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Aircraft divisionprofit fall for Boeing

turnover andprofit surge in2015 for acs

collaborationthe key tosuccess

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security set to be the hot topicin miami

The weekly newspaper for air cargo professionals

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BOEING has seen revenues and profits from its Commercial Airplanes division fall in the first quarter (Q1) of 2016 because of fewer aircraft deliveries.

Commercial Airplanes revenue fell by six per cent to $14.4 billion because de-liveries during Q1 were down by four per cent to 176. Profits for the division fell by 36 per cent to $1 billion. Revenue for the whole company was up two per cent to $22.6 billion though net profits were down nine per cent to $1.2 billion.

Boeing chairman, president and chief executive officer, Dennis Muilenburg says: “Our teams are focused intensely on de-livering on our existing commitments including the production ramp-up associ-ated with our large and diverse backlog, accelerating progress on quality, safety and productivity improvements company wide, returning greater value to share-holders through profitable growth, and investing in the future as we enter our second century in business.”

Boeing delivered 121 737s in Q1, the same as in 2015, but only one 747 and 767 each, compared to four 747s and five 767s in Q1 2015. It delivered one fewer 777 this year, down to 23 and 30 787s.

Air Cargo Community Frankfurt is aim-ing to make Frankfurt Airport the largest International Air Transport Association (IATA) Center of Excellence for Indepen-dent Validators (CEIV) Pharma certified hub in Europe.

The community are looking to hit the target by early 2017. At present, Per-ishable Center Betriebs and Bollore Logistics Germany in Frankfurt are IATA CEIV Pharma certified and the additional companies embarking on the nine month pro-cess include Celebi Cargo, FCS Frankfurt Cargo Services, Lufthansa Cargo (airline and Lufthansa Cargo Cool Center), LUG and Swis-sport. International airlines and major freight forwarders stationed at Frankfurt are also aim-

ing to become certified.Air Cargo Community Frankfurt executive

director, Joachim von Winning (pictured) says: “With comprehensive certification of the entire process chain we will have independent confir-mation and can recommend Frankfurt as the

Pharma-Gateway for Europe.”“At the same time we also see

the certification process as an opportunity to optimise services and processes. In doing so we want to respond even better to the needs and requirements of freight forwarders and pharmaceutical companies.”

IATA global head of cargo, Glyn Hughes says: “We are very pleased

to have Frankfurt, as one of the major pharma-ceutical hubs, recognise the obvious benefits of the IATA CEIV Pharma-Standards. The col-lective approach to certify across corporate boundaries and for every relevant part of the process chain cannot be stressed enough.”

struggles of world’s largest air cargo market continue

Asia Pacific - the world’s largest regional air cargo market - con-tinues to struggle as overcapacity and weak

world trade impacts business.Cargo volumes have continued

to plunge, falling by 5.3 per cent in March despite Chinese exports picking up following the Lunar New Year, the Association of Asia Pacific Airlines (AAPA) says.

Freight tonne kilometres (FTK) were down by 5.3 per cent in March to 5.6 billion and so far this year have fallen by 6.5 per cent to just under 15 billion. The start of 2015 had received a boost due to the US West Coast seaport disrup-tion, which cleared by the end of the first quarter, but cargo in Asia Pacific has struggled since then.

Cargo woes are in contrast to passenger numbers, which are growing strongly, AAPA direc-tor general, Andrew Herdman says: “During the first quarter of the year, Asia Pacific airlines saw international passenger numbers increase by a solid 7.5 per cent to an aggregate total of 72.8 million.”

“However, international air

cargo demand remained soft, with volumes declining by 6.5 per cent compared to the same period a year ago, reflecting the general slowdown in global trade.”

Despite the fall in volumes, capacity in available freight tonne kilometres keeps increasing, ris-ing by 2.6 per cent to 8.9 billion in March and 2.1 per cent to 25.1 bil-lion in the first quarter (Q1).

Load factors keep falling, down 5.2 percentage points in March to 62.9 per cent and 5.4 percentage

points to 59.6 per cent in Q1.Herdman says although pas-

sengers are benefitting from low oil prices and affordable airfares, global economic outlook is still concerning: “Some concerns remain over the global economic outlook, but the region’s airlines are continuing to invest in new air-craft, and products and services to meet the projected growth in con-sumer demand.”

Q1 in 2015 was strongly affected by the US West Coast seaport dis-

ruption, which had put FTKs 8.4 per cent above 2014. February 2015 had the most noticeable rise, up 20.5 per cent, due to demand for Asian exports to the US. Since then, FTKs have either been stagnant or seen year-on-year declines.

Heavyweight carriers like Cathay Pacific have been affected and in Q1, the airline’s load factor was down 4.7 percentage points to 61.1 per cent, while cargo carried fell 3.1 per cent to 421,995 tonnes and cargo revenue tonne kilome-tres fell 4.8 per cent to 2.4 million.

It is not just the airlines that have noticed downturns in Q1 this year, as airports have also been noticing the decline.

Hong Kong International Air-port (pictured) saw cargo fall by 3.5 per cent in Q1 in 2016 to 987,000 tonnes, mainly due to February seeing a year-on-year fall of 14.9 per cent, due to exports falling with no US West Coast seaport disrup-tions increasing demand. European airports have been noticing slow-downs to Asia, with Amsterdam Airport Schiphol seeing cargo with the region declining by 4.3 per cent to 50,380 tonnes.

frankfurt aiming to become europe’s top pharma hub

Volume: 19 Issue: 17 2 May 2016

aircargoweek.com

NEWSWEEK

3ACW 2 MAY 2016

A ir Charter Service (ACS) has reported a strong 2015 with a 10 per cent increase in turnover totalling just over $480 million in the year

ending 31 January.ACS says it arranged more than 10,000 char-

ter contracts in the 12 months and achieved a gross profit of $60.2 million in the year, a 28.2 per cent increase on the $47.2 million it made in 2014.

Overall profits are up 60 per cent year-on-year with earnings before interest, taxes, depreciation and amortization (EBITDA) growing from $7.3 million to $11.7 million, which ACS chairman, Chris Leach (pictured) says is down to continuous investment in global infrastructure.

Leach says to achieve a turnover of almost half a billion dollars is a “remarkable feat” and a fantastic way to end its 25th anniversary year

and explains: “The strong increase was fairly evenly spread across our 20 offices worldwide, except for a downturn in our Russian offices’ fortunes, due to the troubles in that region.

“The cargo charter market continues to strengthen and our Cargo department, in particular, has had a brilliant year, buoyed by business done during the West Coast port strike at the beginning of 2015. We saw a 36 per cent increase in the number of charters and an impressive 35 per cent growth in gross profit last year.

“Since 2014 we have restructured our Group Charter division and cut out an unprof-itable revenue stream, which has allowed us to focus on other markets. We are starting to see the benefits now, with underlying growth of

14 per cent in charter numbers and a healthy 23 per cent in gross profit,

as a result of this refocus.“Our revamped On Board

Courier department enjoyed an excellent first year, booking almost 700 jobs in the past 12

months, smashing all targets that we had set for it.”Leach says ACS remains debt free

with a strong balance sheet and bank funds of $14.9 million worldwide at the end of the year, up from $10.9 million last year, a 36 per cent increase.

He adds: “We have revamped our websites and really developed our product offerings this year, as well as opening three new offices over the past 12 months, in Geneva, Miami and Sydney. We are confident that these invest-ments will pay off too.”

Conversion orders for AEI and PACAVITHE freighter conversion market continues to gather pace as Aeronautical Engineers (AEI) has signed a contract with Vallair to provide four 11-pallet position Boeing 737-400SF freighter conversions.

All of the conversions will be modified by Commercial Jet’s Dothan, Alabama facility with the first one com-mencing in May 2016, followed by the remaining three modifications in June, July and September of this year.

AEI says the B737-400SF is the only passenger to freighter conversion product that offers operators 10 full height container positions.

Fellow conversion company the PACAVI Group has con-firmed its first orders for the Freighter LITE Airbus A320/A321 passenger-to-freighter conversion.

Colt Aviation has ordered two A321s with the option for one more, Airline Management will acquire six A320s and an undisclosed leasing customer has also ordered aircraft.

The PACAVI A321 Freighter LITE has a cargo capacity of 27 tonnes and a range of up to 3,500 nautical miles, depending on the load.

aircargoweek.com

More freighter routesfor Etihad

Turnover and profit surge in 2015 for ACS

ETIHAD CARGO has expanded its Middle East network to Kuwait by adding an additional freighter and introduced a new twice weekly service into Muscat in Oman.

The twice weekly Airbus A330 freighter service to Kuwait and the A330 freighter to Muscat have taken to the sky.

Etihad Cargo vice president, David Kerr says: “The Mid-dle East market continues to perform strongly for us and is at the core of our operation. We will also be looking to ex-pand elsewhere around the globe during the year ahead.”

Meanwhile, Etihad Airways as a whole has seen profits pass the $100 million barrier in 2015 while cargo volumes have increased by four per cent to 591,000 tonnes.

Net profits rose from $73 million in 2014 to $103 mil-lion and revenue was up from $7.5 billion to $9 billion in 2015. Cargo volumes increased from 569,000 tonnes in 2014 to 591,000 tonnes in 2015.

Etihad Cargo, represented 88 per cent of cargo at Abu Dhabi International Airport. Etihad’s network increased with six new bellyhold routes and three new freighter ser-vices to Dakar, Nouakchott and Douala. Etihad has 204 aircraft on order including 71 Boeing 787s, 25 Boeing 777Xs, 62 Airbus A350s and 10 Airbus A380s.

NEWSWEEK

4 ACW 2 may 2016

TNT has reduced its losses to 14 million euros ($15.7 million) in the first quarter of 2016 despite revenue dipping 2.2 per cent to just under 1.6 billion euros.

Along with reducing losses by 26.3 per cent from 19 million euros in the first quar-ter of 2015, TNT reduced its operating loss by 90.9 per cent to one million euros, partly helped by the charges related to the FedEx takeover offer.

TNT chief executive officer, Tex Gunning says: “In the first quarter, TNT again de-livered solid underlying revenue growth. Adjusted operating income improved de-spite fewer working days and continued investments in the Outlook strategy. The Outlook strategy is on track and delivers good growth from SME customers.”

“Meanwhile, we spent significant time and effort towards the completion and preparation of the intended acquisition by FedEx, which we expect to complete in the first half of 2016.”

TNT’s international European business made a loss of two million euros as op-erating income in North America fell in anticipation of the FedEx takeover. Revenue growth and cost management meant inter-national AMEA operating income increased by 66.7 per cent to 15 million euros.

TNT previously reported that revenues rose 3.5 per cent to 6.9 billion euros ($7.7 billion) in 2015, which was an increase on the 6.6 billion euros in 2014.

TNT explained it returned to revenue growth despite economic volatility in some of its markets, notably Brazil and China, while revenues from small-medium sized enterprises (SMEs) grew at 5.1 per cent, accelerating as the year went by.

FedEx is set to takeover TNT for 4.4 bil-lion euros, and the deal has been cleared by competition authorities in the European Union, US, and Brazil. Both integrators ex-pect to close the offer in the first half of this year.

Norwegian Cargo has appointed dnata as its new cargo handler in the UK with the cargo handler providing services from 1 May.

dnata will provide Norwegian with a full range of cargo handling capabilities at all UK airports served by Norwegian – Gatwick, Birmingham, Manchester and Edinburgh.

dnata will manage Norwegian’s regional han-dling and trucking requirements throughout the

UK as it expands its UK air and road network.Norwegian Cargo’s UK network continues

to soar as the airline has introduced five new short-haul routes from Gatwick, Manchester and Edinburgh and two new long-haul routes from Gatwick to Boston and Oakland-San Fran-cisco this year.

The airline recently introduced its first of 31 Boeing 787-9 Dreamliners into its long-haul fleet each capable of providing up to 20 tonnes of widebody capacity.

Norwegian Cargo head, Bjørn Erik Bar-man-Jenssen says: “With seven new routes taking off from the UK this year it’s ever more important to utilise our growing capacity and ensure Norwegian Cargo’s increasing shipments are handled with speed and care in mind.”

dnata senior vice president of business development, Mohammed Akhlaq says: “We are delighted to be partnering with Norwegian Cargo and supporting their fast growing net-work and services at key UK gateways.”

PACTL volumes up 1.5% in Q1

SHANGHAI PUDONG INTERNATIONAL AIRPORT CARGO TERMINAL (PACTL) has continued its growth path achieving two new records in the first quarter of 2016.

PACTL processed 142,297 tonnes of cargo, an increase of 6.8 per cent year-on-year (YOY) in the month of March, while total volumes grew by 1.5 per cent to 367,791 tonnes in the first three months of 2016.

These were the strongest results in both

the month of March and the first quarter of any year in the company’s history.

PACTL’s import cargo volumes increased by 1.4 per cent YOY to a total figure of 157,270 tonnes during the first three months. International imports rose by 1.9 per cent to 146,241 tonnes, while domes-tic imports decreased by 4.5 per cent to 11,029 tonnes.

Export cargo volumes grew by 1.5 per cent to a figure of 210,521 tonnes. Interna-tional exports showed a growth rate of 1.8 per cent reaching 198,337 tonnes, while domestic exports declined by 2.6 per cent to 12,184 tonnes.

PACTL vice president, Lutz Grzegorz says: “Following several investments in our infra-structure and the continuous enhancement of handling processes, we were even able to further increase our market share.”

dnata to be UK handler for Norwegian

aircargoweek.com

Losses reduced by TNT in Q1

NEWSWEEK

5ACW 2 MAY 2016

Brussels Airport’s cool chain part-nership with Finnair Cargo is paying dividends for both the car-rier and Belgian hub.

Last year, Finnair became the first airline in the world to complete the Interna-tional Air Transport Association’s Center of Excellence for Independent Validators (CEIV) in Pharmaceutical Logistics programme, in collaboration with Brussels and as part of a partnership between the two.

The success of the relationship is detailed in a new AZura Production’s video entitled ‘Cool Chain Success - Collaboration in Pharma Trans-port’, which can be viewed on the Air Cargo Week website.

Brussels Airport cargo and product devel-opment manager, Nathan De Valck says the video shows how such partnerships can opti-mise the movement of pharma cargo, and boost business.

He says the collaboration “is a win-win for Brussels and Finnair” and offers extra connec-tivity and benefits to cargo customers.

De Valck notes: “This type of partnership works and this one with Finnair gives us a good opportunity”. He adds that cool chain cargo is “too complex” to arrange it on your own.

He says the partnership has created a cool chain cargo quality lane and he notes Brussels is now becoming somewhat of a pharma trans-portation “specialist”.

De Valck explains Brussels handles more pharma than any other hub in Europe, and has an area of 18,000 square metres dedicated to pharma at controlled room temperatures. Six per cent of cargo it handles is pharma, double the average at gateways across Europe.

A key part of the cool chain philosophy and pharma cargo community is the CEIV programme. Brussels was the first airport com-munity to become CEIV certified.

There are 19 air cargo operators certified at CEIV and the gateway hopes more airlines will follow Finnair and Brussels Airlines.

De Valck says CEIV has boosted the hub and the cargo community: “If we had not had this CEIV we would not have been able to bring the cargo community together.

“We used to have to put in a lot of energy to get firms to be part of our cargo community, but not now, as they are contacting us.”

One problem in the pharma supply chain has been solved through the hub’s Cool Dolly, where cool chain is moved airside in dollies between a minimum and maximum tempera-ture. De Valck says it will soon bring the passive storage technology to the market and it has helped eliminate the “remaining weak link” in the chain.

Another key aspect of the pharma commu-nity is the BRUcargo Pharma Forum, where pharma workshops are held two to three times a year, which he says further improves the han-dling of pharma and is a “powerful tool”.

Visit www.azuraproductions.com for more.

Collaboration the key to success

FINNAIR CARGO is aiming to accelerate growth in the pharma sector and its partner-ship with Brussels Airport is a key part of the strategy.

The Finnish carrier’s manager of marketing and sustainability, Milla Nyholm says: “It is very important for us, which is why we have in-vested in pharma and improved facilities and we will have the new Cool Nordic Cargo Ter-minal at Helsinki Airport opening in May next year with a 3,000 square metre pharma area with temperature controlled storage. We have also developed a lot of processes as part of the IATA CEIV certification.”

The new 80 million euro ($87 million) termi-nal will improve the quality of cargo handling through a new cargo management system (CMS) and monitor pharma temperatures. Nyholm says: “The temperature controlled devices in the pharma area are connected to the CMS will be easer to monitor and provide information to the customer.”

From 2012-16, Nyholm says Finnair has seen its pharma volumes grow three times and with the new facilities in place, CEIV and better processes is aiming to drive growth.

Brussels was a natural choice for a part-nership, she explains: “We reviewed quite a few airports but Brussels is so centrally locat-ed and close to Western Germany, Northern

France and Benelux. It is an ideal location and our network matched really well with the air-port as they didn’t have so many connections into Asia so it was a good match for them too.”

Another reason it partnered with Brussels is because Europe is important. Nyholm notes: “It is close to the key manufacturing regions in Northern Europe and Central Europe and the centre of pharma in Europe. European pharma routes are very important.”

Asia is also a key trade lane, she explains: “Asia and especially North East Asia are our specialities and our focus areas especially China and Japan.”

The Brussels set-up was a match made in heaven for Finnair. Nyholm notes: “They are very interested in innovating and finding solu-tions and doing things together and involving all the stakeholders, which is a very good op-portunity for us to work with them and create the best possible solutions.”

Finnair has ordered 19 Airbus A350s which will double its cargo capacity by 2020 and operates them on routes to Asia. Nyholm ex-plains: “It gives us more volumes, one more pallet per aircraft, on a good day we can carry over 20 tonnes of cargo.”

Nyholm says the AZura Productions video will be shown at events, on its newsletter, and web-site and the Cool Chain Success video will ben-efit the industry and the carrier showing air cargo is interested in pharma.

Partnerships boost pharma handling

ACW 2 MAY 2016 6

BCUBE air cargo expects to see further growth in 2016 and pharma project manager, Serena Vettori says invest-ments in assets and high-specialised staff have been “delivering results”.

She notes: “The first quarter of 2016 is fol-lowing the same path. We expect a further increasing of high specialist cargo volumes.”

Vettori says 2015 was a positive year even if the global economic conditions didn’t bring the cargo handler out of the worldwide crisis of the previous years.

The targets for the rest of 2016 are improve-ments through its ‘diamond’ services such as art vault, pharma, and other niche segments, while it expects some airlines will increase freighter frequencies to Milan Malpensa Airport.

Vettori explains BCUBE’s strategy is to focus on delivering “excellent services and innova-tive solutions with the goal to stimulate further growth of our customers volumes”.

The quality of Milan Malpensa has helped and BCUBE believes it is now competing at the same level with other North European hubs, but Vettori says the challenge is stimulating Italian cargo handlers to achieve higher and higher standards, increasing KPI’s and efficiency.

She notes the impact of gaining the Interna-tional Air Transport Association’s Center of Excellence for Independent Validators pharma certificate and opening of Pharma Centers at Malpensa and Rome Fiumicino.

“We have become an important qualified referent for the Italian pharmaceutical sector. Eventually the producers had the chance to ver-ify that the airport is not a supply chain ‘black hole’ but an important platform that completely satisfy their quality requirements,” Vettori says.

She adds: “It was a very important achieve-ment to prove we were talking the same quality language. Results came easily afterwards as a consequence. And our pharma pioneering

adventure had been translated in a big increasing of pharma volumes moved now from Malpensa and Fiu-micino instead of being diverted to other departure points.”

Vettori sees e-freight improvement as an interesting opportunity for its Malpensa hub: “High technology solutions are the key to increase the volumes and improve the timings.”

She explains some airlines are will-ing to increase their volumes from Malpensa, thanks to facilities like the Pharma Center.

Vettori adds: “Therefore as ground handler we have to be ready to welcome part of the cargo that used to be ‘air-trucked’ to Europe. We will also have to keep our dynamic and innovative approach by build-ing more ‘tailored’ services and new facilities capable to attract shipments producing higher

yields in a period when air cargo rates are gen-erally going down.”

The BCUBE vision, Vettori says is to take air-port cargo handling to the “highest level” while “continuously enhancing processes as well as infrastructures”.

CARGO GATEWAY MILAN

CARGOLUX ITALIA is planning on increasing freighter frequencies between Milan and its new hub in Zhengzhou (China).

The Luxembourg carrier is targeting more services into the city where it launched its new venture – Cargolux China.

Asia is where its sees growth and Cargolux Italia sees the ripest opportunities to be picked in Japan and China.

Cargolux Italia explains to Air Cargo Week in the first quarter of 2016, it has flown more block hours compared to the same period in 2015.

It adds: “However, tonnage and load fac-tors went down due to the slowdown in the business, especially during the Chinese New Year and because of the poor performance of imports from Asia into Italia and Europe.

“If we consider the performance out of Milan Malpensa Airport for airfreight, we have achieved a share of 6.2 per cent in total and have outperformed the market with a growth of 10.6 per cent and market share of about 15.9 per cent. It should be noted that export is growing by 10 per cent but im-port only at one per cent.”

Cargolux Italia’s targets for the rest of 2016 are to increase capacity by 24.4 per cent compared to 2015 and the load factor by 0.4 percentage points to 67.6 per cent.

The Milan market is performing well, espe-

cially for exports, increasing by 10 per cent in the first two months of 2016, the carrier notes, using International Air Transport As-sociation CASS statistics.

The main cargo types unsurprisingly from Milan are luxury fashion goods, and cars, both synonymous with Italy and traditionally strong exports for Cargolux.

Cargolux Italia is now the number one cargo carrier in Italy and says Milan Malpen-sa “grows with Cargolux”, adding: “We are part of the development here and the air-port’s new cargo infrastructure will certainly bring benefits to all parties.”

The Italian arm of Cargolux enables the overall Group to grow and expand globally. The carrier explains: “Cargolux Italia is an integral part of the Group’s strategy and rep-resents a solid reality in the Italian freight market since 2009. It secured a solid pres-ence for the Cargolux Group in Italy and is a prime example of the sound strategy that is growing Cargolux into a true global operation with multiple hubs.

“With our successful expansion since 2009, as well as the destinations that Cargolux Italia now operates on behalf of Cargolux, we significantly contribute to the economic success, the sustainability of the network, the business and, ultimately, to the healthy bottom line of Cargolux.”

aircargoweek.com

Growth in high specialist cargo volumes eyed by BCUBE

Milan boosting Cargolux bottom line

B usiness is rosy at Milan Malpensa Airport and Ita-ly’s principle air cargo gateway goes from strength to strength and more growth looks a given.

Malpensa saw a nine per cent uplift in tonnage in both 2014 and 2015, reaching 500,000 tonnes last

year and has a 55 per cent market share of Italian air cargo, while in the first quarter of 2016, the positive trend is continuing with an increase of six per cent and April is looking good.

Despite the weak trend of global cargo demand from Asia, the Milan hub says it is seeing rising export flows mainly to Asia and Middle East markets, which represent more than 50 per cent of total volume.

Luxury and fashions (clothes, garments, shoes, cars) are the main products for exports, while semi-finished products are on the rise on the import side from Asia.

The airport says owing to strong performance during the last few years, export flows made up 60 per cent of traffic in 2015, which confirms its status as the gateway for all the ‘top class’ made in Italy products, which are sent to the rest of the world.

Malpensa says: “The investments made during last year by the two cargo handling companies operating to improve their facili-ties and processes dedicated to pharma products (both have the International Air Transport Association Center of Excellence for Independent Validators pharma certification) make us confi-dent about a considerable growth of this kind of traffic.”

Growth at Malpensa is coming from all segments and freight-ers, which make up 60 per cent of traffic is growing at a rate of five per cent, while the integrators (FedEx and DHL) are growing by three per cent and make up 10 per cent of volumes. Bellyhold cargo has increased by 10 per cent driven by more widebody capacity by Alitalia, Qatar Airways, Korean Air, and Oman Air.

Integrator cargo is set to rise further as DHL, which has six flights to its hub in Leipzig Halle Airport, four flights to East Midlands Airport directly connecting to the US and two flights to Hong Hong (by Aerologic) will expand operations by investing 90 million euros in a new site covering 46,000 square metres.

The airport says DHL plans on connecting Malpensa with its eight gateways in Italy and a direct flight to US is being considered and the new facility will be operational by the middle of 2018.

FedEx is also building a new warehouse ready for the end of July this year (operational by October) - allowing it to gradually increase cargo volumes and positions it at the centre of its activ-ity for southern Europe and Italy.

These two developments and a third warehouse under con-struction will give an additional cargo capacity of 500,000 tonnes per year, doubling the current warehouses capacity of 600,000 tonnes.

Malpensa will continue to develop its Cargo City: “In the future, our goal will be the development inside the airport of ‘second line’ warehouses dedicated to freight forwarding companies.

“Due to historical reasons the major part of airfreight forwarders are based in the South East area around Milan (near Linate Airport) during the next three or four years we will be ready to make available some ‘second line’ warehouses inside the airport to push the forwarders to move their bases in Malpensa.

“We believe this move could make the Italian air cargo logistics chain more efficient, helping the airport to increase cargo vol-umes. We are already in contact with some potential customers and are experiencing a good interest from the market.”

More freighter operators will consolidate operations at Mal-pensa, the airport says and besides Cargolux Italia, it expects further development from AirBridgeCargo Airlines and Silk Way Italia, while it says Qatar Airways has announced a cargo development plan, according to the “positive ending of the part-nership project with Meridiana”.

Cargolux Italia, Malpensa’s main cargo carrier, has added a new service to New York and new flights to Zhengzhou (China) are foreseen late this year or in the beginning 2017 to exploit the potential of Cargolux China’s new hub, while the gateway says other markets like Iran, Turkmenistan and Africa are on the radar.

Despite growth, Malpensa sees challenges ahead: “We need to revert the negative judgements about Italian import procedures, spread among many freight forwarding operators.

“During the last years, Italian Customs has made available

many new and more efficient procedures for air cargo imports. For instance, since 2014 it is operating in Malpensa a ‘single window’ procedure allowing to obtain clearance simultaneously with other clearances in a few hours.

“The new European Customs Code (in place from 1 May) will improve the ordinary Customs clearance. A better image about Italian import processes inside the airport will certainly help to boost air cargo flows.”

Equally it sees opportunities for growth through better road feeder service volumes, freighter capacity increases, improved infrastructure and better road connectivity into Malpensa, which

all make it a more attractive gateway for air cargo.The airport says it is also investing in systems and processes:

“From 1 July a new ICT system will be available for all the air-freight operators working in Malpensa allowing to share the main data regarding departing and arriving cargo among all interested parties.

“This ‘cargo community system’, named Malpensa Cargo Smart City will add a very useful enhancement to upgrade Malpensa operations to the best European airport practices. It will make all the processes related to cargo delivery and pick-up more efficient avoiding errors and time losses.”

More development

7ACW 2 may 2016

CARGO GATEWAY MILAN

Growth across segments

aircargoweek.com

Milan Malpensa on target to continue strong expansion path

ACW 2 may 2016 8

Saudia Cargo is launching new ser-vices this year to Munich, Ankara and the Maldives – adding to its list of bel-lyhold cargo destinations.

From April this year, Saudia started flying to the Maldives with two flights and it will operate to Munich from July with 10 weekly flights. The last quarter of the same year will see it being four weekly flights to Ankara.

The cargo services will be available aboard a Boeing 777 and Airbus A320/A330 aircraft departing to the same destination.

These aircraft have a sizeable belly payload and are capable of transporting more than 30 tonnes of cargo.

Saudia Cargo chief executive officer, Nabil Khojah says the carrier’s quest is to enhance its logistic services to many global capitals and cit-ies around the world, taking the advantages of the available capacities aboard Saudi Airlines’

growing passenger fleet.Khojah said that this will contribute to achiev-

ing the company’s objectives, among which are reaching new markets and delivering cargo ser-

vices that meet customers’ expectations.He has also indicates that Saudia is carefully

studying such markets and the selling opportu-nities that are available within.

Bellyhold routes into Saudi Arabia are also expanding via Turkish Airlines, which has launched flights from Istanbul Sabiha Gokcen Airport to Medina four times a week.

The carrier has already launched its new route from Istanbul Sabiha Gokcen to Jeddah and Istanbul Sabiha Gokcen to Riyadh.

Both routes started operating seven times weekly, from 27 March, 2016. Turkish Airlines’ Ankara Esenboga to Medina route also began on 27 March with seven weekly flights and its Tra-bzon to Riyadh flights begun on 29 March with three flights per week.

From Istanbul Ataturk Airport, Turkish also now operates 21 weekly frequencies to Jeddah, with 14 weekly frequencies to both Medina and Riyadh - as demand for bellyhold services to Saudi Arabia from Turkey increases.

THE privatisation of Saudi Arabia’s airports continues as the state aims for full private ownership by the end of this decade.

This is part of the government’s plans to increase productivity and efficiency with-in its aviation industry and boost its cash streams by reducing state spend.

The General Authority for Civil Aviation (GACA), outlined proposals in November last year to privatise all 27 of the Kingdom’s hubs under its operational control through to 2020.

In February, the Irish airport operator, Dublin Airport Authority (daa) International won a five-year tender for the new Termi-nal 5 at King Khaled International Airport (KKIA) in Riyadh.

GACA awarded the management contract to daa International following a tender pro-cess against that included operators from Europe, Asia and Africa.

KKIA is Saudi Arabia’s busiest gateway and is the main hub of Saudia Cargo’s

freighter flights while the likes of Lufthansa Cargo, Cargolux, Turkish Cargo and Ethi-opian Cargo also operate all-cargo routes into the airport.

The airport is also growing its bellyhold network and the new terminal is set to further boost cargo as will be able to ac-commodate 16 narrow-bodied aircraft or up to eight wide-bodied aircraft.

The rest of KKIA’s operations are set for privatisation, with the airport’s management to be remodelled as a corporate structure by the end of the first quarter of 2016.

Privatisation of the Jeddah and Dam-mam airports is scheduled for completion by the end of 2017, with the remaining air hubs, which are largely domestic and small-er-scale service facilities, to be transferred between 2018 and 2020.

Private sector players have played a part in the expansion work at the Mohammad Bin Abdulaziz Airport in Medina, which began servicing flights last year.

Saudi airports set for privatisation

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Network expansion continues for Saudia and TurkishSAUDIA ARABIA

D espite low oil prices reducing exploration activity, Alaska Airlines is remaining positive as it upgrades its fleet.

The airline tells Air Cargo Week: “With the drop in fuel prices, we have seen a slowdown in oil explora-

tion related activity in a number of places across our network. We foresee this trend continuing through 2016 as the oil industry con-tinues to stay volatile in global supply.”

This year has started in a similar fashion to 2015, with a slight increase in the first quarter due to diversifying business. Domestic cargo is expected to improve this year as Alaska Airlines invests in new aircraft. It will bring three 737-700s online in early 2017, and retire its combi fleet.

“Changes within our own business model as well as investment in a new [Boeing] 737 -700F freighter fleet provides us the abil-ity to build and grow new partnerships for the rest of this year as we begin to anticipate the arrival the first aircraft to arrive in early 2017 / late 2016.”

“The growth will come from added capacity for a number of markets we serve today as well as right sizing it for others and real-locating it for new growth during off-season times of the year.

“This growth will require us to look at our current cargo facilities

and route structure to determine what best meets the needs of our customers and Alaska’s long-term strategic fit. We are excited about the opportunity this provides Alaska Airlines as the last remaining US legacy carrier with a cargo fleet.”

Though Alaska Airlines primarily serves the domestic market, it does have an extensive network in Mexico and Canada, and has started covering Costa Rica.

“Alaska Airlines is a major US carrier having a significant North America presence and partners that provide a global reach. Our focus within cargo is to support the airline as it grows which gives our cargo business a domestic US focus where Alaska Airlines flies and partnering where we can on connecting cargo throughout.”

The US and Cuba re-establishing diplomatic relations after over 50 years is also a great growth potential, with Alaska planning flights from Los Angeles to Havana.

“The relaxation of trade relations between the two countries will allow for greater cooperation for trade and is especially true from the state with the second highest Cuban population in the US.

“If successfully awarded, we fully intend to pursue the carriage of cargo on these flights which will tie Alaska Airlines entire network to the market.

“We see a great deal of opportunity for cargo traveling between Cuba and the US and look forward towards the opportunity to serve the market.”

9ACW 2 MAY 2016

USA

Virgin restarts Chicago servicesVirgin AtlAntic cArgo has restarted Chicago services, strengthening Mid-West services adding to Detroit flights.

The Airbus A330-300 services restarted on 27 April and has 16 tonnes of capacity. The Chicago service lands at Lon-don’s Heathrow Airport at 07.55h, providing onward road services to over 50 European and same day connections to India and South Africa.

Virgin Atlantic Cargo senior vice president, John Lloyd (pictured) says: “We are pleased to welcome back our very popular Chicago route and with the addition of Detroit last year, has enabled us to strengthen our year-round presence in the US, Midwest, where are have very strong support from our customers on both sides of the Atlantic.”

“For customers in the US, the early morning arrival of our Detroit and Chicago services into Lon-

don means we can help them to quickly connect to markets across Europe and to other online destinations such as Jo-hannesburg and Delhi.”

Virgin will connect Manchester with San Francisco and Boston from 2017

using A330s on both routes.

SeAttle tAcomA internAtionAl Airport saw its fourth straight year of growth in 2015, helped by increasing num-bers of large freighters, and 2016 has had a relatively good start, manager of cargo business development, Tom Green tells Air Cargo Week.

Cargo grew by 1.6 per cent in 2015, and like a number of airfreight companies, Seattle Tacoma benefitted from the US West Coast seaport strike creating a surge in de-mand. Green says: “We saw continued growth in the number of freighter flights to Seattle, especially in the largest air-craft size category. For the first time, Seattle saw more than 1,000 of these large freighters in a single year, at 1,057 in 2015, including 180 of the newest Boeing 747-8F and 20 of the Antonov AN-124.”

Due to the boost in demand in the first quarter of 2015, the start of this year appears comparably weak, but domestic volumes are looking healthy and the international business has been helped by weekly lufthansa cargo services from 1 April, operated by an Aerologic Boeing 777 Freighter. Green says: “SEA has a well-balanced trade portfolio both import/export as well as with commodities on the industrial and consumer side, so are not too affected by impacts from any single country or commodity. There is a high growth potential from rapid increases in e-commerce related airfreight.”

aircargoweek.com

Alaska upgrading fleet as it continues to diversify its business

Freighters driving Seattle growth

ACW 2 may 2016 10

The International Air Cargo Associa-tion’s (TIACA) Executive Summit will take place at the Margaritaville Holly-wood Beach Resort in Hollywood, just north of Miami from 24 - 26 May, and

the theme will be ‘Securing the Air Cargo Sup-ply Chain - Operations, Regulations and Cyber Challenges’.

TIACA says security tops the agenda as the air cargo industry “must wake up to the growing threat of cybercrime to global supply chains”, while cyber security will also be one of the leading topics, along with phar-maceuticals and the Air Automated Manifest System (AMS).

The Summit will also see updates on global Pre-Loading Advance Cargo Information (PLACI) Pro-grams, supply chain security, and a discussion of industry challenges

from a panel of global shippers.Before sessions get underway the event will

kick-off with a welcome reception at the License to Chill North from 6-8pm, giving delegates a chance to network prior to serious debate.

The Summit’s opening comments on Wednes-day 25 May will be given by TIACA’s chairman, Sanjiv Edward, who will be joined by Miami-Dade Aviation Department director, Emilio T. González – who heads up Miami International

Airport.Once they finish their keynotes, the nitty gritty starts with the first ple-

nary session on PLACI, chaired by TIACA’s secretary general, Doug Brittin (pictured).

PLACI is one of the hot industry topics as the European Union is

beginning implementation of its own programme and the US is pre-

paring its rule-making, while other countries have shown interest and the International Civil Aviation Organization (ICAO) and World Customs Organization (WCO) are working towards a common framework.

In the first part of the session panelists from ICAO, WCO, the US Transportation Security Administration (TSA) and others will discuss where we are now, what issues remain, how will data be shared, IT costs, and how transit cargo and mail will be analysed.

The second part will see further discussion, but this time a panel will feature representa-tives from the likes of Lufthansa, and FedEx.

Delegates will then have the choice of attend-ing session’s entitled Cyber Security or E, E and E sessions, which run at the same time after lunch.

Cyber Security will be chaired by the World-wide Information Network’s managing director, John DeBenedette, and will see cyber-crime, which is a significant threat to global supply chains come under the spotlight.

He will be joined by a panel who will discuss how organised criminal gangs are increasingly attacking shippers and logistics companies to mis-direct international payments, spy on transport activity targeting physical cargo theft opportunities and for terrorism.

The debate will centre on how the air cargo segment of the logistics industry is well behind the technology curve compared to the main-stream consumer and needs to catch up.

The E, E and E session will be chaired by the International Air Transport Association’s (IATA) head of cargo, Glyn Hughes and focus on e-commerce, the electronic air waybill and e-freight and it will also feature updates on Cargo iQ and executive director, Ariaen Zimmer-man will be on the panel.

The last session of the day will be Supply Chain Security where panelists will include the Airforwarders Association executive director, Brandon Fried and representatives from UPS, the TSA, IATA and Atlas Air.

This will focus on how from the account con-signor to certified shipper to regulated agent - how do we get to a common global approach and definition, who can do what, and what lies ahead for industry and ask - do we need a global database?

In the evening a TIACA Hall of Fame reception will take place at the Compass Rose Ballroom, which will feature a dinner and ceremony for any new inductees.

The final day of the Summit on Thursday 26 May, will start with the plenary session - Air Cargo Challenges from the Shipper’s Point of View - which bring air cargo shippers to the fore as they are given a prominent voice.

Lars J.T. Droog, who was recently appointed to chair TIACA’s new Shippers’ Advisory Com-mittee, will be leading the panel including representatives from FedEx, Ericsson and Honeywell, who will delve into global shipper concerns and future requirements.

For the last session of the event, delegates will have a choice of attending either Simpli-fied Processes and Trade Facilitation: The Vision of Streamlined International Trade under the New Automated Commercial Environment, or a Temperature Controlled Supply Chain, discussing trends and challenges in the pharma sector.

Among the stellar panelists in the latter of the two sessions will be Brussels Airport’s head of cargo, Steven Polmans, and joining him will be senior figures from Envirotainer, Lufthansa and ASC Associates.

Brittin says of the Summit: “TIACA represents every segment of the air cargo supply chain, and our Executive Summit is the perfect platform for industry to come together and discuss the issues that matter.

“Our workshop and seminar series this year includes important updates on legislative and regulatory changes occurring across the globe, and our Summit will also be a great opportunity for the air cargo community to network and build new business opportunities.”

Air cargo security set to be the hot topic in MiamiTIACA EXECUTIVE SUMMIT PREVIEW

Technology curve

Voice of the shipper

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Freight Forwarders

Freight Forwarders

Freight Forwarders

11ACW 2 MAY 2016

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