week.

He explains: “Many regional and global players set foot into Iraq and even Kurd-istan hoping to have a some market share, but most of them had to pull out in response to what happened in the middle of 2014 and afterwards. In fact it is more difficult than what most people think or thought earlier.”

The bulk of Mateen’s volumes are mobile phones and other consumer products and a mixture of commercial, industrial, oil and gas and projects. “Our home base market is Iraq and Kurdistan, so our traffic direction (volume wise) is mostly globally towards Iraq. Some time ago, there was a surge in relief material. Project related volumes are not as much as it should be.” Barzanji says.

Unsurprisingly, operating in a war-torn country, Mateen handles lots of danger-ous goods including of radioactive sources and commercial and industrial explosives, along with acids, chemicals, industrial gas and all type batteries.

The firm works with regional, local, national and federal agencies in Iraq such as the Ministry of Defense, Ministry of Peshmerga (in Kurdistan), local security and police. More stability in the region would clearly be welcomed.

2 ACW 2 novemBeR 2015

Instability in Iraq making business tough

UPS has seen its third quarter profit increase by 3.5 per cent to $1.2 billion despite revenue dipping by 0.4 per cent to $14.2 billion.

The company says the revenue fall was because of curren-cy exchange rates and lower fuel surcharges. It says across the business, shipments increased by 1.9 per cent to 1.1 billion packages, because of US air products and European transborder shipments.

UPS chief executive officer, David Abney says: “Third quar-ter results reflect strong progress on our long-term initiatives despite uneven economic conditions. We remain committed to these strategies to support customers and improved shar-eowner value.”For the first nine months of 2015, UPS has seen profit in-crease by 36.2 per cent to $3.5 billion despite revenue dipping by 0.1 per cent to $42.3 billion.

Profit increase in Q3 for UPS

TNT has seen its losses for the third quarter reduce slightly from 56 million euros ($61.7 million) in 2014 to 51 million euros this year with revenue increasing by 2.3 per cent.

Revenue for the period increased by 2.3 per cent to 1.6 billion euros. For the first nine months of this year revenue is up by 3.3 per cent to five billion euros from 4.9 billion in 2014. Losses for the year have increased to 70 million euros from 55 million euros in 2014.

Despite the loss, TNT chief executive officer, Tex Gunning is optimistic because of the progress made with FedEx’s planned take over of the Dutch courier, which should clear in the first half of 2016, and upgrading IT infrastructure. Gunning says: “Substantial progress has been made in the recommended acquisition of TNT by FedEx: TNT shareholders have approved the resolutions of the extraordinary general meeting. We have been informed by the European Commission it will not issue a statement of objections.”TNT expects 2015 to be a challenging year as it upgrades and opens new facilities, and carries out transformation projects.

Losses down,revenue up at TNT

NEWSWEEK

3ACW 2 NOVEMBER 2015

The most significant challenge for Peg-asus Cargo is the liberalisation of traffic rights in the Middle East, the Turkic republics and in North Africa, according to the carrier’s vice presi-

dent for cargo, Aydin Alpa.He tells Air Cargo Week the airline no longer

has problems obtaining rights in Europe, but it does face issues in these regions: “There are many routes we are unable to launch because of the traffic rights in these regions. Ideally, we would like the restrictive frequency quotas that exist to be lifted, like they have been in Europe.”

He says traffic rights agreements are becom-ing more liberal and the carrier realises progress has been made. Alpa adds: “The situ-ation is improving but it can be even better if a similar liberalisation that has been adopted for domestic routes in Turkey a few years back was adopted for international routes as well.

“We are very vocal and in constant commu-nication about liberalisation of the market and

are hopeful that this process of opening bilater-als will speed up in the future.”

Despite network development challenges, Pegasus continues to expand services, which presents new market opportunities. In 2015 it has introduced services to Baghdad, Erbil (Iraq), London, Nice (France), and Oslo. “There-fore, cargo volumes have been increasing year-by-year for Pegasus Cargo with the launch of new domestic and international routes. We are growing our cargo volumes as planned,”

Alpa says.Looking ahead, Alpa says Europe and the

Middle East have the greatest market potential for Pegasus. “The MENA markets that we are penetrating in the Middle East and North Africa represent a significant importance and oppor-tunity for our business: the growth potential of aviation in this market,” he says.

In 2012, Pegasus made a $12 billion order for 100 new Airbus aircraft. In 2016, deliveries will arrive and continue the following years.

The new Istanbul airport is set to open in 2018, and Alpa says once completed it will eval-uate opportunities it presents Pegasus. “The third airport in Istanbul will be very important for Pegasus Cargo, when we look at the growing aviation sector as well as the economy of Tur-key. Due to the trade increase to/from Turkey, Istanbul will need a larger airport with larger facilities as increased trade will mean increased cargo movements and this is why the third air-port is crucial,” Alpa concludes.

Pegasus urging more liberalisation of traffic rights

AIRBRIDGECARGO AIRLINES (ABC) transported 42,480 tonnes across its network in September, a 28 per cent year-on-year (YOY) rise.

ABC also reports a 35 per cent YOY growth in demand, measured in freight tonne kilometres and a stable load factor.

Overall, during the first nine months of 2015, ABC says it has achieved 18 per cent growth in tonnage, carrying 344,130 tonnes across its growing global route network.

The carrier says the positive result was driven by strong customer support of the airline’s consistent development across existing and new markets.

In September, ABC increased capacity in all of its core markets in Europe, the US and Asia with additional flights from its already established stations, and has also expand-ed its service offering in the Asian region by introducing new weekly flights to/from Singapore.

ABC’s executive president, Denis Ilin, says the figures reflect the positive spirit within the airline and a deep com-mitment to proactive collaboration with ABC’s customers.

WorldNewsALL NIPPON AIRWAYS has started a daily service between Tokyo and Brussels – the first direct connection between the two countries in 15 years. The Boeing 787 Dreamliner will offer Belgian and Japanese companies new opportunities for investment and export. Brussels Air-port says it will give Belgian firms a new transport link to export goods such as chocolate and pharmaceutical products.

EMIRATES SKYCARGO is to expand its Italian cargo network with daily flights to Bologna from 3 November 2015. The service will be operated by a Boeing 777-300ER, offering 23 tonnes of belly capacity from Bologna to Dubai. Bologna is home to Lamborghini, Duca-ti, Ferrari and is an emerging centre for the agriculture, fashion and retail industries.

AEI wins conversion orderAVIATION CAPITAL GROUP (ACG) has ordered 15 Boeing 737-800 Special Freighter conversions from Aeronautical Engineers (AEI), with the option for an additional 15.

AEI expects to receive Federal Aviation Administration Supplemental Type Certification in 2017 for modifying the 737-800 and has potential orders for 50 aircraft. The AEI 737-800SF was formally launched in October 2014 and will accommodate 12 pallets and have capacity of 23 tonnes.

AEI president, Roy Sandri says: “ACG is a substantial player in the commercial aircraft leasing business, serving approximately 90 airlines in 40 countries. We are simply delighted that yet another high calibre global leasing com-pany has demonstrated its trust in the AEI 737-800SF conversion offering.”

ACG chief executive officer, Denis Kalscheur says AEI has already converted six 737-400 aircraft from passenger to freighter and quality of the work, punctuality to schedule and flexibility to accommodate ACG’s operators exempli-fies working together.

Surge in tonnage at AirBridge

NEWSWEEK

D elta Cargo is looking to develop its network into Latin America (LATAM) while in North America it is focusing on US West coast growth.

The carrier’s director of sales for the Americas, Andy Kirschner, tells Air Cargo Week, despite the industry facing some challenges like excess capacity, and foreign exchange yield pres-sure, it is seeing strong numbers domestically and in LATAM, where the perishable season is in full force it is looking “quite optimistic”.

Kirschner says Delta continues to focus on West coast growth in Seattle and Los Angeles and in the East in New York, where its two hubs are located. He notes the carrier has seen record-break-ing tonnage out of John F. Kennedy International Airport over the last few weeks. It is expanding its network to connect LATAM

to the West Coast. Delta will add routes in December, including a service between Orlando (US) and São Paulo (Brazil) and Atlanta (US) to Medellin (Colombia). This winter it will increase daily capacity between Rio de Janeiro (Brazil) and Atlanta as well as a daily widebody service between Atlanta and Buenos Aires.

But LATAM is the prime focus for Delta, Kirschner says: “Further developing our Latin network is an initiative for our company. Delta has increased ownership stake in GOL and expects open skies with Brazil in the next year and intends to file for anti-trust immunity shortly thereafter. We expect to receive anti-trust immunity and establish a joint venture with Aeroméxico in the coming months. Our plans are to closely partner with the leading carriers in the two largest markets in Latin America.”

Delta Cargo sales general manager for Latin America, Priscilla Byrne, adds the growth opportunity in LATAM is “very exciting”.

Perishables and pharmaceuticals remain key cargo markets for Delta Cargo, Kirschner says, and it has seen a positive trend in perishables revenue and volume over the last couple of years. “We also continue to see demand for our money back guaran-tee express products because of our vast domestic network and international flight schedules,” he adds.

4 ACW 2 novemBeR 2015

Latin America network to be developed by Delta

HEATHROW AIRPORT has seen its nine month profit increase to £419 million ($642 million) from £52 million in 2014.

The gateway says revenue increased by 4.1 per cent to £2 billion with aeronautical revenue rising by three per cent to £1.3 billion.

Heathrow chief executive officer, John Holland-Kaye, says the results show that the airport needs a third runway. He says: “Expansion at Heathrow fills the gaps in the UK’s long-term economic plan, by connecting all of the Britain to global growth … we’re well placed to make the private investment to fund expansion. Let’s make it happen.”

Heathrow says if it has a third runway, as recommended by the UK government’s Airports Commission, it could serve up to 40 new long-haul connections. The airport says a third runway could offer economic benefits of up to £211 billion, while creating 180,000 jobs nationally.

Heathrow saw cargo volumes increase by 0.2 per cent to 1.1 million tonnes despite September seeing a fall of 4.4 per cent to 119,091 tonnes. It says growth in North America was offset by declines in the Middle East and Asia Pacific. The airport says in 2015 it improved taxiways to cope with increased usage of Airbus A380s.

Rhino job for IAG Cargo

IAG CARGO welcomed six white rhinos on British Airways’ first Airbus A380 flight to Miami (US) on Sunday, 25 October.

The rhinos embarked on the journey from Johannesburg (South Africa) to Miami to ensure the continued genetic di-versity for breeding programmes which are part of a global conservation effort.

IAG Cargo product manager for live animals, Gabriella Tamasi, says the rhinos weighed one metric tonne each: “Im-portantly, the A380 allows us to control the hold temperature to within one degree of accuracy – which is really important as rhinos give off a lot of body heat and we need to keep the temperature as comfortable as possible for these magnifi-cent creatures,” Tamasi adds.Rhinos in Africa face a range of external threats including poaching and an encroachment on their space by humans.

A irports Company South Africa (ACSA) has signed a strategic sister airports agreement with Munich Airport Group. Both have jointly agreed on areas of strategic cooperation and information sharing. The agreement will

allow employees from each organisation to learn from each other’s knowledge, skills and regional experience.

ACSA says Munich’s aerotropolis experience will be invaluable as it works with the Ekurhuleni Metropolitan Municipality to develop O.R. Tambo International Airport into Africa’s “first true aero-tropolis”. ACSA is planning to extend a runway at the Cape Town International Airport and Munich will be embarking on the con-struction of its third runway, if approved by shareholders. ACSA chief executive officer, Bongani Maseko, says: “There are collabo-ration opportunities offered by this agreement especially in new customer service technologies and systems.”

Strategic agreement signed

Profit up at Heathrow

DHL Global Forwarding opened a third life sciences and healthcare competency centre in Germany to meet demand for the continuous growth in temperature controlled pharmaceuticals.

The integrator says it needed a larger facility near Frankfurt and has also extended its global DHL Thermonet net-work for pharma products.

The new competency centre is located near Frankfurt Air-port and serves as a hub for the transport, transport preparation, temporary storage, and transport follow-up of active and passive temperature-controlled pharma and medicinal products.

DHL Global Forwarding global head of life sciences and health-care, Nigel Wing, says: “The life sciences and healthcare industry is regulated by increasingly stricter compliance requirements. At the same time, dealing with highly sensitive pharmaceuticals brings new complexity to the supply chain since the products have specific temperature range tolerances and a high value.

“When designing cold chains, ensuring product integrity is at the heart of our solutions. With its strategic location near Frank-furt Airport, this new competency centre further strengthens

our existing temperature-controlled network in Germany and worldwide.”

The division has been established in DHL’s logistics centre in Mörfelden and the 600 square metres competency centre has two different temperature-contolled areas.

One area is for pharma products that must be stored at constant temperatures between two to eight degrees, while the second is dedicated to a controlled temperature range of between 15 to 25 degrees Celsius.

The facilities are equipped with temperature and humidity sensors that immediately sound an alarm should conditions fall outside of established parameters.

DHL Global Forwarding vice president of airfreight in Germany, Thilo Specht, says: “In this new life sciences and healthcare cen-tre we will be handling every aspect of transport and warehouse management for our pharmaceuticals customers and their air-freight shipments.”

The logistics center will primarily provide DHL Thermonet, the standard product from DHL Global Forwarding for managing temperature sensitive airfreight shipments.

According to a report published by DHL - smarter cold chains must be consistent and robust, incorporating ways of mitigating risk and loss, with strong contingency capabilities and proactive problem resolution processes.Temperature sensors

Third Frankfurt life sciences opened by DHL

5ACW 2 NOVEmbEr 2015

PHARMA NEWS ROUND-UP

Better pharma containers for AAAMERICAN AIRLINES (AA) CARGO has received approval to use Envirotainer e1 and e2 containers, making it the first bellyhold carrier allowed to use the e2 product.

AA Cargo will be able to accept the containers from 1 No-vember, having received approval from the Federal Aviation Administration.

The airline says the container’s benefits include better in-sulation, internal space and a battery life of up to 100 hours. The RKN e1 container uses compressor cooling and electric heating for temperature control.

Envirotainer says the larger RAP e2 container uses an insulated shell to provide highly temperature sensitive phar-maceuticals with better protection. The e2 is an actively temperature controlled container, which can be set between zero and 25 degrees Celsius.

AA Cargo manager of cold chain strategy, Tom Grubb, says: “With these options, American continues enhancement of the Expedite TC service offerings and can provide the capa-bilities desired by our customers.”

CAL CARGO AIRLINES has received International Air Trans-port Association (IATA) Center of Excellence for Independent Validators (CEIV) certification for pharmaceutical logistics for all operations as an airline and for ground handling.

The airline and its logistics hub at Liege Airport in Bel-gium are now CEIV certified, which CAL says makes it the first group to implement the certification across airline and ground handling operations. Its road feeder service, operat-ed in partnership with Jan de Rijk Logistics already had CEIV certification for pharmaceuticals.

CAL Group chief executive officer, Eyal Zagagi, says: “CAL has committed to the pharma industry at the highest possi-ble level. CAL has always been an early adopter of industry regulations, and now we’re proud to be one of the first in the industry to earn the CEIV Pharma seal.”

Explaining the importance of pharmaceuticals to the air cargo industry, Zagagi, adds: “The global pharmaceutical lo-gistics market is valued at over $64 billion a year and new regulations and technology have made it essential to define a standard for pharma transportation, in compliance with international regulations.”

Pharma certificate for CAL

ACW 2 NOVEMBER 2015 6

E tihad Cargo has racked up some impressive traffic statistics for the first half of this year and the carrier’s vice president for cargo, David Kerr, says it

continues to outperform the industry, with sig-nificant increases in freight and mail carried. “The fleet carried over 290,000 tonnes, repre-senting an 8.8 per cent growth in volume for the same period last year,” enthuses Kerr.

“That growth can be attributed to the con-tinued expansion of the airline’s global passen-ger and cargo network and the addition of new passenger aircraft to the fleet, which have provided extra belly-hold capacity.” Kerr explains. “We have also

rolled out new cargo products designed to meet the specific needs of customers and the strong export and import demands between financial centres and key emerging markets.”

At the beginning of this year, Etihad also launched Tempcheck, a cool-chain cargo service created to ensure the integrity of temperature-sensitive pharmaceutical and healthcare products. Simultaneously, Etihad Cargo upgraded its temperature-controlled storage facilities in Abu Dhabi and installed facilities to support the new venture.

In June, Etihad Cargo expanded its freighter network with a twice-weekly cargo service to Brazzaville in the Republic of Congo, operated by a Boeing 777 Freighter, transiting via Mur-talla Muhammed International Airport in Lagos, Nigeria.

Additional bellyhold capacity has been pro-vided through three Boeing 787 ‘Dreamliner’

aircraft, to Washington DC, Brisbane (Austra-lia) and Zurich (Switzerland). Two new Airbus A380s are being used to serve London and Syd-ney (Australia).

“Etihad Cargo is a vital part of the airline,” Kerr observes. “The cargo division is already a billion-dollar part of the wider airline group and is continuing to expand.”

Kerr says: “We’re witnessing new trade pat-terns from emerging markets such as China,

Vietnam, Bangladesh and India to Africa via our hub in Abu Dhabi. We are perfectly positioned to take advantage of those trends through our strategic location and with new long-range air-craft being added to the fleet.”

As well as investing in a new cargo termi-nal in Abu Dhabi to help create an even larger global freight hub, Kerr notes it is working with partners. “We have several strong partner-ships, with one example being Avianca Cargo. Both airlines share a common goal in working together to expand their networks for their respective and mutual customers.

“We see a lot of shared opportunities in this partnership which provide mutual benefits and aim to expand in South America, with Avianca Cargo being one of the strongest competitors in this area of the world.”

Kerr concludes: “Our vision is to be seen by our customers as a reliable and trusted partner, and by our partners as a company to do busi-ness with – delivering value for both parties. A lot of what we do is based on the premise of partnership, as evidenced by the work we are doing with partner airlines such as Alitalia, Air Berlin and Jet Airways in the Italian, German and Indian cargo markets.”

Etihad Cargo builds partnerships for successUNITED ARAB EMIRATES

Fleet upgrades

DUBAI boasts not one but two major in-ternational airports – Dubai International Airport (DXB) and Al Maktoum Interna-tional Airport at Dubai World Central (DWC) (pictured above).Despite the shift of all of Emirates SkyCar-go’s freighter operations from DXB to DWC in May 2014, the former continues to regis-ter marginal growth in freight traffic, thanks to increasing bellyhold volumes.

During the first seven months of 2015, DXB handled 1,438,904 tonnes of freight – up by 2.7 per cent from the 1,401,743 tonnes handled during the same period of last year. DWC, on the other hand is wit-nessing a surge in freight volumes following the shift of Emirates’ all-cargo operations from its fellow Dubai gateway, as well as thanks to a number of other carriers launch-ing new operations there. Freight volumes at DWC rose by 42 per cent in the first half of 2015 to reach 443,012 tonnes.

According to Dubai Airports vice presi-dent, terminal and cargo operations, Jamal Zaal: “The new airport is making its pres-ence felt as more and more cargo operators recognise the unique opportunity it offers to them in terms of flexible schedules and proximity to Jebel Ali Port, the Jebel Ali Free Zone and to Dubai International. Most importantly, carriers recognise future prospects, with $32 billion earmarked for developing DWC into the world’s largest and best hub for passengers and cargo.

“The growth in cargo volumes at DWC has been very rapid in recent months, with the airport already rising among the ranks of the world’s busiest cargo hubs to enter the list of top 20,” Zaal enthuses.

“Managing that growth and timing the expansion programme at both airports over the comings months and years will be challenging and our primary focus,” he concludes.

Growing times at Dubai’s two hubs

Emirates Airline says it cargo business Emirates Sky-Cargo now makes up 15 per cent of the carrier’s transport-related revenue.

In 2014, the airline carried carried 2.4 million tonnes of freight through its ever-expanding freighter and bellyhold network.

And cargo is an area of the carrier’s business which is still growing, Emirates SkyCargo’s divisional senior vice president, Nabil Sultan, tells Air Cargo Week: “At a time when many cargo operators are cutting back, Emirates SkyCargo continues to grow at a rapid pace to keep up with customer demand for our ser-vices. During the 2014-15 financial year, we saw revenues of 12.3 billion Arab Emirate dirham ($3.4 billion), which was up nine per cent from the previous year.

“So far in 2015, Emirates SkyCargo has launched services to Columbus [US], Bali [Indonesia], Multan [Pakistan], Orlando [US] and Mashhad [Iran]. We will also launch flights to Bamako and Bologna [Italy] before the end of the year. Plus, we recently announced a new service from Dubai to Panama, which will pro-vide an important link for our cargo customers in India, Asia and the Middle East to one of Central America’s biggest economies.”

Emirates freighter operations were recently moved away from Dubai International Airport to Al Maktoum International Airport at Dubai World Central.

“This facility gives us the space and technology needed to expand our operations, while ensuring cargo is delivered safely and on-time, which is what our customers have come to expect from us,” Sultan says.

“The facility is especially critical to our cool-chain operations, which can accommodate up to 140,000 tonnes of perishable cargo per year at temperatures of between 18°C and 25°C.”

Emirates SkyCargo has taken delivery of its 13th Boeing 777 Freighter. Another milestone saw its 30,000th dedicated cargo flight operated by a Boeing 777. The Emirates SkyCargo freighter fleet complements the parent carrier’s bellyhold capacity avail-able on 222 passenger aircraft.

Hubbing on Dubai offers a range of significant benefits, Sultan says: “Dubai and the region continue to grow at a rapid pace. With the majority of the world’s population living within a five-hour flight of Dubai, our hub in Dubai provides tremendous opportuni-ties to connect new and future emerging markets with the world.”

Further network development at Emirates set to fuel growth

7ACW 2 NOVEMbER 2015

UNITED ARAB EMIRATES

Competitive and changing marketNATIONAL AIR CARGO, whose sister company is the Boeing freighter operator National Airlines, is undertaking freight forwarding in the United Arab Emirates (UAE) as part of a wider third-party logistics offering through its warehousing facility at Al Maktoum International Airport at Dubai World Central. “We mostly work with medium to large size organisations” in this regard, explains Jacob Chacko, director of commer-cial operations at National Air Cargo Middle East Free Zone Establishment.

“There has been a significant increase in the number of international freight forwarders and logistics providers es-tablishing a presence in the UAE,” he says.

“There have been few domestic and regional forwarders investing heavily in their infrastructure and reach; though there is a fair amount of competition to ones headquartered in the US and Europe, the lead is still held by those latter companies.”

As for the cargo market in the UAE, Chacko reflects: “There has been a major fall in military-type cargo move-ments through the UAE. However, the UAE is increasingly preferred as the best transit point for cargo flying between the Far East/Africa and Europe/the US.”

“Connectivity by air and the capacity on offer (through Emirates Airline and Etihad Airways) have played the most significant role in the surge of the airfreight market in the UAE,” he concludes.

SHARJAH AVIATION SERVICES (SAS) head of cargo, Gon-zalo Jacob, believes the location of Sharjah makes it the natural gateway to the northern Emirates.

SAS offers cargo, and ground handling services at Shar-jah International Airport. SAS is playing a role in increasing the capability of the airport. At the end of September it con-cluded the selection process for its Next Generation Cargo Handling System, enabling SAS and its clients to profit from what he says will be “future-oriented technology”. Jacob expects to complete roll-out during the first half of 2016.

Sharjah airport has seen volumes fall in 2015. “However, the picture becomes relative, once the volumes of military equipment being returned from various places and chan-neled onwards via Sharjah have been deducted,” Jacob says. “We have experienced a traffic increase in scheduled general cargo on specific trade lanes, although the last two months have been in tune with world airfreight markets and their downward trend. We are looking to start the end-of-year season in Europe and Africa with big expectations.”

Location, location for Sharjah

ACW 2 november 2015 8

J apanese airfreight received a boost of seven per cent from January to August, helped by the US increasing by 28 per cent, Lufthansa Cargo director for Japan and Korea, Michael Stoermer

(pictured) tells Air Cargo Week (ACW).Stoermer explains to ACW that the US West

coast port seaport strike at the end of 2014 into the beginning of 2015 resulted in very strong trans-Pacific demand, particularly from the auto-motive manufacturing sector. Growth slowed again from the end of March once the port strike finished and the situation calmed down.

He tells ACW: “In 2015 the main goods carried by airfreight were and are products related to the automotive industry. Especially during the US harbour strike most Japanese carmakers had to supply their US factories by airfreight to avoid a stop in production.”

He says the automotive industry is of increasing

importance to Japanese airfreight. “Automotive in general has become the strongest supporter of the airfreight industry. Especially batteries and electronics from Japan have become essen-tial parts of all carmakers worldwide and thus replaced electronics as [the] leading industry.”

On other routes, Stoermer says South Ameri-can trade has increased by 11 per cent, Europe is up eight per cent and Africa by three per cent. Asia Pacific has seen a dip of one per cent while the Middle East is down by five per cent.

Stoermer tells ACW: “The slight decrease to Asian destinations is mainly based on the declin-ing volumes to Korea and China. The strongest growth to Europe was noticed on routes to Germany.”

For the rest of the year, Stoermer says: “We do expect a reasonable growth until the end of the year. Traditionally we always had a good last quarter to Europe, which can be expected again during the remaining weeks of 2015.”

In December 2014, Lufthansa Cargo started its joint venture with All Nippon Airways (ANA) Cargo. The carriers started the partnership on Japan to Europe services before offering it between Europe and Japan. ANA started services to Brussels from 25 October.

Stoermer tells ACW: “Daily services with a Boeing 787 will offer a total weekly capacity of about 120 tonnes to a central European destina-tion with a huge catchment area.”

Stoermer says Lufthansa is seeing competition from Chinese and Middle Eastern carriers but

thinks its reliability quality creates loyalty with Japanese customers.

He tells ACW: “Our biggest challenge in Japan these days is the growing capacity of passen-ger flights of Chinese and Middle East carriers, which consider airfreight only as a contributor to cover operational costs rather than covering all related costs plus a minor margin as base of their offer.”

Stoermer continues: “Even with such a tough competition the Japanese customers still insist on high quality and a reliable network. In this regard Lufthansa Cargo is treated [as] a long term partner of ship-pers and forwarders, which supports us to maintain our market position and even increase our market share.”

Lufthansa Cargo looks set to continue being a key player in the Japanese market.

Japan looking at North America for growthJAPAN

Seasonal European demand

All Nippon Airways (ANA) Cargo tells Air Cargo Week (ACW) that 2015 started strongly, but has subdued since the US West coast seaport strike cleared.

The carrier says: “[2015] started with booming [growth] to [the] US due to West coast limited operations, however, after [the] spring season, [we saw] very low de-mand especially because of continuous weak export and slow down of Chinese economy.”

ANA Cargo tells ACW it expects the rest of the year to be “steady”. “Due to US in-terest rates raising possibility, even intra Asian businesses seem standstill. Also, Chinese economy will be the key for air-freight business impacting [the] global economy, especially for automotive related movements.”

Since the Tohoku earthquake and tsuna-mi in March 2011, Japanese manufacturers have moved to other Asian countries. ANA Cargo says: “Since the big earthquake a few years ago with higher yen rate, many Japanese manufacturers shifted their place in Western Asian countries and [will] never come back.”

ANA Cargo is looking at partnerships for growth starting with a joint venture with lufthansa Cargo, in December 2014, and has received anti-trust immunity for an agreement with United Airlines.

ANA Cargo tells ACW: “In Japan, both sales teams started visiting customers

jointly to promote our joint venture space, and in some European countries, we have just started the joint venture and seems the market to be adopted more quickly.”

As for the United Airlines joint venture, the carrier says: “We are now finalising our preparation, especially on our system side, to start the joint venture at sometime in 2016.”

In addition to partnerships, ANA Cargo has launched new routes. In June it started Tokyo to Houston (US) services using a Boe-ing 777-300ER. ANA Cargo tells ACW: “Now we are very much excited to provide our non stop services to those South USA market and business, results are very much beyond our expectations.”

In September it also started twice weekly Boeing 767-300 Freighter Tokyo – Bangkok – Jakarta – Tokyo services, which increased to three times a week on 27 October. ANA Cargo tells ACW: “[The] route is one of our new and exciting challenges to maximise fleet accommodation with customer ship-ment demand.”

Growth slows after strong start

ACW 2 november 2015 9

A irports in Japan have seen mixed fortunes, with Narita International Airport (pictured) seeing volumes increase by 2.3 per cent in the first half of 2015, though New Kansai

International Airport Company saying the year has been hard so far.

Both airports say Japan is facing competition from seafreight while facing increasing compe-tition from other Asian airports.

Narita International Airport Corporation, deputy vice president cargo sales & marketing department, Fumio Gunji tells Air Cargo Week (ACW): “With the yen settled at lower levels and demand for air transport increasing due to cargo handling delays in the ports and harbours on the US West coast in February and March this year, exports surged by 14.1 per cent.”

Gunji says imports fell by five per cent though transit cargo was up by 0.4 per cent due to a slowdown in China and Hong Kong. For July to September, Gunji tells ACW: “While imports and transit cargo kept the same trend, exports went down slightly over last year.”

Kansai International Airport and Osaka International Airport’s operator, New Kan-

sai International Airport Company, has seen declines in August at both airports this year. Kansai was down by six per cent to 56,451 tonnes while Osaka declined by four per cent to 11,611 tonnes. The company’s cargo sales and marketing aviation sales marketing department, Satako Koide tells ACW: “[So far in 2015 we are] having a harder time than last year so far. [For the rest of the year volumes] will be decreasing from the previous year until March 2016, and increasing from April 2016.”

For the 2015 financial year, ending in March 2015, Kansai saw volumes increase by 10.5 per cent 740,823 tonnes while Osaka was up slightly by 0.1 per cent to 133,354 tonnes.

Gunji says at Narita in 2014, it handled over two million tonnes for the first time since 2010, partly helped by increasing use of large aircraft such as Boeing 747-8 Freighters and Boeing 777s for Asian and North American routes. He tells ACW he expects further increases helped by the yen depreciating. “Further increases in exports are expected while transit cargo is also predicted to strengthen, particularly between

Asia and North America.”He says the depreciation of the yen as well as

an increase in consumption tax in April 2014 saw imports slump though government pol-icies may result in this rising. Exports rose for the first time in four years, seeing a six per cent increase to 596,000 tonnes, with plastic and automotive parts to the US driving the increase from July onwards. Gunji says transit volumes saw the most dramatic increase. He tells ACW: “This sector has seen a increase of 15.3 per cent to 684,000 tonnes, the third successive year of increases and a new record.”

To encourage further carriers to use the air-port, Narita introduced its ‘Narita Promotional Incentives’ in April 2015, which reduces landing fees for new routes in addition to its ‘Additional Tonnage Incentives’ introduced in April 2013. The latter offered up to a years free landing charges for airlines increasing volumes.

Major hubs seeing mixed results in 2015JAPAN

Japan airlines (JAL) says volumes between Europe and Japan have been quiet this year, though there may be some growth later this year.

The carrier’s European cargo route mar-keting manager, Adrian Rayner tells Air Cargo Week (ACW): “This year has been quieter than last year with lower yields. The market has gone a bit soft since August but a few optimistic signs over the winter. It’s not totally clear how it may go.”

Rayner says Europe - Japan trade main-ly consists of wine, foodstuff and salmon, with pharmaceuticals showing noticeable increases. Textiles have declined in recent years.

Flight frequencies have remained the same due to slot constraints. He tells ACW: “[There has been] no change in flight fre-quency to Japan is planned in the near future due to slot constraints in Japan.”

So far this financial year, JaL Group, which covers all of JAL’s operations, has handled 125,875 tonnes of international

cargo and 13,217 tonnes of mail. Domes-tically, it has handled 166,302 tonnes of cargo and 12,710 tonnes of mail.

In August on international routes, JAL Group handled 24,193 tonnes of cargo and 2,802 tonnes of mail. On domestic ser-vices, it handled 33,133 tonnes of cargo and 2,328 tonnes of mail.

In the first quarter of 2015, JAL Group made a profit of 32.6 billion yen ($268 million) compared to 14.7 billion yen for the same period of 2014. The company revenue was 312 billion yen, up from 307 billion yen in 2014.

International and domestic cargo rev-enue increased to 20.5 billion yen from 19.8 billion yen in 2014. When the airline announced the results in July, it said inter-national revenue increased by 5.1 per cent to 14.7 billion yen because of improving efficiency of transit shipments.

Domestic cargo revenue fell dipped by 0.5 per cent to 5.7 billion yen due to in-creased competition.

Europe to Japan proving quiet

ACW 2 NOVEMBER 2015 10

CARGO TERMINALSFinnair Cargo’s new Helsinki terminal taking shape

Freight terminal for RickenbackerRICKENBACKER INTERNATIONAL AIRPORT is set to open a new 100,000 square foot cargo terminal sometime in the middle of next year to meet demand for more freight-er movements at the gateway.

The facility will be built on land that the Columbus Re-gional Airport Authority (CRAA) will lease to Distribution Land Corp (DLC). DLC will construct the facility and lease the space to companies that can benefit from the strate-gic location that allows for the expedited transfer of cargo between aircraft and trucks.

The State of Ohio, JobsOhio and City of Columbus will join DLC and CRAA in funding construction of the new cargo terminal and other related airport infrastructure.

Last month, Cathay Pacific Cargo and Emirates Sky-Cargo extended freighter services by adding additional weekly frequencies to their existing schedules.

The carriers said it was in response to rising demand for both imports and exports.

Cathay Pacific added a fourth weekly frequency from Hong Kong beginning 13 October. Emirates added a second frequency on 3 October from Dubai. This year, Rickenbacker has seen cargo volumes grow by 40 per cent. Cargolux International Airlines also operates freighters.

Construction on Finnair Cargo’s new state-of-the-art 80 million euro ($88 million) Cool Nordic Cargo ter-minal at Helsinki Airport is shaping up.

Ground was broken on the project on 30 June and the facility is expected to be in operation in April 2017.

Once finished, the terminal will have 31,000 square metres of warehousing space and 6,000 square metres of office space. The facility will be capable of handling 450,000 tonnes annually.

Finnair also has the option of expanding the site by a further 10,000 square metres and 100,000 tonnes annually.

The terminal will be split into three areas. This will feature a 3,000 square metre pharmaceuticals area with an average tem-perature of plus 20 degrees Celsius.

There will be storage rooms for pharma needing to be kept from two to eight degrees Celsius. There will also be a frozen storage section and general cargo will be stored separately.

Another section will be a 3,500 square metre perishables area. This will include a packing area for perishables needing to be stored at six to eight degrees Celsius.

The terminal development is part of a Finnair fleet develop-ment strategy that will see the Finnish carrier receive 19 Airbus

A350s over the next five years, increasing total bellyhold capac-ity by 50 per cent.

This upgrading of its fleet will result in cargo capacity being expanded and the opportunity to handle more volumes.

Finnair Cargo is aiming to double the amount of cargo it han-dles by 2020, as part of its investment in its widebody fleet and construction of the new freight terminal.

Speaking to Air Cargo Week, Finnair Cargo head of operations, Jukka Glader, says the terminal will give the carrier the chance to move cargo operations to another level. He adds the termi-nal heralds a new era for cargo and is part of a bigger plan and investment by Finnair, totalling three billion euros.

In 2014, the airline handled 149,000 tonnes of cargo and is aiming to process 300,000 tonnes by 2020. Cargo made up 17 per cent of Finnair’s revenues last year.

Finnair Cargo vice president and head of cargo, Antti Kuusen-maki (pictured), says construction is based on its model of transit cargo and specialised cargo. The carrier has a strategy focusing on life sciences, perishables, mainly seafood and general cargo. Finnair has introduced eight services for specialist types of cargo includ-ing pharma and seafood and will have two more by the end of 2015, Kuusenmaki adds.

ALOHA AIR CARGO is now operating a new $14 million Honolulu cargo facility.

The carrier has finished work on the maintenance han-gar at Honolulu International Airport, which was the final part of the 115,000-square-foot facility that will serve as its primary hub. The new facility also includes a cargo warehouse and the company’s corporate office, which has just been completed.

Aloha Air Cargo says it broke ground on the project in 2013. The development consolidates cargo operations, aircraft maintenance and other operations into one facili-ty, as part of the Hawaii state’s $739 million expansion of Hawaii’s largest airport.

The $14 million project included the demolition of the Aloha Air Cargo/Hawaiian Airlines maintenance hangar, as well as Hawaiian’s existing facilities. This included an engine shop, maintenance facility, multi-purpose build-ings, cargo facility and other structures..

Hawaii cargo facility opens

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