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DHL profits climb 29.1% in Q1

60 secondswithdavid kerr

future lookingbright foracs

big plans at fcsas it targetsexpansion

digitisation thefocus this year for lufthansa

The weekly newspaper for air cargo professionals

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DEUTSCHE POST DHL GROUP has seen profits increase by 29.1 per cent to 639 million euros ($728.4 million) despite revenue falling due to negative currency effects and lower fuel surcharges.

Revenue fell by 6.1 per cent to 13.8 billion euros with Global Forwarding and Supply Chain seeing the biggest revenue falls. Global Forwarding saw revenue fall by 12.2 per cent to 3.3 billion euros and Supply Chain was down by 13.9 per cent to 3.4 billion euros, but Post was up by 2.4 per cent to 4.2 billion euros and Ex-press up 0.3 per cent to 3.2 billion euros.

Deutsche Post DHL Group chief execu-tive officer, Frank Appel says: “We’ve had a good start to the current year. With an EBIT [earnings before interest and tax] of 873 million euros we have registered the strongest first quarter in our history.

“The efforts we made in 2015 to posi-tion ourselves for profitable growth in all divisions are paying off. Last year was a year of transition, and we are now firmly on track to achieve our targets for 2016.”

Express EBIT was up 7.5 per cent, and Global Forwarding and Supply Chain both doubled to 51 million euros and 127 mil-lion euros, respectively.

The UPS Foundation has given an $800,000 grant to trial drone deliveries of live-saving medicines with robotic company, Zipline, and Gavi, the Vaccine Alliance, to be trialled in Rwanda.

The Rwandan government will start using Zipline drones later this year, which can make

up to 150 deliveries per day to 21 transfusing facilities located in the Western half of the Afri-can country.

The Rwandan drone network will initially focus on blood supplies but the plan is to expand it for other vaccines including treat-ments for HIV/AIDS, malaria, and tuberculosis

among others.Zipline chief executive officer (CEO), Keller

Rinaudo says: “The inability to deliver life saving medicines to the people who need them the most causes millions of preventable deaths each year. The work of this partner- ship will help solve that problem once and for all.

“With the expertise and vision of UPS, Gavi and Zipline, instant drone delivery will allow us to save thousands of lives in a way that was never before possible.”

Gavi, the Vaccine Alliance CEO, Dr Seth Berkley says: “It is a totally different way of delivering vaccines to remote communities and we are extremely interested to learn if UAVs can provide a safe, effective way to make vac-cines available for some of the hardest-to-reach children.”

Price-fixing settlements paid out in the US passes $1.2 billion

Air New Zealand is the latest carrier to settle as part of a US antitrust lawsuit over price-fixing after

agreeing to payout 51 million New Zealand dollars ($35 million).

This leaves Air India as the only outstanding carrier in the long-run-ning litigation case brought by airfreight buyers, in which a case is still pending against.

The Air NZ settlement in the Air Cargo Shipping Services Anti-trust Litigation, is subject to court approval by United States District Court for the Eastern District of New York. The settlement is the 27th to be paid out over the last decade.

In 2011, Air NZ successfully defended its position with the US Department of Justice, and was released from its criminal investi-gation, but after 10 years of arguing the validity of the civil compensa-tion lawsuit in US courts, it decided to settle with freight forwarders.

Media reports in New Zealand report it settled rather than take the risk of a potentially “very material” commercial liability by continuing

to defend its position and mitigate an unacceptable risk it created. Air NZ has not admitted being part of the conspiracy.

Legal firm Kaplan Fox & Kilsheimer, one of the four co-lead counsel representing a class of direct purchasers from defen-dants, says the total now settled for by air cargo carriers exceeds more than $1.2 billion.

Defendants have been seeking settlements of air cargo shipping services for shipments to or from the US between 1 January, 2000,

and 30 September, 2006. They have sought compensation for alleged overcharges of air cargo fuel and security surcharges sustained as part of a price-fixing conspiracy.

Of the 26 defendant groups totaling more than $1.2 billion, set-tlements with 24 defendant groups for $1.04 billion have been granted final approval by the court.

Settlements with Air China and Air China Cargo and Polar Air Cargo, Polar Air Cargo World-wide, and Atlas Air Worldwide reaching $150 million - have been

granted preliminary approval by the court.

Polar Air Cargo, which along with Polar Air Cargo Worldwide and Atlas Air Worldwide Holdings agreed on a $100 million settlement.

Korean Air has paid out $115 million, while other big settle-ments have included EVA Airways ($99 million), Singapore Airlines ($92 million), China Airlines ($90 million), British Airways ($89 mil-lion), Lufthansa ($85 million), and Air France-KLM-Martinair ($87 million).

Drones to be trialled in Rwanda to deliver life-saving drugs

Volume: 19 Issue: 19 16 May 2016

aircargoweek.com

NEWSWEEK

2 ACW 16 may 2016

DSV posts better than forecasted Q1 figures

EMIRATES has seen profits increase by 56.4 per cent to 7.1 billion dirhams ($1.9 billion) for the 2015-16 financial year, but revenue plunged for its cargo arm Emirates SkyCargo due to weakening yields.

Revenue for the group was down by 4.3 per cent to 85 billion dirhams, due to currency devaluations against the US dollar and adjustments following falling fuel prices.

Emirates SkyCargo saw its revenue fall by 9.4 per cent to 11.1 billion dirhams with yields falling due to weakening of major currencies, despite volumes increasing by six per cent to 2.5 million tonnes.

During the year, Emirates SkyCargo expanded its network to Mexico City, Ho Chi Minh City, Ahmedabad (India), Columbus (US), Algiers and Ciudad Del Este (Paraguay), in addi-tion to bellyhold capacity on passenger routes.

Dnata also broke the one billion dirhams profit mark for the first time in its history, and revenue increased to 10.6 billion dirhams. It increased its global presence by acquiring Aviapartner’s cargo business at Amsterdam Airport Schiphol; Ground Handling SPA at two Milan airports, and RM Ground Services in Brazil.

FEDEX EXPRESS has opened its FedEx Cold Chain Centre at the FedEx Express World Hub in Memphis, to cater for expected double-digit growth in cold chain logistics to Europe.

The 83,000 square foot facility is designed to protect the integrity of temperature sen-sitive healthcare shipments and forms an integral part of FedEx’s cold chain network and includes temperature controlled areas for different ranges.

Other features include separate areas for healthcare shipments, real-time monitoring, an international document agent, palletising, staging, handling and breaking down areas, dry ice replenishment, cross dock station and a cold lock dual door.

FedEx Express vice president of global trade services, Richard Smith says cold chain logistics is a “game changer” for the healthcare sector.

New cold chain centre in Memphis for FedEx

Danish freight forwarder, DSV saw airfreight volumes rise in the first quarter (Q1) of 2016 – in its first period since buying UTi World-

wide for $1.35 billion on 22 January 2016.The world’s fourth largest forwarder

says its Air & Sea Division delivered the best performance in Q1 reporting organic growth of 3.6 per cent compared to Q1 in 2015.

The division saw an increase in air-freight tonnage of approximately 71 per cent in Q1 in 2016 to 122,817 tonnes, compared to Q1 in 2015, of which it notes around 66 per cent of the growth origi-nates from UTi.

Airfreight revenues increased by 50.2 per cent to 3.2 billion Danish Kroner (DKK) ($490 million) and air gross profit was up 73.1 per cent to 888 million DKK.

Overall forwarding saw revenues

increase by 30 per cent to seven billion DKK and earnings before interest and tax rose 6.7 per cent on Q1 2015 to 414 mil-lion DKK.

DSV chief executive officer, Jens Bjørn Andersen says: “As anticipated, UTi con-tributed a loss in the first months of the year, but the existing DSV operations con-tinued the positive development of 2015.”

Meanwhile, net profit rose year-on-year

by 10.9 per cent to 13.1 million Kuwaiti Dinars (KD) ($43.4 million) in Q1 of this year at Kuwaiti logistics firm Agility, while revenue for Q1 was 298.8 million KD, a 6.1 per cent fall.

Agility’s earnings before interest, taxes, depreciation and amortization (EBITDA) was up 12.1 per cent, to 26.2 million KD, compared with Q1 in 2015.

Agility chief executive officer, Tarek Sultan says: “Our longer-term target is to reach an EBITDA of $800 million by 2020. We have a demanding road ahead to achieve this target, but have defined a clear strategy and roadmap to meet this goal.

“We continue to improve our financial performance by focusing on growing our Infrastructure portfolio of companies and simultaneously driving transformation of our core commercial logistics business.”

Revenue fall for Emirates SkyCargo

aircargoweek.com

NEWSWEEK

3ACW 16 MAY 2016

A tlas Air Worldwide Holdings has recorded a net income of $7.7 million for first quarter (Q1) of 2016 endeing 31 March, 2016, compared with $25.8

million in Q1 last year.Total operating revenue in Q1 2016, was $418

million, down on the $444 million in Q1 2015.Atlas says in the charter market, results on a

year-over-year basis were indicative of its abil-ity to capitalise on the very strong demand for freight in the first half of 2015, which was driven by throughput issues at US West coast ports.

The company says lower revenue per block hour during the period was primarily due to a reduction in fuel prices in 2016 and the impact of higher rates related to the US West coast port disruption in 2015.

Atlas notes given the seasonality of airfreight demand, it expects the majority of its earnings in 2016 to be generated in the second half. Unlike 2015, which benefited from increased

first-half demand driven by US West coast port congestion, it anticipates results in 2016 will be more reflective of historical patterns.

President and chief executive officer, William J. Flynn says Q1 was in line with expectations and its outlook for growth in 2016, including the immediate earnings contribution it expects from its acquisition of Southern Air Holdings, which it closed on 7 April.

Flynn says: “As we also announced today, we are excited to begin a strategic, long-term rela-

tionship with Amazon. Our agreements with Amazon to provide and to operate 20 Boeing 767-300 converted freighters, in support of the continuing expansion of Amazon’s e-commerce business and to enhance its customer-delivery capabilities, are expected to be meaningfully accretive to our future earnings and cash flows.

“We expect this service to begin in the second half of this year, become accretive starting in 2017, and scale up to full service and full accre-tive benefits through 2018.

“In addition to being immediately accretive, our acquisition of Southern Air with its highly complementary 777 and 737 aircraft operat-ing platforms will provide a broader array of services for customers and new avenues of busi-ness growth for us.

“We are eager to capitalise on our ongoing ini-tiatives and our opportunities with Amazon and Southern to drive substantial value and benefit for customers.”

Income rise for Atlas as it looks to capitalise on investments

AIRPORTS in Europe have seen freight volumes increase by 2.1 per cent in the first quarter despite March remaining flat, Airports Council International (ACI) Europe says.

During the first three months of 2015, Paris Charles de Gaulle Airport was the busiest hub with volumes increasing by 4.9 per cent to 479,041 tonnes, ahead of Frankfurt Air-port, which saw a fall of 1.5 per cent to 475,550 tonnes. Amsterdam Airport Schiphol remained third largest, with a 0.8 per cent increase to 389,042 tonnes, while Heath-row Airport was up 0.4 per cent to 372,299 tonnes. Cologne-Bonn Airport rounded out the top five, with a 1.7 per cent increase to 180,452 tonnes.

ACI Europe director general, Olivier Jankovec says airports have been performing well despite security and geopolitical concerns. He says: “As long as these risks remain in check and with oil set to remain affordable, we remain positive about the traffic outlook for the rest of the year.”

“The fact that airports are now keenly focused on improv-ing their competitive positions and are fighting to attract new traffic also plays an important – and often overlooked – role in maintaining the growth momentum.”

WorldNewsPETER ULBER has been elected Panalpi-na chairman, succeeding Dr Rudolf Hug, who is retiring. Ulber was confirmed as chairman by the board of directors, suc-ceeding Hug, who had been chairman since 2007 and did not stand for re-elec-tion due to age limitations.Ulber will continue as chief executive officer until 1 September when his des-ignated successor, Stefan Karlen takes over.

AIR FRANCE KLM ended its slump in volumes with revenue tonne kilometres (RTK) rising by 0.9 per cent in April. Cargo in RTK was up by 0.9 per cent to 709 million in April while capacity in available tonne kilometres was down two per cent to 1.1 billion. The load factor rose 1.7 percentage points to 60.9 per cent.

21% revenue rise in Q1 for ATSGAIR TRANSPORT SERVICES GROUP (ATSG) has seen rev-enues surge by 21 per cent in first quarter (Q1) of 2016 to $177.4 million.

The aircraft lessor says results are up to 31 March, 2016 and excluding revenues from reimbursed expenses, reve-nues rose 18 per cent.

This increase included contributions from five more dry leases of Boeing 767 cargo aircraft with external cus-tomers, and expanded air network operations for ATSG’s newest customer, Amazon Fulfillment Services (AFS), a subsidiary of Amazon.com.

Adjusted EBITDA (earnings before interest, taxes, de-preciation and amortization) from continuing operations increased 11 per cent to $51.3 million, which was a first-quarter record.

ATSG president and chief executive officer, Joe Here adds: “Margins were affected in part by revenue/expense timing factors. We project margins to improve in the second half as we complete more dry leases and deploy additional freighters into the Amazon network.”

Q1 freight boost forEuropean hubs

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NEWSWEEK

Q atar Airways has taken delivery of its 50th Boeing 777, bringing its fleet to 180 single aisle and widebody aircraft.

The airline first ordered 777s back in 2006, when it flew to 50 destinations, and says the aircraft has been invaluable, as it has increased its network to over 150. Qatar Airways has been using 777s on long and ultra-long haul routes, and it will be using a 777 on its Doha – Auckland service, which at 18 hours 20 min-utes, will be the longest commercial route in

the world. Qatar Airways Cargo also has nine Boeing 777 Freighters.

Qatar Airways continues expanding its bel-lyhold network by connecting its hub in Doha the Australian city of Adelaide using an Airbus A350. It is the fourth Australian city served by Qatar, having started flights to Melbourne in 2009, Perth in 2012 and Sydney this year. The new service will offer 80 tonnes of belly-hold cargo capacity a week, adding to the 450 tonnes available on the Boeing 777s Qatar to Melbourne, Perth and Sydney.

4 ACW 16 may 2016

Cargo flying high at MAG airports

THE MAG Group has seen cargo volumes surge in April compared to the same month last year at Manchester Airport, East Midlands Airport and Stansted Airport (above).

Manchester handled 9,202 tonnes, a year-on-year (YOY) rise of 8.9 per cent, Stansted processed 20,826 tonnes, a YOY uplift of 12.6 per cent and East Midlands handled 27,198 tonnes, which was a 4.4 per cent YOY increase.

Manchester Airport chief executive of-ficer (CEO), Ken O’Toole says: “It’s been another strong month for growth and it sets the tone for what we hope will be a record summer for Manchester Airport.”

He adds: “It is pleasing to see the airport play such a positive role in driving the visi-tor economy of the North West in this way.”

Stansted Airport CEO, Andrew Cowan says the summer will be very busy and exciting.

New Boeing 777 and Australian route for Qatar

ICAO calls on aviation expansion

THE International Civil Aviation Organiza-tion’s (ICAO) secretary general Dr. Fang Liu says aviation is a catalyst for socio-econom-ic development and is particularly critical to the economies of landlocked countries.

She was speaking during a recent mission to Burkina Faso in Africa, where she held meetings with the country’s prime minister, Paul Kaba Tieba.

Liu explains: “The development of safe, secure, and efficient air connectivity is a strategic global objective for ICAO as it is a vital lever for development. For landlocked countries in particular, such as Burkina Faso, aviation should be identified as a pri-ority sector within its national strategy.

“Through our No Country Left Behind pro-gramme and the support of our Regional Offices, ICAO is committed to facilitating all Member States’ efforts to improve their air services through greater compliance with the global standards.”

Liu also encouraged the government to provide appropriate infrastructure and to fa-cilitate air connectivity for the transportation of passengers and cargo, in coordination with other transport modes.

She adds: “The government must pur-sue strong support for the aviation sector, including continuous compliance with ICAO standards and recommended practices.

“Burkina Faso’s role within the implemen-tation of ICAO’s continental strategies – the Comprehensive Regional Implementation Plan for Aviation Safety in Africa (AFI Plan) and the Comprehensive Regional Imple-mentation Plan for Aviation Security and Facilitation in Africa (AFI SECFAL Plan) – is particularly essential.”

She called on the Burkina Faso govern-ment to lend support to the establishment of a Regional Aviation Safety Oversight Or-ganization (RSOO) for States of West African Economic and Monetary Union (UEMOA).

aircargoweek.com

Justin Burns ACW: How was business in the first quarter (Q1) of 2016?Kerr: Etihad Cargo continues to grow, with tonnages increasing five per cent year-over-year in Q1. Market yields remain under pressure, however Etihad Cargo continues to improve against the market trend.At the end of 2015, Etihad Cargo’s freight and mail volumes had risen four per cent to 591,000 tonnes. It accounted for 88 per cent of air cargo imports, exports and transfers at Abu Dhabi International Airport last year, while enhancing its global reach by offering bellyhold capacity on six new passenger routes.Etihad Cargo also expanded its freighter services to several new markets including Dakar, Nouakchott and Douala in Africa.

Justin Burns, ACW: What have been the strong cargo lanes and where are load factors high?Kerr: Freight volumes out of Europe have been strong in Q1 with 11 per cent growth, led by markets in Italy (+28 per cent) and Germany (+7 per cent), which reflects our partnerships with equity partners such as Alitalia and Air Berlin. Another strong region for us remains South Asia Pacific specifically Thailand at (+27 per cent) and Australia at (+35 per cent).

Justin Burns, ACW: In what sectors is Etihad seeing growth?Kerr: There are several strong areas we are targeting such as temperature control where we are increasing our offer having launched our specialised TempCheck product directly for this growing area of the industry last year. We specialise in the movement of pharmaceuticals and it has required significant investment throughout our network to ensure our facilities are up to the regulated standards required. TempCheck is continuing a strong growth performance and is up 22 per cent against last year, while February 2016 was a record month.In addition, areas such as chemicals, automotive and fresh produce remain vibrant and we are aiming to provide stronger support to these industries during the year ahead. Justin Burns, ACW: How will your new Boeing 777 Freighter from Milan to Bogota boost business?Kerr: The service has been running since November 2014 with a wet lease B747, and this is the first time Etihad’s own aircraft has operated on the sector.The aircraft is capable of transporting over 100 tonnes of cargo on each flight and has already strengthened the cargo division’s network between Europe and South America.Through our partnership with Avianca with their hub in Bogota,

we’ve been able to offer integrated connectivity to the region for a sustained period and we see many more opportunities to grow across South and Central America with our partner.

Justin Burns, ACW: What are the biggest challenges and opportunities for Etihad Cargo?Kerr: The sector is competitive and we work in a very competitive region alongside some of the fastest growing airlines, and their supporting cargo divisions. While there remain many challenges

in emerging markets and there are several areas of geopolitical threats putting pressures on trade lanes for several cargo operators, we continue to outperform the market.On opportunities, the US market is recovering well and we are growing our services to and from the US on these important trade lanes. That is being done with our own aircraft and those airlines we partner with such as Air Berlin.

We continue to work on upgrading facilities at Abu Dhabi Airport through our subsidiary EAS Cargo, which will be a key component of our growth story over the next few years.

Justin Burns, ACW: Where are you going to invest this year?Kerr: We’re continuing to invest in our specialised product range. The division has developed several industry-specific products called ‘Sky Stables’, ‘TempCheck’, ‘Safeguard’ and ‘FastTrack’ which offer dedicated teams involved in the movement of horses, pharmaceuticals, valuables and priority handling. They have been very successful and we believe there are more opportunities out there for us to expand.For our cargo fleet, we have added two new freighters this year. The two new aircraft have additional seats for stable grooms, which has enabled us to expand our SkyStables product. It has allowed us to operate charters for the movement of high quality equines with space for a greater numbers of horses per flight. Sky Stables increased over 50 per cent on the last year.New passenger destinations have commenced to Istanbul Sabiha Gokcen, Rabat and a third daily A380 service to Heathrow. The airline will shortly add two new A380 destinations of Mumbai and Melbourne. New 787 will start flying to Düsseldorf, Perth, Shanghai, Istanbul and Johannesburg during the summer.

5ACW 16 may 2016

Middle Eastern carriers have been growing their cargo divisions and Etihad Cargo is one of the strongest performing in the marketplace.Air Cargo Week spoke to Etihad Cargo’s vice president, David Kerr about how this year has started and where it aims to grow.60 withdavid kErr

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ACW 16 MAY 2016 6

A ir Charter Service (ACS) continues to grow strongly and is upbeat about its future pros-pects in the ever-unpredictable and changeable air charter market.

In 2015, operators like ACS had business boosted in the first quarter by the US West Coast port strikes, while providing help and supplies to the various humanitarian disas-ters that took place in Nepal and in other crisis-torn countries.

Last year, ACS saw a 10 per cent increase in turnover, achieving just over $480 million in the year ending 31 January, while it posted a gross profit of $60.2 million in the year, a 28 per cent rise on the $47.2 million in 2014.

Overall profits were up 60 per cent year-on-year with EBITDA (earnings before interest, taxes, depreciation and amortization) growing from $7.3

million the previous year to $11.7 million.ACS’s commercial director, Justin Lancaster (pictured) tells Air Cargo

Week (ACW) the business was strong across all divisions including cargo. The company saw a 36 per cent increase in the number of char-ters and a 35 per cent growth in gross profit last year.

He explains to ACW: “We never know what is going to happen week to week, but at the moment it is really positive across all offices and

regions for us.”Lancaster says ACS is now seeing a return on the investments it made

across the company during and since the 2008 recession, and he forecasts a repeat performance in 2016.

He says: “With oil prices and macro economic situation we are positioned well and the mar-ket could be strong, but it will be similar to last year and the future is bright. When the oil prices increase then that will help the situation and we will keep making investments in our infrastructure, people and business.”

The global expansion strategy has driven business growth and ACS now has 20 offices after open-ing at three new locations over the past 12 months, in Geneva, Miami (US) and Sydney (Australia).

Lancaster explains: “We have taken a pump with cargo in some offices that have turned out really well. If we had not expanded our cargo reach into other regions it might be tougher in the downturn.

“We do not have any assets and it is all about the people and building and developing relation-ships with clients.”

The first quarter (Q1) of this financial year is likely to be down on last year, as the US West coast port strike at the beginning of 2015 buoyed business, and Lancaster is under no illusions of the positive impact it had on ACS in Q1 last year: “The port strike had such as big impact and I cannot see anything that can reach that kind of revenue this year.”

But he is positive as the unpredictable charter market always throws up an opportunity some-where for operators, which ACS will look to exploit. Lancaster says there is always likely to be some kind of event that air charter brokers can benefit from.

One particularly unpredictable sector is humanitarian relief charters and ACS recently operated charters to Ecuador last month to provide supplies and aid after the South American country was struck by a 7.8-magnitude earthquake, killing and injuring many.

Lancaster says that ACS did quite a few charters into Ecuador for different agencies working with relief efforts, although it was not on the scale of earthquake disasters in January 2010 in Haiti and in April last year in Nepal, which it operated charters to.

He notes that operating charters for humanitarian relief efforts boosts the business and he says ACS is in a position to offer assistance to any non-governmental organisation (NGO) or government.

Lancaster says humanitarian charters are a part of the business ACS is “proud” to be a part of as it feels like it is helping people and areas of the globe that are going through a crisis.

He explains: “It is life and death when you are doing these charters. Profitability wise it does not have much of an impact on the company, but for turnover it does.

“Humanitarian disasters are not something we wish too happen due to their nature and we do not benefit, but you feel like you are doing something worthwhile by putting on charters to provide assistance where they take place.”

Interesting charters over recent months for ACS have been moving more than 17 tonnes of ham to Puerto Rico after someone on the island forgot to put in their usual order. Last month it stopped over 200 designer dresses being more than fashionably late by flying them from Milan to Paris for the Paris Fashion Week.

ACS looks a sure bet for success in the rest of 2016 and is ideally positioned for further growth.

Future looking bright for ACS as expansion fuels growthAIR CHARTER

Global office expansion

Humantarian relief

aircargoweek.com

A ir Partner has seen freight profits double to £0.8 million ($1.1 million) in 2015 while the company’s profits were down to £2.3 million due to acquisitions during the year.

The freight division performed well due to con-tinued work with governmental aid agencies assisting with geopolitical crises and strong growth in Germany and the US. Air Partner says it benefitted from developing strong relationships and a good reputation with freight forwarders, while its ‘Red Track’ technology helped the aircraft on ground business.

Air Partner chief executive officer, Mark Briffa says: “Our full-year performance is a testament to all of those who work at Air Partner and shows that by putting our customer first we can deliver good trading and positive momentum, the benefits of which we are already seeing in the new financial year.

“The acquisition of Cabot Aviation Services and Baines Sim-mons are exciting opportunities for Air Partner to extend the Group’s service and product capabilities and should enhance our customer proposition.”

Company revenue increased from £37.6 million in 2014 to £49.9 million in 2015, while profit fell to £2.3 million from

£2.8 million, due to £1 million of costs relating to acquisitions. During the year, Air Partner acquired aircraft remarketing broker, Cabot Aviation Services, and aviation safety consultant, Baines Simmons.

Meanwhile, Air Partner has appointed Mike Hill as director of

freight, with responsibility for freight across the entire Group.Hill has been with the Group since 2007, when he joined to set

up Air Partner’s freight office in Germany from scratch. He will report directly to Richard Smith, head of products, who previ-ously held the role.

Hill says: “I have thoroughly enjoyed my time building up Air Partner’s European freight presence and am delighted to now be expanding my role across the Group. Richard and the team have built up an enviable global freight business, leaving me well placed to capitalise on opportunities within the industry.”

Interesting charters Air Partner has helped to deliver in recent times have included a precious cargo of 445 treasured Romanian artefacts to China for the ‘Treasures of Romania’ exhibition at the National Museum of China in Beijing.

The air charter firm worked on behalf of TNT Romania for the National Museum of Romanian History (MNIR) in January flying the shipment from Bucharest Otopeni Airport to Beijing Capi-tal International Airport on a Boeing 777 Freighter, which was operated by Emirates.

The artefacts dated from prehistoric times to the late 18th cen-tury included ceramics, mural paintings and manuscripts.

Freight division performing strongly for Air Partner

7ACW 16 may 2016

AIR CHARTER

OUTSIZED and project cargo charters are in high demand both in quality and quantity in the marketplace, according to ProAir Charter Transport general manager, Andreas Wald (pictured below).

He tells Air Cargo Week that business is on a comparable level this year to 2015, but there is a decrease in requests for regular sized on Boeing 777 Freighter and 747F loadable cargo due to increased capacity on the scheduled services, however, project work has picked up.

Wald explains that the start of the year has been a bit of a mixed bag: “The automotive sector is rather quiet since the beginning of the year. After a successful third quarter (Q3) and Q4 in 2015 the automotive industry is in a stable condition and has relatively little demand for our emergency services with air charters and on-board couriers (OBC).

“But being in the industry for 20 years now we know that this can change very quickly. The quantity and quality of re-quests for outsized/project cargo is very good.”

As for the rest of 2016, Wald hopes the automotive industry will present higher demand for ad-hoc charters and OBCs.

This year, ProAir has operated some interesting charters, such as a 747F with vintage cars going to an exhibition (and back), which includes some unique cars with what Wald says was an “irretrievable value”.

He adds: “This was the highest insured value we ever had on one single flight. Besides that we had some great flights with heavy, outsized pieces.”

Last year, ProAir opened an office in Istanbul, so Wald says there is no expansion plans in 2016 on the cargo segment, but it has had some additions to the passenger charter group as a result of growing demand and additional aircraft into its fleet.

There are challenges Wald observes, which are more on the commercial side of the business: “The mentioned increased capacity on 777F and 747F with added freighter served destination eats up a good piece of requests that we would normally have received for part charters or diversions.

“On the side of Eastern transport aircraft the variety of operators is decreasing,

which leads to higher transparency and an easier direct access for brokers cus-tomers to the airlines direct.”

However, he notes on a positive side, the effect is that the operators that are

around are “highly professional”.

,

aircargoweek.com

Demand for project cargo

ACW 16 may 2016 8

F rankfurt Cargo Services (FCS) is set to expand its portfolio over the coming years as it looks to reap the rewards of being taken over by the Worldwide Flight Services Group (WFS).

However, the cargo handler does feel improve-ments need to be made at Frankfurt Airport to boost its business and air cargo at Germany’s largest airfreight hub.

FCS managing director, Hans-Georg Emmert (pictured) tells Air Cargo Week: “We would like to see a hub improvement at Frankfurt Airport to strengthen performance of the airport such as lead times in Cargo City South.

“Frankfurt Airport provides a lot of expansion area, also for cargo facilities at Cargo City South. Developing these areas quickly will strengthen the position of Frankfurt Airport as logistics hub and support our growth on site.”

As a part of the WFS Global group FCS will

enlarge its services within the WFS network and is planning to become an integral part of the WFS trucking network.

Emmert notes: “We are providing new solu-tions for the quick delivery of export and import BUPs to/from local forwarding agents, the so-called ‘CargoCity Shuttle’.

“Furthermore we will implement a new IT solution for truck slot management and have successfully introduced a new quick process for the delivery of import BUPs. These measures will further improve the service for our custom-ers especially during peak times.”

Since FCS became part of WFS in November, it has noticed in the first quarter a consider-able increase in turnover, which Emmert says reflects its “high quality performance”.

In the first four months of 2016, it has achieved double-digit growth, which it says is above the market average and customers con-

tributed to this success, as well as the significant growth of longstanding customers.

Emmert explains: “The year 2016 with our new ownership of WFS is showing even more potential for an expansion of our services and business.”

As for cargo types growing in demand, the temperature-controlled segment is performing strongly and FCS says it is confident that this special product will increase throughout 2016, especially pharmaceuticals.

Emmert observes: “More airlines will focus on this special product, and we are proud to be able to offer individual handling and storage services. Strongest part of the temperature-controlled shipment is the pharma industry, therefore FCS is undergoing the International Air Transport Association Center of Excellence for Independent Vali-dators Pharma certification process together with several members of the Air Cargo Community.

“We hope to be certified in the summer this year, which means FCS will be part of the biggest certified pharma hub in Europe.”

FCS is clearly doing something right and the likes of Singapore Airlines Cargo have renewed handling contracts and it has just won a new contract, a prestigious one with the world’s third largest cargo carrier, Qatar Airways Cargo, which will move to the FCS premises in July 2016, and FCS is confident of winning more customers in the rest of 2016.

In a changing air cargo industry, FCS faces many challenges, and Emmert says even in a digitised world and freight data is electronically available, it is still facing a high amount of man-ual data input - so a future target is to further improve efficiency in data exchange.

He also explains staffing is another area prov-ing a challenge: “With a growing demand for special services there is a high need of qualified personnel. Employment of cheap work power has emerged due to low price politics and com-petition. FCS is a high quality service provider and to achieve our goals such as customer sat-isfaction and proficiency we need qualified and motivated staff.”

FCS handles cargo for more than 40 carriers and further growth looks a good bet now it has the muscle of WFS behind it.

Emmert notes: “Being part of the WFS Global group, we have been able to extend our service on an international basis. Our signs are set on growth.

“We are very much supported by the WFS group, which is focusing strongly on global growth. But we also trust in the development of our existing customers who already today show a very positive trend above market

average.”But how does Emmert and FCS see the

future of cargo at Frankfurt Airport?He feels the central European loca-

tion will mean it remains a major cargo hub and is convinced the gate-way will always play a significant role

in the air cargo business.Emmert notes: “All places in our

European neighbourhood are easily reachable by truck in a time schedule from

two hours to 12 hours. This is why FCS is also focusing on establishing a trucking concept as a new service in our portfolio. FCS is looking for-ward to a positive future.

“Being the major airline independent cargo handler we offer high quality services with well-trained and experienced staff with high seniority. Furthermore, our direct access to the apron ensures safe and fast handling.

“One of our targets is to provide flexible handling procedures based on airline require-ments. Special handling and dedicated storage for temperature-controlled shipments accord-ing to GDP guidelines are also part of our range of services as well as a high security level and numerous add-on services.

“Special attention and care to sensitive products is self-evident for us. Our competent personnel is available seven days per week and 24 hours per day. Our signs are set on growth which is very much supported by our new owner WFS.”

Emmert says FCS is planning to increase its infrastructure “considerably” in order to be pre-pared to offer new services and to expand its customer portfolio.

Big plans at FCS as it targets portfolio expansionCARGO GATEWAY FRANKFURT

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O vercapacity in the marketplace continues to be the main challenge facing Lufthansa Cargo as it battles with difficult ongoing trading conditions.

The carrier’s vice president for Germany, Europe & Africa, Florian Pfaff (pictured) says it is a tough mar-

ket: “The overcapacity in the market and persistently subdued market tonnage pose the biggest challenges. We have to succeed in keeping the load factors high while also countering deteriorat-ing yields.”

Pfaff says Lufthansa’s focuses in 2016 are the digitisation and automation of the air cargo sector, to successfully market the Eurowings long-haul capacities ex-Cologne, strengthening coop-erations and providing comprehensive customer support.

Tonnage and revenue figures are below expectations in 2016, Pfaff says. He adds:

“Additionally, massive overcapacity in the market as a whole as well as things like the TSA regulation introduced at short notice, freak weather in the US and, not least, the German trade union

ver.di strike have also contributed to this. Frankfurt as a market in itself is performing

somewhat better on average than the German market as a whole.”For the German market, the cumulative Lufthansa Cargo ton-

nage is slightly below last year’s level, but Frankfurt as a market in itself is somewhat above it, and Pfaff notes: “The port strike in the US and increased volumes resulting from this must be taken into account when comparing the figures with those of last year.

“The revenue numbers can only be compared to a limited

extent as Lufthansa Cargo introduced the airfreight surcharge for winter 2015/16 and has therefore changed its pricing structure.”

The carrier is seeing growth in the special products sector such as temperature sensitive goods, animals, perishables and valu-ables by increasing capacity and using Boeing 777 freighters on its key trade lanes to Japan, China, India and the US.

Lufthansa Cargo’s big plan for a new cargo facility LCCneo, revealed in March 2015 was deferred by at least two years towards the end of last year, but Pfaff says it is developing alter-native concepts to the presented LCCneo.

He adds: “Naturally, investment is always needed with an older building. We are continuously modernising our Lufthansa Cargo Center such as by investing in SmartGates.”

As for freighters it has no specific plans for further removals of aircraft from its fleet and holds buying options for five more 777F and decisions on options are likely to be made in the rest of 2016.

He says it is in talks with clients and partners for further digiti-sation: “This will open up fantastic opportunities for all involved to make airfreight even faster and better in the future. We want to achieve this together. We have been able to celebrate the first significant success with the introduction of the eAWB, and we are setting the course for more to follow.”

Digitisation the main focus this year for Lufthansa Cargo

9ACW 16 MAY 2016

CARGO GATEWAY FRANKFURT

FRANKFURT AIRPORT’s operator, Fraport has seen cargo rise in April - making it the first month it has risen in 2016 after struggled in the first quarter (Q1).

In contrast to passenger traffic, which fell by 2.5 per cent, freight soared by five per cent to 181,948 tonnes.

Fraport says: “Far East traffic was the main growth driver, with cargo tonnage to/from this region climbing by nine per cent. Freight volumes on routes to/from China, Japan, and India even recorded dynamic double-digit growth.

“While cargo throughput declined during the first three months of 2016, cumulative cargo volumes in the year to April reached positive territory again for the first time, grow-ing by 0.5 per cent.”

In Q1 cargo volumes at Frankfurt fell by 1.2 per cent reaching 496,764 tonnes, which the gateway says was due to the slowdown in global trade.

In 2016, the gateway has struggled until April as it saw year-on-year declines, with January down 0.1 per cent to 159,650 tonnes, February by 1.4 per cent to 159,721 tonnes and March by 1.3 per cent to 187,063 tonnes.

This is a boost, as according to the Airports Council In-ternational’s 2015 cargo hub figures, Frankfurt lost its title as Europe’s busiest airfreight airport to Paris Charles de Gaulle Airport after seeing volumes fall last year by 2.6 per cent as it was hit by pilot strikes and slow world trade.

In Q1 Fraport’s profits rose to 15.1 million euros ($17.2 million). The group’s profit increased by 42.5 per cent from 10.6 million euros in the first quarter (Q1) of 2015, which came despite revenue dipping by 0.6 per cent to 572.5 mil-lion from 575.9 million.

Fraport’s overall aviation revenue also slipped a fraction in Q1 to 200 million euros compared to 200.4 million in 2015, and ground handling was down by 5.4 per cent from 154.7 million to 146.4 million, due to selling shares in Fraport Cargo Services.

Cargo boost in Aprilat Frankfurt

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ACW 16 MAY 2016 10

TAP Portugal would have only lost 7.6 million euros ($8.7 million) in 2015 if it had not been for sales in Venezuela that have not been transferred, along with the

South American nation’s currency devaluations.The Portuguese carrier made a loss of 99 mil-

lion euros in 2015, of which, 91.4 million were stuck in Venezuela, a country which has been causing a lot of airlines problems. When taking Venezuela out of the equation, the loss of 7.6 mil-lion euros is an improvement compared to losing 46 million in 2014. TAP’s revenue fell from 2.5 billion euros in 2014 to 2.4 billion in 2015 and it

reduced its debt to 942 million from one billion.TAP says the concerns about ticket sales in

Venezuela occurred between March 2013 and January 2015, when the airline suspended sales to prevent it being impacted to a larger extent.

Venezuela has not been the only South Amer-ican nation to cause TAP problems; Brazil’s economic slowdown has also caused difficul-ties. The economic and political crises in Brazil caused a decrease in traffic volumes and caused airfares to significantly decline. The slowdown of the Angolan economy also negatively impacted air traffic to a lesser extent.

TAP results hit by VenezuelaSPAIN AND PORTUGAL

The perishable market has started strong-ly for IAG Cargo, particularly with Asian shipments going to Latin America, regional commercial manager Spain/Portugal, Idoia Martinez tells Air Cargo Week (ACW).

Business remained consistent in 2015 with Spain proving slightly stronger than Portugal, with Spanish volumes consisting of textiles, perishables and courier services.

Perishables are the main imports to Spain IAG Cargo handles, including fish from Chile and Colombia, asparagus from Peru, flow-ers from ecuador and Colombia, and exotic fruit from Central America.

She says: “In 2015 our Madrid hub with its strong Latin American connections saw significant volumes of Asian shipments en-tering and transferring into markets such as Chile; Mexico and Peru.”

IAG Cargo will be increasing its services from Madrid with Iberia, with new services including Madrid – Shanghai and Madrid – Tokyo flights due later this year. Martinez

tells ACW: “Japan is Spain’s fourth largest export destination after Mexico, the US and Dubai, and is therefore an important desti-nation for the region.”

“The new route is our first direct flight from Spain to Asia Pacific and will therefore bring considerable benefits to our custom-ers who previously had to access the region via our London hub.”

In 2016, perishables have proven strong, with Martinez commenting: “This year has started well, with the region benefitting from a strong perishables season in Janu-ary and February. Vegetable and fresh fish imports have performed particularly well.”

IAG Cargo will focus on premium prod-ucts across its network, including Spain and Portugal. Martinez says: “Our strength in Premium products, such as Constant Cli-mate for time and temperature sensitive shipments, plays an important role in help-ing us meet the needs of our customers in this region.”

SpAnISh airports have seen growth of 10.6 per cent to 183,853 tonnes in the first quar-ter (Q1) of 2016, with Madrid and Barcelona leading the way, airport operator, AEnA says.

Adolfo Suarez Madrid-Barajas Airport (pictured), which handles 53 per cent of Spain’s air cargo, saw volumes increase by 7.3 per cent to 97,425 tonnes. Volumes at Barcelona El prat Airport were up by 16.5 per cent to 31,132 tonnes. Palma De Mal-lorca saw cargo fall by six per cent to 2,179 tonnes and the Canary Islands airports in-creased by 0.1 per cent to 8,915 tonnes.

The Group I airports, which include Valen-cia and Seville saw cargo increase by 8.9 per cent to 7,682 tonnes, while Group II, which includes Santiago saw volumes rise by 19.3

per cent to 24,100 tonnes. Group III saw cargo increase by 20.5 per cent to 12,420 tonnes, with the growth coming from Vitoria, which is used by DhL.

In Q1, AeNA’s revenue increased by 10.2 per cent to 744.3 million euros ($848.7 mil-lion) with profits increasing by 140 per cent to 29.2 million euros, compared to 12.2 mil-lion in the same period of 2015.

AeNA received recognition from the Inter-national Air Transport Association for its work on the Center of excellence for Indepen-dent Validators Pharma certification. During the quarter, AeNA signed a surface rights agreement with DhL to expand facilities in Vitoria and has opened a call for tender to lease a cargo terminal in Barcelona.

Spanish airports grow 10.6% in Q1

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Perishables prove strong at IAG Cargo

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NEWSWEEK

The British International Freight Association (BIFA) says freight for-warders support the UK’s Transport Committee’s criticism of aviation dithering.

Earlier this month, the committee criticised the UK Government over a decision on the expansion of UK airport capacity, which has received strong support from the trade associa-tion that represents the UK’s freight forwarding and logistics businesses.

The government is expected to make a deci-sion by the summer on the whether to add a third runway at Heathrow Airport or a second runway at Gatwick Airport, although some reports suggest any move will be put on hold until the autumn.

BIFA director general, Robert Keen says: “The 1,500 companies within BIFA share the Trans-port Committee’s belief that the delay risks damaging UK economic growth by deterring investors uncertain about the future of Britain’s

communications.“BIFA agrees with the Transport Committee

that the UK must stop ‘dithering’, make a deci-sion and set out a timetable for completing the project.

“We have already stated that last December’s announcement to delay a decision on the matter, was about political expediency, not environmen-tal matters.

“Like the Transport Committee, we accept that

the package of measures to mitigate environ-mental impacts needs careful consideration and further work. We do not accept that all of this needs to be done before a decision is taken on location. In fact a decision on location would give more focus and impetus to this work.

“As the Transport Committee states, the detailed and evidence-based work of the Air-ports Commission on environmental issues provides an ideal starting point for any further work on environmental issues to be undertaken in parallel with the other pre-construction work.

“The absence of a decision on location creates uncertainty, which is exacerbated by the lack of clarity the Government has created about exactly when a decision will be taken.”

He says five months on, the UK’s freight for-warding community, which is the engine of Britain’s international trade, is still waiting for the Government to stop playing “political foot-ball” with the issue of aviation capacity and make a decision.

Agreement penned by Cathay and LufthansaCathay Pacific and Lufthansa Cargo have signed an agreement, to benefit customers from a joint network between Hong Kong and Europe, which both say means more direct connec-tions, greater flexibility and time savings combined with service enhancements.

Cathay Pacific director of cargo, Simon Large and Lufthansa Cargo chairman of the exec-utive board, Peter Gerber signed the agreement in Frankfurt, which will see co-operation on routes between Hong Kong and Europe, network planning, sales, IT and ground handling.

Gerber explains: “By joining forces, customers gain access to unique flexibility with more flights to choose from and a combination of feeder and direct flights. In this way their cargo can reach its destination hours earlier. We will also have more options for shipments which have to be transported by freighter due to their size or properties.”

The co-operation will also focus on services and customers will be able to access the joint network via the booking systems of both. Joint handling, initially at Hong Kong and Frankfurt, will make things easier as there will only be one point for export drop off and import delivery. Both plan to move the first shipments from early next year – initially from Hong Kong to Europe. The ability to book eastbound shipments from Europe to Hong Kong will follow later in the year.

Indochina carriers up belly routesVIETNAM AIRLINES and Cambodia Angkor Air are to increase domestic and international bel-lyhold routes.The airlines will operate new and additional connections between Vietnam and Cambodia, as well as further links to and from Laos and Myanmar during 2016. Vietnam Airlines holds a 49 per cent stake in Cambodia Angkor Air.

Vietnam Airlines’ trunk routes linking Hanoi and Ho Chi Minh City, Ho Chi Minh City and Da-nang, and Hanoi and Danang will see capacity increased in 2016. Services between Vietnam and Myanmar continue to expand with a total of seven flights per week between Hanoi and Yangon (from five) and five flights per week from Ho Chi Minh City (from three).

Cambodia Angkor is introducing a six times a week service linking Sihanoukville with Ho Chi Minh City, effective 17 June 2016, along with a thrice weekly service linking Siem Reap with Da-nang, effective 1 July 2016. Also planned for 2016 is a new route connecting Siem Reap with Hanoi.

Vietnam Airlines UK general manager, Le Thanh Dzung adds the carrier’s six non-stop flights a week from Heathrow to Vietnam will become daily from 3 July 2016.

BIFA says delay on UK runway expansion decision damaging economy

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