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Atlas complete takeover of Southern Air

MERGER SUCCESSFULLYCARRIED OUT

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LUFTHANSASHIFTING FOCUSTO EUROPE

The weekly newspaper for air cargo professionals

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ATLAS AIR WORLDWIDE has completed the acquisition of Southern Air Holdings in a deal worth about $110 million.

The deal will give Atlas access to South-ern’s fleet of crew, maintenance and insurance (CMI) Boeing 737s and Boeing 777s. The five Southern 737s and five 777s will compliment Atlas’ fleet of more than 75 aircraft, which are a mix of Boe-ing 737s, 747s, 757s, 767s and 777s on ACMI (aircraft, crew, maintenance and insurance), charter, CMI, and dry-leasing operations.

Atlas Air Worldwide president and chief executive officer, William Flynn says: “We are proud to welcome Southern Air, its op-erating companies, and its professional, experienced workforce to the Atlas family. Together, we will be a stronger, more diver-sified, more profitable company offering access to the widest range of modern, ef-ficient aircraft for domestic, regional and international applications.”

Southern Air is the parent of Worldwide Air Logistics Group and its operating sub-sidiaries, Southern Air and Florida West International Airways. Atlas Air World-wide is the parent of Atlas Air, and Titan Aviation Holdings as well as the majority shareholder of Polar Air Cargo Worldwide.

Air Canada and Cargojet announced last week they are finalising a commercial arrangement that will see Air Canada Cargo introducing ded-icated freighter services from Canada to Latin America and Europe with a Boeing 767-300ER Freighter (pictured) operated by Cargojet.

Air Canada Cargo will become the first and only provider of direct scheduled freighter ser-vice between Canada and Latin America.

The new flights will provide 52 tonnes of net cargo capacity and are scheduled to begin 9 June 2016, subject to obtaining the necessary regulatory approvals.

Initial service will operate from Toronto to Bogota, Colombia and Lima, Peru via Atlanta in the US and Toronto to Mexico City via Dallas/Fort Worth.

Under the arrangement, Air Canada Cargo also plans to introduce dedicated freighter ser-vice to Europe from Toronto sometime in the second half of 2016.

Air Canada Cargo vice president, Lise-Marie Turpin says: “We are thrilled to offer our cus-tomers the only dedicated freighter service

between Canada and Latin America. Working with Cargojet, we are able to leverage and build upon Air Canada’s extensive North American and international networks.

“We look forward to continuing to grow our dedicated freighter network to Europe later this year and for a successful and mutually beneficial relationship with Cargojet into the future.”

Cargojet president and chief executive officer, Ajay K. Virmani explains: “This new arrangement builds on Cargojet’s long-stand-ing relationship with Air Canada Cargo and is a win-win for both parties.

“It allows us to optimise our overall freighter aircraft utilisation and to expand our range of services and customer base with Air Canada.”

The Middle East region just keeps rolling onT

he Middle East continues to be the shining region of the air cargo indus-try and despite facing its own challenges - its

growth rolls on at a significant pace as carriers launch new services and boost capacity.

Led by the likes Qatar Airways Cargo (pictured), Emirates Sky-Cargo, Etihad Cargo, Oman Air, Gulf Air and Saudia Cargo - Qatar, the United Arab Emirates (UAE), Oman, Bahrain and Saudia Ara-bia are all growing their markets and nearby Iran is opening up and soon set to join the party.

The International Air Trans-port Association’s (IATA) Airlines Financial Monitor for February and March 2016, published last week, says the Middle East now has a 14 per cent share of the world air cargo market and it is edging ever closer to Europe with a 22.3 per cent share and North America with 20.5 per cent.

IATA says in the first two months of the year, the region’s carriers’ freight tonne kilometres (FTK) are up 6.8 per cent and available freight tonne kilometres are up 11

per cent – as airlines continue to expand their capacity.

The Middle East’s growth rate is 5.4 per cent up on the second best performing market in the first two months of 2016 - Latin America, which grew 1.4 per cent, and IATA says only Europe also saw FTK growth, a minimal 0.9 per cent.

Airlines in the Middle East are showing no signs of stopping their phenomenal growth as they con-

tinue to invest and expand services and enhance their cargo business.

Last week, Qatar Airways Cargo, the world’s third largest cargo car-rier, entered the express market after launching a new product QR Express – an on-demand service for urgent time-critical shipments.

The Qatari airline continues to expand its portfolio of specialised services and products, and it adds to its QR Pharma, QR Fresh and QR

Equine it started last year and QR Charter.

Qatar Airways Cargo says QR Express gives customers the opportunity to book time-sensitive shipments via a quick and simple system that offers high boarding priority and rapid handling, ensur-ing speedy delivery of their cargo.

Other features include short and flexible close-outs, quick and ded-icated ramp transfer (for express transit), as well as priority load-ing at origin and unloading at final destination and speedy retrieval at final destination (90 minutes).

Qatar Airways chief officer for cargo, Ulrich Ogiermann says: “This new product enables our customers to ship time-sensitive cargo with the knowledge that transit time will be minimised.

“It will be an ideal solution for supply chain process and fast mov-ing consumable goods.”

And last week, Etihad Cargo also flew its new Boeing 777 Freighter for the first time (see page 10) while Qatari freight forwarder Tokyo Freight is to expand by moving into a new facility in Doha (see page 3).

First freighter to fly from Canada to Latin America

Volume: 19 Issue: 15 18 April 2016

aircargoweek.com

NEWSWEEK

The Airports Council International (ACI) says airfreight volumes at air-ports across the globe were down by 4.1 per cent in February – due

to the timing of Chinese New Year and the disruption of the US West Coast sea ports a year ago.

ACI says international freight saw a greater decline than domestic freight (down 5.5 per cent and 0.8 per cent respectively).

The association says while there is some “cause for concern”, much of the decline is attributed to the timing of the Chinese New Year (19 February in 2015 versus 8 Feb-ruary in 2016; this difference of 11 days affects global imports and exports).

As a result, Hong Kong, Shanghai-Pudong, Seoul-Incheon, Tokyo-Narita and Taipei saw traffic losses of 14.9 per cent, 13.1 per cent, 9.4 per cent, 16 per cent and 18.2 per cent respectively.

However, some major freight hubs

remained in positive territory, including Dubai (+2.9 per cent), Paris-Charles de Gaulle (+9.9 per cent), Doha (pictured) (+20.8 per cent) and London Heathrow (+2.7 per cent).

Based on the global sample of airports, 16 of the top 20 hubs in terms of freight volume all experienced year-over-year declines for the month of February, including Memphis and Louisville, the two major freight hubs in the US and Miami; Frankfurt; Singapore; Los Angeles; and others.

ACI concludes: “The picture is thus two-sided - as all major airfreight markets in East

Asia experienced declines in traffic volumes, the major airfreight markets in Europe remained flat or grew only marginally.

“At the regional level, Asia-Pacific and North America are the only regions with sig-nificant and comparable rates in air freight declines (minus 8.1 per cent and minus 7.3 per cent), testifying to the pattern of international trade and economic interde-pendence of the two regions.

“At the same time, the short term distor-tionary boost to freight volumes a year ago during the West Coast sea port crisis has exacerbated the decline in February.”

2 ACW 18 april 2016

ACI: 16 of the top 20 hubs see tonnage falls in February

DNATA says its new Heathrow Airport cargo facility will be dedicated to Cathay Pacific.

dnata UK says it will open in April and the high-spec customised handling facility will meet Cathay’s specific requirements as it ex-pands its UK cargo business.

dnata has invested £40 million ($57 mil-lion) in Building 521a, a 63,600 square foot warehouse and office facility located next to the dnata City complex.

A six-month refurbishment has seen dnata implement its vehicle control centre at the facility, an industry-leading innovation al-

ready operational at dnata City.Further enhancements providing custom-

ers with full e-airway bill processing including receiving advance data information are to be included. It also provides easy landside customer access and direct airside access, which combined with the new control centre, will ensure processing times are kept to a minimum.

dnata UK’s operations chief executive, Gary Morgan, says it is part of a contract signed on 1 January this year when Cathay awarded dnata its cargo handling contract for Man-chester Airport and UK regional airports, including inter-airport trucking throughout the UK and Ireland.

The Heathrow facility will also cater to cargo handling for Cathay from Gatwick Airport, with volumes set to grow when the airline launches a new four-times weekly ser-vice from 2 September.

Cathay Pacific cargo manager for UK and Ireland, Andrew Roe says it is now well placed to grow its UK freight business in the future.

dnata to open new Cathay Pacific facility at HeathrowKerry Logistics to raise stake in Indev LogisticsKERRY LOGISTICS has entered into mem-orandum of understanding to increase its stake in Indev Logistics (INDEV) – an Indian forwarder based in Chennai.

Kerry has upped its interest from 30 per cent to 50 per cent, and says it has an “in-creasingly positive” view of India’s economic prospects. The announcement was made at a re-branding ceremony on 13 April.

The move will see INDEV re-branded as Kerry-INDEV Logistics and Kerry Logistics says it reflects its growing capabilities and ambition to becoming a major pan-Indian lo-

gistics company.Kerry Logistics chairman, George Yeo says:

“We have always held an optimistic view of India’s potential, and are pleased to be strengthening our partnership with INDEV to tap into the opportunities that are emerging India has become one of the fastest-growing economies in Asia.

“We see the introduction of Goods and Services Tax and the campaign to ‘Make in India’ as being very positive for the quan-titative and qualitative expansion of the logistics industry.”

K orean Air Cargo and Uzbekistan Airways have penned a co-operation agreement, which will see cargo moved to Iran via Tehran’s Imam Khomeini

International Airport.The agreement sees the carriers moving

freight within Korean Air Cargo’s network,

which would be transported to Tehran via Uzbekistan Airways’ Navoi hub.

Korean Air Cargo already partners with Uzbekistan Airways to feed cargo into Frank-furt Airport, and by the end of April will be able to use the airline’s twice weekly service to Tehran with one of its 767-300 Freighters.

Agreement signed by Korean and Uzbekistan

aircargoweek.com

NEWSWEEK

3ACW 18 APRIL 2016

Qatari freight forwarder Tokyo Freight is looking for further growth and is planning on building a logistics com-plex near Hamad Port in Doha.

The company will consolidate all its services and capabilities into a single hub to take advan-tage of the proximity to imports coming into the country through the port.

At the new facility, the central warehouse will be divided between bulk, FMCGs, cold chain, pharma and other sectors, while the open yards will be consolidated into one.

Commercial manager, Pradeep Kumar says Qatar is similar to other Gulf Countries, and is a consuming market, as almost everything is imported and says the plan to have a new logis-tics complex near to Hamad Port is also driven by a need to diversify: “We want to consoli-date and strengthen our entire operation and develop our own logistics complex from which we can run our operation in Qatar.

“We plan to build a temperature-controlled warehouse to expand our activity in the pharma and cold chain sectors.”

Tokyo Freight has significantly expanded its

fleet over the last 12 months in anticipation of this latest move, and now operates a fleet of 85 (52 only) trailers, with 33 more on order and due for delivery in the second half of 2016.

Kumar says Tokyo Freight offers a one-stop solution to clients, and tries to provide all core services in-house: “Clearance of shipments is done using our own broker license and we deliver goods using our own fleet of trucks. We do work with key experts for some areas of the supply chain, but they are partners that we have been working with for a very long time.”

One of the sectors in which Tokyo Freight outsources work is in automotive transport. The firm works on the the Qatar side for sev-eral major auto manufacturers, the largest of which is Honda, which has been using Tokyo Freight for more than 15 years.

Tokyo Freight general manager, Muthan-ikkat Abdul Rauf says for airfreight it works with Qatar Airways, Emirates, Etihad Air-ways, Lufthansa and Cargolux. He adds: “We do the majority of volume with Qatar Airways because they have the best connections to and from Doha. We also utilise DHL, UPS, and Aramex to handle our shipments that are con-siderably smaller or more specialised. If there is a shipment needed urgently for example, we’ll courier it in.”

Tokyo Freight managing director, Abdulla Moideen says it works very closely with Qatar Airways because it operates many connections to and from Doha.

Rauf adds: “Our company is very large now, but remains small enough to be flexible and adaptable to clients’ needs. So if a client calls me even at night and needs a solution to a par-ticular problem, I’m able to help them on time.”

Billund fits the bill for Turkish

TURKISH CARGO started a freighter service on 10 April to Billund Airport, which is seen as a major boost to exporters in Denmark.

The carrier will operate an Airbus A310 Freighter that lifts 45-50 tonnes of cargo and will run the service once a week.

The general sales and service agents ap-pointed to serve the route is NordicGSA and its director and sales manager for Denmark,

Thomas Frederiksen says: “We received the final confirmation only shortly before Easter, so we have not yet started out active sales and marketing work for this new service. But it is definitely good news that will be well received among customers.”

He says NordicGSA will look to fill the air-craft with Danish exports, but will probably also attract export cargo from Norway too.

Frederiksen adds: “The Sunday flight schedule is absolutely ideally suited to the needs of Danish exports, transiting ship-ments through Istanbul Ataturk Airport and reaching destinations on the carrier’s global network by early Monday.”

NordicGSA also sells the cargo capacity on Turkish Airline’s three daily bellyhold ser-vices from Copenhagen Airport, expanding to four flights from May 2016.

Microchip mission for AirBridgeCargoAIRBRIDGECARGO AIRLINES (ABC) has transported cutting-edge microchip produc-tion technology from Amsterdam to Dalian in China for one of its key customers, freight forwarder DB Schenker.

The machines were delivered onboard two ABC Boeing 747 Freighter flights from Amsterdam to China via the airline’s hub in Moscow. ABC says each charter flight car-ried two machines of “significant value”.

The main machine systems were packed in specially-designed transport containers with internal climate control to protect the machines throughout the transportation

process. The additional parts completing the shipment were crated with shock indicators on all sides.

ABC’s general manager in Amsterdam, Henk-Jan van Keulen says high-tech goods are strictly monitored throughout the deliv-ery chain, from the time cargo is delivered to us by the agent until it is handed over to the final consignee.DB Schenker’s head of airfreight cluster for Benelux, Joep Bruijs adds “safety, security, speed and reliability” are the reasons why it chose ABC to carry out the “very important flights”.

Tokyo Freight to build logistics complex

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NEWSWEEK

4 ACW 18 april 2016

THE slowdown in economies across Latin America particularly in Brazil have impacted cargo at Miami International Airport (MIA).

MIA marketing division director, Chris Man-gos says the weak climate across the region as well as the fate of the US dollar’s value, have “certainly affected” activity on those trade routes.

But he notes there are positive signs: “Ar-gentina is showing strong growth signals, achieving a 16 per cent growth in trade values with MIA during 2015, and expanded frequen-cies of capacity to both Buenos Aires and the secondary market of Cordoba.”

MIA is North America’s main freight hub for Latin America and its top five trading partners are Colombia, Chile, Peru, Brazil, and Ecuador, and by value are Brazil, Colombia, Chile, Peru, and Argentina.

MIA handled 2.2 million tonnes in 2015, the same as in 2014. This year, Mangos says through February, traffic is up 1.3 per cent year-over-year, a slight increase to the less than one per cent growth it saw in 2015.

He adds: “The Asia to Miami, Asia to Brazil via Miami, and the Brazil to Miami sectors are down considerably. Europe offers mixed per-formance with some markets on the rebound, while others continue to lag behind.”

In November, MIA was made the first phar-ma hub in the US by the International Air Transport Association (IATA) in its Center of Excellence for Independent Validators (CEIV) Pharmaceuticals Certification programme.

Pharma has been a strong growth sector and Mangos says MIA is looking at the benefits and opportunities from the certificate, work-ing with businesses who are pursuing training certification of their own companies through the IATA programme. He adds: “Externally, we

are engaging in pharma production markets to gauge shipping practices. Our aim is to link MIA with pharma hubs across the globe.

“Further, an ongoing process to designate all of MIA as a Free Trade Zone will open up new synergies and opportunities to bring services to the pharma product on airport property. A formal announcement and more details will be available later this year.”

Perishable import volumes grew by five per cent in 2015, with fish imports leading the way at eight per cent and fruits and vegetables at seven per cent.

Mangos says other non-traditional products are “quietly entering the billion or multi-bil-lion dollar club” as in 2015, art and antiques saw nearly $1 billion in business, and medi-cal equipment over $2.3 billion in imports and exports.

More freight flights will start and Canadian carrier KF Cargo started scheduled charter freighter flights at MIA on 15 April, 2016. KF Cargo is soon to operate three weekly round-trips between MIA and Bogota and three weekly services on a triangular route from MIA to Caracas and on to Lima.

Mangos adds: “There are also other efforts underway to expand or introduce at least two new cargo routes with that expectation being later in 2016.”

As for the future: “Finding growth opportuni-ties throughout the globe when the economies in China and several Latin American countries have slowed down, combined with US exports slowing due to a strong US currency, are ex-pected to present challenges to our cargo performance this year. But there remains op-timism as other opportunities are cultivated, MIA will see growth in certain segments or markets.”

Air France KLM has seen its cargo vol-umes fall by 13.5 per cent in March, and load factors keep falling, as it struggles with overcapacity.

Revenue tonne kilometres (RTK) for the group were down by 13.5 per cent to 711 mil-lion while available tonne kilometres (ATK) declined 10.7 per cent to 1.1 billion. The load factor fell by two percentage points to 60.4 per cent.

Between January and March, the group’s RTK was down 10.1 per cent to two billion and ATK fell by 8.1 per cent to 3.4 billion, with the load factor declining by 1.3 percentage points to 59.2

per cent.Air France saw March’s RTK falling by 8.5 per

cent to 299 million, and down 6.8 per cent to 842 million year-to-date (YTD). Capacity in ATK was down 4.7 per cent in March to 442 million and 3.9 per cent to 1.6 billion YTD. The load fac-tor has fallen 1.7 percentage points to 51.6 per cent YTD.

KLM saw a big fall in FTKs in March, down 16.8 per cent to 413 million, and declining 12.2 per cent YTD to 1.1 billion. ATK in March fell15.4 per cent to 619 million and down 11.6 per cent YTD to 1.8 billion. KLM’s load factor has fallen 0.5 percentage points to 66.1 per cent YTD.

Tough times for LATAM in March

LATAM AIRLINES GROUP has seen cargo volumes fall again in March with revenue tonne kilometres (RTK) dropping by 11.1 per cent to 302 million.

Cargo volumes have continued to fall faster than capacity in available tonne kilo-metres (ATK), which were down by 3.6 per cent in March to 576 million. The load factor was down by 4.4 per cent to 52.4 per cent.

Between January and March, RTK has fall-en by 9.8 per cent to 875 million with ATK down 3.4 per cent to 1.7 billion. The load factor has fallen by 3.6 percentage points to 51.2 per cent so far this year.

LATAM Airlines Group has also announced its cargo division will be consolidated under one brand, LATAM Cargo. The new brand unites LAN Cargo, TAM Cargo, LAN CARGO Columbia and Mas Air and aims to position itself as the leader in the region’s perish-able market.

LATAM Airlines Group cargo executive vice president, Cristian Ureta says: “Apart from representing each affiliate’s best and offer-ing consistent and impeccable service, this change also involves an evolution internal-ly in relation to how we do things, how we deal with issues and how we come up with solutions.”

Volumes continue to slide at Air France KLM

aircargoweek.com

Miami holding firm against headwinds

NEWSWEEK

5ACW 18 April 2016

Heathrow Airport has seen cargo vol-umes fall by 3.8 per cent in March to 131,661 tonnes, following strong growth in January and February.

Between January and March, cargo volumes at the hub have increased by 0.4 per cent to 372,299 tonnes having seen growth of almost three per cent in both January and February.

Despite the fall, Heathrow says that East Asian cargo volumes are up six per cent boosted by Vietnam Airlines moving from Gatwick Airport and increasing Hanoi and Ho Chi Minh City services, and British Airways launching Kuala Lumpur services. Garuda Indone-sia also started direct services to Jakarta, in Indonesia, further driv-ing Asian traffic.

Heathrow Airport chief executive officer, John Holland-Kaye (pictured) explains: “I’m delighted that we’ve added the UK’s first direct connection to Indonesia.

“As Southeast Asia’s largest economy, Garuda Indonesia’s new route will be a significant boon

for British SMEs [small-medium enterprises] looking for new export opportunities.”

He continues: “But it isn’t just Indonesia waiting to access the UK’s only hub – there is a queue of over 30 airlines waiting for slots from Heathrow.”

The airport is set to find out in the summer if it gets the go ahead from the UK government to build a third runway. Last year, the Airports Commission recommended it added another strip, but the government put a decision on

hold so an independent assessment could be made of potential impact

on pollution in the area.Holland-Kaye adds: “With

expansion, we can supercharge British trade by opening up 40 new long-haul trading links with

the fastest growing markets in the world. Let’s make it happen.”

Meanwhile, Heathrow Airport has also launched its WebPortal for consolidat-

ing freight loads and decreasing the number of trucks on the road - as it ramps up efficiency.

Frankfurt struggles continue

FRANKFURT AIRPORT’s cargo volumes fell by one per cent in the first quarter of 2016 as it continues to be affected by the slow-down in global trade.

Cargo volumes, which consist of airfreight and airmail, dipped to 506,434 tonnes, due to the slowdown in global trade.

In March, volumes fell by 1.3 per cent to 187,063 tonnes, which Frankfurt’s opera-

tor, Fraport, says was because production slowdowns relating to the timing of the Easter holidays.

Growth has been patchy at Fraport’s other airports. Ljubljana Joze Pucnik Inter-national Airport was up 5.2 per cent in the first quarter

to 2,416 tonnes, while Jorge Chavez Inter-national Airport in Lima was down 5.5 per cent to 61,148 tonnes.

At its Bulgarian hubs, Burgas Airport saw an increase of 100 per cent to 3,130 tonnes and Varna Airport was up 10.6 per cent to 20 tonnes.

Hannover-Langenhagen Airport was down four per cent to 4,691 tonnes.

Massive cargo drop in March at GatwickGATWICK AIRPORT’s freight traffic plunged by a double-digit dip in March, falling by 26.1 per cent to 5,832 tonnes.

The March figures continue the downward trend seen this year, with January seeing volumes fall by almost 10 per cent and February saw a double-digit drop.

Despite cargo volumes continu-ing to plummet, Gatwick Airport chief executive officer, Stew-art Wingate (pictured) explains that the gateway should receive a second runway, rather than Heathrow getting a third.

He explains: “Government backing

for Gatwick expansion this year will mean that the UK finally and definitively has a solution to its long enduring aviation ca-pacity issue. Our plan is legal, affordable, cleaner and quieter and will finally deliver

for Britain.”Wingate says he is optimistic about 2016 with new routes to destinations including Hong Kong, Cape Town, Vancouver, Lima and Costa Rica. He adds Norwegian will significantly in-crease Dreamliner services if

Gatwick gets approval for a sec-ond runway.

Tonnage fall in March of 3.8% at Heathrow

ACW 18 APRIL 2016 6

L eipzig/Halle Airport expects tonnage growth to be boosted this year through the even closer links it has forged at the airport between rail and road.

One area it is looking for further business is as a result of handling the Emons freight trains from Hamburg and Bremerhaven, which have been operating on working days since the begin-ning of 2016.

The airport’s operator is Mitteldeutsche Airport Holding and head of business develop-ment for cargo/logistics, Mario Patyk explains to Air Cargo Week: “PortGround, our affiliated company at the airport, processes these [trains] at the freight handling station here at Leipzig/Halle Airport.

“We also believe that there is further highly promising potential in the enhanced marketing and further development of logistics services, which the freight forwarders operating at the airport are already demanding to an

increasing degree.”Each train moves between 700 and 1,500

net tonnes of freight in containers, which are earmarked for onward transportation, or for temporary storage.

Leipzig/Halle is Germany’s second busiest cargo hub by volumes behind Frankfurt Air-port, who it is closing fast on and has broken tonnage records for 11 successive years.

In 2015, the East German gateway handled 998,420 tonnes, which was a rise of 8.5 per cent on the previous year.

The airport is showing no signs of slowing tonnage growth and Patyk explains that freight handling operations are growing for the 12th year in succession.

He explains: “During the first quarter of the year, the airport handled 248,416 tonnes, an increase of 6.3 per cent over the figure for the same period in the previous year.”

Patyk says the volume of freight in March alone was approximately 91,260 tonnes, which is an increase of 8.8 per cent on March 2015 and a record level in the history of the company.

He explains: “Express freight is largely responsible for the ongoing growth - Leipzig/Halle is one of the world’s biggest freight han-dling centres for this thanks to the involvement of DHL at the airport.

“However, the strong performance of Air-BridgeCargo Airlines (pictured at Leipzig/Halle) should also be mentioned; it is contribut-ing to the growth process too.”

Growth is also being driven by freight charter traffic, which is developing fast and Patyk says the aim is to intensify this process even further in future.

He notes: “The main areas of focus here are flights for military operations, outsize cargo, perishables and pharmaceuticals.

“In the light of this, we and the whole sector hope that the Federal Aviation Office will issue permits for charter flights more quickly and make progress with regard to granting rights for new routes.”

Express and charter sectors driving Leipzig to new heightsGERMANY

FRANKFURT CARGO SERVICES (FCS) says the merging with Worldwide Flight Services (WFS) in Frankfurt has been “successfully implemented” – two months after WFS took a majority holding.

Since 1 February, 2016 FCS has been in charge of WFS handling and the handling it carries out has been fully integrated into the warehouse capacities of FCS.

WFS acquired a 51 per cent shareholding of FCS as part of a strategy to be a major player at one of Europe’s busiest cargo hubs – Frankfurt Airport and across the European air cargo market.

FCS says all customers of WFS can now smoothly move to the FCS premises due to an optimised restructuring of the existing capacity. Documentary handling of all WFS customers is still processed by the WFS

colleagues.FCS managing director, Hans-Georg Em-

mert (pictured) says: “We have managed to bring together two companies in a short time to offer our customers the best possible ser-vice and a continuing high quality handling. This is the most important goal for FCS and for WFS.”

In addition, another 19 colleagues of WFS now support FCS in physical and documen-tary operational handling.

FCS explains it is pleased with the growth in qualified employees, premium customers and is confident that together with WFS, there will be a “further strong growth in the future”.

FCS handles more than half a million tonnes of air cargo each year for custom-ers at Frankfurt, which includes around 40 airlines.

When WFC acquired the majority stake last year, it explained to Air Cargo Week it was also looking to grow further in Europe, citing Amsterdam Air-port Schiphol as one of the locations it wants to grow organically.

aircargoweek.com

FCS and WFS merger successfully carried out

T he air cargo market was stagnant last year in Germany - Europe’s powerhouse freight market - as tonnages fell by 0.1 per cent in 2015, but forecasts for this year are for it to grow by about 1.7 per cent.

The German Airports Association (ADV) predicted the uplift earlier this year, when it said there was a high level of political and economic uncertainty in major foreign markets for airfreight.

ADV notes much of Germany’s problems were homemade, such as restrictive uptime and missing test flight rights for foreign cargo airlines, leading to a diversion of cargo flows to airports in neighbouring European countries.

In ADV’s outlook for 2016, the association says it expects solid growth in cargo, driven by the overall good macroeconomic performance leading to higher demand for airfreight.

However, even higher growth is prevented by exter-nal risk factors, such as the decline of trade with China and the emerging markets as well as wars and unrest in the Middle East.

The association also explains that the economic data for 2016 in Germany remains positive and the forecast is of a 1.6 per cent growth in gross domestic

product.Meanwhile, in other German air cargo

news, the Board of Airline Repre-sentatives in Germany (BARIG) has elected AirBridgeCargo Airlines’ Ivan Santoro (pictured) as co-chairman of its cargo committee. Santoro will co-chair the BARIG Cargo Committee alongside Michael Hoppe.

The committee works on several topics including working groups on cargo charges, security and cargo infrastructure.

Santoro is regional operations & ground handling director Europe, Middle East and

Africa for AirBridgeCargo Airlines. He has previously worked for several freight forwarding agents and also worked for British Airways.

Hoppe says: “I am glad that Ivan Santoro is now co-responsible for the leadership of this committee.

Together with the member airlines we emphasise important topics and thereby greatly contribute to

securing Germany’s future as an air cargo location.”BARIG member airlines transport about four million tonnes of

air cargo in Germany a year, and the cargo committee cooperates with the Air Cargo Community Frankfurt, as well as logistics associations such as DSLV (German forwarding and logistics association), SLV (forwarding and logistics association in the states of Hesse and Rhineland-Palatinate), and VACAD (associa-tion of air cargo handlers in Germany).

Germany set for growth this year, but challenging times ahead

7ACW 18 APRIL 2016

GERMANY

MUNICH AIRPORT saw growth in all traffic segments in the first quarter (Q1) of 2016, and cargo led the way in terms of percentage growth.

The gateway handled 79,300 tonnes of airfreight in Q1, which was a rise of six per cent on Q1 last year.

The airport is set to grow further in the years ahead and it is looking to construct a third runway, now awaiting approv-al by the airport’s shareholders.

2015 was a record year as cargo tonnage rose 8.9 per cent to 317,000 tonnes at Munich Airport, driven by increases in bellyhold capacities and new freighter ser-vices. Thriving sectors were general cargo, express and pharmaceuticals.

Expansion of cargo infrastructure is on the cards and the airport is in negotiations with parties for projects with a de-cision expected this year so work can start soon.

In 2016, the airport expects additional capacities for the summer schedule from new long-haul routes like Lufthansa to the US. The express market has already seen an increase in capacity as DHL has started operating with larger aircraft and introduced a new flight to Ljubljana.

Q1 tonnage rise at Munich

LUFTHANSA’s fleet ugrade continues after it received an-other Airbus A320neo on 31 March - the carrier’s second.

The first scheduled commercial flight was on 1 April from Frankfurt to Dusseldorf, making Dusseldorf another belly-hold destination for the A320neo together with Hamburg, Berlin and Munich.

The A320neo has new engines and improved aerody-namics enabling a significant advance in terms of noise and emission reduction. Due to the new technology of the engines, the A320neo is 15 per cent more fuel-efficient than current comparable models.

The Lufthansa Group has ordered a total of 116 air-craft in the Airbus neo version, 45 of these as the larger A321neo model. The new aircraft are intended for Lufthan-sa and Swiss.

According to list prices, this is an investment of $13.3 billion. This year a total of five A320neo should be deliv-ered to Lufthansa and stationed in Frankfurt.

Second A320neo for Lufthansa

aircargoweek.com

ACW 18 april 2016 8

Turkey may be going through tough economic and political times, as well as suffering instability due to prob-lems in neighbouring countries but DHL Express and DHL Freight are

aiming for continued growth.DHL Express Turkey chief executive offi-

cer (CEO), Markus Reckling (pictured) tells Air Cargo Week (ACW): “Despite being a very difficult year for Turkey, 2015 has been out-standingly successful for DHL Express.

“We grew over 10 per cent in both volume and revenue, which we see as a huge success in the current environment. Furthermore inter-national e-commerce shipments grew by a high double-digit figure.”

DHL Freight South Eastern Europe CEO, Selcuk Boztepe says instability in Turkey with two general

elections and geopolitical risks have hit trade. He says: “In such an environment, despite the decreases in country exports (8.7 per cent) and imports (14.4 per cent), DHL Freight Tur-key managed to continue with the successful growth trend by increasing its revenue by over 10 per cent versus 2014.”

The start of 2016 has been mixed, with Reck-ling reporting that DHL Express has still seen strong momentum, but weaker than last year,

while Boztepe says DHL Freight has seen double-digit growth.

Despite tough economic con-ditions in Turkey, DHL remains committed to Turkey, and it is one of the company’s 11 key markets to generate growth for its Express

division, while Freight is targeting growing at double-digit rates.Reckling says DHL Express will focus

on serving specific sectors. “We already have a very strong know-how and customer base in textile and automotive industry and we also aim to position as the key player in life sciences and healthcare industry. We also see an extremely strong momentum also driven by the SMEs in international e-commerce.”

Boztepe says: “Till the end of the year, DHL Freight’s anticipated growth rate for 2016 is at a low-to-mid double-digit rate. This is, as every year, far-above market growth, which will gain us further market share.”

DHL will continue to invest in Turkey, a country benefitting from an ideal geographi-cal location, which the Express division wants to develop into a regional hub. DHL Express is the only express company to have flights from both of Istanbul’s airports, Ataturk and Sabiha Gokcen.

To show its commitment to Sabiha Gokcen, DHL Express has placed a second aircraft at the airport, and has signed a memorandum of understanding to secure an area within the facil-ity at the third Istanbul airport when it is built.

Reckling says: “Since Turkey is located in a critical geographical position, we are intending to further our investments to transform Turkey into a regional hub. Our 60 million Euro invest-ment will support Turkey in becoming a new regional hub connecting Asia, Middle East and Europe.”

DHL Freight also believes Turkey’s location could work in its advantage. Boztepe tells ACW: “Turkey is a country surrounded on three sides by sea and is close to Europe, Africa, Middle East and CIS [Commonwealth of Independent States]. But there is an opportunity to take bet-ter advantage of this location.”

Key market for DHL as business continues to boomTURKEY

The growth of the Turkish economy is a great opportunity for air cargo, but Pegasus Cargo says it could grow more if it could obtain more traffic rights.

The airline says its volumes increased by 17 per cent to 11,717 tonnes in 2015 and has increased its sales target for this year. Much of this cargo consists of fresh flowers, textiles, automotive parts, and machine and computer parts. “We are taking advantage of the great opportunities arising from the growth of Turkey’s economy as the demand for our air cargo business is continuously increasing.”

Pegasus Cargo operates in 97 destinations across 38 countries and aims to expand fur-

ther across europe, the Caucasus, Russia, the Commonwealth of Independent States, and the Middle east. Pegasus Cargo tells Air Cargo Week: “We expect this expansion to yield a very positive outcome for our cargo revenue which will help us achieve our annual cargo sales targets. We will continue to add new routes to our network based on permis-sions received from civil aviation authorities.”

The airline says gaining these traffic rights is its biggest challenge at the moment. “Ob-taining traffic rights for the Middle east, the Turkic republics and North Africa is a major challenge for us, and there are still new stations/routes that for which we haven’t ob-tained rights yet.”

aircargoweek.com

Pegasus wants moretraffic rights

T urkey is an important market for UPS for all business areas and its geographical location is a major asset as a transit hub.

UPS uses a chartered Airbus A300 Freighter to con-nect Istanbul’s Ataturk International Airport with

its main European air hub at Cologne Bonn Airport four days a week.

UPS tells Air Cargo Week (ACW): “As a country, Turkey’s biggest advantage and asset is its geographical location, serving as a tran-sit and transfer hub between the Middle East, Asia and Europe.

“This geographical advantage that facilitates easy access for Turkey to Eastern Europe, Central Asia, the Middle East and Northern Africa, enables the country to benefit from operating as a base in an expanding region.”

The company says it had a strong year in 2015, carrying 4.7 bil-lion packages and achieving a strong operating profit. UPS says: “While the entire group experienced growth, the International segment led the way and achieved an operating profit of $2.2 bil-lion. Much of this was due to strong performance in the Europe Region, which includes Turkey.”

“Turkey is an important market for UPS, and all three of our business units (Small Package, Supply Chain Solutions, Freight

Forwarding) are present. As UPS, we connect companies and individuals in 81 cities throughout Turkey to each other and to more than 220 countries and territories throughout the world.

“For UPS, the key segments in Turkey are industrial man-ufacturing, automotive and retail. UPS is working to show businesses in these key sectors how we can provide them with logistics solutions and tap into the global marketplace.

“Apart from these initiatives, we are also strongly focusing on SMEs in Turkey. Turkish SMEs are looking to grow their business by reaching new markets beyond Turkey’s borders. UPS helps these Turkish companies by offering strategic and logistical support.”

UPS is also excited about the prospect of the Istanbul third airport, telling ACW: “The Istanbul third airport project will provide exciting opportunities for Turkey. We continuously consider new business and investment opportunities in order to provide the best service for our customers.”

The company has high expectations for Turkey’s future growth, saying: “Turkey is an important market for UPS and, like any other market, has its own characteristics. UPS looks forward to continuing its growth path in Turkey.”

Turkey continues to prove an important market for UPS

9ACW 18 april 2016

TURKEY

Lufthansa CaRGO is confident that Turkey will remain an important market despite the expansion of Bosporus and Gulf based rivals, its regional director Austria, East and South East Europe, Turkey and Israel, Hasso Schmidt (pic-tured) tells Air Cargo Week (ACW).

Schmidt says Turkey benefited from record sales volumes and revenue, helped by the US West Coast seaport strike at the start of 2015. This year Lufthansa’s Turkish operations will focus on Germany and Europe.

“Turkey is an important location for our company. Lufthan-sa Cargo Istanbul posted record sales volumes and sharply increased revenue in 2015 compared to 2014. Of course it has to be taken into account that 2015’s first quarter was boosted by the harbour strike on the US West Coast.”

“Capacities continue to increase and the market situation remains challenging. Due to last year’s harbour strike effect our main focus was on the US market, this year our focus changed to German and European routes.”

He says Lufthansa is targeting profitable growth by focus-ing on special and standard cargo, and is hoping to match its 2015 result. In addition the airline wants to continue offering bellyhold capacity on sun Express aircraft, linking Western and Southern Turkey.

One problem faced by all operators is the lack of capac-ity at Istanbul’s airports, ataturk International airport and sabiha Gokcen International airport. Schmidt says: “Slot and general infrastructure problems at both Istanbul Ataturk Airport and Sabiha Gokcen Airport will remain a big chal-lenge. The planned opening of the third airport in Istanbul in 2018 should solve these problems and represents another opportunity for growth.”

Lufthansa Cargo also faces intense competition in the Turkish market. Schmidt tells ACW: “The main challenge for Lufthansa Cargo Turkey is our Gulf and Bosporus-based rivals expanding their fleet and network with aggressive strategies. For airfreight the biggest opportunities are the increasing trade volumes between Germany and Turkey.”

The strength of German-Turkish relationships benefits Lufthansa, and gives exporters in Turkey opportunities to use the airline’s wide network to send their products around the

world. Schmidt says: “We are focusing on our standard segment (“td.Pro”) as well

as on special products like fish (“fresh/td”) out of western and southern Turkey. Transporting temperature-con-trolled goods is one of our strengths and we do see huge further potential in

this segment.”

aircargoweek.com

Lufthansa shifting focus to Europe

Boeing has launched the Next-Generation 737-800 Boe-ing Converted Freighter (BCF) (pictured) - and secured 30 firm orders and 25 commitments from seven customers.

Many carriers are buying freighter conversion air-craft such as the BCF, as view them as a more cost-effective option to develop and run cargo, rather than buying new freighters.

Boeing Commercial Aviation Service senior vice president, Stan Deal (pictured) says the aircraft provides value to express freight carriers through its “superior payload, range, reliability and efficiency”.

He adds: “While the recovery of the global cargo market has been slow, we see demand for freighters, such as

the 737-800BCF, that will carry express cargo on domestic routes.

“Over the next 20 years, Boeing fore-casts customers will need more than 1,000 converted freighters the size of the 737, with China’s domestic airfreight carriers

accounting for nearly one-third of the total market.”YTO Airlines is to be Boeing’s launch cus-

tomer for the 737-800 BCF programme and has ordered 10 conversions with commitments for 10 additional conversions.

Boeing says it will provide the Chinese express carrier, based in Hang-zhou with competitive advantage in the marketplace. The carrier now operates Boeing 737-300 Freighter aircraft on domestic and international routes.

China Postal Airlines has ordered 10 conversions while GE Capital Aviation will provide the initial air-craft for conversion, has ordered five conversions.

An unannounced customer has ordered five conversions with two commitments, in addition, Boeing has secured 13 commitments for conversions including from SF Airlines, and China Cargo Air.

The first 737-800BCF is on target to be delivered to customers sometime in the fourth quarter of 2017, Boeing says.

Through its freighter conversion programme, Boeing transi-

tions passenger aircraft into freighters, thereby extending the economic life of the aircraft.

The 737-800 is the first Next-Generation 737 that Boeing has offered for conversion. While large freighters carry high-density cargo on long-range routes, the 737-800BCF will primarily be used to carry express cargo on domestic routes.

The 737-800BCF can carry up to 23.9 tonnes of cargo, flying routes of nearly 2,000 nautical miles (3,690 kilometres) while the 12 pallet positions – 11 standard pallets and one half-pallet, which will provide 141.5 cubic metres of cargo space on the main deck.

This will be supplemented by two lower-lobe compartments, combined providing more than 43.7 cubic metres of space for revenue-generating cargo.

The expansion of the freighter conversion market looks set to result in reduced full-freighter aircraft orders in the years ahead.

ACW 18 april 2016 10

FREIGHTERS

ETIHAD CARGO’s new Boeing 777 Freighter flew for the first time from Milan Malpensa Airport in Italy to Bogota in Colom-bia on 7 April.

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 can transport over 100 tonnes of cargo on each flight and the carrier says it will strengthen the cargo division’s operation between South America and Europe.

The B777 joined the fleet at the end of February 2016 and takes Etihad’s freighter fleet to a total of 11 aircraft.

Etihad Cargo vice president, David Kerr says: “The aircraft will support the continuing growth of Etihad Cargo during 2016. We are adding to our fleet this year with a further aircraft on order and building our reputation globally as the trusted global carrier of choice.

“We have a commitment to working with clients to meet their specific requirements and it is their business needs which have driven the designs of our product range so that we are in close symmetry.”

Italy is already Europe’s third largest cargo market and Eti-had Cargo says Milan is growing as an important European cargo hub.

Etihad Cargo and the airline’s equity partner, Alitalia, are able to offer capacity on freighters or in bellyhold for clients who are importing and exporting from Milan, while both carriers share a growing global network which customers can access.

The Etihad Cargo division generates over $1 billion in reve-nue annually and reported strong cargo volumes for 2015, with 592,090 tonnes of freight and mail flown in total, a four per cent increase over 2014’s figures.

In other freighter news, Boeing has booked orders for its 747-8 Freighter, which represent the first sales of the year for the aircraft according to media reports.

The US manufacturer has reportedly not identified the cus-tomer for the order, which came after Boeing booked two net orders in 2015 and none the year before.

Full freighter orders to remain slow, as conversion market expands

New freighter forEtihad Cargo

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11ACW 18 APRIL 2016

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