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Air India settlement brings case to an end

60 secondswith sanjeev gadhia

cutting business overheads

dusseldorf happy despite fall

icelandic imports finally start recovery

The weekly newspaper for air cargo professionals

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AIR INDIA is the latest and last air cargo carrier to settle as part of an antitrust law-suit over price-fixing after agreeing to payout $12 million.

The settlement is subject to court ap-proval by United States District Court for the Eastern District of New York and it is the 28th to be made in the last decade.

The total settled by carriers has now ex-ceeded $1.2 billion and Air India is the last to agree compensation to buyers of air cargo services. Air New Zealand set-tled for $35 million earlier this month.

Defendants were seeking settlements of air cargo shipping services for ship-ments to or from the US between 1 January, 2000, and 30 September, 2006, and compensation for alleged overcharg-es sustained as a result of a price-fixing conspiracy.

Polar Air Cargo, which along with Polar Air Cargo Worldwide and Atlas Air Worldwide has agreed on a $100 million settlement. Korean Air paid out the most at $115 million, while others have includ-ed EVA Airways at $99 million, Singapore Airlines at $92 million, China Airlines at $90 million, British Airways at $89 mil-lion, and Lufthansa at $85 million.

ASL Aviation Group has completed the acquisition of the operations of TNT Express – comprising of TNT Airways (Belgium) and Pan Air Líneas Aéreas (Spain).

The two airlines are to be renamed ASL Airlines Belgium and ASL Airlines Spain respectively.

ASL’s offer to acquire the two TNT Express airlines was announced on 5 February, 2016 and was conditional on the intended takeover of TNT Express by FedEx. On 18 May, 2016, the FedEx offer to acquire TNT was declared unconditional.

ASL has entered a multi-year service agree-ment to operate flights for the new FedEx-TNT combination. ASL will continue to serve multi-ple airline customers.

TNT Airways and Pan Air Líneas Aéreas have

become part of ASL Aviation Group, bringing the number of airlines in the Irish-based avia-tion group to nine.

The TNT Airways facilities in Liège, and Madrid will be maintained as the corporate offices of ASL Airlines Belgium and ASL Airlines

Spain. TNT Express’ Liège hub (Eurohub) is not part of the airlines sale.

There will be no service interruption as ASL has immediately taken over the flights operated. In addition to continuity of service delivery the change of ownership and control of TNT’s airline operations ensures compliance with European Union airline ownership and control rules.

The addition of the 35 aircraft in the two air-lines brings the total ASL fleet to over 130 cargo and passenger aircraft. As part of the transac-tion, ASL expects the airlines will maintain contracts with partner contractors, suppliers and airlines, which currently operate an addi-tional 20 aircraft daily for TNT Airways.Financial details of the transaction are confi-dential and cannot be disclosed.

pharma organisation launched by Miami and Brussels

Miami International Airport and Brus-sels Airport have signed a letter of intent to set up a

pharmaceuticals organisation – pharma.aero - to improve pharma handling and quality in air cargo.

The two gateways announced the partnership at The International Air Cargo Association’s (TIACA) Executive Summit in Miami (US) on 25 May, which took place from 24-26 May.

Both hubs say the organisation will be set up by October this year and it will create a pharma trade lane with a focus on quality, devel-oping pharma tools and excellence and promoting standardised high quality handling.

Brussels Airport head of cargo, Steven Polmans (pictured right)says the aims of Pharma Aero will be networking and events to bring people handling pharma together, create a standard setting of pharma handling and projects, and network excellence for mem-bers and creating a pharma lane certification.

The two airports will co-operate

and share pharma best practices and aim to learn from how each other handles pharma cargo.

Polmans says the gateways are in discussion with other airports and also pharma shippers about joining Pharma Aero, but would not reveal who at this stage might join up, only saying they are “big names” and significant industry players.

Any company joining Pharma Aero must be International Air

Transport Association (IATA) Center of Excellence for Inde-pendent Validators (CEIV) in Pharmaceutical Logistics certified, like the communities at Brussels and Miami.

Polmans says the organisation may also lead to more routes con-necting the two cities, but that is not the main aim, but he notes pharma shippers are looking to scale down the routes they use and

focus on ones with high standards.He adds around $35 billion is lost

through temperature excursions and this is something Brussels and Miami both want to fix.

Polmans explains: “The organ-isation will be very much content focussed, developing solutions and creating transparency in very close co-operation with the pharma industry.”

Miami-Dade Aviation Depart-ment director, Emilio Gonzalez (pictured left) notes there is syn-ergies between the two airports as both hubs are CEIV Pharma certi-fied for their air cargo communities.

Gonzalez says pharma provides a high return and is also a low weight product and both airports share the same goal of growing their pharma volumes.

Gonzalez adds after being the first IATA designated pharma hub in the US it wants to leverage its strength by “collaborating with other airports around the world who share a common goal” of strengthening pharma certified trade lanes and extending pharma cold supply chains to reach new international markets.

tnt express operations taken over by asl aviation

Volume: 19 Issue: 21 30 May 2016

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NEWSWEEK

2 ACW 30 may 2016

Pharma centre at Schiphol for DHL

CARGO at Brussels Airport is recovering after the 22 March terrorist attacks, but volumes still took a hit from the deadly attacks.

The gateway says volumes in March and April were impacted and freighter traffic was resumed on 24 March, but because of the suspension of the passenger operations until 3 April, no cargo could be carried on bellyhold flights.

In April, the airport handled 39,129 tonnes, a 4.8 per cent fall on the 41,105 tonnes in April last year, while in March cargo traffic recorded a 20.9 per cent drop on the same month last year, but it was boosted by the return of Ethiopian Cargo (pictured).

The full freighter segment and the integrator services quickly recovered and were again showing positive growth in April – up 19.1 per cent and up 2.7 per cent in the integrator segment compared to last year. The 39.2 per cent drop in bellyhold cargo in April can en-tirely be attributed to the limited number of long-haul flights in March and April.

In the course of April, flights to most destinations were resumed and Brussels Airport saw the bellyhold cargo volume increase week by week.

The fall in all three segments was due to the impact of the attacks of 22 March and after four months Brussels has handled 148,491 tonnes, down on the 161,221 tonnes for the same period in 2015, a 7.9 per cent fall with bellyhold traffic down 16.6 per cent.

QATAR AIRWAYS has increased its shareholding in International Airlines Group (IAG) from 12 per cent to 15.01 per cent.

Qatar first took a 9.99 per cent stake in IAG in January 2015 and is hoping to increase further over time within non-European Union ownership limits. IAG is the holding company of Aer Lingus, British Airways, Iberia and Vueling.

Qatar Airways Group chief executive, His Excellency Akbar Al Baker says: “We have been very happy with our investment in IAG, from a financial, commercial and strategic perspective. We fully support IAG’s ongoing strategy. IAG is very well positioned in Europe with attractive exposure to the transatlantic segment; leading positions at the London and Madrid hubs and the future benefits from the acquisition of Aer Lingus.”

IAG sells another 3% to Qatar Airways

DHL Global Forwarding has opened a new logistics centre for life science and healthcare products at Amsterdam Airport

Schiphol.The Life Science Competence Center

is located next to the airport at the busi-ness park Schiphol Southeast. It serves as a hub for the transport, transport preparation, temporary storage, and transport follow-up of active and passive temperature-controlled pharmaceutical and medicinal products.

The facility covers 1,000 square metres and was part of an investment of one mil-lion euros ($1.1 million) and is run by 14 trained logistics specialists.

DHL Global Forwarding says one area is dedicated to pharmaceutical products that must be stored at constant temperatures between two and eight degrees Celsius,

while the second one allocated to a con-trolled temperature range of between 15 to 25 degrees Celsius.

The centre is equipped with numer-ous temperature and humidity sensors that immediately sound an alarm should conditions fall outside of established parameters.

DHL Global Forwarding global head of life sciences and healthcare, Nigel Wing

says: “The life sciences and healthcare industry is regulated by increasingly stricter compliance requirements that stretch beyond the historic boundaries of GMP & GSP (Good Manufacturing Practice and Good Storage Practice).

“At the same time, dealing with increas-ingly sensitive pharmaceutical products, often of high value, that have specific han-dling and temperature tolerances brings new complexity to the supply chain.

“With its strategic location at Amsterdam Airport Schiphol, this new competence centre further strengthens our existing temperature-controlled net-work worldwide. The facility is certified as part of our network of DHL Thermonet stations and allows us to expand and share our knowledge and expertise glob-ally, whilst meeting the high quality levels expected of the life sciences industry.”

Terrorist attacks impact Brussels Airport

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NEWSWEEK

3ACW 30 MAY 2016

Shippers from a cross-section of global industries have joined The Inter-national Air Cargo Association’s (TIACA) Shipper Advisory Committee.

TIACA announced the news at its Executive Summit in Miami from 24-26 May.

Representatives from Chanel Fragrances and Beauté, Ericsson, and Sandvik Machin-ing Solutions will join chairman Lars J.T. Droog (right) manager of supply chain and general affairs at the Tosoh Corporation on the council.

Marine Harvest RMT and Teva Pharmaceu-tical Industries have also become members, with shippers from the automotive and flower sectors to be announced soon.

Droog says: “We have representation from a wide range of industries who ship a significant amount by air globally to bring insight into ship-per challenges, so that the industry can better collaborate and work towards slicker, safer sup-ply chains.”

The new council complements existing ship-

per organisations to include all sectors of the air cargo community, according to TIACA’s secre-tary general, Doug Brittin (second right).

TIACA’s chairman and head of cargo business at Delhi International Airport, Sanjiv Edward (second left) explains: “TIACA represents all sections of the industry and we feel it is very important to provide this platform specifically for shippers to bring their concerns to the dis-

cussion table. Collaboration is key to ensuring we add value to the industry.”

TIACA has also launched a new improved advocacy knowledge bank on its website as it looks to enhance the communication of perti-nent issues with members in the supply chain.

The information will be sorted by topic, including Pre-Loading Advance Cargo Infor-mation (PLACI), dangerous goods, security programs, research and development, e-com-merce, as well as market access and trade facilitation. Each topic will be fully described and easily searchable so that industry segments can determine how it may affect them.

Brittin says: “We want to ensure that we deliver timely, relevant information to our members so that they can be ready for new leg-islation and take action where necessary.”

TIACA’s three-day Executive Summit brought together over 170 delegates from across the globe to network and take part in discussions on topics from e-commerce to PLACI.

TIACA bolsters shipper commitee and improves website

JAPAN’s All Nippon Airways (ANA) and United Airlines are to start their joint cargo venture on trans-Pacific routes from 5 July this year.

The joint venture and aligned operations will start on flights from Japan to the US and Canada, followed by routes from North America to Japan at an unspecified date “in the near future”.

The Japanese carrier explains: “This program will offer cargo customers access to more destinations with quicker transport times.”

The network will provide customers with 175 non-stop flights a week to 12 destinations and numerous flights and truck connections within the US and Canada.

ANA’s has also recently expanded its joint network with Lufthansa Cargo by adding services to Fukuoka, on the southern Japanese island of Kyushu.

This Japan to Europe service will eventually be followed by one to Sapporo on the northern island of Hokkaido.

ANA and United to start JV in July

WorldNewsPEMCO WORLD AIR SERVICES (PEMCO) has redelivered another Boeing 737-300 freighter aircraft to China-based SF Airlines. Performed by partner STAECO in Jinan Shandong (China) the latest redelivery marks the 15th B737-300/400 PEMCO convert-ed aircraft to SF Airlines since 2013.Four more PEMCO converted aircraft are planned to be added to SF Air-lines’ cargo fleet in 2016.

FRANKFURT AIRPORT has received its fourth connection to China with Air China launching three times a week bellyhold Frankfurt – Shenzhen services on an Airbus A330 service started on 21 May. It is the only di-rect service to Shenzhen in Germany. Shenzhen is known for its electrical and telecommunication industry.

longhao Air set for launch in ChinaCHINA is set to see another all-cargo carrier taking to the sky after its aviation authority granted initial approval for the launch of Longhao Air, to be based at Guangzhou, in southern China.

The approval for the airline has been given by the Central and South Regional Administration of the Civil Aviation Au-thority of China (CAAC).

Operating out of Guangzhou Baiyun International Air-port, it will be privately held by the Guangzhou-based Longhao Group.

Longhao Air plans to establish both domestic and interna-tional cargo and mail routes with a fleet of 737 freighters, according to media reports in China. Domestic routes will include Hong Kong, Taiwan and Macau.

China’s domestic cargo market is growing rapidly, fuelled by the growing e-commerce market driven by the thirst of the expanding middle-class population’s consumer needs.

Express carriers in China are developing fast over the last few years, led by the likes of SF Airlines, Alibaba backed YTO Express and Shentong Express.

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NEWSWEEK

4 ACW 30 may 2016

Airlines in Asia Pacific returned to profitabil-ity in 2015, despite cargo revenue falling due to weakening global demand, the Association of Asia Pacific Airlines (AAPA) says.

Airlines in the region made a profit of $6.9 billion, with strong passenger demand, lower fuel prices and improvements in operating ef-ficiencies. The profit is in contrast to 2014, when the region’s airlines made a loss of $1.2 billion. Despite returning to profit, cargo reve-nue was down 11.7 per cent to $18.5 billion.

AAPA director general, Andrew Herdman (pictured) says: “Air cargo markets remain weak as a result of the slowdown in global trade. nevertheless, taking a positive view of the future, Asia Pacific airlines are con-tinuously reviewing their fleet and network development plans in line with evolving mar-ket trends, and introducing new customer service initiatives, whilst continuing to focus on disciplined cost management efforts.”

revenue for the region fell by 5.6 per cent to $166.9 billion, but the fall in fuel prices means that operating expenses were down 12.6 per cent to $153 billion. Fuel expendi-ture was down 31.4 per cent to $41.2 billion.

Freight tonne kilometres (FTK) in 2016 have started to see improvements, with April increasing by 0.1 per cent.

April saw a year-on-year improvement of 0.1 per cent to just under 5.4 billion but the year is still down 4.8 per cent on 2015, at 21.4 billion FTKs. April is the first month since the middle of 2015 to see year-on-year im-provements. February saw the most dramatic fall, down 12.1 per cent, though this was not helped by the previous year being artificial-ly strong due to the Us West Coast seaport strike. March had also struggled, down 5.3 per cent on 2015.

Herdman says: “international air cargo mar-kets are still weak, with year to date demand registering a 4.8 per cent decline compared to the same period a year ago, reflecting the lacklustre global trade conditions.”

Capacity in available tonne kilometres in-creased by 2.8 per cent in April to 8.7 billion, and by 2.3 per cent year-to-date to 33.9 bil-lion. The load factor fell by 1.7 percentage points to 61.7 per cent in April, and down by 4.5 percentage points to 60.1 per cent be-tween January and April.

V ietJet has finalised an order for 100 Boeing 737 MAXs worth $11.3 billion, with deliveries due to start in 2019.

The agreement was signed at the Presidential Palace in Hanoi by VietJet presi-dent and chief executive officer (CEO), Nguyễn Thị Phương Thảo, and Boeing Commercial Airplanes president and CEO, Ray Conner. The US president, Barack Obama, and his Vietnam-ese counterpart, Trần Đại Quang were present at the ceremony.

Nguyễn says: “Vietjet is efficiently operating a fleet of narrow body airplanes. Our investment in a fleet of B737 Max 200 will accommodate our strategy of growing Vietjet’s coming inter-national route network including long haul flights.”

“Through this agreement, Vietjet will contrib-ute increasing bilateral trade turnover between

Vietnam and the United States, as well as the integration and development of the aviation industry in Vietnam.”

Conner says: “Boeing is proud to again play an integral role in advancing Vietnam’s avia-tion industry. We’re honoured to be joined by President Quang and President Obama for this historic milestone and order of 100 737 MAX 200 airplanes.”

ABC links Houston with Abu Dhabi

AirBridgeCArgo Airlines (ABC) expand-ed its network further with weekly services between Houston and Abu Dhabi.

The weekly flight departs Houston on Monday evenings via Chicago and luxem-bourg to Abu Dhabi, returning to Moscow’s sheremetyevo Airport. ABC will offer truck-ing services from luxembourg, covering continental europe, and from Abu Dhabi, connecting both dubai international Air-port and dubai World Central.

ABC vice president north and south Amer-ica, Hendrik Falk says: “We are delighted to add Houston and Abu Dhabi to our growing list of destinations. We can now provide a direct connection from the Houston area to key markets in russia and the Middle east.”

“We expect that the oil and gas indus-try, in particular, will benefit from this new service and naturally our sales force will be developing this destination for other com-modities too.”

Houston Airport system director of avi-ation, Mario Diaz says: “We are delighted to have AirBridgeCargo among our carriers, especially understanding the scale of its achievements and performance.”

ABC says the Abu Dhabi route will pro-vide onward connections to locations such as Johannesburg and singapore. in April, ABC increased singapore services to thrice-weekly to cater for demand.

Vietjet confirms order for 100 737s

Asia returns to profitdespite weak cargo

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NEWSWEEK

FedEx has completed its 4.4 billion euro ($4.9 billion) takeover of TNT Express, with integration of the compa-nies to start immediately.

The companies say customers will interact with each company as they always have and once the integration is

complete, FedEx says they will benefit from an expanded global offering.

FedEx chairman and chief executive officer, Frederick Smith says: “The timing of this historic event is important, particularly in the current market environment where global e-commerce is growing at double-digit rate. Adding TNT’s capabilities to our existing world-class suite of services, including GENCO and the recently relaunched FedEx CrossBorder, will further expand the ability of FedEx to support business connections around the world.”

Smith adds: “Over our 43 year history, FedEx has repeatedly reinvented and revolutionised the industry, from the first over-night express service backed by a money-back guarantee to the invention of internet shipping.”

“And just as we revolutionised the U.S. domestic parcel busi-ness through the acquisition and development of what is now FedEx Ground, the acquisition of TNT will change the way cus-

tomers view FedEx around the world.”FedEx announced its intention to acquire TNT in April 2015,

saying at the time that the merger would create a strong global competitor in the logistics and transportation.

FedEx also wanted access to TNT’s extensive European road network, while TNT clients benefit from FedEx’s portfolio, includ-

ing global air express, freight forwarding, contract logistics and surface transportation.

Due to European Union ownership rules, TNT Express was forced to sell its airline operations, which was acquired by ASL Aviation, though TNT kept control of the Liege Airport Eurohub.

To get the takeover approved, the companies had to receive government approval. In 2016, it received unconditional approval from the European Commission, Brazil’s Conselho Administra-tivo de Defesa Econômica and China’s Ministry of Commerce.

UPS had attempted to acquire TNT in a similar deal, but this was blocked by the European Commission in 2013 due to con-cerns over competition.

UPS attempted to block the FedEx-TNT deal, arguing that the European Commission had ‘committed an error of law and a man-ifest error of assessment when examining the likely price effects of the concentration’, ‘diverged from the standard set by the case law’, ‘committed a manifest error of assessment by misapplying the concept of closeness of competition’, it had breached UPS’ rights of defence ‘by denying it access to relevant and exculpa-tory evidence’, and committed ‘a manifest error of assessment in analysing customers’ ability to restrain the merged entity’, when assessing its takeover of TNT.

6 ACW 30 MAY 2016

FedEx completes 4.4 billion euro takeover of TNT Express

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DHL Global Forwarding has added Moscow and other major cities in Russia to its Airfreight Plus network, and will expand further into the Commonwealth of Independent States by the end of the year.

Airfreight Plus provides customers with intra-European and intra-Asian door-to-door air transportation for cargo up to two tonnes. Moscow and other Russian cities will be integrated into the network by mid-2016.

DHL Global Forwarding global head of airfreight, Ingo-Alexander Rahn says: “We have noticed a switch from overnight demand to more economical distribution solutions, and thus an increasing demand for our DHL Airfreight Plus product.”

“By offering scheduled deliveries and a choice of transit times and various service benefits at a simple all-inclusive rate for end-to-end shipping, we meet our customer’s needs for cost effective transport options, while growing our air freight business and foot-print in Europe and Asia.”

AEROFLOT has seen cargo and mail volumes increase by 15.3 per cent to 14,652 tonnes in April, with the domestic market driving the growth.

In April, domestic volumes were up by 33.2 per cent to 7,195 tonnes while international saw an increase of 2.1 per cent to 7,456 tonnes. Between January and April, cargo and mail volumes have increased by 15.2 per cent to 48,266 tonnes, with domestic increasing by 27.5 per cent to 22,902 tonnes and international up 6.1 per cent to 25,364 tonnes.

Aeroflot also increased its load factor by 3.9 percentage points in April to 64.8 per cent, with international up 2.4 per-centage points to 62.2 per cent, and domestic rising by 6.8 percentage points to 69.6 per cent.

In the first four months of 2016, Aeroflot added three Boe-ing 737-800s, one Boeing 777-300ER, three Sukhoi Superjet 100s and two Airbus A320s to its fleet.

Five Airbus A319s, one A320 and three Airbus A321s were retired from the fleet during the same time period.

Domestic growthfor Aeroflot

DHL expands Airfreight Plus into Russia

Justin Burns, ACW: How is business for Astral Aviation?Gadhia: We have experienced a 15 per cent decline in payloads in 2016, compared to the same period in 2015, which can be contributed to various reasons such as drop of oil, gas and mining commodities, which combined with a weak currency is affecting inbound volumes to Africa. There is excess capacity of an average 25 per cent to and from Africa, and yields are low. We expect the situation to correct itself in the second half of 2016.

Justin Burns, ACW: What are your buoyant trade lanes?Gadhia: Nairobi–London Stansted - which is being operated twice-weekly on the Atlas wet-leased Boeing 747-400F now in its third year of operation. In addition, Nairobi-Juba, Nairobi-Mogadishu and Nairobi-Mwanza continue to operate relatively well on schedule, while the Djibouti–Sanaa route has been very buoyant on the charter front, mainly for the aid-fraternity with an excess of 50 charters performed to date.

Justin Burns, ACW: Where are seeing strong growth?Gadhia: Aid and relief along with consumer goods are on the rise. The perishables sector is experiencing good growth levels to and from Africa.

Justin Burns, ACW: Does Astral plan on widening its network and reach within Africa and outside of Africa?Gadhia: Indeed. Astral has exciting expansion plans in its existing East African footprint in addition to planned expansion into West and Southern Africa, along with the acquisition of B737 Freighters. Timing is very important as the expansion plans into West Africa is dependent on a buoyant oil and gas industry, which is sadly not the case, however, Astral will continue to evaluate its strategies cautiously.

Justin Burns, ACW: What are the biggest barriers to development of the air cargo industry in Africa?Gadhia: 1) The air cargo sector in Africa is not fully liberalized 2) Restrictions on traffic rights on the intra-African sector for African carriers due to outdated BASA’s which limit growth potential 3) Protectionism exists in certain countries, which limits accessibility 4) Unfair and restrictive business practices in traffic rights 5) Imbalance in air cargo results in higher operating costs for freighters 6) Lack of intra-African connectivity 7) Cargo infrastructure 8) High costs - jet fuel, cargo handling, royalties, freight fees and taxes 9) Lack of co-operation between African airlines in air cargo 10) Dominance of foreign carriers who control 85 per cent of air cargo traffic 11) Ageing freighter fleet and presence of Russian aircraft

Justin Burns, ACW: Which countries in Africa do you think will boom over the next few years?

Gadhia: The freighter hubs of Nairobi, Addis Ababa, Johannesburg and Lagos will experience good levels of growth as all inbound cargoes are routed via these hubs, however, I rate the following countries highly: Mozambique, South Sudan, Somalia, Cameroon, D R Congo, Djibouti, Ghana and Rwanda.

Justin Burns, ACW: What are the potential benefits of using drones to move cargo in Africa?

Gadhia: Commercial drones will revolutionise Africa, just like mobile technology, due to various reasons such as lack of accessibility, infrastructure and physical address. Drones will play an important part in the transportation of medicines in remote and in-accessible areas, in addition to urban deliveries of small parcels to the growing African middle-class population, which don’t have access to a postal address. Drones will be used in aerial surveys and will be useful to monitor infrastructure projects in addition to the power, oil and gas sector, besides anti-poaching efforts. Astral aims to be the largest drone operator in Kenya once the regulations have been ratified.

Justin Burns, ACW: Where do you see the air cargo industry in 10 years’ time?Gadhia: It’s very hard to predict where Africa will be in 10 years time,, but one thing is for sure, that it will be the largest market for air cargo, as it’s a continent with 54 countries, and blessed with enormous natural resources which remain unexploited, along with the largest middle-class population in the world which is embracing e-commerce at a fast pace.Many African countries will emerge from developing to developed status with a new generation of young leaders and entrepreneurs, which will transform, what was once described as the failed continent to a prosperous one.

7ACW 30 may 2016

Astral Aviation is one of the leading players in the growing African air cargo industry, which still faces a wealth of challenges.Air Cargo Week spoke to the carrier’s founder and chief executive officer about how he sees the African marketplace and what needs to be done to improve the supply chain.60 withSanjeev gadhia

Seconds

60SECONDS

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ACW 30 MAY 2016 8

Air Cargo China 2016 in Shanghai is set to see a record number of dele-gates and exhibitors from across the airfreight supply chain attending the industry’s biggest event in Asia.

Organised by Messe Muenchen and co-or-ganised by AZura International, the publisher of Air Cargo Week, the biennial exhibition and conference will take place for the seventh time from 14-16 June at the Shanghai New Interna-tional Expo Centre.

The last edition in 2014 saw 66 exhibitors from 28 countries and 16,800 visitors from 69 countries and regions, but 2016 is set to suprass those figures.

Air Cargo China will cover all sectors of the supply chain including equipment, airfreight pallets, logistics systems, security systems, for-warding agents, air cargo carriers, airports, express and courier services, freight centres, charter brokers, general sales agents and other

parts of the supply chain.China is a key market for the transport and

logistics industry, especially in the air cargo sec-tor and is one of the fastest growing segments in the world.

The Asian powerhouse has a growing mid-dle-class and demand for airfreight is increasing all the time, as e-commerce booms with consum-ers and businesses alike demanding products at speed from across the world.

Despite China’s economy slowing a bit, it is still registering more than six per cent gross domestic product (GDP) growth and both its international and domestic air cargo sectors are expanding as China moves to a consumer driven economy.

Over the three days of Air Cargo China there will be three different conference sessions mod-erated by Bernd Maresch, owner of Maresch, and these will focus on both international and regional aspects of air cargo.

Messe Muenchen member of the management board, Gerhard Gerritzen explains: “For the first time the accompanying conference will be taking place over the entire period of the exhi-bition dealing not only with the most economic issues affecting the air freight sector and cover-ing both international and regional aspects but also examine the area of fresh logistics and/or solutions for perishable goods logistics. More

than 100 speakers will provide insights into the trends of the transport logistics markets as well as the air cargo market.”

He adds: “Along with the excellent supporting program, the fair offers solutions for the Chi-nese and Asia market at the highest possible level and is perfect for initiating important busi-ness transactions in this growth market as well as developing contacts.”

Shanghai to play host to Asia’s biggest airfreight showAIR CARGO CHINA PREVIEW

The first conference session at Air Cargo China will focus on cutting overhead costs in air cargo and ask what works, for whom and why?

New, more efficient and larger aircraft add capacity to the weak market and over-capacity is leading to price pressure, which ultimately questions overhead expenses.

Panelists will discuss what can be cut, what can be outsourced without hurting key selling points, whether solutions are scalable globally, and what operators in the industry should do as a non-Asian company in Asia and an Asian firm outside the vast continent.

Joining moderator, Bernd Maresch and speaking on different topic areas pertinent in the industry will be the International Air Transport Association’s (IATA) head of cargo industry, Anne Marie MacCarthy, who will talk about cargo projects at IATA.

Swissport International’s senior vice president for global cargo sales and ac-

count management, Rudolf Steiner (pictured left)

will then outline how the cargo handler outsources solu-tions in its ground operations.

The future of the air cargo industry will

then be focused on by

AirBridgeCargo Airlines executive president, Denis Ilin (pictured right).

The Russian carri-er is one of fastest growing air cargo airlines and has in-creased its capacity through network ex-pansion and is handling increasing volumes of cargo.

ECS Group chief operations officer, Adrien Thominet will give his views on out-sourcing and a new business model at the general sales and service agent and as a strategy.

Unit load device management is one of area of the air cargo industry, which is seeing more and more outsourcing as carriers look to cut costs and improve efficiency.

Jettainer manage the ULD fleets of a range of airlines, and head of marketing and communications, Martin Kraemer will detail his thoughts on outsourcing of a core activity - container management of airlines.

Also speaking will be Accenture man-aging director, Fox Chu who will focus on taking costs out out of the business.

he will discuss improving efficiency through procurement, supply management, business services and in other sectors.

Cutting business overhead costs

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A growing sector in air cargo is temperature sensitive freight but it comes with a range of new challenges, which are now demanded by shippers of pharmaceu-ticals and perishables.

This is also compounded by the strong competition from ultra-low sea freight rates in general cargo and perishables, although air cargo is improving its standards across the supply chain.

Air Cargo China’s second conference session ‘Temperature con-trol – air cargo’s safe haven or last resort’ on 15 June from 13.00h to 14.30h will focus on this segment.

Joining Bernd Maresch for debate will be a host of well-known industry figures with extensive experience in temperature sensi-tive cargo, who will all focus on particular areas of their expertise in the air cargo chain.

An opening speech will be given first before the debate by Dr Joachim Ehrenthal from the ZHAW School of Management and Law, who will give an insight into the marketplace and the chal-lenges faced.

Freight forwarders are a key part of the chain and the session will also ask how long will forwarders’ tolerate the airlines’ direct approach of shippers?

To shed some light will be Panalpina’s senior vice president, Markus Muecke who will talk focusing on temperature controlled supply chain. He will detail how Panalpina, one of the world’s big-gest forwarders has achieved this and the strategy that it carries out for temperature sensitive cargo.

Following him will be Lufthansa Cargo’s director of product and solutions manage-

ment for specials and express, Annette Kreuziger.

She will give an airline’s view on the supply chain with respect to temperature controlled cargo and also explain about

the GDP certification and how standards are increasing across the industry.Brussels Airport has established itself as

somewhat of a specialist pharmaceutical hub and was the first gateway to be awarded the International Air Transport Asso-ciation’s Center of Excellence for Independent Validators in Pharmaceutical Logistics certificate.

The airport’s head of cargo, Steven Polmans (pictured) will dis-cuss what Brussels has done to meet the needs of the sector in a focus on ‘infrastructure, hub and platform for high sensitive cargo’.

The last discussion will see Cargolux Airlines director of prod-uct management for pharmaceuticals and temperature controlled shipments, Stavros Evangelakakis taking centre stage.

His area of focus is entitled ‘air logistics for temperature con-trolled goods’ and he will encompass the entire chain and how air cargo can win business and improve and its handling of pharma-ceuticals and perishables.

Temperature control takes centre stage in China

9ACW 30 may 2016

AIR CARGO CHINA PREVIEW

THE final conference session at Air Cargo China will bring under the spotlight the one sector where there is great opportunity for airfreight operators - omnichannel logistics.

From 09.30h to 11.00h on 16 June, a stellar line-up of repre-sentatives from the industry will ask whether air cargo will miss out on a slice of the pie or can it contribute to omnichannel retailing and make money.

New technologies and disruptive business models have cre-ated new markets in transportation and along have come new competitiors such as Alibaba and aCommerce, who are promis-ing to deliver fast and at a low cost.

Are they directly attacking air cargo’s existence or opening up new business beyond e-commerce?

First up joining Bernd Maresch on stage for debate will WiseTech Global chief strategy officer, Benn Bekic, who will give a talk about IT providers and cloud-based software solutions.

E-commerce is the without ques-tion providing a major challenge and meeting the needs and demands of this sector is seen as key for a successful fu-ture for the industry.

Swiss WorldCargo’s head of marketing, Alain Guerin will discuss e-commerce and how it fits in with air cargo and new service options and opportunities that the sector presents.

Air cargo omnichannels via the Middle East will then be the focus when Saudia Cargo’s vice president for commercial, Rain-er Mueller (pictured) takes to the stage. He will give an insight into how the region is developing and what his carrier’s strategy is to meet the growing demands and capturing business.

E-commerce is also presenting new challenges for hubs and Amsterdam Airport Schiphol’s director of cargo, Jonas van Ste-kelenburg will follow giving an airport’s take on e-commerce and how it is affecting his gateway and what it is doing to meet the needs of the fast growing cargo sector.

The last conference debate will see Scaldim bvba senior con-sultant, Dr Wouter Dewulf speaking about e-commerce logistics as a whole.

Omnichannel logistics

aircargoweek.com

The prestigious Air Cargo Week World Air Cargo Awards, the Oscars of the air cargo industry, will return to the Kerry Hotel in Shanghai’s Pudong dis-trict, on Wednesday 15 June.

The esteemed awards celebrate excellence within the air cargo industry, and the ceremony starts with a champagne reception, followed by a Chinese banquet featuring fine wine. Attend-ees will enjoy music and live entertainment, as well as awarding leading companies across the air cargo industry at the five star Kerry Hotel, next to the Shanghai New International Expo Centre, where the Air Cargo China tradeshow is taking place.

The sought after awards cover nine catego-ries, Airfreight Forwarder of the Year, Air Cargo Handling Agent of the Year, Air Cargo Charter Broker of the Year, Airport of the Year, Air Cargo General Sales Agent of the Year, Air Cargo Indus-try Customer Care Award, Air Cargo Industry Achievement Award, Information Technology of

the Air Cargo Industry Award and Cargo Airline of the Year. Television presenter, Steven Weathers, of the state channel, CCTV, will be on hand to guide the awards ceremony for another year.

Highly regarded companies including Etihad Cargo and Brussels Airport are sponsoring cat-egories, and there are still categories available for sponsorship. Sponsors receive perks including a table with 10 places in a prime position for the gala dinner as well as the opportunity to announce with winner of the sponsored category and presenting the award to the lucky winner.

Tickets are still available and can be purchased either from www.worldaircargoawards.com or during the show at AZura International stand, number 317 in hall one, subject to availability. Tickets cost £115 ($168) each or £1,000 for a table of 10.

Do not miss out on the chance to attend this incredible evening, which is recognised as one of the biggest nights of the year for the air cargo industry.

ACW 30 MAY 2016 10

Prestigious ACW awards return to Shanghai for another yearAIR CARGO CHINA PREVIEW

Leading figures from the air cargo industry will return to Shanghai’s new international expo Centre for the 7th air Cargo China exhibition and conference.

The show, which takes place from 14 to 16 June 2016, gives companies and delegates the chance to talk business and plan expansion in China, a key market the logistics, especially air cargo. air Cargo China is part of Transport Logistic and is organised by Messe Muenchen.

Companies will be eager to take advantage of changes in Chinese economic growth, as this country, which boasts the world’s largest population, moves towards becoming a na-tion of consumers as well as a producer. Chinese consumers are increasingly affluent, and the middle-class is now larger than the entire US population. They are increasingly shopping online, and want goods from abroad, presenting great oppor-tunities for companies in China and from abroad, who want to increase their presence.

The 2014 show was the biggest ever, with 66 exhibitors from 28 countries and 16,800 visitors from 69 countries and regions. Leading companies including airlines, airports, gen-eral sales agents, and aircraft manufacturers will attend this year’s instalment.

Leading european airports such as Amsterdam Airport Schiphol, Brussels Airport and the Manchester Airports Group (Mag). Stansted Airport, which is operated by Mag, became the only airport in the UK to receive a direct freight-er link to China when China Southern Airlines linked it with guangzhou.

The airports will be joined by other companies including air-lines such as Cargolux, which has ambitious plans for China. The Luxembourg based airline is developing Zhengzhou Xinzheng International Airport in Henan Province as its dual hub and is planning a joint venture airline with its Chinese shareholder, Henan Civil Aviation Development & Invest-ment Co.

it is not just the airlines and airports that will be present; Boeing Commercial Airplanes has a stand, and has been re-ceiving aircraft orders to cater for Chinese domestic demand. Boeing has received a number of orders for 737-800 Boe-ing Converted Freighters (BCF) from companies including YTO Airlines and Shenzhen based SF Airlines. SF airlines also re-ceived its first 767-300BCF in 2015, as it looks to capitalise on the rapidly growing Chinese e-commerce market.

With all these companies and more present, there will be great opportunities to do business and expand in China.

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Leading companies exhibit in Shanghai

ACW 30 MAy 2016 12

Belgium based transport and logistics firm, H. Essers has seen volumes fall during the first quarter of 2016, and is not expecting an increase for the rest of the year.

The firm, which provides road transport for air cargo, says it has noticed a fall in the usage of freighters.

It tells Air Cargo Week: “In 2015, we noticed a change in the loading volume on the EU-air-ports. The usage of full freighters is becoming less and much more cargo is being transported on passenger aircrafts to limit size and weight.”

Describing 2016, Essers continues: “During the first quarter of 2016, we transported less volume compared to the first quarter of 2015. We do not expect an increase of volume. When we base our predictions on those of the differ-ent airlines, there will be no expectation of an increase of air cargo volume.”

Essers says it has seen a move towards trans-porting high value goods and pharmaceuticals. It has high security lorries with features includ-ing geo-fencing and electronic locks, which can

only be opened by authorised people. Driv-ers follow predetermined routes and are only allowed to stop at extra secure and approved rest areas. Perishable and temperature con-trolled goods are transported in special lorries with trailers with temperature sensors.

“We notice an evolution of general air cargo commodities to transportation of more high value goods and pharmaceuticals. The former volumes of textiles and semi-finished products are nowadays replaced by high value electron-ics and temperature controlled goods.”

Another thing Essers has noticed is custom-ers are getting ever more demanding, expecting double crewed trucks, 24/7 follow-up systems, fixed routes and shorter deadlines. On top of all of these, there are also strict security require-ments to comply with.

Airlines are suffering from cost pressures, something that transport firms such as Essers are also noticing. “Because of the fact that the airlines are being pressured to offer the prod-uct as cheap as possible, our trucking rates are of course pressured as well.”

EUROPEAN CARGO

DusselDorf Airport Cargo saw volumes fall in 2015, something that has continued into the start of 2016, but managing direc-tor, Gerton Hulsman (pictured) says there is much to optimist about.

Volumes fell in 2015 to 104,000 tonnes from 114,000 tonnes in 2014, and this year up to April has also been a struggle. Hulsman tells Air Cargo Week (ACW): “The start of the year 2016 was below expec-tation and also below last year in terms of tonnage and turnover. We hope that the situation will change to the better in the re-maining months to come.”

Despite this slowdown, there are reasons for Dusseldorf to be happy, including becom-ing International Air Transport Association Center of Excellence for Independent Vali-dators (CEIV) Pharma certified. Dusseldorf has been operating the DUS Pharma Center since August 2015 and has 23 temperature controlled coldrooms to keep products be-

tween two and 25 degrees Celsius. Hulsman tells ACW: “At this time of

speaking we are the first single operator who achieved the CEIV certificate. This will enable our clients in North Rhine Westpha-lia that at DUS their merchandise is in good hands.”

“We will not stop to convince other par-ties in the supply chain to join us in our effort to offer the market the best possible cool product.”

lufthansa Cargo’s joint venture with Jap-anese carrier, All Nippon Airways has been going well for Dusseldorf, and the agree-ment signed with Cathay Pacific, which is due to start next year, also offers great potential.

Hulsman says: “This joint venture is run-ning very well and the Cathay Pacific joint venture they made recently is also very promising. Good on-loads and top class services offering a myriad of destinations on both ends.”

Hulsman admits operating conditions are challenging at the moment, but innovation could help matters. “At the moment the output is low but hopefully this will change in short. The challenge for this part of the world is to innovate and to lead the industrial world into the 4.0 era. An opportunity would be that this airport can handle more airplanes in an hour than it can so far.”

Dusseldorf happy despite fall

aircargoweek.com

Essers expecting tough year

Both imports and exports grew in the final quarter of 2015, and imports are finally starting to recover following the 2008 financial crisis, Icelandair Cargo

managing director, Gunnar Mar Sigurfinnsson (pictured), tells Air Cargo Week (ACW).

Sigurfinnsson says: “Business was accept-able, especially in the later part of the year. We saw a very good increase during the last four months which gave us acceptable results by the end of the year. Both imports and exports grew quite well in the last quarter.”

Imports have started to recover, having fallen dramatically during the 2008 financial crisis. Sigurfinns-son says: “Import particularly has been increasing, but one has to bear in mind that it went drastically down in year 2008, during the economic crises we had and has hardly recovered since then until now.”

He tells ACW that Icelandair is confident that the growth in imports is sustainable though still below 2007 levels, and exports are expected to

remain strong for the foreseeable future.Fresh fish to the European and North Amer-

ican markets remain Iceland’s biggest export, and a well organised logistics chain means it can be in the shops abroad within 36 hours of being caught off of Iceland’s coast. Sigurfinnsson says: “By combining the freighter operation and the passenger operation we can offer direct service for the fresh fish to more than 40 destinations.”

Icelandair has a number of expansion plans for 2016, including introducing Boeing 767-300s to its fleet, and adding locations such as Chicago and Montreal to its network.

Describing the 767, Sigurfinnsson says: “Those aircrafts are equipped with containers and carry up to four times the volume we can carry with a B757 so that will open up a lot of opportunities for us, especially considering moving products from Europe to North Amer-ica and vice versa.”

Icelandair offers direct services to 12 airports in the US, five in Canada and 31 across

Europe, and now five in Greenland. “The operation is very well connected so it is easy to send products crossing the Atlantic as well as to Greenland from both Europe and North America.”

The world is taking an increas-ing interest in Iceland, meaning

Icelandair Cargo is facing increased competition, though that can also be seen

as a good thing. Sigurfinnsson points out: “Increased competition creates lot of oppor-tunities for a small market like Iceland, as it draws lot of attention to our markets, which in the end increases all business at our home market.”

EUROPEAN CARGOIcelandic imports finally start recovery

13ACW 30 maY 2016

EuroAirport Basel-Mulhouse-Freiburg (pictured) managed to pass the 100,000 tonne mark in 2015 despite a challenging operating environment, with pharma and e-commerce expected to make up for weak-ness elsewhere this year.

Despite EuroAirport describing 2015 as a “difficult year”, tonnage still increased by three per cent, and so far in 2016, volumes have been stable.

EuroAirport tells Air Cargo Week: “Busi-ness continues to be challenging since there has been no clear sign of a upswing yet. Currently, volumes are stable when compared to last year.”

Describing its expectations for the rest of the year, EuroAirport says: “2016 will re-main tough for general cargo except for the pharma, which remains stable. On the other hand, e-commerce will continue to boost and will lead to a favourable development on the integrator side.”

Pharmaceutical traffic is of great impor-tance to EuroAirport, as it is for Switzerland and the whole industry, and EuroAirport has been part of Qatar Airways Cargo’s Pharma Express since 2015. “Taken together, the flown airfreight from EuroAirport is growing, also when compared to 2015. Overall per-formance is good. Some carriers like Qatar have even increased the capacity available from our airport.”

EuroAirport’s cargo terminal is Good Distribution Practices certified and the com-munity continues to work on implementing international Air transport Association Center of Excellence for Independent Vali-

dators certification.“Since our activities are now certified, our

customers can benefit from a seamless ser-vice covering all stakeholder interfaces. This is very positive. It also strengthens our over-all position towards the shippers.”

EuroAirport has plans to increase capac-ity for integrators, having allocated three million euros ($3.3 million) to transform the former cargo building into an express terminal.

“In addition to this, we are working closely with our customers in the full freighter busi-ness to explore various options to increase our services and quality including, for exam-ple, a direct tarmac access for ULD’s, which will reduce waiting times for sensitive ship-ments to zero minutes.”

EuroAirport says though the economic environment is still weak and there is over-capacity, this is not all bad.

“There are opportunities for freighter operations as shippers tend to focus on ca-pacity. Thanks to continuous improvements in service and quality, we are confident that EuroAirport will become one of the shipper’s favourite gateways in Europe.”

EuroAirport passes 100,000t

aircargoweek.com

Picture supplied by EuroAirport

ACW 30 MAY 2016 14

Exports from Israel are down and there continues to remain a market imbalance between exports and imports.

CAL Cargo Airlines vice president for commercial Ronen Regerman explains to Air Cargo Week: “Exports

from Israel are down and prices are lowered since most are highly dependent on the season, while import remains strong. There is stronger competition now than ever before, with other large players entering the market.”

He says the Israeli market has a “typical” market imbalance with a wide gap between exports and imports, but overall it is a steady market, and CAL continues to be the leading cargo player in the market and is “performing at our expectations with small growth in 2016”.

The best performing trade lanes from Israel are to Europe, the Transatlantic corridor and to Asia, which is growing fast.

There is fierce competition in the marketplace from other carriers, while seafreight is a major force in the region owing to Israel’s long Meditteranean coastline.

One of the main focuses for CAL has been the cool-chain seg-ment, especially pharmaceuticals and perishables. Israel is somewhat of a hot-bed for pharma, and temperature controlled

and special products manager, Navot Hirschhorn says: “In export, the most in-demand sector is perishables – specifically flowers and fresh spices.

“However, agriculture is volatile dependent on the season and is not as strong as it used to be. Agriculture is also being shipped by sea more and more, another source of competition.

“In import the quantities of perishable and food such as meat and fresh fish have grown during the last few years.

“Pharma is also a key sector for the Israeli market although it has weakened slightly, and CAL is a major player in this field.”

CAL was the first to receive the International Air Transport Association’s Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certification for both carrier and ground handling operations, which Hirschhorn says is a big advantage.

Regerman feels there is weaknesses in the Israel air cargo mar-ket the main being the market imbalance while competition is growing.

He adds: “In addition, our unique geopolitical situation means we are limited in routes. We have no possibility to feed from outer station ex-Israel like in Europe. Perishable exports are suffering from climate changes.”

The Israeli market is technologically advanced and logistics are consolidated to a high degree and three warehouses serve all the forwarders, so everything is in place for growth he says.

CAL operates daily flights from Tel Aviv to Europe (Liege) and the US (New York, Atlanta), as well as frequent flights to and from Larnaca using its fleet of Boeing 747-400’s.

The carrier has no new infrastructure development plans at its hubs in Tel Aviv and Liege, where its wholly owned ground handling company LACHS is located where it has 16,000 square metres of space, and the largest high-loader capacity (52 tonnes) in Europe.

Regerman says CAL will continue to maintain strong pres-ence in Israel and adds: “In 2015 we opened an online station in Atlanta, which supports our efforts in the US. We are always eval-uating new routes and targets as well as other efforts to improve our service and continue on our strategic plan for growth.”

Imbalance between exports and imports continues in IsraelISRAEL

EL AL recorded a net profit of $107 million in 2015, which compared to a loss of $28 million in 2014 - while revenue was $2.054 billion, compared to $2.081 bil-lion the year prior.

EL AL president and chief executive officer, David Maimon says: “We present record results thanks to our excellent employees, a dramatic im-provement of operational efficiency due to the drop in fuel prices, the entry of new aircraft into our fleet, a considerable investment in the global website, modular pricing for UP-branded flights which increased the demand (UP is the low cost airline operated by EL AL) and the execution of a historical wage agreement.”

Last year was full of significant events for EL AL, in-cluding the signing with Boeing of the largest aircraft acquisition in the airline’s history for the purchase of 15 Dreamliner aircraft and the launch of the only non-stop flights between Boston and Israel three times a week.

The airline’s stocks also entered the Tel Aviv 75 index (a stock market index of the most highly capitalised companies listed on the Tel Aviv stock exchange), the launch of the digital innovation program for supporting and accelerating startups in the fields of aviation and technology called “Cockpit” as well as the continued effort to reduce the age of the narrowbody aircraft fleet.

EL AL’s main hub is Ben Gurion Airport in Tel Aviv.

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EL AL agrees dealwith Boeing

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