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TIACA sets up new shipper committee

double pharma joy forafklmp

asian regionthe backbonefor lufthansa

challengesahead aftergrowth

pharma drivingcool chainsector

The weekly newspaper for air cargo professionals

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THE International Air Cargo Association (TIACA) has created a new Shippers’ Ad-visory Committee to be chaired by Lars Droog of Tosoh Corporation.

The group will complement TIACA’s other committees and review all elements of the supply chain to make improvements with the interests of the shipper in mind.

Droog is also vice chairman of EVO’s Airfreight and Express Council.

“The voice of the shipper is all too often missing from the global conversation on freight, and I am excited to be establish-ing a platform for communication within TIACA, which represents all sectors of the air cargo chain”, says Droog. “I am looking forward to bringing the vision and ideas of the shipping community to the discussion table so that we can work together to im-prove our industry.”

TIACA chairman, Sanjiv Edward adds: “Shipper feedback is paramount in any effort to improve the airfreight supply chain. TIACA has set-up this Shippers’ Advisory Committee to act as a bridge, understanding the shipper requirements on end and taking them back to players in the airfreight supply chain, for creating effective and quality solutions.”

Air Transport Services Group (ATSG) has penned a agreement with Ama-zon Fulfillment Services, an affiliate of Amazon.com – to operate an air cargo network to serve the online retail giant’s customers in the USA.

The network from Wilmington, Ohio will see the aircraft lessor lease 20 Boeing 767 Freighter’s and provide logistics sup-port. Amazon has also been granted rights to purchase ATSG equity.

ATSG president and chief executive officer, Joe Here says: “Since last summer, we have been working closely with Amazon to demonstrate that a dedicated, fully customised air cargo network can be a strong supplement to existing transportation and distribution resources.

“We are excited to serve Amazon custom-

ers by providing additional air cargo capacity and logistics support to ensure great shipping speeds for customers.”

The leasing of 20 767 Freighters to Amazon, by ATSG’s Cargo Aircraft Management (CAM), the operation of the aircraft by ATSG’s airlines, ABX Air and Air Transport International, and

gateway and logistics services will be provided by ATSG’s LGSTX Services.

The 20 leases will be five to seven years and the agreement covering oper-ation of the aircraft will be for five years.

Amazon senior vice president of worldwide operations and customer service, Dave Clark says: “We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members and we’re excited to supplement our existing

delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one and two-day delivery for customers.”

ATSG’s revenues rose 15 per cent to $181.6 million for the fourth quarter of 2015, and were up five per cent to $619.3 million for the year.

The air cargo industry is showing signs of pick-ing up as it grew at its fastest rate since April, the International Air

Transport Association (IATA) reports.

However, the uncertainty that has plagued markets will remain moving forward due to continued over-capacity issues, falling yields and an unstable world economy.

In its report for January, IATA says air cargo carriers’ freight tonne kilometres (FTK) rose by 2.7 per cent, but load factors continue to fall suggesting yields will come under further pressure.

The association says January continues the growth seen towards the end of 2015 and is the fastest it has been since last April. Though FTKs increased by 2.7 per cent, available FTKs were up by seven per cent, causing the load factor to fall by 1.8 percentage points to 41.3 per cent.

IATA director general and chief executive officer, Tony Tyler explains: “It is good news that vol-umes are growing, but yields and revenues are still under tremen-dous pressure. Air cargo plays a vital role in our globalised and fast-paced world in which trade is the foundation for long-term

prosperity. Removing barriers to trade is a win-win. It will shore-up the foundations for stronger economies.

“And an improved business envi-ronment for air cargo will help facilitate much needed technol-ogy and process investments so that the industry will be an even stronger catalyst for growth and development. A third of the value of goods traded internationally are delivered by air. But the value of air cargo goes much deeper in the prosperity that it creates in supporting jobs and economic opportunity.”

Different regions of the globe performed in contrasting ways in January as Asia Pacific, Europe, North America and the Middle East all saw surges in FTK’s, but Africa and Latin America saw slumps.

Asia Pacific’s FTK growth was 1.3 per cent, while Europe and North America were both 2.5 per cent. The Middle East continues to lead the way posting an 8.8 per cent FTK increase. Latin America saw FTKs fall by 3.6 per cent and

Africa recorded a 1.4 per cent drop.Worryingly, load factors were

down in January across the board with Asia Pacific’s down 2.3 per-centage points to 49.8 per cent, Europe’s by 1.5 percentage points to 41.6 per cent, North America by 1.4 percentage points to 34.6 per cent, Latin America by 2.7 percent-age points to 32.9 per cent, Africa by 4.8 percentage points to 22.6 per cent.

Even the globe’s strongest mar-ket the Middle East saw a 0.3 percentage point fall to 39.2 per cent.

This week’s IATA World Cargo Symposium in Berlin will see dele-gates gather to discuss the industry. Tyler notes: “Without airfreight the modern globalised economy could not function. Air cargo, however, is going through a tough time. Growth has disappointed since 2010.

“And the industry as a whole faces a period of profound transfor-mation as it adapts to new digital processes, shifts in global supply chains and evolving needs for ever-more specialised types of goods.”

amazon signs agreement with atsg to run air cargo network

Volume: 19 Issue: 10 14 March 2016

aircargoweek.com

positive FTK signs but load factors falling

NEWSWEEK

2 ACW 14 MARCH 2016

Profits dive 25.6% in 2015 at Deutsche Post DHL

FREIGHT volumes at European airports have got off to a strong start in 2016, up 3.5 per cent in January, making up for the struggles of 2015, Airports Council International (ACI) Europe says.

The 3.5 per cent year-on-year growth was above the 2015 global average of 2.2 per cent. The association says the strong result was mainly because January 2015 was a weak month, declining one per cent.

ACI Europe says: “Freight traffic across the European network grew by 3.5 per cent, above last year’s average of 2.2 per cent. However, this improvement is mainly due to comparison with a weak January 2015 (minus one per cent).”

Growth among Europe’s top five freight airports, growth has been patchy. In January, Paris Charles de Gaulle Airport was the busiest, handling 152,000 tonnes, up 4.5 per cent on the same month of 2015. Frankfurt Airport saw a decline of 0.3 per cent to 149,336 tonnes while Amsterdam Airport Schiphol was up 4.7 per cent to 125,979 tonnes. Heath-row Airport increased by 2.9 per cent to 119,214 tonnes and Cologne Airport (pictured) dipped by 0.1 per cent to 59,744 tonnes.

Strong start for European airports

LATAM AIRLINES GROUP has doubled its losses to $219.2 million in 2015, and its cargo division has continued to struggle falling 22.4 per cent to $1.3 billion.

Losses increased by 99.7 per cent from $109.8 million in 2014 to $219.2 billion in 2015. In the same time, total revenue fell by 18.8 per cent to $10.1 billion.

LATAM Airlines Group chief executive officer, Enrique Cueto admits the Latin America region as a whole has struggled but he is staying positive.

In 2015, cargo revenue tonne kilometres fell by 12 per cent to 3.8 billion while capacity in available tonne kilometres was down by 1.9 per cent to 7.1 billion. In 2015, the load factor declined by 6.2 percentage points to 53.6 per cent. LATAM says cargo was hit by weakness in Brazil, and depreciation of the euro and Brazilian real.

Losses deepen for LATAM and cargo plunges

Deutsche Post DHL Group has seen profits for 2015 fall by 25.6 per cent to 1.5 billion euros ($1.6 billion), with the Global Forward-

ing division making losses due to renewing its IT system.

By division, earnings before interest and tax (EBIT) for Deutsche Post fell by 15 per cent to 1.1 billion euros while DHL was down 17.8 per cent to 1.6 billion euros. Of the DHL divisions, Express EBIT increased by 10.4 per cent to 1.2 billion euros and Supply Chain saw it drop by 3.4 per cent to 465 million euros.

Global Forwarding made an EBIT loss of 181 million euros, blamed on the 336 mil-lion euro IT renewal, which DHL says is a one-off cost.

In the fourth quarter profits were up 4.7 per cent to 640 million euros.

Deutsche Post profit measured in EBIT

was up 14.6 per cent to 487 million euros and DHL was up 2.6 per cent to 595 million euros. Despite a strong year, DHL Express EBIT was down 8.3 per cent in the fourth quarter to 348 million euros, with Global Forwarding up 39.4 per cent to 99 million euros, and Supply Chain increasing by 9.3 per cent to 176 million euros.

Deutsche Post DHL Group chief execu-tive officer, Frank Appel (pictured) says: “In

2015 we made significant progress against our strategic initiatives. Over the entire year, we have worked hard to pave the way for sustainable success in the future.”

“The positive earnings momentum we have seen in the fourth quarter once again confirms the fundamental strength of our business. We are firmly on track with our strategy.”

The group says 2015 was a transition year, laying the foundations for profitable growth in 2016 and beyond as part of Strategy 2020. Deutsche Post is investing in its parcel network to harness growth in e-commerce, it has come to a wage agree-ment with unions in Germany and increase letter postage prices. Express has invested in its network infrastructure and quality, while Global Forwarding has upgraded its IT, and Supply Chain says it has optimised business through restructuring.

aircargoweek.com

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NEWSWEEK

4 ACW 14 MARCH 2016

Premium focus for IAG Cargo

IAG CARGO is expecting excess capacity to continue into 2016, but chief financial offi-cer, Sarah Nichol and head of commercial, David Shepherd (pictured) tell Air Cargo Week (ACW) that new aircraft, the Aer Lin-gus acquisition and premium products are reasons to remain positive.

In 2015, on a directly comparable basis, cargo revenue fell by 4.6 per cent and ca-pacity increased by 6.6 per cent, but Nichol says considering the market has remained flat, this is a good result.

IAG is focusing on premium products such as Constant Climate for temperature sensi-tive produce, which has seen a 37 per cent increase in revenue and Prioritise for fast shipments, which rose by 14 per cent.

Nichol tells ACW: “We are pleased with the results, the cargo market volumes have remained flat. Our capaci-ty increased by six per cent and yield was down four per cent. We remain focused on premium products such as Constant Cli-mate and Prioritise.”

The acquisition of Aer Lingus last year has gone well, and IAG is working hard to integrate the

Irish carrier into the group. Nichol says: “As a cargo business, we are working towards integrating them into the family. We plan to complete integration in 2016.”

IAG Cargo is being helped by fleet up-grades, including the introduction of Boeing 787s and the imminent arrival of Airbus A350s. Shepherd tells ACW: “The 787 is going very well, it is a cracking aircraft. It may be a smaller passenger aircraft but it has more cargo capacity than a [Boeing] 747. It [the 787] has great economics, very fuel efficient.”

Shepherd says Asia continues to be strong, particularly in India, and IAG has not been hit significantly by the slowdown in China, as it does not offer much capacity to the country. “Relative to other players, IAG

Cargo does not have huge amounts of capacity in that market. We haven’t

seen any real falling off in demand.”As for 2016, both say yields and

volumes will remain a challenge, along with excess capacity, but they think IAG Cargo will remain in a strong position by focusing on

premium products and its revenue management system, Optima.

Sao Paulo’s Guarulhos International Airport (GRU Airport) has started an incentive programme, which includes scrapping landing fees for cargo flights.

The ‘GRU Incentives Program’ is for carriers operating routes between Guarulhos and coun-tries in Africa, North America, Asia, Europe and Oceania.

The airport says it is to encourage new inter-

national cargo flights and expand business opportunities, and exemptions will be from 27 March 2016 to 25 March 2017, for cargo only operations.

In order to qualify for the incentive operations must be outside peak hours and take place at least once a week with monthly regularity of at least 80 per cent.

GRU Airport Cargo closed 2015 with a two per cent market share growth in international air cargo. In 2014, its market share was 36 per cent and in 2015 it increased to 38 per cent between imports and exports, consolidating its position as the largest air cargo terminal in Brazil.

The hub says the goal of attracting new cargo flights is to offer a complete logistics solution to customers already operating at GRU Airport, as many types of freight can only be transported by cargo-only aircraft.

Difficult month for Air France KLM

AIR FRANCE KLM has had a difficult month in February, with revenue tonne kilometres (RTK) falling by 9.7 per cent year-on-year and declining load factors.

In February, RTK for the group was down from 726 million in 2015 to 656 million in 2016. At the same time, capacity in avail-able tonne kilometres (ATK) was down by 6.5 per cent to under 1.1 billion, with the load factor falling by 2.2 percentage points

to 60.6 per cent.For January and February combined, RTK

was down by 8.1 per cent to 1.3 billion, with ATK falling by 6.7 per cent to 2.2 billion and the load factor declining 0.9 percentage points to 58.6 per cent.

Air France KLM Martinair Cargo (AF-KL-MP) has introduced its ‘Kold Kart’ for safe transportation of cool chain products at air-ports in hot climates.

It has started using the Kold Kart in Mexi-co where high temperatures are normal and ramp operations are quite distant from the warehouse.

AF-KL-MP will be introducing the Kold Kart in other locations and says it is fully com-patible with palletised unit load devices.

The Kold Kart is designed for temperature sensitive cargo such as perishables and pharma.

Brazil hub scraps landing fees for cargo flights

aircargoweek.com

NEWSWEEK

6 ACW 14 MARCH 2016

Cargo infrastructure being expanded across the Big Apple’s gateways

DEUTSCHE POST DHL GROUP has sent its Disaster Response Team (DRT) to Fiji to help coordinate relief efforts at Suva Airport following Cyclone Winston.

The cyclone, the largest to hit Fiji in its history, has caused considerable damage to the Pacific island nation. DHL has dispatched seven volunteers from the DRT to Fiji where they will work alongside the United Nations Office for the Coordination of Humanitarian Affairs (UNOACHA).

Deutsche Post DHL Group head of international relations and disaster management, Asia Pacific, Carl Schelfhaut says the teams experience from the Cyclone Pam relief effort will help them in the aftermath of Winston. “Our volunteers are no stranger to the complex-ity posed by Fiji’s myriad islands, having managed everything from unloading to forward transportation of relief goods when Vanuatu was struck by Cyclone Pam last year.”

DHL Express in Fiji has provided four vehicles to assist in Nadi and Suva. DHL has also designated its offices as ‘public drop points’ for the public to donate clothes, blankets, outdoor equipment, food and other aid resources.

KALITTA CHARTERS has ordered a second Boeing 737-400SF conversion from Aeronau-tical Engineers (AEI), to be delivered in June 2016.

The aircraft, which was built in 1989, will be converted at Commercial Jet’s Miami facility. The converted 737-400 can accommodate 10 88 by 125 inch unit load devices, which AEI says is unique due to its main deck cargo door location being 40 inches back from the competition. AEI says this increases capacity by 10 per cent.

This is the fifth 737-400SF order AEI has received this year. In January, it received an order from an aviation fund, in February ASL Aviation ordered three 737-400SFs, one to World Star Aviation and one for JMV Aviation.

AEI gets 2nd conversion order from Kalitta

New York is expanding its airfreight facilities and invest-ing in its airport infrastructure as it targets growth across hubs in the Big Apple.

The Port Authority of New York & New Jersey’s air cargo business development manager, Michael Bed-

narz says the major focus will be John F. Kennedy International Airport (JFK), but initiatives are planned at Newark Liberty International Airport and Stewart International Airport.

At JFK, a number of developments have been completed or underway, Bednarz says: “A number of old cargo buildings at JFK were demolished to make way for new development. Devel-opment of the new animal handling facility, The ARK at JFK – a state-of-the-art facility will be unparalleled in North America - is considered as a top global animal handling facility. The ARK will offer veterinary capabilities, kenneling, and handling of equine, bovine, swine, birds and exotic and zoo animals. It will accommo-date freighter aircraft including the Boeing 747-8F aircraft. We expect it will open and operational by the early summer of 2016.”

He says there will be construction of a multi-tenant cargo facil-ity in the North area of JFK, to serve as a catalyst for the further development of new and larger facilities.

These include specialised facilities, for perishable handling and e-commerce fulfillment, as well as freight forwarding facilities.

In 2015, airfreight volumes were up 1.2 per cent at Port Author-ity airports, which included JFK’s 1.3 million tonnes, slightly less than 2014 volumes while Newark Liberty saw growth of 5.7 per cent, handling 700,000 tonnes. Approximately 56 per cent of the region’s traffic was international and 44 per cent was domestic.

Machinery and apparel continue to be the major import com-modities in terms of tonnage with pharmaceuticals in the top 10 on the import side while perishables continue to perform well.

New York’s hubs have seen over 36 per cent growth in fruits and vegetables, seafood increasing by more than four per cent, and an almost 24 per cent rise in live animal shipments.

Major export commodities in terms of tonnage, are machinery and related supplies; perishables, such as seafood and pharma continue to be strong exports from the region. Bednarz adds: “Additionally, some airline business partners have anecdotally stated that e-commerce shipments handled through forwarders, especially to China, have been particularly strong.”

Major trades for inbound cargo are China, Germany, Italy, India, and France, and for exports the UK, China, Germany, Japan, and South Korea are the top five trade partners.

Bednarz says the authority’s goal is to attract freighters, and there has been a rise in flights in 2015 versus 2014, which bodes well for its goals to attract more freighters to JFK. In 2015 Silk-way, Saudia Cargo, and Turkish Cargo began services to JFK.

JFK has some specific challenges, Bednarz says: “As freight for-warders are not typically located on airport property, as they do not have the same needs for ramp access that airlines do. Plus, it is usually costlier to be located directly on airport.

“However, the transformative stages the air cargo industry has gone through, and surely continues to go through, keeps pointing to airports as a more synergistic and efficient location for for-warders to be located on, at least in my view.”

DHL helps cyclone relief efforts in Fiji

aircargoweek.com

ACW 14 march 2016 8

A ir France KLM Martinair Cargo (AFKLMP) has been awarded Inter-national Air Transport Association (IATA) Center of Excellence for Inde-

pendent Validators (CEIV) in both Paris and Amsterdam.

The certification covers hub operations at Paris Charles de Gaulle Airport and Amster-dam Airport Schiphol, and Air France and KLM airline processes. It is the first airline group to gain the recognition at two different hubs at the same time.

AFKLMP Cargo executive vice president, Bram Graber says: “Pharma is a top priority for our airline group. In an increasingly demanding environment for – time and temperature sensitive – shipments, this certification recon-firms our commitment to offering the

highest possible quality standards in support of our customers’ business activities.”

AFKLMP Cargo product market group director for pharmaceutical logistics, Renate de Walle (pictured) says the pharma pro-gramme surpasses the Good Distribution Practice guidelines by adding “explicit air transport requirements, aiming for high-end transportation in the pharma and healthcare

industry”.IATA head of cargo, Glyn Hughes adds: “After successfully under-

going a rigorous assessment against national and international standards, we are delighted to recognise Air France Cargo and its Charles de Gaulle station

as well as KLM Cargo and its Amsterdam station as CEIV pharma

certified.”

Double joy for AFKLMPPHARMA NEWS ROUND-UP

IAG CARGO opened five Constant Climate centres for temperature sensitive pharma-ceuticals in Latin America in 2015 to cater for growing demand for the valuable prod-uct, its regional commercial manager for Latin America, Rodrigo Casal tells Air Cargo Week.

In 2015 its Constant Climate revenue grew by 37 per cent and the network was expanded to 110 stations worldwide. Of these, five were in Latin America, in Quito and Guayaquil in Ecuador, Montevideo in Uruguay, El Salvador, and Santo Domingo in the Dominican Republic.

This will expand further this year with ser-vices to Peru’s capital, Lima, and San Jose in Costa Rica from London’s Gatwick Airport on British Airways, while Iberia will start Madrid to San Juan in Puerto Rico services in May. The Gatwick – San Jose service will

operate twice a week from April and Gatwick – Lima will be thrice weekly from May.

Casal says: “Pharmaceuticals are on an upward trajectory with Peru’s pharmaceuti-cal market expected to grow to $3 billion by 2024 while Costa Rica will experience the largest increase in pharmaceutical sales over the next 10 years.

“We are supporting this growing stream of business with the launch of two new routes this year serving Lima and San Jose which will be of clear benefit to manufacturers looking to enter these markets.”

He adds: “We know that Latin America is an important high-growth market for phar-maceutical trade. Our strength in Premium products, including Constant Climate for the pharmaceuticals industry … will play an im-portant role in helping us meet the needs of our customers.”

Frankfurt talks pharma

PHARMA was on the agenda in Frankfurt when the Air Cargo Community Frankfurt presented the range of services for the ship-ment of pharma products by air at Frankfurt Airport (FRA) to BVL International (the German Logistics Association) in the Rhe-in-Main region.

The ‘Visit FRA pharma’ initiative saw 80 participants given an update on trends and developments on logistics and specifically for the transport of pharma products.

Speakers included Andreas Gmür from Camelot Management Consultants and Andreas Seitz, managing director of Do-KaSch Temperature Solutions. Dominik Misskampf, head of the Competence Team Pharma presented how FRA is committed to

the shipment of pharma and what special products and services are available.

Air Cargo Community Frankfurt executive director, Joachim von Winning says: “The pharma industry has the most demanding requirements for airfreight. Many shipments are of very high value and extremely tem-perature sensitive and they often have to get to their destination quickly.

“Frankfurt has an innovative world-class service offer that stands for speed, safety and reliability. This is what we want to make better known with ‘visit FRA pharma’. I am therefore all the more happy about our good partnership with BVL. Thanks to their sup-port we were able to welcome a lot of its members to ‘visit FRA pharma’”.

During the second part visitors saw live op-erations at the Lufthansa Cargo Cool Center and the Perishable Center Frankfurt.

Von Winning adds: “Frankfurt Airport is Europe´s number one in airfreight – nat-urally as well with pharma with more than 100,000 tonnes annually.

“We, as a community, are instrumental in securing and expanding this position in Frankfurt long-term, especially in regard to pharma companies and shippers.”

Constant LATAM expansion for IAG

aircargoweek.com

The world’s most traveled airport, Harts-field-Jackson Atlanta International Airport (ATL), is on a journey to break into the top tier of the world’s leading cargo airports.

In addition to having some of the lowest operating costs in the United States, ATL

has exceptional infrastructure, an efficient layout with five parallel runways, generous airfield capacity with round-the-clock operations, and no slot restrictions or curfews.

In 2015, ATL topped 101 million passengers. Each week, ATL accommodates nearly 8,500 departures to about 175 domestic and 70 international destinations.

Atlanta Mayor Kasim Reed has charged the ATL team with increasing its cargo operations, setting a goal to grow from its 10th place position to the top five US air-ports for cargo volume.

In 2015, Hartsfield-Jackson made strides toward this objective, handling more than 626,000 tonnes of cargo, up 4.15 per cent over 2014.

All-cargo carriers combined with passenger airlines that carry belly freight contribute to the year-round cargo traffic.

A total of four new all-cargo airlines began operations at Hartsfield-Jackson in 2015, and plans are in place for additional carriers to launch operations this year.

The ATL team stands behind what it views as its pur-pose: to serve as the Atlanta community’s chief economic development tool for the creation of jobs and the growth of wealth for its residents.

Robust cargo development helps Hartsfield-Jackson realise this mission. Air cargo is a fertile source of employ-ment and economic opportunity for metro Atlanta. According the airport’s economic impact study, ATL cargo operations support more than 27,000 jobs and generate revenue exceeding $6.7 million in metro Atlanta.

In 2015, ATL welcomed Elliott Paige, the airport’s new cargo air service development manager responsible for identifying and attracting new carriers.

ATL’s cargo route development program aims to increase overall traffic and enhance trade connectivity between ATL and global markets. This includes further development of dynamic European and Asian routes and new trade routes to Africa, the Middle East, and Central and South America.

Supporting Elliott is the airport’s Air Service Incentive

Program (ASIP) which is designed to stimulate interna-tional air cargo and passenger growth, particularly along routes that link Atlanta to the world’s fastest-growing economies and air cargo traffic.

The incentive program waives landing fees for up to two years for qualified passenger airlines starting international routes not already served from Atlanta and matches up to one-half of promotional costs, capped at $50,000. International cargo service carriers benefit from a waiver of both landing and parking fees during the same periods.

The higher tier benefits are available to carriers starting service to one of the five major emerging economies: Brazil, Russia, India, China or South Africa. Carriers starting service to other parts of Africa, Eastern Europe or Southeast Asia can also receive extra consideration.

To accommodate additional cargo growth and oper-ations, the airport has begun a capital improvement program dubbed ATL Next. In addition to a landmark terminal modernisation project and a variety of airfield initiatives, it includes plans to increase cargo warehouse space and improve landside access for trucks to pick up arriving and drop off departing cargo.

ADVERTORIAL

ATL CargoA Strategy for Growth

atlanta-airport.com

IMPORTS:Targeting origins that produce fresh fish, meats, and fruits and vegetables from South America.

EXPORTS:Targeting in-transit cargo shipments destined to Asia and Europe that originate from Central and South America and by developing a southeastern logistics hub for the health care and pharmaceutical industries.

PASSENGER SERVICE:Expanding passenger service frequencies to the same locations where targeted cargo traffic also exists.

MARKETING ATL CARGO:Marketing ATL cargo as offering world-class facilities in a competitive location to air cargo stakeholders globally.

ON-AIRPORT REAL ESTATE:Redeveloping existing real estate and potentially secure additional on-airport real estate to accommodate marked growth in air cargo volume.

CARGO FACILITIES:Building a best-in-class cargo and perishable facility to attract transportation providers and shippers to ATL to support import and export trade.

PUBLIC-PRIVATE PARTNERSHIPS:Engaging with third-party airport cargo warehouse developers to invest in cargo-facility development at ATL.

WIDEBODY AIRCRAFT:Incentivising widebody passenger and freighter service into and out of ATL to support import and export needs.

TRADE AND TOURISM:Fostering trade and tourism alliances to key destinations with key industries to help create passenger demand and lift capacity for cargo.

The Hartsfield-Jackson cargo development blueprint

ACW 14 MARCH 2016 10

A sia remains a key region for Lufthansa Cargo and it is target-ing further growth as demand rises for cross border e-commerce.

Lufthansa Cargo vice president for Asia Pacific, Frank Naeve (right) tells Air Cargo Week (ACW) the major trade lanes are China, Japan, Korea and India, which he adds form the “backbone of our services”.

The region is very important as a significant part of the carrier’s freighter production oper-ates in the region, in addition to increasing passenger belly uplift and Asia has always made a sizeable contribution to the overall profitabil-ity of Lufthansa Cargo.

China is also performing well in 2016, despite the concerns, Naeve says: “Demand into China this year has been very robust, especially in and around the Lunar New Year festivities.”

The partnership with All Nippon Airways (ANA) Cargo is developing positively, accord-

ing to Naeve with the aim of offering improved network coverage and services to customers. “A significant amount of business has already been generated due to the partnership with customer feedback being very positive,” Naeve notes.

Lufthansa Cargo is seeing export cargo driven by high-tech goods, pharmaceuticals, garments and some perishables, while imports are infra-

structure related goods, and machinery parts.The fastest growing segment is cross

border e-commerce goods and demand is increasing.

At the end of March the carrier is adding a second frequency to Ho Chi Minh City in Vietnam and an additional frequency to Hong Kong, while it is looking for more business opportunities.

India is a country in Asia performing well due to an equal balance of imports and exports and government initiatives to make doing busi-ness easier, Lufthansa Cargo regional director South Asia and Middle East, Veli Polat tells ACW.

Polat says Indian government schemes including 24/7 customs and plans for a ‘single window’ will make doing business in India much easier. He also believes the growing domestic consumption can provide huge opportunities.

Polat explains: “There are wide opportunities in India as it has a huge potential and market to grow due to high own consumption. We are fortunate to have balance between import and export tonnage in India which makes our oper-ations more viable.”

Indian exports consist of traditional goods such as garments, auto parts, carpets and leather goods, but pharmaceuticals are par-ticularly strong from Mumbai and Hyderabad.

Imports mainly consist of chemicals, elec-tronics, engineering goods, medical

supplies, spare parts and telecom-munication equipment such as mobile phones.

Opportunities and challenges exist in Asia for Lufthansa Cargo,

but Naeve says despite the regional slowdown it remains “the most

dynamic region in the world”. He adds: “As one of the largest cargo carri-

ers we see numerous opportunities to position ourselves and grow in the region. To do this, we need to act quickly and adjust our network flex-ibly as required.”

Principal challenges lay in the overall mac-ro-economic environment, which combined with overcapacities in certain markets is creat-ing downward pressure on yields.

Naeve is optimistic for Asia: “Volumes have been reasonable although our markets are very competitive. The post Lunar New Year period has been slow but we already see vol-umes picking up leading into Easter. We don’t see Asia as one homogeneous market, we feel confident 2016 will not only be full of nega-tives but also provide opportunities to expand and offer improved coverage to our customers. One example being the new Eurowings capacities.”

Asian region remains the backbone for Lufthansa CargoASIA

SWEDAVIA and CAPITAL AIRPORTS HOLD-ING (CAH) have signed a memorandum of understanding (MoU) to establish a sis-ter airport agreement between Stockholm Arlanda Airport and Beijing Capital Inter-national Airport.

The agreement is designed to share knowledge and best practice between Arlan-da and Beijing and strengthen links between Sweden and China. It was signed on 24 Feb-ruary by the president and chief executive officer (CEO) at CAH, Liu Xuesong, and the Swedavia Group CEO, Karl Wistrand.

Xuesong says he hopes CAH will be able to learn from Swedavia how to make its operations more environmentally friendly. He says: “Capital Airports Holding Compa-ny attaches great importance to the sister airport relationship with Swedavia, and CAH

is willing to learn the rich experiences of green airport, sustainable development and airport management from the counterpart.”

Wistrand says: “As environmental industry leaders we are hoping to be able to share best practices from our work on how to be-come a sustainable airport. It will also be beneficial for Arlanda to get Beijing Capital International Airports insights on airport in-frastructure and a competitive airport city development.”

CAH owns or manages over 40 airports across eight provinces in China and its air-ports handled 2.8 million tonnes of cargo in 2015. Swedavia owns Stockholm Arlanda and Gothenburg Airport, and operates and develops 10 airports across Sweden.

CAH has also confirmed its sister airport relationship with Finland’s Helsinki Airport.

aircargoweek.com

Beijing and Stockholm sign agreement

T he Cathay Pacific Group recorded a profit of six billion Hong Kong dollars ($772 million) in 2015 – up on the profit of HK$3.1 billion in 2014.

The carrier says the group’s performance in 2015 was better than in 2014, with the business benefiting

from low fuel prices.Cathay Pacific says air cargo demand, which came under pres-

sure during the second quarter of the year, remained weak in the second half.

Cargo revenue in 2015 was HK$23.1 billion, a decrease of nine per cent compared to the previous year. This mainly reflected a reduction in fuel surcharges due to lower fuel prices.

Capacity for Cathay Pacific and Dragonair increased by 5.4 per cent. The load factor decreased by 0.1 percentage points to 64.2 per cent. Strong competition, overcapacity, unfavourable foreign currency movements and the reduction in fuel surcharges put pressure on yield, which fell by 13.2 per cent, to HK$1.90.

Cathay explains that cargo demand was strong in the first quarter of 2015, assisted by industrial action at ports on the West coast of the USA, but overall demand was weak for the rest of the year, particularly on European routes.

Cathay Pacific chairman, John Slosar says: “The operating envi-ronment was better in 2015 than in 2014, but we faced some significant challenges, which we expect to continue in 2016. Strong competition from other airlines in the region, foreign cur-rency movements and weak premium class passenger demand will put pressure on passenger yield.

“Cargo demand will be adversely affected by industry overca-pacity. Overall passenger demand remains strong and we expect to continue to benefit from low fuel prices. Our subsidiaries and associates are expected to continue to perform well.

“We are confident of lon-ger-term success, and we will continue to help our passen-gers to travel well. In January 2016, we announced that Drag-onair is to be rebranded as Cathay Dragon, as part of an effort to create a more consis-tent travel experience between the two airlines.

“We will continue to invest in aircraft, in our products and in

the development of our network. Our financial position is strong. Supported by our world-class team, we remain deeply committed to strengthening the aviation hub in Hong Kong, our home city for the past 70 years.”

In 2015, Cathay Pacific took delivery of six Boeing 777-300ER aircraft and three Airbus A330-300 aircraft. In 2013, Cathay Pacific agreed to buy six Boeing 747-400 Freighters from Boeing. Two have been delivered and the remaining four will be delivered by the end of 2016. At 31 December 2015, the airline had 70 new aircraft on order for delivery up to 2024.

Profit surge in 2015 for Cathay, but cargo revenue falls

11ACW 14 MARCH 2016

ASIA

YUSEN LOGISTICS INDONESIA has opened air import op-erations at Jakarta’s Halim Perdanakusuma International Airport.

Yusen says the Halim service will improve urgent delivery requirements with the airport based in Central Jakarta, close to the East Jakarta Industrial Zone.

Services will include enhanced visibility and transport management controls, such as freight status tracking at the airport bonded area, customs clearance and supervised ve-hicle loading.

Yusen says delivery times will be considerably reduced due to road transportation to Halim being much faster than to Soekarno-Hatta International Airport.

This is Yusen’s second expansion in Indonesia in less than a month; on 25 February it started consolidation airfreight forwarding from Semarang’s Achmad Yani International Airport.

It says due to the poor infrastructure and Semarang’s vul-nerability to flooding, the airfreight service will prove much more reliable than road transportation.

Chicago for China EasternCHINA EASTERN AIRLINES is to increase US services with a daily bellyhold flight between Chicago (US) and Shanghai (China) from 18 March.

The airline will use a Boeing 777-300ER on the ser-vice between Chicago O’Hare International Airport and Shanghai Pudong International Airport, making it the only Chinese carrier to directly connect Chicago and Shanghai.

China Eastern Airlines chief marketing officer, Dong Bo says: “We keep the guest [at the] top of [our] mind at every touch point, and are proud to be the only Chinese airline to offer this direct route between Chicago O’Hare International Airport and Shanghai Pudong International Airport.”

On 26 February, China Eastern took delivery of the first of 30 Boeing 737-800 Next Generations.

Jakarta operations for Yusen

aircargoweek.com

ACW 14 MARCH 2016 12

Brussels Airport (pictured) has seen two years of strong growth, but airline departures means the future could be challenging, head of cargo, Steven Polmans tells Air Cargo Week (ACW).

In 2015, cargo volumes increased by 7.8 per cent to 489,303 tonnes, because of large increases in freight traffic. In January and February, the airport saw cargo volumes fall by 2.1 per cent to 74,735 tonnes.

Freighter traffic for the first two months fell by 13 per cent to 19,254 tonnes, which it says was entirely due to Ethiopian Cargo departing for Maastricht Aachen Airport. When releasing its February figures on 8 March, the airport said it hoped that due to a bilateral agreement with Ethiopia, Ethiopian Cargo may return to Brussels.

Polmans explains: “With the departure of Ethiopian [at the] end of last year, the lack of capacity of DHL for fur-ther growth until their new facility is ready and the announcement of Jet Airways to discontinue their hub operations in Brussels, this will be a challenging year.”

He expects the first two quarters will be difficult though Brussels aims to see small growth for 2016. This will depend on how quickly Jet’s capacity can be filled and if Ethiopian can be tempted back, or replaced.

Polmans predicts bellyhold traffic will be strong, with Etihad increasing services to double daily, United Airlines and Brussels Airlines adding capacity and the latter considering fly-ing to India.

Polmans comments: “Full cargo will be more difficult: I am expecting growth next year on the integrator side when the new facility of DHL Express will open, but not that much this year.”

Whatever happens in 2016, Polmans says Belgium is focus-ing on logistics, with its airports and seaports. According to the World Bank list of logistical countries, Belgium has moved from 15th in 2007 to third in 2015.

Polmans says: “On the next list, our aim is clearly to be at least

number two. With many distribution centres, low overall costs, good connec-tions to our neighbouring countries, we offer some huge opportunities to our industry.”

The main imports and exports have remained the same, largely consisting of automotive, chemicals, machinery, spare parts, pharmaceuticals, e-com-merce, perishables and consumer goods. He tells ACW: “These flows have been pretty stable over the last years, only on e-commerce and pharma we have seen above average growth both on import

and export. Also in the near future we expect to see the same growth on

both of these flows.”Brussels has the advantage

of a good geographical loca-tion in both Belgium and Europe, and offers con-nectivity on integrator,

freighters and bellyhold capacities. The cargo zone has

a large variety of forwarders and BRUcargo almost operates as

a separate cargo airport with functions and facilities centralised in one area.

Polmans tells ACW: “The airport is paying a lot of attention and interest in developing the cargo in a very active way. Although [there is] no 24 hours full flexibility at our airport, we do have a sufficient flexible system allowing cus-tomers to operate from our airport as shown by many operators including DHL Express.”

Challenges ahead following years of growthBELGIUM

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Liege Airport (pictured) saw growth of 10 per cent in 2015 and has followed this up with a year-on-year increase of six per cent in January, the hub’s cargo and logistics manager, Bert Selis (pic-

tured) tells Air Cargo Week (ACW).Selis was very happy with 2015, as the aim

had been to consolidate the five per cent growth seen in 2014. He says: “The significant growth is mostly the result of rising volumes of existing partners and customers. Their choice to operate their freighters out of Liege clearly triggers new opportunities for them.”

“The flexibility to operate freighters in the best possible conditions, day and night, and the handling performance allowing the product to spend the least possible time at the airport are key to success and key growth factors” he explains.

In January, Liege handled over 50,000 tonnes of cargo. Selis says the timing of Chinese New Year means it is hard to draw too many conclu-sions from this, it is certainly a promising start to the year.

“We always look at January and February as one period. Still, we certainly feel we had a good take off.”

Liege, which operates 24 hours a day with no night restrictions, primarily handles perish-ables, live animals, pharmaceuticals and express & parcels. It also operates charters and project cargo such as oil and mining. Pharmaceuticals are increasingly important, helped by the three handling agents, Aviapartner, Liege Air Cargo Handling Services and Swissport becoming International Air Transport Association Cen-ter of Excellence for Independent Validators (CEIV) certified.

Over the coming years, Liege will be expand-ing facilities. It is constructing a horse facility, known as ‘The Horse Inn’, and is building 13,000 square metres of warehousing.

The main extension is the ‘Flexport City’ as part of the cargo and logistics area at Liege Air-port. The first phase of development became

available from December 2015, with 300,000 square metres of land for logistics activities, which should be operational by the first quarter of 2017.

Longer term, when phase two is ready by 2020, and phase three by 2022, Liege will have 850,000 square metres of logistics land directly

connected to the airport.Selis tells ACW: “This area is part of the air-

port development masterplan and is entirely dedicated to the handling and consolidation of air cargo, pharmaceutical products, perishable products and parcels/e-commerce business.”

The Belgian government has ambitious plans to develop the region around Liege. Selis explains: “The real government master-plan however is the development of 4,700,000 square metres of land around Liege Airport in the coming 15 years.

“Together with Liege’s Trilogiport devel-opment, a major inland container terminal operated by DP World, Liege is positioning itself as the cargo hub of the future.”

In the meantime, Selis says though Belgium is competitive, with three airports competing for the same market, and strong competition in neighbouring countries, he says Liege focuses on cargo.

“Liege Airport is open 24/7 and has no night curfew. Airlines are not hampered by slot requirements.

“Liege Airport gives priority to freighter oper-ations, both scheduled and charters. The airport and all the service providers at the airport, have freighter operations as the one and only core business.”

“The scale of the airport guarantees plenty of con-nections are available by air and road, while the freighter-only approach makes sure transit times are still minimal, compared to passenger airports.”

BELGIUMContinous expansion will allow Liege to keep on growing 24/7

13ACW 14 march 2016aircargoweek.com

ACW 14 march 2016 14

The cool chain sector is growing, fuelled by the rising movement of pharmaceu-ticals, and investing in infrastructure is becoming a high priority across the supply chain.

Cool Chain Association (CCA) chairman, Sebastiaan Scholte (pictured) tells Air Cargo Week more and more airlines seem to focus on pharma, mainly driven by better yields and growth opportunities, but in absolute volumes, the perishable market is still a lot bigger than healthcare.

Scholte notes the biggest air cargo trade lanes for pharma remain between Europe and the US, while the Asian markets, like India and China have shown robust growth in recent years.

He says according to Seabury the biggest growth lanes for pharma by air last year were Europe to North America (increasing nine per cent) and from North America to Asia (up 15 per cent), whereas from Europe to Asia there

was a decline of 10 per cent.The biggest flows for perishables

remain from Latin America to the US and Europe and from Africa to Europe, and intra-Asia, while Seabury says the biggest trade lane for perishables is still from Latin America to North America, but it grew only one per cent last year.

The second biggest trade lane is from Africa to Europe, which saw growth of 20 per cent, but intra-Asian growth remained flat last year, whereas the trade lane from Latin America to Europe decreased by five per cent.

However, Scholte says improvements are needed in the industry: “Shippers have been complaining about a lack of common quality standards, mainly for pharmaceuticals. There are now different common quality standards in place, like GDP [Good Distribution Practices]

and recently CEIV [Center of Excellence for Independent Validators], which

focusses more on the air cargo sup-ply chain.

“The latter is gaining momentum in the industry where more and more companies are getting the

CEIV certification. It is now a ques-tion of getting enough critical mass

of certified companies, allowing an end-to-end cool chain that is aligned to

the same set of quality standards.”He feels the weak link remains operations

at the tarmac, but adds: “It is good to see that at certain airports they now have temperature controlled dollies in order to avoid temperature deviations during the tarmac transport between the cargo warehouse and the aircraft.

“For airports in moderate climate zones a thermal cover or a passive transport dolly are enough, whereas airports in more extreme hot or cold climate zones active temperature con-trol is required. Equally important is the pharma mindset of the staff handling the cargo. Training can increase awareness and avoid mishandling.”

There is a need to improve temperature con-trol at the tarmac in the opinion of Scholte, as he says not all the handling agents can invest in cool facilities at every airport. “In smaller air-ports the relative small market does not justify the investment for more handlers,” he adds.

Better meeting the needs of shippers is some-thing many in the industry feel is pivotal for air cargo operators, which he agrees with.

“We need to listen more to the shippers. At the end they pay the final bill. Additionally sub-optimising only part of the cool chain is not a solution. Therefore only by collaborating between the different partners in the cool chain a reliable and transparent cool chain service will be guaranteed,” Scholte says.

There are a raft of challenges and opportu-nities across the cool chain air cargo sector, notably the need for visibility and standards, which is still proving a big challenge.

Scholte says shippers do not always know where and how their products will be handled in a complex supply chain involving many han-dover points: “Temperature loggers will register the temperature deviations, but the failure will only be visible upon arrival at final destination. The growth of this sector is an opportunity. Demographics more than economics define the growth.”

And challenges with perishables remain, such as imbalances in the air cargo flows, as more is being exported from Colombia, Ecuador and Kenya than being imported by air, while weather remains a factor that influences volumes.

“The other issue, especially with perishables is that there is more seasonality than with gen-eral cargo, which makes it harder for airlines with freighters to allocate the right capacity according to the demand,” Scholte says.

As for where the CCA is and plans for 2016, he says it is the association’s goal to foster col-laboration, networking, share information, and create awareness in the cool chain sector through the two conferences a year, one on pharma and the other on perishables.

Due to the increased global demand and attention, the CCA is organising events outside Europe as well and last year it had a perish-

able conference in Miami (US) and in 2016 it will have a pharma con-ference in Dubai in September. It will have an extra conference on air cargo cool chain issues in Dallas (US) in December.

Scholte says the most important issue moving forward for CCA mem-bers is simple - they want to see more visibility and to know where their cool chain shipments are and what the sta-tus is of their shipment.

The cool chain sector is certainly thriving in pharma and perishables, but more investment is clearly needed across the supply chain to tap into the opportunities on offer and win busi-ness from other transport modes.

COOL CHAIN

Trouble at the tarmac Seasonality

Pharma driving cool chain sector, but investment needed

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