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THE coast looks clear for FedEx’s ac-quisition of TNT Express after an appeal against the takeover was thrown out by Brazil’s competition authority.

Unconditional approval has been upheld after the appeal lodged was rejected.

Brazil’s Conselho Administrativo de Defesa Economica unconditionally ap-proved the 4.4 billion euro ($4.9 billion) deal on 2 February, but an unnamed third party, thought to be UPS, filed an ap-peal against the massive takeover on 18 February.

UPS itself had a 5.2 billion euro bid for TNT rejected two years ago.

The takeover has received anti-trust ap-proval from authorities in the European Union, US and now Brazil.

The deal still needs to receive clearance in other jurisdictions including China, but is expected to be completed sometime in the first half of this year.

In 2015, TNT’s revenue increased by 3.5 per cent to 6.9 billion euros and loss-es were reduced by 70.5 per cent to 56 million euros. In the third quarter ending on 29 February, FedEx posted revenue of $12.7 billion and a net income of $692 million.

US air cargo carriers will achieve a 3.5 per cent a year demand rises over the next 20 years, according to the Federal Aviation Adminis-tration (FAA).

The administration made the forecast in its annual market review and forecast for 2016-2036 – in which it also says US cargo airlines will improve their overall share of the market.

The FAA explains air cargo demand at US airlines increased by 2.2 per cent in 2015 com-pared to the previous 12 months to 35.9 billion revenue tonne miles (RTM).

This included a 3.3 per cent rise in domestic to 13.1 billion RTM and a 1.6 per cent surge in international to 22.9 billion RTM.

In 2016, the FAA forecasts demand to grow by 4.5 per cent – which it explains will be

fuelled by solid US and world economic growth.The FAA estimates that between 2016 and

2036 domestic cargo RTM will increase at an average yearly rate of 0.4 per cent.

The FAA says international growth will rise in 2016 by six per cent due to the expected surge

in global trade growth and over the next two decades, international cargo will increase an average of 4.7 per cent a year.

The above estimate is based on forecasted economic development in global gross domes-tic product.

Cargo airships move a step closer to take-off

Airships able to carry substantial cargo pay-loads are closer to becoming a reality.

UK firm Straightline Aviation (SLA) last week signed a letter of intent (LOI) to purchase up to 12 Lockheed Martin Hybrid Airships (pictured) with a value of approximately $480 million.

SLA is now working with Hybrid Enterprises, Lockheed’s Hybrid Airship reseller, to finalise the deal. The first delivery of the airship is planned for 2018.

The developers say Lockheed ’s Hybrid Airship is capable of carry-ing more than 20 tonnes of cargo along with 19 passengers and two pilots. It has a range of 1,400 nau-tical miles and a cruise speed of 60 knots.

SLA co-founder and chief exec-utive officer (CEO), Mike Kendrick says: “We are delighted to be first in line with this magnificent air-craft that is going to dramatically change the way cargo is moved around the world.

“The clear-cut economic and environmental advantages of these Hybrids are attracting vast

amounts of attention from a wide-range of potential end users.”

Hybrid Enterprises CEO, Rob Binns says Lockheed’s Hybrid Air-ship represents a “revolution in remote cargo delivery” and adds: the LOI “solidifies the demand for this new mode of transportation”.

Developers say with its tri-lobe shape and air cushion landing system, the airship can affordably transport cargo to and from the most remote locations.

They require little or no fixed ground infrastructure and burn significantly less fuel compared to

conventional aircraft making them an environmentally-friendly solu-tion to remote cargo delivery and faster than land and sea transport.

Meanwhile, Aeroscraft Cor-poration (Aeros) was granted a patent number by the United States Patent and Trademark Office (USPTO) for a sub-system empowering the Aeros Dragon Dream (right) cargo airship.

The patent covers the ‘Aero-structure for ‘Rigid Body Airship,’ or ‘Aeroshell,’ which defines the outer shape of the lighter-than-air vehicle, serving structural and

operational functions as an inter-nal truss system.

UK-based Hybrid Air Vehicles (HAV) is also developing an air-ship, the Airlander 10, which will have a 10 tonne cargo capacity.

The firm launched a £500,000 ($718,000) crowdfunding drive on Tuesday 29 March, which was reached within 10 hours. HAV says it is now into overfunding and in an effort to satisfy investor demand the round will remain open for a limited period.

This will value HAV at £55 mil-lion after the fundraising closes, up on the valuation of £36 million at the last crowdfund last year. HAV says Airlanders are “low noise, low pollution, and are environmen-tally-friendly and have ultra-long endurance”. They can take-off and land in a short distance from unpre-pared sites in desert, ice, water, or open field environments.

FAA forecasts 3.5% annual demand rise for US cargo carriers

Volume: 19 Issue: 13 4 April 2016

aircargoweek.com

NEWSWEEK

A irlines in Asia Pacific have seen cargo volumes plummet by 12.1 per cent in February due to weak global volumes and the timing of

the Lunar New Year, the Association of Asia Pacific Airlines (AAPA) says.

Freight tonne kilometres (FTK) fell from 4.9 billion in February 2015 to 4.3 billion this year. Overcapacity continued with available FTKs (AFTK) increasing by 1.3 per cent to 7.6 billion. The region’s load factor fell by 8.6 percentage points to 56.8 per cent.

AAPA director general, Andrew Herdman (pictured) says: “Air cargo markets are showing fur-ther declines, reflecting the slowdown in global trade and raising some deeper concerns about the future outlook for the wider global economy.”

In the first two months of

2016, cargo volumes are down by 6.2 per cent to 9.4 billion FTK. Capacity in AFTK increased by 2.1 per cent to 16.2 billion, and the load factor fell by 5.2 percentage points to 58.2 per cent.

The cargo results are in stark contrast to passenger numbers, with revenue passen-ger kilometres increasing by 10.2 per cent to 176 billion in January and February.

Herdman continues: “The region’s car-riers remain positive on the outlook for further growth in travel demand in the

coming year, but are continuing to focus on disciplined cost management

efforts, including the effects of low oil prices and currency volatility in an intensely com-petitive market place.”

The weakness at the start of 2016 follows from 2015 when

the region was given an unex-pected boost due to the US West

Coast seaport strike before struggling from the middle of the year due to weakening global trade. In 2015, Asia Pacific airlines saw FTK increase by 1.6 per cent to 64.9 billion, seeing most of the growth at the beginning of the year.

2 ACW 4 april 2016

Asia Pacific carriers see 12.1% volumes fall

IAG CARGO is to expand its reach into South Africa by add-ing a new route to Cape Town from 24 November this year, to target the flourishing perishables market.

A British Airways Boeing 777-200 will service the city from London’s Gatwick Airport, three times a week.

The new Cape Town route brings total flights to the coun-try from both IAG’s London and Madrid hubs to 27 per week by the end of the year, offering customers a weekly lift of up to 440 tonnes into South Africa.

IAG says extra capacity will benefit the buoyant perish-ables market in Africa. Over the past 12 months it has seen volumes of mangoes, avocados and pineapples, as well as floriculture continue to perform extremely well out of South Africa.The Perishable Products Export Control Board says 55 per cent of South Africa’s subtropical fruit including avocados, mangoes, pineapples, and passion fruit was exported to the European Union last year.

IAG targets perishables in South Africa

AIRBRIDGECARGO AIRLINES (ABC) has reported a 15 per cent growth in its airfreight volumes in February, transport-ing over 37,000 tonnes across its global route network in Asia, Europe, North America and Russia.

The airline’s freight tonne kilometres rose three per cent over the same month last year when the airline saw an ex-traordinary demand for air cargo services due to the strikes at US sea ports.

Particular growth was reported on North America-Europe routes, where ABC doubled its cargo traffic year-on-year.

In terms of the nature of cargo, ABC enjoyed stable de-mand in its flower traffic in February.

The carrier performed nine special flights for customers onboard its modern Boeing 747 freighters to satisfy peaks in demand ahead of St. Valentine’s Day on 14 February and International Women’s Day on 8 March.

Freshly cut roses were carried from Ecuador to Am-sterdam, Karaganda and Ekaterinburg, Novosibirsk and Khabarovsk.

Blooming month for AirBridgeCargo

aircargoweek.com

NEWSWEEK

3ACW 4 APRIL 2016

C argolux says against a background of low yields, overcapacity and declin-ing volumes, it performed “extremely well” achieving record levels of ton-nage and block hours and ended the

year on a net profit after tax of $49 million.Cargolux grew its freight tonne kilometres

by 8.7 per cent, which it says ranks it num-ber seven among the world’s cargo operators, according to International Air Transport Association data.

In 2015, Cargolux carried 889,652 tonnes of freight, 7.4 per cent more than in 2014. With 26 Boeing 747 Freighters at year-end, a mix of 747-400 and 747-8 freighters and the largest fleet in its history, Cargolux achieved a record 114,792 block hours, an increase of 8.8 per cent over the all-time high in 2014.

The average load factor remained fairly sta-ble at 65.9 per cent, even with a larger fleet and increased capacity. The group’s average market share in 2015 grew to 3.8 per cent.

Cargolux president and chief executive officer, Dirk Reich says: “It is a sign of our company’s strength that, despite the energy we needed to achieve a CWA [collective work agreement] compromise, we managed to achieve a significant boost in our performance and a healthy profit, contrary to most of our European competitors.

“While this excellent result benefitted from a reduction in fuel costs, it is in large part due to the hard work of our people, as well as our strategy and the corresponding measures that

we began to introduce in 2014 in order to reduce our costs.”

Cargolux’s complementary Chinese hub, Zhengzhou, was a major focus during 2015. Flights increased to 13 per week by year-end and the company introduced transpacific ser-vices between Zhengzhou and Chicago.

Cargolux flew over 65,000 tonnes of freight to and from Zhengzhou in 2015. In early 2016, it approved an investment of $77 million for ‘Cargolux China’, the new joint venture airline based in Zhengzhou. Cargolux China is set to start operations in 2017, focusing on transpa-cific and intra-Asian routes. Its fleet is planned to grow to five 747 freighters within the first three years.

Reich adds: “We will continue to expand our network and, with Cargolux China get-ting primed for take-off, we go wherever our customers want us to go, be it with Cargolux Airlines, Cargolux Italia or, in the future, Car-golux China.”

Tonnage and block hours rise in 2015 for Cargolux

VIRGIN ATLANTIC CARGO has appointed John Giannitelli as regional sales manager in the US as it commences its biggest-ever transatlantic summer schedule.

Based at New York’s John F Kennedy Airport in his new role, he joins from Aer Lingus, where he ran the airline’s sales and reservations operation for the US.

Prior to Aer Lingus, he spent nine years at Qantas cov-ering the East Coast of the US. As regional sales manager for the US he will be responsible for developing and driving Virgin Atlantic’s revenue performance.

Virgin Atlantic has been one of the most consistent pro-viders of transatlantic cargo capacity for over 30 years and in 2016, in conjunction with joint venture partner, Delta Air Lines, will have a 27 per cent market share of capacity.

Virgin Atlantic senior vice president for cargo, John Lloyd says given the carrier’s significant presence in the market it is delighted to be welcoming John to the team as it looks to increase market share.

Giannitelli says: “We have a great choice of services to offer our customers and I am very much looking forward to working with the Virgin Atlantic sales team and to build on their great work, which has established us as one of the leading carriers from the US.”

WorldNewsEGYPTAIR CARGO has launched its first flight to N’Djamena in Chad carrying 40 tonnes of cargo.This is part of the carrier’s strategy of operating new routes around the globe and also boosting its position in the African market.Media reports say the Cairo-based airline had negotiated with authorities in Chad about entering the market and carried out studies of the African marketplace.

CEVA LOGISTICS has appointed Ste-phen Dean as senior vice president for business development in contract lo-gistics in its North America cluster. He will be based at the firm’s Jacksonville, Florida facility in the US and will report to executive vice president business development for North America, Casey Fisher.

runways to fairways for trioWELL-KNOWN characters of the air cargo industry have swapped runways for the fairways after setting up a golf events company, Classic Golf Events.

Phil Thompsett and Tony Coe are using their experience arranging golf events for The Aviators Golf Society and Baltic Air Charter Association to run the new venture and are joined by Tony Bauckham.

Classic Golf Events will provide all aspects for golf events including event staff, electronic scoring, full invitation man-agement and merchandising.

Their co-director is Carl Watts, who spent years on the professional European Tour, and was the first to shoot -24 under par. He will give tuition, do motivational coaching, clinics and do after dinner speeches at events.

Golf events of any type can be put on at any location by the company and the trio hope it will take-off and fly high as they themselves have done in the business world.

Visit www.classicgolfevents.co.uk or call 0800 3213071 or email sales@classicgolfevents.co.uk for more information.

Giannitelli fits Virgin role

aircargoweek.com

ACW 4 april 2016 4

S wiss WorldCargo is looking to grow its pharmaceuticals offering and plans on launching new prod-ucts and service to meet the needs of the sector.

The Swiss carrier is also plan-ning on improving the handling of pharma cargo through various lanes to improve the quality and standards.

Swiss WorldCargo head of cargo, Ashwin Bhat tells Air Cargo Week it is looking into how it can improve and develop business in the segment, but it is not just about the product or service as he aims to develop a knowledge-based organization.

He explains: “It is not just good enough to throw a new product or service to the customer as pharma is so specialised and knowledge based – you need the right people.

“I cannot ask the reservation guys to sud-denly start selling pharma as the customers

demand a certain knowledge so I need to upgrade - we are looking into train-

ing in this sphere.”Swiss WorldCargo gained the

International Air Transport Association’s Center of Excellence for Independent Validators (CEIV)

in Pharmaceutical Logistics certifi-cate at Zurich Airport, and is looking

to attain this at other stations. Bhat says: “We went for CEIV in Zurich and have

that and in Zurich are aiming as an airline to be certified soon and are looking into CEIV for our whole network wherever there is a big flow and I would like to create ‘quality corridors’. We are talking about a chain and you cannot have the Zurich hub great and other destinations not at the same standard. I would like to elevate my

same standards across the network.“As an example of this could be Singapore – a

quality alliance we created with SATS and the cargo handler. Both the lanes are certified and we have created with partners a quality corridor – where customers get the same level of quality.

“I want to create quality corridors across the network – where there is a value for these services. India would be one, the US would be another and so on, this is something we are working towards. So one is the product and services, the second is the people part, and the third is quality part – for me it is all about cus-tomer experience.”

Bhat feels Swiss WorldCargo is in good shape generally, but it needs to branch out, as he believes “you cannot have the same pony with the same trick” and must always evolve and grow as a business.

The carrier introduced its first Boeing 777 to its fleet in January and will add six more in 2016 and three in 2017/18, giving it 15 per cent more cargo capacity this year.

Swiss WorldCargo is also planning to invest further in technology and e-freight as Bhat says it improves efficiency and the transferring of data boosts transparency. He feels the amount of time spent giving out information is “phenome-nal” and is reducing the speed of service.

E-commerce is another possible target seg-

ment, and Bhat says the Swiss airline is looking to see “if there is space for us” and is aiming to find partners it can work with for the first and last miles of the supply chain.

Bhat concludes: “It is going to be tough in 2016. January and February were tough, China and Asia are soft, but I am confident and want to focus on my own strengths and success factor.

“The capacity we have as a medium sized car-rier – the focus should be how I fill that. It is all about positive mindsets and delivering on the ground and on your promises to your customers – it is about continuous improvements.”

Focus on pharma for Swiss WorldCargo in 2016PHARMA NEWS ROUND-UP

THE last month has seen a wave of opera-tors being awarded the International Air Transport Association’s (IATA) Center of Ex-cellence for Independent Validators (CEIV) pharmaceuticals certification.

DHL Global Forwarding Belgium at Brus-sels Airport has achieved the certificate and becomes the first station within the DHL net-work to be awarded.

The integrator operates a state-of-the-art logistics centre at the Brussels cargo zone, opened in 2012.

This facility offers 1,750 square metres of temperature-controlled areas meeting GDP standards in line with the business require-ments of the pharmaceutical industry.

Last year, Brussels Airport launched the second wave of the IATA CEIV certification for the BRUcargo community, which saw eight firms taking part after the initial 11 in 2014.

Over in Germany, Düsseldorf Airport has been awarded the IATA CEIV pharmaceuticals certification.

The airport’s cargo division, Düsseldorf Airport Cargo started operating DUS Pharma Center in August 2015, which occupies 800 square metres and three separate corridors, with 23 cold rooms in total, and can keep pharma at temperatures between two and 25 degree Celsius.

Düsseldorf Airport Cargo chief executive officer, Gerton Hulsman says: “IATA’s stan-dards, which are set for high-quality transport of pharmaceutical products will become the global model in the long run. That’s why there was no question that we would put those guidelines directly into practice.” Hulsman adds Düsseldorf is the first airport in Germa-ny to gain CEIV certification.

In China, the new cool chain infrastructure at Shanghai Pudong International Airport Cargo Terminal (PACTL) has been IATA CEIV certified, becoming the first Chinese air cargo terminal to do so.

PACTL vice president, Lutz Grzegorz ex-plains: “This further helps Shanghai Pudong International Airport move towards becoming the number one pharmaceutical gateway to China.”

Operators gain IATA’s CEIV certificate

aircargoweek.com

NEWSWEEK

5ACW 4 APRIL 2016

T he Turkish airfreight market has great potential to grow but will face strong competition from China’s One Belt One Road railfreight project, UTIKAD presi-dent, Turgut Erkeskin says.

Speaking at the Pegasus Cargo International Transport and Logistics Conference at Istanbul Uni-versity’s Transportation and Logistics Faculty on 24 March, Erkeskin told attendees that connecting China and Europe by rail posed strong competition to airfreight.

As part of One Belt One Road, the Chinese gov-ernment plans to connect China and Europe via rail through Turkey, similar to the historic Silk Road.

Erkeskin says: “One Belt One Road will be a com-petitor to airfreight. Products have to be brought to the airport at least a day or two from takeoff, plane goes to destination then it is handled again. It takes six or seven days so if the train can cover the same distance in nine days it is important competition.”

He says the East is the factory of the world, and the consumers are in the West, with Turkey in the

middle. Erkeskin says Turkey’s advantages include a large population and land area, as well as close proximity to Europe.

He notes: “Once new corridors open there will be new opportunities. Turkey has become a logistics hub so once we can start, these corridors will be a transit area between Europe and Africa.”

The One Belt One Road may be a potential com-petitor to airfreight, but the Turkish section is the missing link.

Erkeskin comments: “The Turkey, Azerbaijan and Georgia link is not functioning, it is the only miss-ing link. Turkey is not complete, do we not want rail roads in our country? Is it not as good as it looks on maps?”

He also believes Istanbul’s airports, Atat-urk International Airport and Sabiha Gokcen International Airport, are strong, and the city’s airfreight will keep improving. “Air cargo is doing a great job, Istanbul has become a great hub. They have reached great sizes and keep growing. Tur-key’s potential has been realised by air.”

Air faces competition from China’s One Belt One Road

E-commErcE is a big opportunity but Turkish customs must improve to take full advantage of its potential, DHL Express vice president of operations in Turkey, Mustafa Tonguc says.

Speaking at the International Transport and Logistics Conference held in partnership between Pegasus cargo and Istanbul University’s Transportation and Logistics Fac-ulty, Tonguc told visitors that despite improvements, Turkey still is not competitive enough.

As part of DHL’s Strategy 2020 programme, it will be working on the core strengths of its four divisions, Express, Supply Chain, Global Forwarding and Post, which will in-clude growing e-commerce.

The biggest investments will be in emerging markets, which includes Turkey. Tonguc says: “Textiles are still the leader in Turkey with automotive second. Business to con-sumer growth is driven by lightweight shipments, it has grown by 104 per cent in two years. Customs is one of the biggest problems for Turkey, it is improving but not quick enough. Companies like DHL and UPS are crucial to lobby the government to simplify systems.”

Customs must be improved

Learning English essential, Alpa advises logistics students

LogIStIcS students must be able to handle stress, and learning English is essential, is Pegasus cargo vice pres-ident, Aydin Alpa’s (pictured) advice.

Speaking at the International Transport and Logistics Conference the airline hosted in partnership with Istanbul University’s Transportation and Logistics Faculty, that after training, learning foreign languages, particularly English was the next most important thing.

Alpa says: “I have been in transportation and freight for 32 years, the most important thing after training is a command of English. You will have a lot of competitors who can speak it well. In the courses, masters students say the same thing. Logistics is not easy, it is not ideal for those who can’t stand stress. The stress never ends even though it is enjoyable.”

His views were echoed by UtIKAD president, Turgut Erke-skin, who says: “Our job is international, you have to speak English, you have to learn it. Without English you will strug-gle. In order to advance and be a global citizen you must learn English.”

aircargoweek.com

ACW 4 APRIL 2016 6

W ith global trade slowing, Changi Airport’s operator, Changi Air-port Group is focusing on niche industry sectors such as phar-maceuticals to continue growing.

Changi Airport Group senior manager, cargo and logistics development division, Phau Hui Hoon (pictured) tells Air Cargo Week that in 2015 the airport saw volumes increase by 0.5 per cent to 1.8 million tonnes, but pharmaceu-ticals saw double-digit growth.

She says: “Changi Airport is among the world’s top 10 airports for inter-national airfreight movements. Pharmaceuticals was one of the best performing cargo segments at Changi Airport last year, growing 45 per cent year-on-year, albeit on a small base.”

So far this year, January saw four per

cent growth to 158,000 tonnes and Hoon says February was steady, dipping by 0.1 per cent to 135,900 tonnes, compared to 136,000 tonnes in February 2015.

Despite a good start to the year, Hoon says the industry is facing weak conditions but Changi is doing what it can to help its cargo partners. “With the slowdown in global trade due to the weakness in the Euro area, China’s rebalanc-ing and slower-than-expected recovery of the

US economy, air cargo volumes are likely to remain flat.”

“In light of the weak industry con-ditions, Changi Airport Group has rolled out a package of support measures totalling S$14 million [$10 million] for its cargo partners, which include a one-time Special

Assistance Package for cargo agents and the extension of a landing fee

rebate for scheduled freighter flights.”She says: “We remain cautiously optimistic

that air cargo volumes will recover by the end of the year, with the establishment of the ASEAN [Association of South East Asian Nations] Economic Community and the ASEAN Open Skies policy expected to enhance regional trade and connectivity.”

Pharmaceuticals remain a small business area, though they are growing strongly, and to strength its capabilities, Changi is pursuing International Air Transport Association Cen-ter of Excellence for Independent Validators (CEIV) on Pharmaceutical Handling. The pio-neer companies are Singapore Airlines Cargo, dnata Singapore, Global Airfreight Interna-tional, Expeditors Singapore, CEVA Logistics Singapore and Schenker Singapore. Changi will be the first airport in Asia to launch a com-munity of cargo partners to pursue certification, covering a carrier, a ground handler, and freight forwarders.

Elsewhere, perishables and express and e-commerce are increasing. Hoon says: “Per-ishables are an important cargo segment to Changi, contributing 13 per cent of our total cargo throughput. In 2015, perishable vol-

umes at Changi grew 8.4 per cent year-on-year mainly driven by strong growth in imports and transhipments.”

“Express and e-commerce are also expected to do well in line with global trends and the commensurate investments by our airport partners.”

To cater for these growth areas, Changi is planning a number of expansion projects this year, including working with DHL Express on a 24-hour express facility at the Changi Air-freight Centre to be completed later this year. Hoon says: “This new facility will increase DHL’s throughput by three times and processing speed by six times, and further anchors Changi Airport’s position as a key cargo and logistics hub in the region.”

Ground handling company, SATS is investing in an e-commerce hub with Singapore Post (SingPost) at Changi, which is expected to be completed by the end of the year.

Hoon says: “The new facility will improve efficiency and space utilisation, and enhance the consignment handling capabilities for both SATS and SingPost. SATS will be the first ground handler in the world to own such an airside facility.”

Double-digit pharma growth drives Changi upwardsSINGAPORE

ST AeroSpAce has seen profits increase by three per cent to S$226.7 million ($166 million) despite the parent company, ST En-gineering seeing a dip of one per cent to S$529 million.

For 2015, Aerospace revenue increased by one per cent to just under S$2.1 bil-lion despite ST Engineering seeing a three per cent drop to S$6.3 billion. In 2015, ST Aerospace launched the Airbus A320/A321 passenger to freighter (P2F) conversion programme with Airbus and EFW, and also received supplemental type certification from the US Federal Aviation Administra-tion for the 15-pallet Boeing 757-200SF conversion.

For 2016, it has secured an Airbus A330-300P2F launch customer and has set up Boeing 787 heavy maintenance capabilities

in Singapore.ST Aerospace president, Lim Serh Ghee

says: “The Aerospace sector remained re-silient in 2015 and achieved comparable profits despite headwinds. We continue to position ourselves as a total aviation sup-port provider and invest to enhance service offerings to add value to customers.”

By region, revenue in Asia surged 4.8 per cent to just under S$1.2 billion, Europe grew 25.3 per cent to S$139.4 million and others were up 19.6 per cent to S$181.6 million. The USA fell 12.9 per cent to S$589.7 mil-lion. By sector, aircraft maintenance and modification revenue dropped 5.7 per cent to S$1 billion, component/engine repair & overhaul was up seven per cent to S$652.5 million and engineering & material services rose 12.5 per cent to S$398 million.

Aerospace up despite Engineering dip

Lufthansa Cargo had a successful year in Singapore and despite reducing capacity, with revenue remaining the same as in 2014, regional director South East Asia & Australia, Christoph Bannerman tells Air Cargo Week.

He says Lufthansa Cargo managed to maintain reve-nue despite reducing its weekly frequencies and based on World ACD data, Lufthansa Cargo managed to increase its market share to the European Union by two percentage points to 13 per cent.

Bannerman says: “This was quite an achievement considering the increased competition especially through the Middle East carriers.”

Lufthansa Cargo is not planning to change its network set-up in 2016, and will keep operating Aerologic Boeing 777 Freighters to Frankfurt and Leipzig and daily passenger services with belly-hold capacity to Frankfurt.

For South East Asia as a whole, Lufthansa has started offering bellyhold capacity on Eurowings aircraft to Phuket and Bangkok in Thailand.

Bannerman says: “We manage to market our capacities quite nicely also in 2016, our load factors remain at high levels and

flights are full. In January we achieved tonnages and revenue above past years levels. Chinese New Year in February had its usual seasonal impact, but since then business is picking up again. However, pressure remains to be on the yield side since market prices continue to decline.”

Bannerman is expecting good tonnage and hopes Lufthansa will be able to increase load factors though it could be challeng-ing. “[The] challenge will be to stop the ongoing yield erosion which makes it more and more difficult to operate profitably out of Singapore. We expect this trend to continue further since mar-ket capacities further increase.”

The yields make it challenging to operate profitably but there are opportunities. Bannerman explains: “At the same time this gives us the opportunity to focus on goods that require our spe-cial expertise, like dangerous or temperature sensitive goods.

“While the sort of commodities imported remained rather unchanged over the past two years, we see a shift in our export commodities towards goods which require more expertise in handling and operations.”

Bannerman says imports and exports mainly consist of general

cargo as well as temperature sensitive goods. Lufthansa Cargo is also carrying increasing amounts of dangerous goods in and out of Singapore. On the export side, tropical fish are the fourth largest export, followed by fresh food and plants. Fresh food and plants are the fourth biggest import with valuables in fifth.

Strong result despite yields continuing to decline

7ACW 4 APRIL 2016

SINGAPORE

Singapore airLineS (SIA) Cargo is cautious and describes demand as “tepid”, despite nine month losses reducing to S$10 million ($7.3 million).

For the nine months between April and December 2015, Group operating profits were up by 66 per cent to S$528 million but revenue fell by S$167 million to S$11.5 billion due to weak cargo and mail revenue. The airline disposed of one parked Boeing 747-400 Freighter, helping the result by S$10 million.

In the third quarter, SIA Cargo operating profits fell from S$17 million for the 2014/15 financial year to S$2 million in the 2015/16 financial year due to weak yields and no sea-port disruptions to help results. SIA Cargo says: “Revenue contracted by S$36 million, largely on account of lower yield amidst industry overcapacity and the absence of port dis-ruptions in the US and Manila last year, more than offsetting lower operating costs ($21 million).”

In the nine months between April and December, cargo and mail carried increased to 877,100 tonnes from 847,500 tonnes the previous year. The load factor fell by 1.1 percent-age points from 63.2 per cent to 62.1 per cent.

SIA Cargo adds: “The outlook for cargo is cautious amid the prevailing industry overcapacity and tepid demand growth. SIA Cargo will....... manage capacity to better match demand, and pursue higher-yield product segments.”

Singapore airLineS took delivery of its first Airbus A350-900 on 3 March, which will start operating on Am-sterdam services from May.

The airline has 67 A350s on firm order, which it will start using on Amsterdam services, followed by Dusseldorf (Ger-many) from July, with more destinations to be announced in the future. It has ordered seven Ultra-Long Range vari-ants, which it intends to use on non-stop Singapore – New York services when it takes delivery of them in 2018.

When the airline took delivery the aircraft, Singapore Air-lines chief executive officer, Goh Choon Phong explains: “With its arrival, Singapore Airlines is staying true to our longstanding commitment to maintain a young and mod-ern fleet of aircraft. The A350 will ultimately enable us to further enhance the three main pillars of the Singapore Airlines brand promise: service excellence, product lead-ership and network connectivity.” Airbus says the A350 reduces fuel burn and emissions by 25 per cent.

Singapore receives A350

Tepid demand hits SIA Cargo

aircargoweek.com

ACW 4 april 2016 8

United Cargo is looking at finding a feeder partner with a carrier into Vietnam and may also seek to find one to the Middle East from Europe.

This comes after the carrier enhanced its cooperation with Lufthansa in December last year to include cargo operations on routes between the US and Europe.

United Cargo president, Jan Krems (pictured)tells Air Cargo Week: “What we try to do is look at opportunities where we can optimise the network we have and see where we can find different places where we can feed into our network. We are looking at Vietnam and if we can we a find a partner that can be a feeder to Japan for example and also feed into the rest of the world.

“Or maybe we can we find partners to feed from the Middle East into London where we have 18 flights a day to the US as that network

is not full as there is so much capacity. We try to play that game a bit and find different markets to go to our hubs and to the rest of the world.”

Krems says United is also always looking at opportunities to optimise its network by using freighter capacity on other carriers and has been looking at this for the pharma industry in San Juan (Puerto Rico) and flowers from Ecua-dor and Colombia to fly into Houston.

The former Air France KLM Martinair Cargo vice president of the Americas is happy with the carrier’s model: “I would never have a freighter, but I like to have access to freighter capacity, which helps a lot but I would never own freighters. I love to have an outsourced model (for freighters) and a mixed model with our own people and supervision (on freighters). Then at least we have

our power to run it. We like a hybrid model and being flexible is good, but having our own supervision, as we want to keep our quality.”

Cuba is a market firmly on the radar and United is looking at what kind of handling facil-ities it can run as it gets set to fly from various locations in the US. It’s main cargo hubs to the island are set to be Houston, and Newark.

Krems says: “Cargo wise we will be one of the first to be there, but will make sure we operationally have the right partners to do our handling and we must look at whether we will go with our own sales team or have a GSA part-ner. We will be there in the right way with local people and set-ups – we can switch that over-night as are good enough to do that.”

As for overall business, Krems says China has been tough and the usually strong period after Chinese New Year on 8 February was slower and he notes 4,000 factories were closed for four to five days after the celebration.

He adds: “A lot of companies are moving away from China. We were in Vietnam two weeks ago and we see that boosting, but there are some pockets and countries (Asia) where it is good.

“Japan is important market and China where we have 50 flights a week. We are the biggest US carrier for China, but it is tough, and more and we have 18 flights a day out of day out of Japan. We try to find feeders in the area into Japan and China to fill the flights as much as possible.

“In general, excluding the US, volumes are there but the yields are under pressure, and with the fuel prices low, freighters are coming out of the desert – giving a 6-7 per cent capacity increase.”

Krems says Asia is very important, while South America is performing well and United is good in Chile, sees Brazil coming up again, but Argentina is a bit mixed.

As for the European market: “Europe is tough due to exports from Europe because of the

strong dollar. We thought because of the high dollar there would be imbalances there, but strangely that is not happening – at least vol-umes wise in and out of the US to Europe and back is not bad - but the yields again and reve-nues are tough.

“Germany the biggest market is still OK, but there is a lot of pressure on rates and yields – the UK is tough as there is so much capacity and because of the low rates.”

United’s route expansion is set to continue with new flights to Asia, Europe, and the carrier will soon add a new flight to New Zealand, but the main strategy will be to build on what it is already strong at.

Development in the US domestic market is top prority and it will soon operate 19 widebody air-craft from East to West and West to East, thereby expanding capacity in the US. Krems says this will enable it to grow, as it will allow United to better feed Asia from other parts of the US in the West and from Europe into the East.

Investment in facilities will also take place such as new cool chain centres and the carrier has just opened a centre at Newark, and is work-ing on new centres at Chicago and San Francisco.

Krems says United’s PetSafe product contin-ues to thrive and it now transports 500 pets a day and around 200,000 a year. He says United is working on other products, but does not want too many and wants to focus on a few - making sure they are the best they can be.

And Krems has a clear message for how United can grow in the future: “For us the only way to survive is to have better quality, we need quality, quality, quality. This is the way to move forward with products, we think that is the only way to get customer preference and the way to build on the segmentation part, those are the components to grow.”

United certainly looks set to grow further in the years ahead.

NORTH AMERICA

Yields under pressure

US capacity

Network feeder partners targeted by United

aircargoweek.com

D espite regional instability and economic challenges, American Airlines’ managing director cargo sales Latin America, Carmen Taylor tells Air Cargo Week (ACW) the carrier is in for the long haul in the continent - which is one of its key markets.

Taylor says though Argentina and Brazil have been hit by economic and political instability, while they are recovering American will look to utilise its Latin American network. American serves 50 cities across Latin America and has introduced Boeing 787 Dreamliners on Los Angeles – Sao Paulo services, and on Dallas Fort Worth – Buenos Aires and Dallas Fort Worth – Santiago.

The airline is using newer, more fuel efficient aircraft in the region with better cargo capacity, such as using Boeing 777-300s instead of 777-200s and swapping 767-300s for 787s.

Taylor tells ACW: “We’ve seen increased competition across all regions given fuel prices, but we’ve been serving our Latin American customers for over 25 years now and we are well positioned going forward.”

She says American has a strong presence in Brazil in locations such as Sao Paulo and Argentina is expected to improve. “Brazil has been impacted by some economic and political instability, but we

see great strength in our expansive and growing Latin Amer-ica network that opens opportunities to and from locations around the world.

“We also believe that the newly elected government in Argen-tina will be favourable for trade expansion and resulting in new business opportunities to and from Argentina” she adds.

Latin America has hit perishable season, which includes fresh fish and seafood, particularly salmon, fruits and fresh flowers, which it connects to Europe and Asia via Miami, Dallas, New York and Los Angeles.

Taylor says: “The 2015-16 perishables season has gotten off to a great start and we’re optimistic it will lead to a good season overall.”

“We’ve really increased focus on our perishable sector, with increased tracking and temperature control capabilities, cru-cial to the proper shipment of the popular perishables goods out of the region.”

She is also hoping for a boost in cargo in the run up to the Rio Olympic Games. “Generally, for these types of events, we don’t see business until the month or two prior to the date, but are excited about the visibility and demand the Rio Olympics will bring to the region.”

American to stay the course in Latin America despite woes

9ACW 4 april 2016

NORTH AMERICA

IMPORTS to South East Asia and China continue to be the drivers of growth at Rickenbacker International Airport.

The operator is the Columbus Regional Airport Authority, and vice president of business development and communi-cations, David Whitaker says the Asian region is strong and growing for incoming goods.

As for exports, he says: “Europe and China from the region are the leading destinations. We are fortunate to be con-nected to the world through hubs in Europe (Brussels and Luxembourg), the Middle East (Dubai) and Asia (Hong Kong), so we have freight going all over the world.”

Most of the inbound cargo is fashion and consumer goods. Columbus is the number foreign trade zone in the US for categories of apparel and footwear.

On the outbound side, cargo includes automotive goods, consumer goods, industrial equipment, components, and aircraft engines, and animal genetics.

Emirates Airlines operates four times a week, the same as Cathay Pacific, while Cargolux has three services, and the airport hopes frequencies maybe increased.

Whitaker says in 2016 tonnage was up one per cent in January and when you subtract the significant positive effect the West coast port disruptions had on 2015 numbers, it would be up four per cent in February on a normalised basis.

He explains: “Our international portion of traffic is leading the way with double-digit gains offsetting some decline in FedEx and UPS activity. We expect this trend to continue, particularly with our international traffic, which finished up 132 per cent for 2015, and was still up 77 per cent even after factoring out the West coast port effect.”

As for North America, Whitaker says integrators have been down but notes it’s not for lack of express traffic, rather, they have squeezed efficiency out of their networks.

He adds: “They are working closer with large shippers and optimising trucking to send more of that on city-to-city ded-icated routes instead of running as much freight through their air hubs. The international traffic is more than offset-ting those express declines though and is our highest growth opportunity. FedEx and UPS do still account for about 65 per cent of our tonnage, but a few years ago it was 90 per cent. We like the market shift and becoming more balanced with the international freighter operators expanding.”

Whitaker says investment in infrastructure is being made and a $15 million 100,000 square foot air cargo terminal adjacent to the freighter parking ramp will open this Spring, adding to the existing 536,800 square feet. It will soon com-mission a new $8 million air traffic control tower in late April.

Asia driving imports at Rickenbacker

aircargoweek.com

Too many air cargo carriers are still running their own outdated IT systems and the move to latest technology is too slow and hindering business growth.

This is the view of Unisys’ vice president for logistic solutions in the global transportation sector, Chris-

topher Shawdon who explains to Air Cargo Week: “Too many carriers still run and maintain their own cargo systems most of which don’t give them competitive advantage.”

However, he adds: “But we have seen a growing move even by the largest carriers to change this so we could be on the cusp of further major changes and moves to cloud services.”

He feels the slow move to new systems in the industry is due to the investments made in existing ones and the complexity that has built around them.

Unisys has won three contracts in the last year, including in December Aloha Air Cargo and Northern Air Cargo, to replace legacy systems. This adds to contracts with 20 carriers such as Air Asia, Air Canada, Air China, Air France KLM, Air India, Air New Zealand, American Airlines, Delta Air Lines, SAS Cargo, United Airlines, and Virgin Atlantic.

Unisys offer clients a range of IT products for use in air cargo operations, Shawdon says: “Most of our clients buy our cloud

cargo system, but some buy our Cargo Portal Services multi-car-rier booking service and six bought our Cargo iQ platform.

“Key about our approach is all clients use the same software so when we apply updates each month, all clients can use them immediately. That gives our clients competitive advantage quicker than their competition and means we deliver more value per dollar of cost to our clients.”

Shawdon says the cloud-based system boosts business and

improves cargo operations: “As we apply updates each month, we give clients unparalleled speed to market of changes and unparal-leled value compared to legacy IT service delivery models.”

He adds the air cargo IT challenges are gaining competitive advantage, cloud col-laboration, sensors and digital commerce.

Adoption of the latest IT platforms can boost cargo business as technology can provide detailed insights into what is really happening and clients can use those to drive and measure business transformation or disruption.

The industry will be a different place in 10 years time, accord-ing to Shawdon and will be much more analytical and less based on human experience and relationships.

“Everything will be dynamically optimised – from pricing to maximise capacity utilisation, to the use of more robots for mov-ing goods as we see in many ‘dark’ warehouses today.

“Sensors will provide tracking and auditable proof of supply chain security to avoid product substitution such as of pharma-ceuticals or of banned goods,” he explains.

Competition is fierce among IT firms to capture airline busi-ness for air cargo operations as they upgrade systems.

Shawdon says carriers are being offered at least three ven-dors for every service within the industry. He adds: “The leading organisations are the ones that innovate and leverage large client bases to deliver more value.”

ACW 4 april 2016 10

IT REPORT

STREAM SOFTWARE’s customers can now prepare their paper and/or electronic Air Waybills (e-AWBs) efficiently with-in their operational software and transfer data instantly.

Streamliner supports paperless air cargo shipments, e-manifests, and enables users to get savings from reduced airline manual processing fees while gaining full electronic tracking so shipments no longer have to be checked manually.

Stream’s streamliner software connects to 90 airlines through Worldwide Information Network (WIN).

Stream Software senior project manager, Koen Meyskens says: “Stream Software aims to integrate with leading plat-forms to provide our customers with options to streamline their daily operations. The integration with the WIN upholds the quality standards we have set for our integration partners. During the implementation WIN has proven to be a reliable partner we can recommend to our customers.”

WIN managing director, John DeBenedette says: “Our strategy is to reduce barriers to efficiency for independent forwarders worldwide via our advanced technology solutions. Frequently this means engaging progressive solution pro-viders such as Stream Software who completed their WIN integration in a few short weeks. We are very pleased to have them as a partner.”

In other IT news, Silk Way West Airlines is now using Des-cartes Systems Group’s cloud-based Global Air Messaging Gateway. Descartes says it helps Silk Way West achieve high-er standards of service and minimial costs by expanding and automating air cargo communication processes such as the electronic airway bill (e-AWB).

Silk Way West chief executive officer, Kamran Gasimov says: “In an industry where margins are slim, we need to work together with our trading partners to reduce costs and maximize efficiency by eliminating manual and paper-based processes. We’re taking a significant step toward realising these benefits and are pleased to have the technology in place to meet current and future electronic communication initiatives, such as the e-AWB.”

Descartes’ Global Air Messaging Gateway helps carriers automate connectivity to trading partners, monitor shipment status in real-time, and communicate status updates to for-warders and consignees.

aircargoweek.com

Adoption of the latest IT technology still too slow, warns Unisys

Stream connects to 90 carriers via WIN

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