Sponsored by

Sponsored by

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Lux-Airport, HACTL MoU

$1.5 MILLION FOR ACS’ ON-BOARD COURIER

IMPENDING RULES RAISE CONCERNS

CONVERSIONS FUTURE IS A NARROW ONE

GLOBAL DEALS ARE EMIRATES’ GOAL

The weekly newspaper for air cargo professionals

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LUX-AIRPORT and Hong Kong Air Cargo Terminal (HACTL) have signed a memo-randum of understanding to establish a Good Distribution Practice (GDP) trade lane for pharmaceuticals between Lux-embourg and Hong Kong.

They aim to support safe and secure transportation of pharmaceuticals, ed-ucate businesses about GDP and verify quality in the supply chain. Lux-Airport chief executive officer (CEO), Johan Van-neste, says: “I am convinced this is a very interesting and unique development for shippers of valuable pharma shipments, and that it will stimulate traffic between Hong Kong … and Luxembourg.” Lux-Air-port owns Luxembourg Airport.

HACTL CEO, Mark Whitehead, says: “This agreement between lux-Airport and HACTL makes perfect sense as it enables us to create a GDP standard pharma lane between us.” The signing took place on 6 May 2015 at the seventh Air Cargo Europe exhibition and conference in Mu-nich (Germany). Cargolux International Airlines senior vice president for global logistics, Kevin Nash, and LuxairCargo executive vice president, Laurent Jossart both attended the ceremony.

Excitable winners, punching the air with their glass trophies brought to a successful end the Air Cargo Week World Air Cargo Awards. The ballroom at the Bayerischer Hof Hotel heard nine rounds of cheers and applauses for the nine awards presented by corporate sponsors.

In a room of more than 500 industry professionals, BBC producer and director, Nadia Dunn, guided the evening and awards ceremony. Before the awards and the dinner, the audience was treated to urban dancing, an

acrobat and a crystal ball juggler. The backdrop to much of the dinner was a live band. The first award of the evening was airfreight forwarder of the year. Sponsored by Swissport, the finalists were, DHL Global Forward-ing, Geodis, Kuehne + Nagel and Panalpina. The winner was Geodis.

The next two awards were air cargo handling agent of the year and air cargo charter broker of the year. They were sponsored by Etihad Cargo and Saudia Cargo, respectively. The handling agent finalists were Alha Group, Asia Airfreight Terminal, Hong Kong Air Cargo Terminal (HACTL) and Swissport. The winner was HACTL. The finalists for the air cargo charter broker were, Air Charter Service, Chapman Freeborn, Chartersphere and Swiftport. The winner was Air Charter Service.

The other awards and winners were, airport of the year, Brussels Airport; general sales agent of the year, ECS Group; air cargo industry customer care award, Saudia Cargo; air cargo industry achievement award, Volga-Dnepr Group; and information technology for the air cargo industry award, WebCargoNet. The final award was cargo airline of the year. Sponsored by ATC Aviation, the finalists were, AirBridgeCargo Airlines, Emirates SkyCargo, Etihad Cargo, Qatar Cargo. The winner was Etihad Cargo. While the winners spend the night drinking their fill of German beer, or champagne, the 2016 awards will arrive soon enough.

Modest March sets the trendA

irfreight volumes grew modestly in March compared to the same month last year, according to the

International Air Transport Association (IATA).

The association says freight tonne kilometres (FTK) rose by 1.6 per cent in March, compared to the third month in 2014. This was a different performance to the 11.7 per cent increase on last year in February. However, IATA says the Lunar New Year timing and the US West coast sea port dispute skewed February’s results.

Available freight tonne kilome-tres (AFTK) rose by 3.2 per cent in March. In February, it rose by 7.4 per cent. The freight load fac-tor was 47.9 percentage points in March, which compared with 46.5 percentage points in February.

FTK is up 5.3 per cent year-on-year (YOY). AFTK is up 4.7 per cent for the period. The freight load fac-

tor is 45.8 percentage points for the first three months of 2015.

IATA says that the performance for the first quarter of the year is, “in line with general global economic trends,” but is slightly higher than the 4.5 per cent FTK growth that it anticipated in its December outlook report.

“The air cargo industry is on a solid, but unspectacular growth trend. And there is little evidence today that would point towards an acceleration as the year goes on,” says IATA’s director general and

chief executive officer, Tony Tyler.Regions continue to perform

at different rates and Asia Pacific carriers saw two per cent FTK growth in March compared to that month in 2014, which was a sharp slowdown compared to growth of 20.5 per cent in February. Capacity expanded 3.9 per cent. European airlines saw FTK decline 2.4 per cent on March last year as the impact of weak economies and Russian sanctions affected vol-umes. Capacity grew by 2.3 per cent. North American carriers saw

0.8 per cent FTK growth in March compared to a year ago. IATA says there should be stronger growth in the region over the coming months, though capacity fell 3.1 per cent. Middle East airlines con-tinue to lead growth rates and saw FTK surge by 10.6 per cent, driven by network and capacity expan-sion. Capacity grew by 17.1 per cent.

Latin American carriers saw the biggest FTK fall of 6.4 per cent as Brazil and Argentina continue to struggle. Capacity expanded 3.3 per cent. Africa saw 2.4 per cent FTK growth. Capacity grew 0.5 per cent. In the long term, IATA is urging governments to remove barriers to trade. “World trade and air cargo are still growing, but only in line with industrial production. Removing barriers to trade in line with the World Trade Organization trade facilitation agreement would deliver a much needed boost to the global economy,” says Tyler.

ACW World Air Cargo Award 2015 winners

Volume: 18 Issue: 18 11 May 2015

NEWSWEEK

Air Charter Service (ACS) has announced it is to invest £1 million ($1.5 milion) into its on board courier (OBC) division.

OBC is cargo that is carried by a courier on a scheduled service and the aircraft charter company’s marketing director, James Leach, revealed the plans at a press conference at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Tuesday 5 May.

He says ACS is setting up an operations office at Frankfurt Airport to manage the expansion and explains: “We estimate the size of the market is around £30 million and are aiming by 2020 to sell £10 million of OBC a year.” Leach says around 10,000 OBC cargo shipments are made a year. ACS has brought in Oliver Weigelt, as a global time critical manager, who will manage the OBC division in Frankfurt (Germany).

ACS plans on expanding over the next few years by opening offices on other conti-nents in cargo hubs around the world as it forecasts demand to increase.

Weigelt tells Air Cargo Week that OBC cargo used to be just small documents such as passports, but now you can typically see 800 kilogramme loads of automotive products. “There is no limit to what you can transport. The only limit is what you can get into the box,” he says. Cargo loads can be 32 kilogrammes per box, per each

courier, Weigelt adds. Leach says the mar-ket has changed completely over the last five years and the soft launch it saw good demand, but the key is to have infrastruc-ture in places to adapt to new regions.

ACS has previously provided OBC, but not invested in the service. ACS’ group commercial director, Justin Lancaster (see picture), says: “We have been offering OBC solutions to forwarders and airlines for several years now, but we felt that it was an area where we could improve our service.

“We have good relationships with more than 25,000 freight forwarders around the world, many of whom use us for time critical charters, so providing them with hand-carry options was the logical next step.” Last month, ACS announced for the year ending 31 January it achieved a 14 per cent increase in revenue on the previ-ous 12 months.

2 ACW 11 MAY 2015

$1.5 million for ACS’ onboard courier

Frankfurt’s broad front for success

CARGOLUX INTERNATIONAL AIRLINES has started trans-Pa-cific flights between Zhengzhou (China) and Chicago (US), and launched new products, at the seventh Air Cargo Europe (ACE) exhibition and conference on Tuesday 5 May.

The new products are called, CV Classic, for general cargo, CV Jumbo, for heavy and outsized cargo, CV Power, for cars, engines and helicopters, CV Hazmat, focusing on dangerous goods, CV Pharma, catering for the pharmaceutical industry, CV Fresh, for perishables, CV Alive, for live animals and CV Precious, covering artwork and valuable cargo. Cargolux also announced it had begun twice-weekly Zhengzhou to Chicago services using a Boeing 747-8 Freighter in April, though only revealed it at ACE. The airline says it plans to make the new service four times a week by the end of the year.

Cargolux president and chief executive officer, Dirk Reich says: “Linking Zhengzhou to the Chicago market and beyond offers unique opportunities for shippers and manufacturers.” Reich adds that Zhengzhou is the fastest growing airport in the world, and its capacity will be increased to one million tonnes in 2016. Luxembourg and Zhengzhou are expected to handle one million tonnes each, by 2020.

Reich also says Cargolux is to receive its 24th Boeing 747 in the week starting 11 May, and will receive a 25th in September.

New products, routes at Cargolux

CUSTOMS waiting times reduced by a third, better truck management with a digital system, are improvements being promoted by the one year old Air Cargo Community Frankfurt.

Frankfurt Airport has the goal of having a capacity of three million tonnes by 2020, an increase on today’s 2.2 million. The Air Cargo Community Frankfurt members believe they can make progress towards that goal through being more efficient. The community has 27 members including, Frank-furt airport owner Fraport, Frankfurt University of Applied Sciences, Lufthansa Cargo, IJS Global, AirBridegCargo Airlines, Emirates SkyCargo and Chapman Freeborn. From these 27 member organisations, 60 people are participating in working groups.

The groups are tackling subjects such as, temperature controlled transport, location marketing and communi-ty building, and processes and optimisation. Analysing the processes was seen by the community’s board members to be key to removing inefficiency and cost from the Frankfurt area supply chain. One study being undertaken by Frankfurt University of Applied Sciences is to detail the exact cost in euros saved by specific efficiency measures. Board of Airline Representatives in Germany member, Michael Hoppe, is a community board member too. Speaking to Air Cargo Week at the seventh Air Cargo Europe exhitibition and conference in Munich on Tuesday 5 May, he adds: “We are working with the university to evaluate processes and benchmark. We’ll also look at our competitors.”

NEWSWEEK

3ACW 11 MAY 2015

Temperature controlled unit load device (ULD) specialist Envirotainer is aim-ing to double the amount of content it has for its academy as it seeks to pro-vide training for ground handlers after

helping airlines and freight forwarders.Launched in May 2013, by April 2015 the Envi-

rotainer academy, an online learning resource, had been used by 126 companies, with 19,300 courses taken by 4,000 of what the ULD firm calls, “learners”. Envirotainer wants to double the amount of content its academy has with the help of three more courses and three new videos to expand its relevance to potential new users. Envirotainer has a focus on Good Distribution Practice (GDP) in its educational materials. These materials include GDP posters for com-pany’s workplaces. The academy has four broad industry related courses and more than 15 Env-rotainer specific courses.

The academy contributes to the Qualified

Envirotainer Provider Training and Quality Pro-gramme, also known as QEP. This programme began in 2007, for healthcare shippers. Last week, Envirotainer announced its 500th accred-ited QEP, “station.” Such a station is a location, a company, which has demonstrated to Enviro-tainer a proper quality system and showed that they are continuing to train staff. Envirotainer’s 500th station was a Kuehne + Nagel location.

Kuehne + Nagel were the first QEP accredited location in 2007. Envirotainer compliance man-ager, Chris Fore, tells Air Cargo Week (ACW): “We are aiming to get the handlers onboard. [And] we are aiming at the top 150 airports. Not imme-diately, this is a process.” Fore spoke last week to ACW at the seventh Air Cargo Europe exhibition and conference in Munich (Germany). He adds that Envirotainer has 15 carriers and 14 freight forwarders participating in QEP.

Part of Envirotainers decision to help with partner company staff training came from han-dling issues that saw damage to the company’s ULDs and misuse of the containers leading to inconsistent temperature control which led to the company deciding in 2006 to increase its training activities.

The QEP programme also means Envirotainer can tell customers and prospective clients which companies and locations are QEP accredited by achieving a standard of quality service.

CAL CARGO AIRLINES has launched its new product, CAL VAL, for high value items such as artwork, which the carrier unveiled at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Tuesday 5 May.

The carrier says the new product will provide a dedicated escort to monitor the cargo, and a personal escort who may board the flight. It says it can also provide armoured road feeder services. CAL says it will provide real time tracking and reporting, with SMS updates and can use the global positioning system. It says extended insurance is available on request and it can also provide special charter services.

CAL chief executive officer, Eyal Zagagi says: “We have years of experience dealing with these types of shipments and vast experience with delicate and precious artwork.”

Zagagi says he expects demand to be strong on CAL’s transatlantic operations between Liege (Belgium) and New York (US), as well as between Tel Aviv (Israel) and Europe. He says: “CAL VAL complements the rest of our product portfolio, including speciality products for live animals, dangerous goods, pharma and perishable items, and other oversized and overweight products.”

High values for CAL Cargo

Education is Envirotainer’s goal with content doubling

JETTAINER is taking over the management of unit load devices (ULD) for Thomas Cook Airlines UK and Thomas Cook Airlines Scandinavia within the Thomas Cook Group airlines.

The ULD outsourcing company announced the deal at the Air Cargo Europe exhibition and conference in Munich on Tuesday 5 May. Jettainer managing director, Carsten Hernig, says the deal is positive in two ways as it is renew-ing business and helps it gain further market share.

Jettainer has already been working for Thomas Cooks’ Condor airline since 2006, which is one of the four airlines in the group. ULD management will continue with Condor and start with the other airlines around September to Octo-ber. Jettainer will make available and manage about 1,800 ULDs, which will be a mix of what it calls “ultra-light” con-tainers. Jettainer says the ULDs weight will be between 58 and 99 kilogrammes, reducing fuel consumption, costs and carbon emissions.

Thomas Cook Group Airlines director of ground handling procurement, Arne Kirchhoff, says: “This not only pays off in financial terms, but also matches our efforts to provide environmentally friendly air traffic operations in an ideal manner.” Hernig tells Air Cargo Week there are more oppor-tunities in the marketplace and Jettainer is negotiating with other carriers to manage their ULDs. “We see the interest rising with other big carriers in the world who are outsourc-ing ULDs. They are changing their business to outsource ULDs,” Hernig explains. In 2014, Jettainer grew by 10 per cent and this year, Hernig hopes 10 per cent will be the minimum growth figure it will achieve.

Jettainer cooks up ULD deal

WORLDNEWS

KAY KRATKY is to be appointed as the chief executive officer (CEO) of Austrian Airlines. The executive board of Deut-sche Lufthansa will put his name forward to the supervisory board of Austrian Airlines on 12 May. Kratky will succeed Jaan Albrecht as of 1 August. Albrecht is moving to SunExpress, a joint venture of Lufthansa and Turkish Airlines.

CEVA LOGISTICS has appointed Helmut Kaspers to the position of global air and ocean freight chief operating officer. He joins CEVA from Kaspers Consulting + Investment. Previously Kaspers worked for Logwin and held operational and commercial positions with Kuehne + Nagel and DB Schenker. Kaspers will join CEVA’s executive board and report directly to the chief executive officer, Xavier Urbain.

NEWSWEEK

4 ACW 11 MAY 2015

WACO deal hailed by IAG CargoIAG CARGO tells Air Cargo Week (ACW) its strategic partnership with WACO System, which it started in December 2013, has been a great success, but does not plan any similar deals at the moment.

Speaking at the seventh Air Cargo Eu-rope exhibition and conference in Munich (Germany) on Tuesday 6 May, IAG Cargo’s head of commercial, David Shepherd, tells ACW that the strategic partnership to make WACO the preferred forwarder for IAG Cargo customers has been a great success. In September 2014, the airline had a partner-ship with logistics firm IFLN, but only for four

months, and this was not extended. Shep-herd tells ACW: “The WACO partnership is going really well, we have the chance to market our services to their group, which in-clude some very large forwarders. It is going really well and is a mutual win-win.” Shep-herd tells ACW he is happy with the first quarter of 2015, despite revenue dropping year-on-year to 246 million euros ($274.2 million), from 250 million euros in 2014. He says: “Revenue was 246 million euros against 250 million euros last year despite an eight per cent drop in capacity, so it was a strong result.”

Cathay Cargospot by Q1 2016CHAMP CARGOSYSTEMS’ cargo man-agement IT platform, Cargospot, will be operational at Cathay Paciifc by the first quarter of 2016, according to CHAMP chief executive officer (CEO), Arnaud Lambert.

Lambert spoke last week to Air Cargo Week (ACW) at the seventh Air Cargo Europe exhibition and conference in Munich (Ger-many), saying Cargospot’s implementation is going, “perfectly”. Cathay Pacific chose Cargospot in October 2014 after a six month design period to replace the airline’s own IT system, which it introduced in the 1980s.

Lambert tells ACW: “The Cathay Pacific deal is going perfectly, we have learnt a lot. We aim to have it up and running by the first quarter next year. It needs to be finalised into the organisation as it is a big project.”

Lambert became CEO of CHAMP in Febru-ary 2015, replacing John Johnston. Before becoming CEO, he was a member of the

CHAMP executive committee and vice pres-ident of global service delivery. He says management have been very supportive since starting his new position.

Describing his first three months in charge, Lambert tells ACW: “It has been a really exciting few months, being at the helm is a very different adrenaline level. I have spent the first three months listening to the employees, management and also the customers and I will continue to do so.”

He says the areas he and CHAMP are focusing efficiency, compliance and yield improvement.

Lambert adds that CHAMP is always try-ing to evolve, to help customers cope with the ever changing cargo market, and other areas such as security.

He says: “We can see we have a big added value service, several customers are ready for e-freight, though some are not.”

CEVA Logistics is focused on process optimisation with key performance indicators and its TMS, its chief exec-utive officer, Xavier Urbain, tells Air Cargo Week (ACW). Urbain was speak-

ing to ACW at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Wednesday 6 May, following the publication of his company’s results. Urbain says: “It is a totally matrix organsiation,” referring to what the com-pany calls its, business line, cluster operating model. In the firm’s 5 May first quarter results announcement, Urbain says: “We are seeing a visible impact of the operational improvements, ongoing streamlining of processes and greater responsiveness to our customers needs.”

CEVA is merging back office functions so that only those closest to the customer are specific for that business. This is the matrix organisa-tion, Urbain speaks of. Last year, CEVA began

its change programme. One of the change pro-gramme developments has been a competence centre for ground transport. No equivalent cen-tre for airfrieght is planned.

In its first quarter results, published on 5 May, CEVA announced a fall in revenue of 4.8 per cent compared to the first three months of 2014. At constant currency prices it also claimed a 4.6 per cent increase. Its revenue this year has been $1.7 billion, compared to $1.8 billion in 2014. Its earnings before interest, tax, deductions and amortisation, was up 18.6 per cent, according to CEVA. Another positive part of the results was that the airfreight volume grew 5.2 per cent, comparing this year’s and last year’s first quar-ters. CEVA’s sea freight business grew five per cent. The firm agrees there is a modal shift from air to sea, but explains that growth in airfreight is offsetting any losses from customers switch-ing to sea freight.

Optimisation is the way forward Athens’ exports overtake importsATHENS INTERNATIONAL AIRPORT is on the rise and airfreight volumes are increasing despite the country’s continued economic problems.

In 2014, volumes were up 3.3 per cent, and the airport’s cargo development man-ager, Alexios Sioris, tells Air Cargo Week at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Wednesday 7 May, he hopes growth is here to stay, but he is uncertain about the future.

“After four years of drops in cargo volumes we are up nearly four per cent last year and we are even better so far this year. But, it does not mean much if Greece goes bank-rupt,” Sioris explains. Most of the traffic rise at Athens is through bellyhold and from TNT Airways, UPS and DHL. Lufthansa Cargo also operates a freighter service. Sioris says last year exports from Athens overtook

imports for the first time, as Greek people have less money to spend. These exports are mainly perishables such as fish, fruit, but textiles and pharmaceuticals are also exported. Sioris explains the volumes in-crease has been achieved through a strong airport community and a strong relationship with Greece customs. This cooperation with customs, he says, makes it easy to grow.

The focus for Athens now is to drive transit cargo through a strategy called Seanairgy, which combines sea freight and air and trucking. The customs department will soon launch its electronic payment of duties and taxes, allowing payment by bank transfer as well as keeping open account with Greece’s Ministry of Finance. Sioris knows which course he feels the country should take: “We can go by ourselves, but we cannot af-ford too. We need Europe.”

NEWSWEEK

5ACW 11 MAY 2015

IMPENDING new regulations that will see air cargo operators having to provide advanced shipment data for security risk analysis drew a range of views at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) on 6 May.

Advance Data – Is the Industry Ready was the second session at the conference and discussed by a panel of five, moderated by Amsterdam Airport Schiphol’s senior vice president for cargo, Enno Osinga. For the past four years, reg-ulations and industry have been collaborating on the use of shipment data to conduct the security risk analysis after two packages were found with bombs inside on separate freighter aircraft in Yemen in October 2010. The analysis will eventually result with targeted shipment screening instructions issued to carriers or forwarders.

European Commission risk management and security pol-icy officer, Kleman Oven, says the new shipment regulations are likely to be in place by 2016. He explains it will not be adopted within the air cargo industry until around 2019-2020.

Air France-KLM project manager for advanced cargo infor-mation, Arnoud Wink, questioned his timeline and says he doubts the regulations will be in place by next year. “We are not in the right timing. It is more of a wish for 2016. I do not think we will make it then. We know we will have to adapt our systems and I do not think the systems are in place to do so.”

CHAMP Cargosystems’ principal industry consultant, Steve Hill, says CHAMP can work with operators on developing systems to handle the new regulations for advanced cargo information for security purposes. He explains there will be challenges for carriers and forwarder such as potential refer-rals where shipments are not accepted and managing these could take time. “People (operators) have to adapt operations to have their structures in place to accommodate the regu-lations to forward that data early. Any player in the industry needs to adapt their IT systems,” Hill adds.

OHL International’s global freight management and lo-gistics director of aviation security, Steve Hutter, says his company sees a range of challenges for forwarders adapting to the new shipment security regulations coming force and is seeing more issues all the time.

Impending rules raise concerns

How the e-commerce revolution is being taken advan-tage of within the airfreight industry was hotly debated at the Air Cargo Europe exhibition and conference in Munich (Germany) on 6 May.

The first conference session was called, E-commerce in Airfreight: Possibilities and Priorities, and was discussed by a panel of six, moderated by Maresch owner, Bernd Maresch (see picture, left to right, Accenture freight and logistics prac-tice managing director, Marcus Fromm; WCA president, David Yokeum; Fraunhofer Institute supply chain services manager, Tobia Seidler; Kuehne + Nagel executive vice president air logis-tics, Tim Scharwath; Lufthansa Cargo programme manager for e-commerce, Frank Naeve and Maresch). Scharwath, explains to delegates his company, “uses ecommerce applications to be closer to its customers,” and it is a vital part of developing business.

His view about e-commerce technology bringing benefits to customers was also the view of Naeve. He says: “Our main aim is to use the digitisation of processes to improve the interface to our customers and to make it better and easier for them to use.”

The International Air Transport Association (IATA) operates Cargo 2000, which maps the processes involved in the planning

and movement of cargo from shipper to final customer. IATA’s head of cargo e-business management, Guillaume Drucy, tells delegates the association has been trying to get a standardised processing system for the industry.

He says, IATA sees e-commerce as part of the digitisation in the industry. Drucy feels that not enough progress has been made on digitisation, but there has been some progress on regulations, operator processes and standardisation. Drucy feels the key to

making a success of e-commerce is harnessing the power of data and connectivity. He explains in IATA’s opinion, the data revolu-tion is the next step. Meanwhile, Fromm, had strong words for the lack of action on digitisation within the air cargo industry. He says carriers will lose business to integrators if it does not adopt technology soon.

“We cannot wait another 15 years to see the digitisation pro-cess move forward. To be part of a successful industry we need action now.” Drucy also spoke about the need for electronic air waybills (e-AWB) to be adopted across the entire air cargo indus-try. He says that IATA hopes to have an 80 per cent use of the e-AWB within the next two years.

“The struggle we have with the eAWB is all the processes used on the ground on the operations side by airports, handling agents, and airlines all different. A lot of work we are doing is to harmo-nise the processes on the ground and get them standardised in the industry.”

As the session came to a close, Scharwath explains to delegates that operators’ must make investment in IT systems a priority in their business strategies and in his view his company’s end cus-tomers should be getting a better experience forindustry.

Air Cargo Europe: e-commerce is vital for development

HILL People have to adapt operations to have their structures in place to accommodate the regulations

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American Airlines promoted its expanded European network and its Philadelphia pharmaceutical cen-tre to customers at the seventh Air Cargo Europe exhibition and confer-

ence last week in Munich (Germany).Following the merger in the latter half of 2013

of American and US Airways, the combined network has a total of 22 European destina-tions, including Tel Aviv (Israel). Of those 22, AA had 10, including Heathrow Airport and Paris. American has 20 flights a day in and out of Heathrow. The Heathrow flights, go to the US cities of Los Angeles, Dallas, New York and Miami.

Speaking to Air Cargo Week at Air Cargo Europe on Tuesday 5 May, AA cargo presi-dent, Jim Butler, says: “US Airways had more European destinations than American.” Butler points out that cargo was the first part of the

new merged airline to have integrated its Amer-ican and US Airways components. Flights from Europe also go to Philadelphia (US). American now has a 25,000 square foot (2,322 square metres) facility in that city. The facility will be officially opened in June. The facility has differ-ent temperature zones for the various needs of perishables and cool chain products. Butler explains that American is, “soft launching,” its Philadelphia facility. It means that at Air Cargo Europe, American has, “a new offering to talk to customers about,” as he puts it.

With the euro weaker against the dollar, there are industry concerns about traffic only going to the US. Butler accepts that the weak currency means more imports for the US destinations, but he expects other destinations demand for cheaper euro products to offset that traffic dif-ference. On the wider economic situation, Butler says: “We’re encouraged by what we have seen.”

Networks key for pharma Caution is Lufthansa’s strategyLUFTHANSA CARGO has increased its first quarter results compared to last year, but is remaining cautious as to what it can achieve this year.

The carrier’s cargo revenues rose 5.3 per cent to 614 million euros ($684.3 million). Airfreight tonnes dropped one per cent to 396,000. Available cargo tonne kilometres were up 0.8 per cent to 2.8 million. The cargo load factor dropped 2.6 per cent to 69.4 percentage points.

Lufthansa Cargo’s chief executive officer, Peter Gerber, explains to Air Cargo Week at thre seventh Air Cargo Europe exhibition and conference in Munich (Germany) on Tuesday 5 May: “We are performing much better, and in the first quarter we have clearly improved and cargo was the best performing sector in the Group. Our outlook for this year is quite positive. We are on track step-by-step as part of the Lufthansa 2020 strategy.”

The first quarter was boosted by the US West coast port shutdown, but Gerber says the market is difficult to predict as things change quickly and it remains an unstable market.

Gerber is optimistic Lufthansa Cargo will see some growth in volumes this year, which he estimates might be a little less than two per cent, but there will be better growth in revenues.

The carrier announced last week it has put back plans for its Lufthansa Cargo Centre Neo (LCC Neo) project, but Gerber assures it will be built. Gerber says: “The first feeling, when it was announced, was kind of disap-

pointment as we are fighting so hard. We need improved infrastructure. But we are part of the Group and there are some finan-cial issues in the Group. The project is the biggest investment for the Group, so from a financial perspective it is reasonable to postpone it for a few years. The most im-portant thing is the project is ok, we will do it, but not now.”

Gerber says there is no news on what will happen to the grounded Boeing MD-11 Freighter and a decision will be made in the third or fourth quarter on whether Lufthansa Cargo takes up the option of ordering anoth-er Boeing 777 Freighter.

Lufthansa Cargo rolled out a new IT system last week Gerber explains, which he says is critical for the business, and it launched without problems. He adds that this is the next step for the airline and will shape the way it does business in the next two years, and soon it will improve booking functions and e-cargo.

AIR FRANCE KLM MARTINAIR (AF-KL-MP) has seen cargo tonnage fall by 7.9 per cent in the first quarter of 2015 to 301,000 tonnes, and losses continue to mount.

The first quarter fall follows a decline seen in the previous period of 3.2 per cent year-on-year to 334,000 tonnes. For 2014 as a whole, AF-KL-MP saw cargo volumes fall by 2.9 per cent to 1.3 million tonnes. The cargo business saw its operating result fall to 63 million euros ($70.2 million) in the first quarter of 2015 from 34 million euros in the same period of 2014. AF-KL-MP executive vice president, Bram Graeber says a lot of this loss came from exchange rates.

Speaking at the seventh Air Cargo Eu-rope exhibition and conference in Munich on Thursday 7 May, Graeber tells Air Cargo Week (ACW): “[The first quarter] Q1 was not a very good quarter, some lines such as Eu-rope to USA had strong demand. The port

strike [on the US West coast] helped but IATA [International Air Transport Associa-tion] says cargo is back to normal.”

The airline continues to reduce its freight-er operations, with capacity cut by 9.6 per cent in the first quarter, though bellyhold space increased by 1.2 per cent. Graeber tells ACW: “In the future, more of the ca-pacity will come from passenger aircraft.”

He says, much like the rest of the indus-try, AF-KL-MP suffers from overcapacity, particularly from Asia to Europe. Graeber adds that he is expecting overcapacity to get worse in the upcoming quarters due to seasonal demand, but says the airline is prepared for this.

As part of the group’s Perform 2020 plan, to break even by 2017, it will reduce its freighter fleet to five. At the end of 2014 AF-KL-ML retired three Boeing 747 Freight-ers, and its Boeing MD-11 Freighter will go at the end of this year.

Overcapacity means recovery is hard

NEWSWEEK

7ACW 11 MAY 2015

A msterdam Airport Schiphol has launched a new website, schiphol-cargoworld.com, as part of its strategy to better engage with cus-tomers using social media.

Speaking to told Air Cargo Week (ACW) at the seventh Air Cargo Europe exhibition and conference in Munich (Germany) last week, Schiphol’s director of business development for cargo, Saskia van Pelt, says the airport is trying to improve its engagement with customers. Van Pelt explains: “With the new website, we want to create a platform trying to answer questions that shippers have when shipping airfreight.”

She says the website has sections for phar-maceuticals and flowers, and later this year, will be adding high-tech and fashion. Van Pelt tells ACW the new website aims to provide specific answers to customer questions, not just to air-freight but also things like facilities.

She adds: “Our aim is to step up more modern

communications technology to reach custom-ers. We are trying to engage with our customers in latest ways, for example shared videos, clear graphs and pictures, as they say more than 1,000 words.”

She says Schiphol interviewed a large group of people to understand what pharmaceutical customers want from an airport. Van Pelt says: “We want to know what keeps forwarders up at night.”

At the International Air Transport Asso-ciation’s Cargo Network Services Partnership conference in Orlando (US) in April, Schiphol cargo vice president, Enno Osinga, spoke about the airport’s use of a viral video to interest potential customers.

Van Pelt also tells ACW construction of Schiphol’s new logistics park is going very well. Kuehne + Nagel has moved in, as have two other firms, but Van Pelt declined to reveal who they are.

Multimedia is how to be more socialEMIRATES SKYCARGO is to launch a week-ly service to Rickenbacker International Airport from 27 May 2015, departing on a Wednesday.

Operated by an Emirates SkyCargo Boe-ing 777 Freighter, the flight will stop in Copenhagen on route to Rickenbacker and in Chicago (US) and Copenhagen again on the return flight to Dubai. Emirates will start by importing only, but is expected to fly out exports from Rickenbacker in the future.

Rickenbacker Airport is part of the Colum-bus Regional Airport Authority. Columbus is the state capital of Ohio in the US. Ricken-backer has two parallel 12,000 foot (3,657 metres) runways and it has US Customs and Border Protection on site. Carriers already operating there are, Cargolux International Airlines, Cathay Pacific, FedEx and UPS.

The new route was announced on Tues-day 5 May, at the seventh Air Cargo Europe

exhibition and conference, by Emirates Sky-Cargo divisional senior vice president, Nabil Sultan.

He says: “With the addition of Columbus to our freighter schedule, we will be able to connect businesses in the US mid-West and the rest of our global network through our Dubai hub. Columbus also serves as an ideal alternative point to Chicago where shipments originating or destined to the mid-West can be trucked much more efficiently.”

“We have been working together to po-sition Rickenbacker as a critical global air cargo gateway for all commodities,” says Columbus Regional Airport Authority pres-ident and chief executive officer, Elaine Roberts.

Earlier this year, Rickenbacker saw more than 400 Boeing 747 arrivals due to the West coast sea port labour dispute.

Rickenbacker route result

SUCCESSFUL airfreight is about creating an integrated cargo community and building links around the globe, according to Amster-dam Airport Schiphol’s outgoing senior vice president for cargo, Enno Osinga.

Speaking to Air Cargo Week on Tuesday 5 May at the seventh Air Cargo Europe ex-hibition and conference in Munich, Osinga explains that his airport achieved seven per cent growth in volumes in 2014 by focusing on links and community.

“We consider cargo to be a community thing and not about individual players. Inte-grating it all together is the key, as cargo is an integrated part of the business. Our 2014 performance is the result of the cooperation between the partners at Schiphol,” Osinga explains.

Despite a positive 2014, Osinga predicts growth will slow at Schiphol in 2015 as the industry is unstable, export and import vol-umes are dropping in China, the Russian economy is struggling and other economic factors will have an impact. “Air cargo is a volatile market. Quarter one this year was not as good. We are concerned and are look-ing at two to three per cent growth this year,” he adds.

Schiphol announced a memorandum of understanding (MoU) in April with Delhi Indi-ra Ghandi International Airport to develop a trade lane. The Amsterdam airport had spent a few years researching the Indian market, including a study of shippers needs by Dutch university researchers.

The Delhi MoU adds to agreements with Incheon International Airport, Hong Kong International Airport and Singapore Changi

Airport. Osinga is sure the partnership with Delhi is going to be a success and boost vol-umes to and from India.

Osinga says the airport is eyeing other potential agreements: “Maybe Nairobi as flowers are a really big from Africa into the Netherlands. Africa is interesting. Maybe Tanzania and South Africa too.” He adds that Schiphol’s key focus markets are in the Far East, and the airport has developed good contacts with airports in China. He explains Schiphol only links up with airports, which take cargo as seriously as it does and the benefits from forging ties are an improved network, access to market information and more customers.

On 1 August, Osinga will be replaced by Jonas van Stekelenburg. Osinga says van Stekelenburg will focus on innovation and sustainability, as they are the two important areas the industry is facing. “The air cargo industry needs to innovate and I bet next year everyone will be talking about sustain-ability,” he says.

Communities gain new friends

ACW 11 MAY 2015 8

Conflict continues to loom large over the affairs of air transport for the Rus-sian Federation. In April, Airports Council International (ACI) Europe identified a stark difference between

European gateways within the European Union (EU) and those without, in its February traffic report. ACI reported that while freight traffic was, overall, up 2.9 per cent, bellyhold flights were growing at a faster rate within the EU than across European nations outside the trade bloc.

In that February report, ACI Europe direc-tor general, Olivier Jankovec, said: “Russian airports are generally seeing a sharp decrease in passenger traffic, with the country entering recession this year for the first time since 2009

and international sanctions taking their toll. This situation is also affecting freight traffic across Europe, as well as the passenger traffic performance of other European airports that are particularly exposed to Russian demand.”

In January, Airports Council International (ACI) Europe had reported Russian airports were feeling the effects of economic sanctions. Those sanctions from the Ukraine conflict are still in place and for the market little has changed. Back in January, Jankovec stated that: “Non-EU airports are now seeing a traffic slow-down at Russian airports as well as on-going traffic losses in Ukraine.” The data given for airports then included, Sheremetyevo Inter-national Airport which hsaw the smallest

decline in Russia of 6.8 per cent, to 16,345 tonnes in November. Domodedevo Interna-tional Airport saw volumes fall by 9.5 per cent in November to 14,396 tonnes. Smaller airports in Russia also suffered drops, with Koltsovo Airport in Yekaterinburg seeing freight fall by 18.9 per cent to 1,751 tonnes. Novosibirsk Tolmachevo Airport’s volume fell by 21.1 per cent to 1,964 tonnes and Pulkovo Airport in St. Petersburg, a 22.5 per cent drop to 2,037 tonnes.

Like the airports, Russia’s national carrier group, Aeroflot has also sufffered from the fall-out of conflict. Aeroflot’s performance has not improved and it was worsening before the inva-sion of Ukraine. Its freight traffic has continued to fall, seeing drops in its bellyhold cargo levels beyond what was lost when the airline ended its use of feighters in 2013. Last month, the Rus-sain airline group reported that volumes in the first two months of 2015 fall by 8.1 per cent to 17,966 tonnes, with a large percentage fall seen in January, and a smaller decline in February.

Since dropping its freighter fleet in the third quarter of 2013, Aeroflot had blamed its falling cargo figures on comparisons between the pre-vious fleet that has freighters and the one it has now, which does not.

However, for months now such comparisons are not valid and Aeroflot’s freight is still falling. Over the 18 months since the end of freighter operations, international cargo has seen the highest falls. The wider situation for Russia, such as the Ukraine conflict and sanctions has compounded the industry’s problems. Aeroflot’s international cargo in January and February saw

the biggest decline, down by 14.8 per cent to 10,084 tonnes. Cargo volumes for the Aeroflot Group saw a slightly smaller decline, dropping by 7.6 per cent to 20,860 tonnes in the first two months of 2015.

The Group’s domestic cargo saw a rise of 1.3 per cent to 10,418 tonnes. It saw a decline in January of 2.5 per cent to 4,822 tonnes and Feb-ruary was up by 4.9 per cent to 5,596 tonnes.

Despite the Russian recession, lower oil price and sanctions, AirBridgeCargo Airlines has continued to grow. In April it announced that in the first quarter of 2015 rise by 20 per cent to 103,816 tonnes, from 86,500 tonnes over the same period in 2014.

ABC executive president, Denis Ilin, says: “20 per cent growth of tonnage ... is a solid first quarter performance. Adding more capacity at the beginning of 2015 allowed us to maintain and even improve our ... positions in our core markets in Europe, the US and Asia.”

In the Commonwealth of Independent States’ (CIS) countries the situation can be more prom-ising also. Azerbaijan’s Silk Way West Airlines announced an $1.1 billion order for three Boe-ing 747-8 Freighters in March. Silk Way Group president, Zaur Akhundov. “I am confident we will maintain our rate of growth, supported by three new Boeing 747-8 Freighters.” Until there is more stability on the eastern edge of Europe, it seems that most Russian carriers are likely to fall behind their CIS compatriots.

Difficult times continue for Europe’s eastern edgeRUSSIA & CISREPORT

Positive signs for some

REPORT

Austria is finding that airfreight is increasingly playing its part in trade movements between Western and Eastern Europe, with a 13.5 per cent leap in cargo tonnage to 238,843 out

of its six international airports last year.Linz Airport, where Lufthansa is the main

carrier operating one Boeing 757 a day, reported a 3.3 per cent increase in total 2014 tonnage to 44,414 tonnes. According to Linz, it is on course to record a five per cent increase in 2015.

The growth, according to the airport, is pri-marily as a result of, “shipping companies increasingly outsourcing more and more activ-ities to handling agents,” and the strength of Austria’s upper economic zone, of which Linz is the capital.

Linz claims that over a quarter of Austrian exports are produced there making it the fourth strongest export region in the European Union. Major manufacturers include, German carmaker BMW and engineering firm Siemens. The air-port has high hopes for the pharma sector in the months ahead, helped by the opening of a new temperature controlled warehouse, built in co-operation with Lufthansa and operated by the airline.

Despite this, Linz is well aware of the chal-lenges it, and its country, faces in the air cargo sector. “Competition will definitely increase this year,” it tells Air Cargo Week (ACW). “Austria is small, thus we compete with every other airport in the country. Due to our central location in Europe, we also compete with neighbouring air-ports especially those in Germany and the Czech Republic.”

Innsbruck Airport echoes this view on com-petition. It moved 1,850 tonnes last year, but expects no growth this year. “The challenges we face are the direct deliveries made by custom-ers and shippers to bigger airports as a point

of cargo concentration. This includes Frankfurt and Vienna,” Innsbruck Airport tells ACW.

Vienna Airport has had a choppy start to the year with political events in Eastern European markets, Russia and Ukraine, affecting traffic. In February total air cargo rose 2.9 per cent, but in March it fell by 4.5 per cent on the previous year.

In such a volatile period, Vienna prides itself on operational strengths, such as short export cargo acceptance deadlines. A computer system interface between the airport and forwarders has been built around the idea of sharing data to help with this aim of shorter acceptance times.

Vienna is also helped by its exposure to the emerging markets. Cargolux International Airlines moves electronics from Hanoi and Hong Kong (China) with Vienna as a stop-over destination to help goods reach Eastern Europe faster.

An emerging market carrier using Vienna as an additional stopover, this time on its Guang-zhou (China) to Frankfurt (Germany) route, is China Southern Airlines.

Lufthansa Cargo, which operates the cargo service of Austrian Airlines, is the dominant provider in Austria. What does it make of the current market? The airline’s regional direc-tor for Austria, Hasso Schmidt, says it moved 24,000 tonnes of imports and the same amount of exports out of the country last year, but, is cautious about 2015.

“The Austrian airfreight market is currently under pressure, and according to the Inter-national Air Transport Association’s Cargo Accounts Settlement System figures, has shrunk since September [2014] by up to 15 per cent. Presently, we do not foresee a gen-eral change in market trends. We will however

continue to be the expert for specialised and express Cargo and will also focus on the stan-dard cargo segment,” Schmidt says. “Imports for us, so far, have developed healthily with an almost double-digit increase compared to the same period last year.”

Out of Austria, he says the segment losing the most share is standard freight with express and pharma doing well. “With the extended network of Austrian Airlines, we see additional chances [in the fourth quarter],” he states.

Technological developments will also help this year. “We are seeing greater need for the digitalisation of the whole air cargo value chain. E-bookings, which are performed by our cus-tomers have been implemented and steadily increased,” he says. According to Schmidt, together with its forwarder partners, the airline is driving the paperless e-Freight initiative.

“All Austrian gateways are e-Freight-ready now and we are seeing a constant increase in the number of shipments we handle electron-ically,” he says. “Also as part of the Lufthansa Cargo 2020 programme we are rolling out our new state-of-the-art IT platform and have already successfully completed it in Austria by the end of February.”

Lufthansa’s cooperation with All Nippon Airways, a joint sales agreement for shipments between Japan and Europe, is expected by Schmidt to bring benefits this year, “when the flights from Europe to Japan will become book-able for online markets such as Austria.”

Schmidt agrees competition is increasing out of Austria, but is confident of its position. “On the operational side we have made our Vienna hub very fast and reliable. We offer the shortest transit times in Europe,” he says. “Customers value this and there is an increasing amount of cargo from surrounding countries now trans-ported via Vienna.”

Kuehne + Nagel‘s (KN) general manager for Austria, Franz Braunsberger, sees growth from developing more customer-friendly booking processes. “We have introduced our new airfreight booking and quotation tool KN Freightnet,” he explains. “It’s now easier and faster for customers to get competitive quota-tions in various service alternatives and to book the shipment, as well as monitoring the process. In respect of operative routings of volumes we still see a trend towards the utilisation of hubs in order to use all available synergies.” In his view, for both Austrian exports, as well as imports, KN is using the hubs available through its network.

Overall, he describes volumes moved in and out of Austria last year as, “very satisfying”. He adds: “We are continuously increasing our market share, which reassures me that we are following the right strategy of being geographi-

cally close to our customers. These days we see this as a clear competitive edge.”

Although it does not foresee any signifi-cant growth in the Austrian airfreight market in 2015, he says, KN’s aim is to, “increase our market share through innovation and the sus-tainable quality of our services”.

In terms of operational and customer trends in the Austrian airfreight sector, KN sees signif-icant changes in the, “continuous specialisation in specific product requirements in the pharma or high-tech industries”.

Air logistics group Cargo Partner, expects to see a, “significant increase,” in business to and from Austria and Europe this year. Cargo Part-ner’s corporate product management director, Jo Feiks, says: “Due to the dollar-euro [exchange rate], we are predicting an export boom, which may have an effect on imports. We have already seen initial signs of this in Eastern Europe.”

For Feiks, the automotive, high-tech and pharma industries have been significant driv-ers of demand, “for the past few years,” and will continue to have, “a great impact on our growth”. Most recently, the lifestyle sector has become an important field for Cargo Part-ner, with the constant creation of new gadgets from smartphones to fitness accessories, such as pedometer watches. “These trends are very fast-paced, making airfreight the ideal mode of transport,” says Feiks.

Regarding technological changes it is also seeing more demand for e-solutions. “We have always been dedicated to innovative IT solu-tions, and this emphasis will become even stronger in 2015, with products such e-booking, e-freight and electronic booking Austria,” Feiks adds.

Many opportunities, some pessemism, exporting manufacturers, advances in technol-ogy, fluctuating exchange rates, Austria is at a European nexus and 2015 could go well or not..

Emerging markets

AUSTRIA

Prospects are elusive for the Alpine nation

9ACW 11 MAY 2015

FEIKS Due to the dollar-euro [exchange rate], we are predicting an export boom,

Euro-dollar exchange

ACW 11 MAY 2015 10

Narrowbody conversion is to be the bulk of the market for turning passenger aircraft into freighters for some time to come, according to the industry, and e-com-merce will play its role. Aeronautical Engineers (AEI) senior vice president of sales and marketing, Rob Con-

vey, says that, “747 [conversions] are dead, I don’t think we’ll see those for some while”.

In Convey’s view there is one clear winner for the moment. “Right now the 737-400 is the darling of the industry, they’re the ones being converted in the largest numbers and to a lesser

extent the 737-300s and Boeing MD-80s are also seeing an uptick in conversions.” He adds that there is nothing that matches the size or capacity of the 737-400 freighter which can accommodate ten 88-inch by 125-inch AAA full-height containers or pallets. In comparison he says a converted 737-300 only holds eight pallets or containers, 20 per cent less capacity.

Convey says that this is precisely why a number of integrator airlines have chosen the 737-400 in their fleet renewal plans. “If the integrator is saying this is what we want you to fly for us then all the third tier airlines that fly for the integrators, that’s what they’re going to go to the market to try to find. They can’t just use a 300 because the contract they have or the RFQ [request for quote] they’re bidding on is asking for a 400. It just depends what these airlines have been asked to supply to support contracts. Right now everyone is asking for the 400,” he says.

Despite less than 500 737-400 having been produced, between all the conversion specialists globally, nearly 100 have been con-verted to freighters, with AEI ready to deliver its 50th conversion with 10 being converted and, “about the same number in active backlog”. Business is so good in fact that the only headache is finding suitable aircraft for conversion. “You look at what’s left

in the passenger market, we’re looking at about 100 aircraft of suitable age and condition for conversion and they’re all flying for various airlines. They’re coming out, but it’s over time so that’s causing a shortage of suitable aircraft,” says Convey.

With “big batches [of passenger 737-400s] coming off lease in 2016 and 2017 that might be converted”, Convey sees AEI con-verting about 20 of the type in 2016 in comparison to around 25 this year and the same number in 2014. After 2016, he sees the number of annual conversions slowing to, “about 10 or less”. Both AEI and Hong Kong-based HAECO are now planning for conver-sion programmes for the Boeing 737-800 which Convey says will have positions for 11 containers and, “will become the standard narrowbody freighter worldwide for the best part of 40 years. There’s 3,500 already delivered, by the time this programme comes to fruition it will be closer to 4,000”. He says that AEI is finalising contracts for two customers for over 50 aircraft and deliveries, “will start in earnest in 2018”.

However with PacAvi expecting final regulatory STC approval in 2016 for Airbus A320 and Airbus A321 P2F conversions, Boe-ing’s hegemony in the narrowbody freighter market is anything but guaranteed. Airbus itself had been contemplating such a step, though EFW announced and then cancelled its own A320 P2F conversion programme. Yet one thing that the whole industry agrees on, an A320 or a Boeing 737, they are usually full with pas-senger bags and maybe some mailbags. There’s no belly freight alternative on a narrowbody route, plus there’s a lot of business with the integrators, says Convey.

In terms of what freighters will be most in demand, ST Aero-space’s executive vice-president for aerospace engineering and manufacturing, Yip Yuen Cheong sees customer requirements, such as after sale support, key to dictating their choices. “In the past, customers were always concerned with the on-ramp price, life-cycle operating costs, and aircraft acquisition and conversion costs. But, more recently, there is also a concern for long term support…after conversion, as the converted aircraft would still need to operate for another 15 to 20 years.” As aircraft for con-version become harder to find “we’re seeing renewed interest in the 300 and the MD-80. Those are the only two aircraft that are close that are properly certified and available,” Convey says.

Mid-size freighters may benefit from this situation. Boeing’s airline market analysis regional director, Thomas Crabtree, says that the manufacturer is, “seeing a lot of interest in 767-300 freighters,” which he said is particularly well-suited towards freight integrators such as FedEx, which is renewing its fleet of Boeing MD-10 freighters with factory built 767-300s. Yuen Cheong, says that they delivered four 767-300BCFs in 2014 and have another conversion underway. He says mid-sized freighters, such as the 767-300 and the Airbus A330-200, “are well consid-ered for their fuel efficiency and heavier load capacity, especially suited for the Asian market”.

ST Aerospace is hoping its conversions of the type will enter service in early 2017. Chan says that HAECO is also, “seeing quite a pick-up in the marketplace, particularly in China”. He says that particular drivers for domestic airfreight in the country to which smaller and mid-size freighters are well suited include, “domestic consumption and e-commerce”.

Crabtree agrees to some degree, “conversions are more popu-lar in the smaller gauge equipment because they tend to sell more to express network carriers.” And express carriers are increas-ingly about e-commerce. Today, the Internet is even shaping conversions.

Conversions future is a narrow oneFREIGHTER REPORT

After sales support

CONVEY

Boeing MD-80s are also seeing an uptick in conversions.

Freight Forwarders

Freight Forwarders

11ACW 11 MAY 2015

TRADEFINDER

Turkey

Airlines

USAUnited Arab Emirates

Italy

Industry Events

Iraq

Hong Kong

Freight Forwarders

USASpain

NEWSWEEK

Global deals are Emirates’ goal

Emirates SkyCargo was expecting to conclude deals with global freight for-warder players and was seeking airlines for partnerships last week at the seventh

Air Cargo Europe exhibition and conference in Munich (Germany).

The United Arab Emirates carrier spoke to freight forwarders and business partners at the show. Emirates’ divisional senior vice president for cargo, Nabil Sultan (see picture), spoke to Air Cargo Week (ACW) about the airline’s plans for the show and beyond. He says: “We expect

a couple of deals that we’ll sign with key part-ners.” He adds that he is seeking special prorate agreement partnerships with, “a couple of air-lines,” on some routes.

One objective was to convey to pharma ship-pers that Emirates’ facilities at Dubai World Central (DWC) can protect sensitive medical products from the region’s high temperatures. Sultan also spoke to freight forwarders who deal with automotive and other industries to explain to them the capabilities of SkyCargo’s new freight facility. Contact with German freight forwarders during Air Cargo Europe week was another goal.

In May 2014, Emirates move its cargo opera-tions to DWC. Sultan refers to the facility there as, “superb,” and says his airline has already started accepting and delivering cargo for the local market. The facility can handle 750,000 tonnes annually. The goal is to increase its annual capacity to about one million tonnes by 2017 through a gradual, “ramp up”. Sultan wants to emphasise the achievements of his airline’s quality of service, he tells ACW: “Last week, we were at 98 per cent flown as booked.”

QATAR AIRWAYS CARGO is focusing its growth strategy on building both its freighter and bellyhold cargo volumes.

The carrier’s chief officer for cargo, Ulrich Ogiermann, spoke to Air Cargo Week (ACW) at the seventh Air Cargo Europe exhibition and conference on Tuesday 5 May, it allows the airline to reach every market where there are opportunities. “We have global cover-age by increasing freighter and bellyhold. If you only operate bellyhold capacity you are cutting yourself off from certain markets.

Freighters are needed to serve some mar-kets,” he explains. Examples of where the carrier is seeing strong demand for freight-ers, he says, are in moving aircraft engines, and transporting animals, such as horses, to equestrian events.

The key market Ogiermann says for Qatar is Asia, and China is going through a, “restruc-turing phase,” and growth rates have slowed. He says there are opportunities in Africa, and Lagos (Nigeria) and Accra are performing well. “We are looking at more destinations in

Africa and by using the Airbus A330 we can open up new markets,” he explains. Qatar started a freighter service to Los Angeles In-ternational Airport in April, which Ogiermann tells ACW is performing strongly. The carrier is growing its bellyhold routes to the US and on Monday 4 May announced it will operate flights to the US cities of Los Angeles, Bos-ton and Atlanta next year.

He says the airline is also thinking of up-grading capacity on the freighter route into Basel (Switzerland), which was launched in January, as the pharma-focused route has been a success.

Another change Ogiermann says has ben-efitted the carrier is a new sales tactic, by moving away from using general sales agents

(GSA) in some markets. “We changed the way we did things in some markets last year and did it ourselves. This has helped us grow in strong markets. In big markets we have GSAs. We look at market to market in our approach to sales,” he says.

Ogiermann explains Qatar is also planning on launching new products later this year, to add to the QR Fresh, QR Pharma and QR Express products it has. He says the airline feels these specialist services are important to keep customers happy and attract busi-ness. The air cargo industry is volatile in Ogiermann’s view, but he feels by being flexi-ble, differentiating services from competitors and focusing on high quality, then strong growth can be achieved.

Reaching for every market with Qatar Cargo’s bellyholds, freighters

Double-digit rise for MASkargoMASKARGO’s airfreight throughput at Kuala Lumpur International Airport increased by 11.5 per cent in the first quarter of 2015.

The operator says volumes climbed to 154,000 tonnes of cargo in the first three months of the year, is up on the 138,254 that was recorded in the first quarter of 2014.

The best perfoming month was March when 58,211 tonnes were handled. In Feb-ruary, the figure was 48,512 and in January it was 47,485. Other airports across Ma-laysia, which MASkargo handles cargo at, also saw volumes rise during the year’s first quarter.

Penang International Airport’s MASkar-go volumes increased to 21,480 tonnes for the first quarter, an eight per cent rise on the 20,000 that was registered in the same period in 2014. At Kota Kinabalu Interna-tional Airport MASkargo handled 4,902 tonnes in the first three months of the year. This was a 21 per cent surge on the 3,900 tonnes that was handled during the quar-

ter in 2014. Kuching International Airport also saw an increase to 3,702 tonnes for MASkargo, which was a 17 per cent rise on the 3,200 processed in the same quarter in 2014. Senai International Airport handled 430 tonnes, on behalf of MASkargo, down on the 510 last year. This year, MASkargo says that it, along with industry partners, led the expansion of the International Air Transport Association’s (IATA) secure freight programme; an initiative to pro-mote global air cargo supply chain security standards.

This, it explains, aims to develop a secure supply chain programme and to strengthen air cargo security across countries in the South East Asian region. As MASkargo is the cargo division of Malaysia Airlines, it operates scheduled freighter services and bellyhold capacity. MASkargo operates four Airbus A330-200 Freighters and two Boeing 747-400 Freighters. At its 108-acre com-plex in Kuala Lumpur, MASKargo has the capacity for one million tonnes a year.

HACTL hopes for repeat of 2014THIS year started out tracking 2014, in terms of volumes through Hong Kong Air Cargo Terminal (HACTL), but March and April saw a slow down, according to HACTL chief executive, Mark Whitehead.

This slow down means that the first quar-ter is about nine per cent lower than 2014. Whitehead sees this as due to Chinese im-ports and exports declining and linked to the timing of the country’s Lunar New Year celebrations, which fell in February.

He says, “this is not anything to be con-cerned about,” explaining that its linked to actions by the Chinese government and that China’s migrant worker population leaves the cities to go back to the countryside for a holiday of about two weeks.

After the demand peak that occurs just before the New Year holiday, the migration and time in the countryside leads to a de-mand fall off. Whitehead refers to this as the “regional fall off”. This year, the late February New Year meant that that holiday extended into March.

Whtehead also points to the purchasing managers index, which he says has dipped below 50 points. This is the first time it has been below 50 for some time”. The fall in this indicator for demand, Whitehead,

hopes, is, “just a dip”. Another factor may be the reduced annual growth levels the Chinese government has announced, with predictions of seven per cent per year in-stead of the historic 10 per cent. Whitehead points to the World Bank’s calculation that Chinese annual growth will be more like six per cent.

Beyond China, Whitehead says that the US economy, “has held up”, while Europe-an, “trade flows...are down. Volumes to and from Europe are not in growth territory.”

While China has apparently had an import and export slow down, Whitehead still iden-tifies mainland Chinese carriers as airlines doing well. “We are seeing increased ton-nage for Gulf carriers and mainland Chinese carriers,” he says.

Turning away from the macroeconomic situation, Whitehead spoke about “maxi-mising efficiencies.” HACTL has developed a smartphone app that allows truck drivers to get flight details and loading dock area information on their handsets.

“It makes it more efficient,” he says. “We still employ 120 [information technology] IT experts and we had 180,” when the airport was developing the latest version of its IT platform.

Changi Airport is expecting its April volume figures to be better than March, when cargo fell 4.2 per cent to 162,700 tonnes, because its part-ners at the gateway are reporting an

improvement in traffic.Speaking to Air Cargo Week (ACW) at the sev-

enth Air Cargo Europe exhibition and conference in Munich (Germany) last week, Changi Airport Group cargo, logistics development assistant vice president, James Fong (see picture), spoke about the traffic growth and his team’s work at the show. “April should be slightly better. Look-ing at the first quarter we had positive growth, we are happy with that.” Fong sees the US as key to stabilising future growth and he hopes that the demand seen from the US economy contin-ues, beyond the distortion caused by the West coast sea port dispute. “The US economy is driv-

ing consumption. The economy is doing well. The port situation was temporary,” Fong adds.

He also has hopes for the European economy. “Look at the long term,” he says, “in the next 12 to 18 months we expect Europe to come back with its consumption power. Sooner or later Europe will come back.”

Changi’s traffic results have showed that Aus-tralia, Thailand and the US are strong sources of demand. Fong tells ACW that growth from Australia was five to 10 per cent. The shipments range from consumer electronics going to Aus-tralia to live cattle and meat and vegetables coming from the Southern continent.

From Thailand, Fong sees growth that is only returning the country’s exports and imports to what they had been. Because of the country’s political turmoil with the miltary coup last year, traffic from the nation had shrunk. He adds that, meanwhile, the intra-Asian traffic is doing, “rel-atively well”. Changi is benefitting from demand from North East Asia and South East Asia.

During the Air Cargo Europe week, Fong expected to, “catch up with its partners,” and showcase the airports capabilities including its cool chain facilities with potential clients. He also highlighted DHL’s investments in Changi and the fact that FedEx and DHL both use the airport as a hub.

Changi pins hopes on US, Europe