Sponsored by

Quality and freshness preservedBecause maintaining the quality of your produce matters,

Qantas Freight’s Q-GO Fresh ensures your fresh seafood, meat,

plants and flowers arrive at their destination, with freshness

and quality preserved.

Qantas Freight is Australia’s leading air cargo carrier, and with

a reach of over 80 domestic Australia destinations and 480

destinations worldwide, you can move your fresh produce to more

customers almost anywhere in the world. Fresh and on time.

For enquiries about moving fresh produce or any of the products

in the Q-GO range please visit qantasfreight.com

Freight_Q-Go_Fresh_ACW_FPC_290x390_FA.indd 1 13/04/15 2:37 PM

A I R C A R G O W E E K

A I R C A R G O W E E K

GLOBAL

MANAGEMENT

WORLD AIRPORTS.COM

FREIGHTERS.COM

FREIGH

FREIGH

Quality and freshness preservedBecause maintaining the quality of your produce matters,

Qantas Freight’s Q-GO Fresh ensures your fresh seafood, meat,

plants and flowers arrive at their destination, with freshness

and quality preserved.

Qantas Freight is Australia’s leading air cargo carrier, and with

a reach of over 80 domestic Australia destinations and 480

destinations worldwide, you can move your fresh produce to more

customers almost anywhere in the world. Fresh and on time.

For enquiries about moving fresh produce or any of the products

in the Q-GO range please visit qantasfreight.com

Freight_Q-Go_Fresh_ACW_FPC_290x390_FA.indd 1 13/04/15 2:37 PM

7

Gulf Air receives cargo agents

demAnd for p2fs is hiGh

freiGhters drivinG Growth At Aei

spottinG the opportunities for GrAbbinG Growth

AirfreiGht is hAlf wAy to Anywhere in eArth orbit

The weekly newspaper for air cargo professionals

8

9

10

GULF AIR has been receiving represen-tatives from cargo agents near and far with firms from a number of South East Asian countries last week and earlier in August, agents from Kuwait.

The agents have been visiting Gulf Air to take part in what the airline describes as an, “incentive and fa-miliarisation visit,” to experience the Kingdom of Bahrain and learn about Gulf Air’s products. Gulf Air’s cargo capabilities include live animals, pro-duce, electronics and furniture.

The South East Asian agents visiting Gulf Air include, Speedmark Philip-pines, DSV Air & Sea and DHL Global Forwarding, Harpers Freight Interna-tional Air Cargo, East-West Logistics and Trans Air Cargo. The agents from Kuwait included, Caesar’s Cargo and Hazmat Logistics.

Earlier this month, Gulf Air increased its flights between Bahrain and Cairo from 12 to 14 weekly flights from 24 August. The Kingdom of Bahrain’s Civil Aviation Authority and the Arab Repub-lic of Egypt’s Civil Aviation Authority had recently agreed to increase air traffic rights between the two countries.

Qantas and China Eastern’s proposed five-year joint Australia, China services business which will see the airlines offer expanded services, improved departure and arrival schedules and shorter transit times, has been approved by the Australian Competition and Consumer Com-mission (ACCC).

The ACCC says that over the next two years China Eastern is proposing to increase the fre-quencies of its services on routes between Shanghai (China) and the Australian destina-tions of Sydney, Melbourne and Cairns during peak periods and introduce year round services on a new route, “the details of which were pro-vided to the ACCC confidentially”.

But, the conditions ACCC set for its approval for these new routes require Qantas and China

Eastern to increase their combined capacity on routes between Shanghai and Australia over the five year term by 21.6 per cent. The ACCC says: “This broadly accords with the level of capacity growth proposed by Qantas and China Eastern, and their combined historical rates of growth.” The commission also says: “More broadly, the alliance will also allow the parties to co-ordinate the timing of connecting flights in both Australia and China, reducing total travel times.”

China Eastern chairman, Liu Shaoyong, says the airline looks forward to working with Qantas under the enhanced partnership and that: “We are very happy with the ACCC’s decision. Through this partnership we are helping to generate more tourism and trade

opportunities with Australia and provide more convenient travel options for the many custom-ers who travel between our two countries. We are excited by the possibilities ahead and look forward to helping our customers enjoy all that Australia and China have to offer.”

The joint business, announced in November 2014, was initially rejected by the ACCC in March. The commission has now approved the joint service for a five year period following the two airlines agreeing to the conditions that include the capacity increase. Qantas Group chief exec-utive officer, Alan Joyce, says, “By working with China Eastern we are able to maximise Qantas’ presence in China and build a more sustainable platform for future growth such as...new routes from Australia to Shanghai.”

China slowly extends its reachT

urbulence in Chinese stocks and shares and an interest rate cut last week by the central bank of the People’s Republic

of China do not reflect the growing strength of the aviation industry in the Middle Kingdom.

Whether the statistics are deemed to show that China is the largest or the second largest econ-omy in the world, its airfreight sector has been slowly, but surely, making its worldwide presence felt, and so far 2015 has only demon-strated that this continues - despite the air cargo market’s lacklustre peformance since the end of the US West coast port congestion.

The latest development is the approval of the joint ser-vice between China Eastern and Qantas for routes between Australia and China (see story below). Beyond simply increas-ing routes or their daily or weekly frequencies, the Qantas agree-ment is similar to the Lufthansa, All Nippon Airways and Inter-national Airlines Group (IAG) Cargo, Qatar Airways capacity

sharing and development collab-orations. Later this year may see an Air China, Air New Zealand pact, with a similar agreement to the Qantas, China Eastern deal, get regulatory approval. In Novem-ber 2014, Air China and Air New Zealand announced an, “strate-gic alliance,” that could see an increased frequency on Auckland (New Zealand), Shanghai (China), Beijing routes.

Last year, Air China also announced an emphasis on new long haul services for its cargo strategy, “to expand its interna-

tional cargo network.” This year has seen the Chinese aviation firm HNA Group buy the global cargo handler Swissport in a multi-bil-lion US dollar deal, 14 months after the Henan Civil Aviation Development and Investment company (HNCA) invested in Luxembourg carrier Cargolux International Airlines.

Earlier this month, China Southern Airlines was announced as the latest member of IAG Cargo’s Partner Plus programme. Finnair, which has been a Partner Plus member, has entered into a capac-

ity sharing deal with IAG Cargo. A China Southern, IAG Cargo capac-ity sharing deal could happen in future.

Airlines, cargo handlers, the reach of Chinese industry is extending well into Europe and Australasia. At home, China is increasing its capability, in par-ticular for passenger to freighter (P2F) conversions. Airbus told Air Cargo Week (ACW) in July that it could envisage conversion work being carried out in China for its Airbus A320 family P2F product. In this week’s issue of ACW (see page seven) the Chinese firms, HAITEC Aircraft Maintenance and Guang-zhou Aircraft Maintenance Engineering (GAMECO) are part of the non-Airbus backed A320 P2F programme by aviation services company Pacavi Group. GAMECO is a joint venture between China Southern Airlines and Hong Kong-based investment firm Hutchison Whampoa. It would seem that for various parts of the airfreight industry, China is going to continue to receive the welcoming water salute worldwide.

Qantas, China eastern joint service approved

Volume: 18 Issue: 34 31 August 2015

NEWSWEEK

Pilot reports of unmanned aircraft have increased dramatically over the past year, according to the US government’s Federal Avia-tion Administration (FAA) and

freighters have also encountered them.According to the FAA’s latest list of pilot,

air traffic and citizen reports of possible encounters with drones, or unmanned air-craft systems (UAS), on the 26 January a Singapore Airlines Cargo Boeing 747-400, registration 7962, encountered a UAS. In the vicinity of Los Angeles International Airport, a UAS that was black and yellow in colour was seen by the Singapore pilots at about 1,000 feet.

The list’s reports were compiled from 13 November last year to 20 August 2015. The FAA states that pilot reports of unmanned aircraft have increased dramatically over the

past year, from a total of 238 sightings in all of 2014, to more than 650 by 9 August of this year. The FAA says: “Because pilot reports of unmanned aircraft have increased dramat-ically over the past year, the FAA wants to send a clear message that operating drones around airplanes and helicopters is dan-gerous and illegal. Unauthorized operators may be subject to stiff fines and criminal charges, including possible jail time.” In the last 12 months the numbers of UAS being

seen by pilots has increased substantially, according to the FAA. It says, pilots reported 16 unmanned aircraft in June last year and 36 in July, while this year, in June, 138 pilots reported seeing drones at altitudes of up to 10,000 feet, and another 137 in July.

According to the aviation regulator, it is working with law enforcement to identify and investigate unauthorised unmanned aircraft operations. The FAA says it has lev-ied civil penalties for unauthorised flights.

2

Freighters begin to encounter UAS

CHAPMAN FREEBORN AIRCHARTERING and logistics partner GAC have transported 19 Rallycross cars to Trondheim Airport on board a chartered Kalitta Air Boeing 747-200 Freighter.

The supercars, each capable of zero to 60 miles per hour in 1.9 seconds, will compete in a race in Hell, Nor-way, for the Federation Internationale de l’Automobile World Rallycross Championship. The cars were flown from Montréal–Mirabel Airport. The cars were transported along with more than 30 tonnes of loose spares and sup-port equipment.

Rallycross supercars for Norway

Capacity boosts Air New ZealandAIR NEW ZEALAND says capacity growth, supported by strong demand, cost efficiencies and lower fuel prices, has helped it record a record annual profit for the year ending June.

The carrier announced on 26 August that net profit rose 24 per cent to 237 million New Zealand dollars ($153.8 mil-lion) for the year, during which the airline increased capacity by 6.6 per cent on domestic and international routes.

Earnings before tax were 496 million New Zealand dol-lars, an increase of 49 per cent. Operating revenue was 4.9 billion, up 5.9 per cent on 2014. Air New Zealand’s chair-man, Tony Carter, says: “Our strategic initiatives over the past three years have positioned us well to take advantage of market dynamics which have contributed to these results.

“Our investment in new efficient aircraft, the continued development of our alliance partner relationships, world class sales and marketing execution, great customer ser-vice and strong focus on cost management have enabled Air New Zealand to achieve revenue growth against a stable cost base.

“We indicated at our interim result that lower fuel prices and current sales momentum have strengthened the com-pany’s outlook, and this has seen the delivery of a record annual result.”

Carter adds given the known operating environment, along with increased capacity and improved operating efficiencies, the carrier expects to achieve significant earnings growth in the coming year. Air New Zealand’s chief executive officer, Christopher Luxon, says: “We remain focused on the Pacific Rim as our growth strategy.”

ACW 31 AUGUST 2015

NEWSWEEK

3ACW 31 AUGUST 2015

F edEx has formally launched a bid of 4.4 billion euros ($4.8 billion) for Dutch courier delivery firm TNT Express.

The US firm made a public cash offer for all the issued and outstanding ordi-

nary shares of TNT on Friday 21 August, at an offer price of eight euros per ordinary share, which it had first agreed on in April.

The offer will expire on 30 October, and will be subject to a minimum acceptance level of 95 per cent of TNT shares. The threshold can be lowered to 80 per cent if TNT’s shareholders approve the takeover at a shareholders meeting on 5 October. The deal is expected to be com-pleted sometime in the first half of 2016.

FedEx regional president for Europe, David Binks, says: “This is an important transaction for FedEx, and the offer represents positive news for all stakeholders. We believe the com-bination will provide significant value to both companies and both sets of shareholders.

FedEx is delighted by the unanimous support from the executive board and the supervisory board.”

FedEx and TNT say the process of obtain-ing all the necessary regulatory approvals and competition clearances is on track and evolv-ing. Last month, the European Commission opened an investigation into the transaction after concerns about the combined group’s

dominance in the international delivery of small packages in some European markets. The European Union’s (EU) competition commis-sion rejected a 5.2 billion euro offer for TNT Express by UPS two years ago, but the firms believe the deal will be given the green light as FedEx has less activity in the EU market.

The firms say the transaction presents a “highly pro-competitive proposition for the provision of small package delivery services within and outside Europe that will benefit consumers and small medium enterprises in Europe and beyond”. FedEx intends to finance the offer by using available cash resources and through existing and new debt arrangements.

FedEx says the deal will help, “transform its European capabilities and accelerate global growth”. It says customers will enjoy global net-work access combining TNT Express’ European service and FedEx’s strength in other regions globally, including North America and Asia.

Bid launched for TNT by FedEx for 2016 sale

CABOT AVIATION has been appointed by Kenya Airways as its exclusive remarketing agent for four Boeing 777-200 extended range (ER).

The remarketing broker is part of the Air Partner group. All the aircraft were delivered new to Kenya Airways be-tween 2004 and 2007 and have been operated on its scheduled bellyhold routes.

Cabot Aviation chief executive officer and founder, Tony Whitty, says: “This tops off an excellent few months for Cabot, in which a number of transactions are nearing completion, and we are looking forward to using our ex-pertise to deliver the best result for Kenya Airways.”

Earlier this year Cabot was appointed by China Airlines as its exclusive remarketing broker in the sale of two Boe-ing 747-400 and one Airbus A340-300. It also arranged the purchase of a Boeing 757-200ER on behalf of AJW Aviation.

Kenya appoints Cabot Aviation

WorldNEwsCEVA LOGISTICS has announced that Arjan Kaaks has been appointed its chief financial officer (CFO). CEVA’s CFO, Rubin McDougal, is retiring and will remain with the company to facilitate a seamless transition over the next few months. Kaaks joins CEVA from Maxe-da DIY Group, a private equity-owned company focused on the do-it-yourself retail market, where he was CFO.

SEKO LOGISTICS has appointed Randy Sinker to the newly-created post of chief client solutions officer in response to the company’s growth into increasingly complex global supply chains. Based in Chicago, he will work closely with SE-KO’s customer solutions group teams in Europe and Asia Pacific. Sinker joined SEKO in 2004 as vice president of in-ternational operations.

MNX opens Schiphol facilityMNX GLOBAL LOGISTICS has opened a facility with tem-perature controlled capabilities located just outside of Amsterdam Airport Schiphol that will serve as the compa-ny’s operations and warehousing hub for life sciences and medical device customers in Europe.

The facility’s capacity exceeds 1,300 square metres with the option to expand by an additional 1,700 square me-tres when needed. The hazard analysis and critical control points and good distribution practice compliant facility was designed to exceed the, “highest standards in the handling and movement of critical biopharmaceutical, radiopharma-ceutical and medical device shipments,” says MNX.

The facility has minus 20 degrees Celsius, two to eight degrees Celsius and 18 degrees Celsius temperature con-trolled storage with 24/7 monitoring. It also has back-up systems and security technology to ensure the constant integrity and security of high value shipments.

MNX senior vice president for Europe, Middle East and Africa, Jan Willem Van ‘t Riet, says: “The new life scienc-es logistics centre in Amsterdam allows us to provide cross docking, inventory storage and transportation for our clients. In addition, our customers will benefit from...our direct ramp access to personally deliver and retrieve critical shipments from the airlines that serve Amsterdam Airport Schiphol.”

NEWSWEEK

4 ACW 31 AUGUST 2015

July boost for Leipzig Halle

LEIPZIG HALLE AIRPORT saw a record monthly figure for cargo volumes in July, as tonnage was up 7.7 per cent year on year (YOY).

Germany’s second busiest airfreight air-port and Europe’s fifth in terms of volumes, handled 84,397 tonnes in the month, which it says is the most cargo it has ever handled in a single month.

From January to July, Leipzig Halle has seen an 8.5 per cent YOY rise in volumes to 564,778 tonnes, compared to the same seven months in 2014.

In the first half of the year, volumes at Leipzig Halle, reached 480,377 tonnes, 8.7 per cent above the figure for 2014. In June, it handled 82,640 tonnes. In May, volumes reached 81,942 tonnes, in April, volumes were 82,148 tonnes and in March, it was 83,846.

The airport told Air Cargo Week in June, that growth was due to having a 24/7 oper-ating permit for cargo flights and providing extensive connections to the trans-Europe-

an motorway and railway networks. Cargo infrastructure now includes a modern han-dling terminal for large animals, the Animal Export Center and a veterinary border in-spection post.

Leipzig Halle says another factor in rising volumes is the developing express services sector, where its man customer DHL is the driving force and expanding its capacity by 50 per cent.

The airport says it has also been able to establish itself in niche markets like out-sized freight and military logistics or freight charter services.

Cargo flights operate to around 60 des-tinations in more than 30 countries from Leipzig Halle. The airport handled 910,708 tonnes of cargo in 2014. Its owner, Mittel-deutsche Airport Holding, chief executive officer, Markus Kopp, said earlier this year the airport was able to continue consolidat-ing its position in cargo from an increase in express freight and additional routes to Russia and Asia.

A ir China Cargo and Canadian logistics company Braden-Burry Expediting (BBE) have signed a multi-year cargo handling agreement at Edmonton

International Airport.The inaugural Air China Cargo flight will take

off on 3 September and it will connect Shanghai Pudong International Airport, Edmonton and Dallas-Fort Worth International Airport. It is the first cargo flight BBE has handled to and from Asia.

Air Cargo China will use a Boeing 777 Freighter, serving Edmonton six times per week, three from Dallas and three from Shanghai.

Air Cargo China vice president, Ray Lo, says: “We believe BBE is the right fit for us

as we expand our freighter operations into Canada, which will help build important trade links between the country, southern US and Asia.”

BBE president, Heather Stewart, says it is not only a very exciting opportunity for Air China Cargo and BBE, but also for the Edmon-ton region, connecting it with large diversified markets in China and Texas in the US. “The opportunities are endless for local importers and exporters dealing in those markets,” Stew-art adds.

Edmonton president and chief executive officer, Tom Ruth, says it is great to see the investments that BBE is making in their busi-ness, including their new facility at Edmonton airport and in its cargo handling infrastructure, are all having an, “immediate impact”.

The airport estimates that the service will generate 31 million ($23 million) Canadian dol-lars per year for the region. The new service will also increase cargo capacity between the Cana-dian state of Alberta and Texas, helping firms move equipment, tools and products for the two destinations that are considered energy centres. It will be the only freighter service between Alberta and Texas.

Logistics deal done at Edmonton

New members for Frankfurt

AIR CARGO COMMUNITY FRANKFURT has welcomed five new members into the as-sociation to contribute their knowledge of

the airfreight market in the German city of Frankfurt. Handling firm Swissport Cargo Services Deutschland, freight forward-er Dachser, the temperature controlled transport specialist Thermotraffic, road feeder service company Sovereign Speed and my Logistics have joined the commu-nity, which now includes 33 members.

Air Cargo Community Frankfurt execu-tive director, Joachim von Winning, says: “We are delighted about the new additions to our community. Together with the new members we want to make further prog-ress with our current projects, as well as focusing our attention on new issues.”

Air Cargo Community Frankfurt is made up of different companies, institutions and organisations which work together to pro-mote air cargo in Frankfurt.

NEWSWEEK

5ACW 31 AUGUST 2015

V irgin Atlantic Cargo reports it carried 33 per cent more cargo from Dubai in the first half of 2015.

The carrier says additional US routes and frequencies and more traffic due to the Californian West coast port disruptions boosted volumes.

For the six months ending 30 June, the airline carried 2,400 tonnes, compared to the 1,800 tonnes in the same period a year ago. Strong increases were seen in cargo volumes destined for London as well as to the US, it claims.

The carrier explains its additional daily frequency to New York’s John F. Kennedy International Airport and the launch of a new bellyhold Atlanta route both contributed signifi-cantly to the increase.

Virgin Atlantic senior vice president for cargo, John Lloyd, says: “Given the intense level of competition in the region, our performance from Dubai in the opening six months of 2015 is

very encouraging. Our increased capacity to the US has made a big difference and was particu-larly important during this period as customers looked for alternative routes into the US to avoid the port disruptions there.

“We have also seen improvements in our ser-vice levels this year after they were impacted towards the end of 2014 during our ground handler’s relocation in Dubai.” Lloyd adds the carrier hopes to maintain this performance for

the rest of 2015. Virgin Atlantic commenced operations from Dubai nine years ago and its daily Airbus A330-300 flights have 20 tonnes of cargo capacity.

Access to Virgin Atlantic’s 11 US bellyhold destinations from London is popular with cus-tomers moving goods from Dubai, the airline says, as well as its trucking services to other key cities across North America.

In August 2014, Virgin Atlantic awarded a new general sales agent (GSA) contract to Globe Air Cargo in Dubai to market the airline’s freight and courier express services. This move was aimed at simplifying freight and courier express sales for customers in the United Arab Emirates and to take advantage of the Dubai market’s strong growth forecast.

Globe Air Cargo managing director, Shiranka Leo, says it did not take long to win confidence in the market and that paved the way to suc-cessfully fill all of the available capacity.

Dubai gives Virgin Atlantic 33 per cent boost

ACP WORLDWIDE has been appointed as the general sales agent (GSA) across South Afri-ca effective from 1 August this year for Saudi Arabian Airlines’ cargo arm, Saudia Cargo.

Saudia Cargo operates three times weekly Boeing 747 Freighter flights from Johannes-burg (South Africa) to Jeddah (Saudi Arabia) and Amsterdam, which are shared frequen-cies with Nairobi.

In addition to this freighter capacity, ACP Worldwide will also be able to sell bellyhold space on the carrier’s three times weekly Boeing 777-200 flights between Johannes-burg and Jeddah. This offers a total 50 tonnes of lower deck cargo capacity per week.

ACP Worldwide country manager for South Africa, Dawn Bailey, explains: “Following a competitive tender process where we were able to demonstrate our depth of knowledge and professionalism, we were delighted to win the Saudia Cargo business.” Bailey adds: “With a flourishing requirement for fresh

produce in the Kingdom of Saudi Arabia, commodities which are likely to prove pop-ular exported from South Africa include fruit, vegetables, meat, flowers.”

The main business from South Africa is destined for the three principal hubs in Saudi Arabia, Jeddah, Riyadh and Dammam, with onward traffic to network points such as Amsterdam, London, Brussels and Khartoum.

In response to taking over as the GSA in South Africa for Saudia Cargo, ACP’s Johan-nesburg based team has deployed additional reservations and operations staff who will be dedicated to the portfolio.

Saudia Cargo regional director for Africa, Ken Mbogo, says: “With their considerable experience of our market and long estab-lished reputation, we believe ACP is the right partner to help drive our business forward and deliver on our ambitious growth targets in the South African airfreight market.”

Saudia appoints GSA for South Africa

WorlDNewsETHIOPIAN AIRLINES has revamped its website. The airline says it now has streamlined menus with clean navi-gation allowing for an easy access to the essential information regarding all Ethiopian Airlines products and ser-vices. Online recruitment, procurement information like tenders and compet-itive bids, company information and much more can be found there.

AIR CHARTER SERVICE has trans-ported 90 tonnes of tomato ketchup sachets in the US for a fast food restau-rant chain. A Boeing 747 from Los Angeles to Georgia, via Pennsylvania, carried the ketchup. The company’s restaurants across the North East and South East of the US were running ex-tremely low on ketchup servings.

Hermes software goes live in PeruTALMA SERVICIOS AEROPORTUARIOS in Peru has gone live with the latest version of software company Hermes’ air cargo man-agement system.

Talma Servicios Aeroportuarios is a ground handling company. The Hermes system integrates cargo processes and aims to in-crease the efficiency of handling processes, direct warehouse operations and seamlessly interface with local community systems.

Talma chief executive officer, Arturo Cassi-nelli, says the introduction of the Hermes software is another step towards it becom-

ing one of the “leading” air cargo companies in Latin America. Hermes product director and Talma project manager, Simon Elmore, explains working practices and customs re-quirements in Peru differ greatly from other countries and understanding them in detail proved, “challenging at times”.

Talma has operations at 17 airports in Peru and has run cargo services in Mexico for the last 23 years. It operates more than 27,500 square metres of warehouse space and handles around 190,000 tonnes of cargo a year.

NEWSWEEK

6 ACW 31 august 2015

Freighters left out of forecast

AIRBUS predicts that airline fleets in the Russia and the Commonwealth of Inde-pendent States (CIS) region will more than double by 2034 and growth in the region will generate demand for more than 1,280 new aircraft.

The European aircraft manufacturer re-leased the figures on 26 August in its latest Global Market Forecast. Airbus says the Russia and CIS market will more than dou-ble in the next 20 years with over 2,000 aircraft needed by 2034, compared to the 922 in operation today.

The forecast shows that more than 1,280 of these aircraft will be new deliveries val-ued at $150 billion, comprising 1,100 single aisles, 160 twin aisle and 24 very large air-craft. Airbus defines very large aircraft as the Airbus A380 or Boeing 747. However, there is no mention in the forecast update about what the demand for freighters will be in the region.

Airbus says the additional aircraft will satisfy both fleet replacement needs and future growth for the intra-regional CIS and

international market. The aircraft manufac-turer predicts that the region’s economy will grow yearly at 2.4 per cent in the coming 20 years, with some countries such as Uz-bekistan and Kazakhstan, demonstrating a higher annual growth of around four to five per cent.

Airbus executive vice president for sales, Christopher Buckley, explains: “The Russia and CIS market has always been of key strategic importance to Airbus, and we be-lieve it will continue to grow, even with the recent challenges in the region, as air traffic has proven to be resilient to crisis around the globe. We look forward to seeing Airbus deliveries increasing in Russia and CIS to achieve a 50 per cent market share.”

Airbus says since it delivered its first air-craft to Aeroflot in 1992, 28 airlines in the Russia and CIS region now operate more than 340 Airbus models, including both sin-gle aisle and widebody. Over the last five years, the manufacturer’s fleet in Russia has doubled and Airbus says the number of operators is constantly expanding.

Boeing has projected there will be demand in China for 6,330 new air-craft over the next 20 years.

The aircraft manufacturer released the forecast on Tuesday 25 August in

its annual China Current Market Outlook (CMO), estimating the total value of the aircraft at $950 billion.

Boeing’s forecast comes despite a slump in the country’s economy, the tumbling of share prices last week in China’s stockmarket and the fall in the country’s currency the Yuan Renminbi.

The manufacturer says that China will need about 190 regional aircraft, 4,630 single aisle, 81 small widebody, 650 medium widebody and 50 large widebody over the next two decades.

There was no mention in the CMO of how many freighters the country will require. But, in Boeing’s Long Term Market Report for 2015 to 2034, published earlier this year, it said the Asian

region, not only China, would need 380 new pro-duction freighters and 570 converted freighters in the years ahead.

Boeing said in the same report that China’s air-freight market is expected to grow by seven per cent over the next 20 years and the economy will grow by 6.6 per cent in the same period.

Boeing vice president for marketing, Randy Tinseth, says: “Despite the current volatility in China’s financial market, we see strong growth in the country’s aviation sector over the long term.

“Over the next 20 years, China’s commercial airplane fleet will nearly triple: from 2,570 in 2014 to 7,210 in 2034, with more than 70 per cent of these deliveries accommodating growth.”

Tinseth explains that Chinese airlines have more than doubled their long haul international capacity over the past three years, in large part following the delivery of Boeing 747-8 Inter-continental aircraft to Air China and Boeing

777-300 extended range and Boeing 787 models to several Chinese carriers. “Enabled by China’s growing middle class population, new visa poli-cies and the underlying strength of its economic growth, this expansion is expected to continue, and in fact accelerate,” Tinseth says. “The 777,

787 and 747-8 are perfectly positioned to sup-port Chinese airlines’ continued globalisation.” Boeing projects that across the globe there will be investments of $5.6 trillion for 38,050 new commercial aircraft to be delivered during the next 20 years.

Prediction lacks freighter numbers

7ACW 31 AUGUST 2015

Demand for P2Fs high

PRECISION AIRCRAFT SOLUTIONS can provide a 15-pallet position Boeing 757-200 passenger to freighter conversion that delivers 5.4 tonnes more payload capacity.

This follows approvals by the US government’s Federal Avi-ation Administration (FAA). The approval is for an increase to the maximum zero fuel weight (MZFW) for Precision Air-craft Solutions’ converted freighters that may or may not have winglets.

The MZFW is the aircraft’s weight plus a maximum payload you can put on it before it is fully loaded with fuel. The MZFW increase is therefore a payload increase.

About 1,050 757-200 were manufactured by Boeing, according to Precision Aircraft Solutions. The 5.4 tonne im-provement is for Rolls-Royce and Pratt & Whitney engine powered 757s.

Precision Aircraft Conversions’ president, Gary Warner, ex-plained earlier this year to Air Cargo Week: “Boeing only goes so far. What we have been doing is pushing that more and more by using the engineering data we developed during the STC [supplementary type certificate] process for the freighter conversion programme. We apply that to the analysis to in-crease the MZFW and we keep pushing that and believe that...it is probably the maximum you can get out of the aircraft.”

The STC is a certificate the FAA awards when a company demonstrates an aircaft type can be modified in some manner.

Boeing 757 conversion starts

FREIGHTER CONVERSIONS

Pacavi feels its biggest opportunity in the passenger to freighter (P2F) conversion market is developing and con-verting the Airbus A321 as a Boeing 757 replacement.

Pacavi’s strategic adviser for marketing and sales, Jon Bayless (pictured right), tells Air Cargo Week (ACW) the

firm also expects to see opportunities from its A320 and A321 pro-gramme to replace legacy aircraft that are too costly to operate. “The market has already been validated the past year by customer conversions, during trade show symposiums, and new competitor entry,” Bayless says. “Our largest opportunity will be developing and converting the A321 as a B757 replacement.” Bayless explains that Pacavi has received a lot of interest from potential customers around the world.

The company is carrying out conversions in Germany with HAITEC Aircraft Maintenance, in China with Guangzhou Air-craft Maintenance Engineering (GAMECO) and in the US with AerCap subsidiary, AeroTurbine.

Bayless says China is particularly interesting because of the growth of its market as well as the availability of feedstock. “GAMECO has proved to be a very strong partner with an excellent reputation throughout Asia and the world,” he says. GAMECO is a joint venture between China Southern Airlines and Hutchison.

Pacavi and GAMECO are starting Airbus A320 and A321 P2F con-versions in China, with deliveries expected from the beginning of 2017. They are aiming for them to hit the marketplace when they think that demand will be at a peak. The companies are hoping to start converting A321s in Guangzhou (China) by the end of 2015. GAMECO will also convert A321 LITE prototypes. The two part-ners will also collaborate on marketing activities, with a centre in Guangzhou, targeting P2F customers in the region, which includes aftermarket support.

GAMECO general manager, Norbert Marx says: “China combines swift growth for cargo and express carriers with the domestic availability of quality Airbus feedstock. Our doing the first A321 freighters here in China adds new designs, manufacturing and ser-vice capabilities.”

Pacavi is seeing demand globally, and has had interest in P2F conversions from Europe, Asia, Africa, South America, and across

the Middle East. Bayless explains that Airbus, Boeing and mar-ket experts predict more than 800 P2Fs over the next 20 years. The P2F marketplace is “thriving” in his opinion and there is now a modest, but steady stream of orders.

“As economies grow and demand for goods and services increase, narrowbody freighters will fill the gap to meet demand. We expect a steady growth of five per cent through the replacement of older freighter and gradual expansion of current fleets,” Bayless adds.

In the future he says there could be a combi-freighter version, but feel these opportunities are very specific in nature. “At the moment, we are focusing on the A320 and A321 baseline conver-sion, but the engagements we have had with customers around the world indicate to us that the opportunities are countless.

“Most important, we will approach the markets of the future with an innovative business model: While others stick to a tra-ditional conversion-only approach, Pacavi will offer a complete package of airframe sourcing, purchase, conversion and leasing to airline customers. We’re not just selling a product; we are offering a new experience as to how customers acquire their aircraft,” Bay-less says.

In September 2014, Pacavi announced it was starting the

A320 and A321 P2F programme, to satisfy demand in emerging economies.

In January 2015, Pacavi delivered its first prototype A320 to HAITEC Aircraft Maintenance, to finalise regulatory approval from authorities including the US government’s Federal Aviation Administration and the European Aviation Safety Agency. The companies hope to get approval in 2016.”

ACW 31 AUGUST 2015 8

A eronautical Engineers (AEI) is operating different passenger to freighter (P2F) conversion pro-grammes, mainly for narrowbody aircraft as it says this is where the

strongest demand is coming from.AEI currently runs P2F conversions for the

Boeing 737-400, Boeing 737-300, Boeing 737-200 and Boeing MD-80. Additionally in 2017, it will bring to the market its new Bombardier CRJ200 Special Freighter (SF) conversion fol-lowed by the Boeing 737-800 full freighter and combi conversions.

The company’s senior vice president for sales and marketing, Robert Convey (see picture), tells Air Cargo Week (ACW): “Business is good and at more of a steady pace as it was too much before and going bananas.” Convey explains demand is steady and the most buoyant region for business is Europe followed by the Ameri-

cas, but demand is solid in the rest of the world, especially in Africa and the Middle East.

Last month, AEI started a third MD-80 SF con-version for Aeronaves, a year after the Mexican airline ordered the aircraft. The MD-80SF can carry 12 pallets. This will be the sixth MD-80SF it has delivered. Convey says there has been an uptick in the demand for the programme: “We have two in work now for the MD-80 and we are working on two more. We are doing two to four

aircraft a year for the next several years. That is about all we can hope for at the moment.”

The 737-800SF P2F is also taking off and GE Capital Aviation Services is the launch cus-tomer and has ordered 20, but Convey says AEI is working on a second big order as well: “We expect that the 737-800SF will be a mainstay in cargo operators’ fleets for the next 20 plus years,” he adds. AEI will perform the conver-sions at its facilities in the US and China, and the first aircraft is scheduled for conversion start-ing in 2016 in order to earn a supplemental type certification in 2017 from the Federal Aviation Administration. It will then enter service as a leased freighter.

Convey says the CRJ200 programme is per-forming well and the response from the market has been positive. “The new programme, the CRJ200, is in development for the first part of 2016, we have 39 customers already and we think that it will do quite well,” Convey explains.

In 2015, AEI has delivered three Boeing 737-400SF, one each to DHL, Cargoair and Swiftair.

They all received their aircraft in February. Convey explains AEI is working on seven at the moment and that should hold steady for the next few years.

In December, AEI delivered its 400th conver-sion, a 737-400SF 11-pallet position, owned by Vx Capital Partners and operated by TNT. AEI has also delivered the third 737-400SF 11-pallet position to Bulgaria based Cargoair. The carrier will operate it under a long-term contract for European integrator, DHL.

Convey says AEI will soon make more deliver-ies of the 737-400SF over the coming months: “We are about to deliver one to DHL and one to ASL Aviation. We are also working on one for Cargoair who is doing a seventh and will deliver that soon.”

Narrowbody freighters driving growth at AEIFREIGHTER CONVERSIONS

ST AEROSPACE, Airbus and Elbe Flugzeu-gwerke (EFW) are starting Airbus A320 and A321 passenger to freighter (P2F) conver-sions, with ST Aerospace increasing its stake in Airbus’ conversion company, EFW.

The agreement was signed at the Paris Air Show on 17 June and will see ST Aerospace lead the engineering development with help from Airbus and EFW. ST Aerospace and EFW will undertake the conversion work.

ST Aerospace told Air Cargo Week in July, development work will start shortly, though gave no exact date, but said the aircraft should be in service by the end of 2018.

EFW chief executive officer, Andreas Sperl, says: “The launch of the A320/A321 P2F pro-gramme is very good news for EFW and the airfreight cargo market. We are convinced of the significant market potential for our product.”

Airbus chief financial officer, Harald Wil-helm, explains the freighter conversion agreement is a great step for its A320 fam-ily programme, boosting the longevity of the aircraft and, “enhancing value for aircraft owners and investors”.

EFW says over the next 20 years, it expects

there will be demand for 612 small freighters with a payload of less than 30 tonnes, and the A321 P2F, in particular, will fill demand by the replacement of Boeing 757 Special Freight-ers. The firm predicts all the small freighters required over the next 20 years will be con-versions. The A320 P2F will have a payload of 21 tonnes over 2,100 nautical miles (3,885 kilometres) and the A321 P2F will be able to carry 27 tonnes over 1,900 nautical miles.

The companies say the A320 and A321 P2F programmes will be a similar collaboration to the Airbus A330 P2F conversions launched in 2013.

ST Aerospace will increase its stake in EFW from 35 per cent to 55 per cent in a deal, which it hopes to close by the fourth quarter of 2015, subject to regulatory approval.

ST, Airbus and EFW to start programme

Global aircraft charter specialist Air Charter Service (ACS) organised the first civilian cargo flight into the Yemeni port of Aden earlier this month since the con-flict worsened in the country almost five months ago.

ACS arranged for an Ilyushin IL-76 to fly in carrying 35 tonnes of food and medical aid to Aden, which is the tempo-rary capital city of Yemen following the takeover of Sana’a by the Houthis insurgency in March.

The charter firm had already performed more than 20 flights into Yemen’s largest city Sana’a for various Red Cross organisa-tions, charities and governments. Its first direct flight from the United Arab Emirates into the country being operated at the end of July. ACS commercial director, Justin Lancaster, tells Air Cargo Week (ACW) that business in the global charter market continues to be buoyant in 2015.

“Discounting the hike during the US East coast port strike at the start of the year I’d still say underlying growth is in double digits,” he says. “For the 12 months to July we are up every month and business has been really strong. The summer has slowed a little, but that is to be expected. The true test is coming up in the autumn when traditionally we have done two thirds of our busi-ness, but in recent years things have levelled out more.”

With airfreight demand closely allied to the ups and downs of

world economy all eyes are on the markets of the Far East. “As a global company with offices all over the world you can see the differences,” says Lancaster. “When consumer demand is high in North America we’ll see our offices there doing well whilst a slowdown in the Far East might be reflected in the opposite direc-tion. With everything going on in China we are waiting to see if what will feed through into the last quarter.”

Future growth and expansion is notoriously difficult to predict. “It’s the million dollar question,” says Lancaster. “New passenger planes are encroaching on markets that perhaps in the past were exclusive charter markets so there is some concern, but I have no doubt there will always be a need for charter. Despite more and more passenger planes coming onto the market we are growing year on year.”

Along with Chapman Freeborn, ACS is a player in the global air charter market. “Others claim to be global but when you look at their figures and where their offices are, particularly on the cargo side, it really is just the two big global players. Our clients are now all global so it was an essential route for us.”

The on-going challenge for the likes of ACS is to stay ahead of

the competition and remain innovative. “Whether that is through our training, our offering, our IT systems, you know that identify-ing and investing in markets we think are expanding is central to growth,” adds Lancaster.

“We have had specific successes and contracts but I’d say the majority of the growth has been built through our brokers, by adding clients and ultimately eating into our competition’s mar-ket share.”

Spotting the opportunities for grabbing growth

9ACW 31 AUGUST 2015

AIR CHARTER BROKER

QATAR AIRWAYS CARGO’s first Boeing 747 Freighter has joined the carrier’s expanding fleet to satisfy a growing de-mand for outsized freight transportation from customers investing in significant infrastructure projects in the Middle East and throughout the world.

Qatar’s chief officer cargo, Ulrich Ogiermann, says: “This dedicated charter aircraft will enable Qatar to satisfy grow-ing demand from our customers for capacity in the ad-hoc charter market. We continue to grow and have achieved our status as the world’s fifth largest cargo carrier by adopting a market-responsive strategy that is strengthened by our global network and expanding fleet. The addition of the 747 freighter will enable further flexibility by supplementing our existing scheduled services as and when required.”

With a large side cargo door, the 112.5 tonne capacity Boeing 747-400 Boeing Converted Freighter has flexible capacity and can be loaded quickly and easily, according to Qatar, whether the cargo is standard containers and pallets or non-standard, outsized objects. Qatar confirmed an order for an additional four Boeing 777 Freighters at the Paris Air Show in June, increasing its outstanding fleet order to eight 777Fs and two Airbus A330Fs. In October, the airline will welcome a Boeing 747-400 Freighter with a nose-loading door to its fleet.

The 747F, one of the largest palletised cargo aircraft on the market, will provide belly freight capacity and main cargo deck capacity with 39 unit load device positions. A pressurised cargo cabin means it can transport freight of all kinds, offering a temperature control range from four to 30 degrees Celsius. Livestock and horses, perishables, heavy machinery, oversized equipment, oil and gas equip-ment and humanitarian and relief aid can all be transported on long haul cargo flights of up to 10 hours.

The cargo airline operates from Hamad International Airport, Doha, where its terminal is one of the largest in the world with a capacity to process 1.4 million tonnes of cargo per year and accommodate 11 widebody freighters with 42 airside loading docks to facilitate the transfer of cargo in to and out of Qatar.

Expanding for flexibility

ACW 31 AUGUST 2015 10

AIR CHARTER BROKER

Airfreight is half way to anywhere in Earth orbit

Shouldering the demandATLAS AIR WORLDWIDE HOLDINGS, a provider of out-sourced aircraft and aviation operating services, the parent company of Atlas Air and Titan Aviation, and a majority shareholder of Polar Air Cargo Worldwide, has reported ris-ing demand for its aircraft and services in the first half of 2015.

“We are seeing good business as we enter the second half of 2015,” says Atlas chef executive, William Flynn. “Many of our customers are outperforming the overall market and we are working closely to provide them with the most efficient aircraft and effective operating services for their needs.”

Through Atlas and Polar, Atlas Air Worldwide operates a fleet of Boeing 747 Freighters. At the beginning of August, it reported to shareholders a free cash flow of $68.5 million in the second quarter of 2015, compared with $59.2 million in the second quarter of 2014.

“Earnings in the second quarter were driven by con-tribution and margin strength in ACMI (Aircraft, Crew, Maintenance and Insurance), charter and dry leasing,” ex-plains Flynn. “As we gather additional insight into second half demand, yields and military requirements, we continue to look forward to a strong year and a significant increase in earnings compared with 2014.”

Atlas says it will respond to market and customer require-ments by implementing several previously announced fleet initiatives, which include placing an additional Boeing 747-400 freighter in ACMI wet lease service with DHL Express and acquiring a new Boeing 747-8 Freighter in the fourth quarter.

Agrowing number of satellites destined for launch into Earth orbit begin their journey into space with heavy lift airfreight specialist Volga-Dnepr Airlines.

The Russian private air charter company, a special-ist in the worldwide market for oversize and super

heavy cargo transportation, reports a 50 per cent year on year (YOY) increase in its space cargo business.

Volga-Dnepr, which claims that it now delivers one in three of all satellites in the world, says space cargoes represented 42 per cent of its charter business in 2014 and that this market is grow-ing by 50 per cent YOY. So far, in 2015, the airline has operated seven flights delivering space equipment.

Volga-Dnepr regional sales manager, Georgy Sokolov (see pic-ture), tells Air Cargo Week, that around 30 per cent of its total airfreight business is accounted for by aerospace cargoes, with satellites representing nearly two thirds of that.

“Overall we have performed over 900 flights with space equipment since 1990, carrying actual satellites in containers, satellite ground support equipment, space launch systems and rocket engines,” he says. “Satellite containers are designed and built to protect their valuable content, but as this type of equip-

ment is generally quite sensitive and, depending on a particular customer’s needs, we monitor pressure, temperature and other parameters during loading, offloading and the actual flight.”

Sokolov adds that satellite transportation is also very often time sensitive. “Usually the cargo is ready for transportation after manufacturing and extensive testing procedures very close to the planned launch date; and those launch dates cannot be missed as the possible [launch] window is typically rather narrow, so

schedules are very strict and tight, taking detailed preparation and planning to maintain them,” he explains.

Many satellite cargoes can also contain potentially dangerous substances, such as ammonia, which are normally forbidden for air transportation. This means staff have to acquire special exemptions from the aviation authorities of all the countries along the route.

This spring Volga-Dnepr delivered the Russian telecommuni-cations satellites Express AM7 and Express AM8 to the Baikonur Cosmodrome launch site in Kazakhstan.

Flights carrying the satellites operated from Toulouse in France and Krasnoyarsk in Russia using special shipping containers. Special loading equipment developed by the airline was also used to ensure safe loading and offloading.

To keep the delicate equipment safe, Volga-Dnepr’s experts ensured the cargo hold was maintained at a specific pressure and temperature level throughout the journey.

Its long term clients for space transport come from both gov-ernment and private sectors and include the Russian Federal Space Agency, United Launch Alliance, Space System Loral, Thales Alenia Space, Airbus Defense & Space and Mitsubishi Electric Corporation. As more commercial firms, like launch company Space Exploration Technologies and satellite commu-nications specialist MDA, enter the market, the niche business for Volga-Dnepr is expected to grow.

Despite its high profile space deliveries, Volga-Dnepr’s biggest area of activity lies in the more down-to-Earth job of transporting equipment and materials for major customers in the oil and gas industry. This August it completed two simultaneous IL-76TD-90VD cargo flights to ensure the fastest possible delivery of urgent mobile drilling equipment for an oil and gas customer in Kuwait. And since 1990 it has delivered over 90,000 tonnes of oil and gas cargoes all over the world using its unique fleet of 10 An-124-100 and five IL-76TD-90-VD freighters.

Freight Forwarders

11ACW 31 AUGUST 2015

TRADEFINDER

Turkey

Airlines

USA

Industry EventsAZura Productions

Freight Forwarders

Hong Kong

Jamaica

USA

United Arab Emirates

Charter Brokers

Italy

Freight Forwarders

China

NEWSWEEK

Small July increase for Abu Dhabi

Abu Dhabi International Airport saw cargo volumes increase by 2.1 per cent year on year (YOY) in July.

The airport handled 68,888 tonnes at its three terminals in the month, a rise on the 67,456 tonnes in July 2014. This was largely due to Etihad Cargo, which represents 91.5 per cent of the total cargo at Abu Dhabi and saw volumes grow YOY by three per cent in July.

For the first seven months of 2015, Abu Dhabi has handled 483,171 tonnes of freight, an 8.5 per cent YOY increase on the 445,341 tonnes recorded in the same period in 2014. The growth in July is slightly down on the surge in the first half of the year, as after six months the airport saw a YOY increase in cargo volumes of 9.6 per cent, handling 414,203 tonnes.

This year, the airport has seen significant monthly cargo increases including a 19.3 per cent YOY rise in April to 71,650 tonnes, and a 12.6 per cent YOY surge in February to 64,067 tonnes.

Abu Dhabi’s airfreight volumes are expected to grow when it opens its Midfield Terminal Building in 2017. Abu Dhabi Airports, chief operations officer, Ahmad Al Haddabi, says the terminal is being built to meet increasing growth and adds that as each day passes the project resembles its design.

Double-digit net profit growth at KerryKERRY LOGISTICS has seen net profits in-crease by 11 per cent for the first six months of 2015.

The logistics company released its interim results on Tuesday 25 August for the period ending 30 June 2015.

Net profit was 542 million Hong Kong dol-lars ($69.9 million) compared to 490 million in the same period in 2014. Turnover rose by two per cent to 10.1 billion Hong Kong dol-lars, up on the 9.9 billion last year.

Kerry Logistics’ integrated logistics busi-ness arm achieved a 15 per cent increase in profit to 807 million Hong Kong dollars, up on the 704 million in 2014. The international freight forwarding segment saw a 22 per cent rise in profit to 191 million Hong Kong dol-lars, up on the 157 million in 2014.

Kerry Logistics group managing director, William Ma, says: “The global economy con-

tinued to be plagued with volatilities in the first half of 2015. In face of these challeng-es, Kerry Logistics focused on honing its core competence in delivering highly customised solutions tailored to industries with growth potential.

“The group has taken the opportunity during this weakened environment to inte-grate its businesses, improve operational efficiency and further expand into newly developed markets, resulting in strength-ened profitability and sustained double-digit growth in our core earnings.”

He explains further: “The group was able to achieve steady growth in overall operating profits, while businesses in the greater China region remained relatively stable driven by our strong performances in Hong Kong and Taiwan. In Thailand, phase one of the Kerry Bangna Logistics Centre was completed in

the second quarter of 2015. It will serve as a new sorting centre for Kerry Express and a ful-fillment facility for e-commerce customers.”

Also this year, in Cambodia, the group held a groundbreaking ceremony in July for the construction of a 160,000 square feet (14,864 square metres) bonded warehouse at a free trade and special economic zone

in Phnom Penh. In March 2015, the firm ex-panded its business in Indonesia by investing in PT Puninar Saranaraya, one of the coun-try’s logistics companies. Kerry Logistics says it is targeting expansion into Laos and Malaysia in the second half of 2015, as well as into the Philippines, Indonesia, Myanmar and Singapore in the near future.

Capacity expansion for Iranian routeEMIRATES SKYCARGO will increase its bel-lyhold cargo capacity to Iran, when it begins its five non-stop flights to Mashhad (Iran) from 1 September.

Mashhad will become Emirates’ second Iranian destination after the capital Teh-ran, which Emirates has been serving since March 1990. Last year, Emirates handled more than 17,500 tonnes of cargo to and from Iran.

With the new service to Mashhad, Emir-ates will provide more than 150 tonnes of bellyhold capacity between Iran and the United Arab Emirates (UAE) each week. This will further support Iranian exports of

fruits, vegetables, carpets, saffron, nuts and personal effects, and its imports of meat, pharmaceuticals, medical equipment, ma-chinery and automobiles parts.

Emirates SkyCargo’s vice president for commercial cargo for the Middle East, Gulf Cooperation Council and Iran, Khalid Mohd Al Hinai, says: “Iran is an important market for Emirates SkyCargo, and with our Dubai hub strategically located between East and West, we are able to offer Iranian manufac-turers access to our global network coupled with a range of innovative products and ser-vices, such as our cool chain offering for time and temperature sensitive commodities.