Sponsored by

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

4

AEROFLOT BOUNCES BACK – SOMEWHAT

Business Brisk despite somedifficulties

Air cArgo indiA delivers the goods

Air chArter Brokers invest in the future

Well positioned in chAllenging mArket

The weekly newspaper for air cargo professionals

6

8

10

AEROFLOT reduced its annual loss in 2015 to 6.5 billion roubles ($86 million), with cargo-related revenue increasing de-spite volumes falling.

The airline’s losses over the year were down from 17.1 billion roubles in 2014, while revenue rose by 29.8 per cent to 415.1 billion roubles. Cargo revenue increased by 10.5 per cent to 9.6 billion roubles, although cargo and mail volumes fell by six per cent to 156,335 tonnes.

Aeroflot deputy chief executive officer for finance and network and revenue man-agement, Shamil Kurmashov observes: “The challenging macroeconomic situ-ation had a significant impact on Group financial results throughout the year.

“In response to the worsening external backdrop we took a number of steps to optimise the fleet and cut costs, enabling us to limit the growth of operating costs despite significant exchange rate pres-sure over the course of 2015.”

In January, cargo and mail volumes in-creased by 12 per cent to reach 10,811 tonnes. On domestic services, traffic was up by 12.9 per cent to 5,466 tonnes, while traffic on international routes increased by 11.1 per cent to 5,364 tonnes.

Air Inuit is to be the launch customer for Bombardier’s Q300 passenger to freighter conversion, which will serve Canada’s remote and far-spaced North-ern Communities.

The converted Q300 will have a large cargo door, a capacity of about 5.6 tonnes and will be designed to accom-modate both palletised and unpalletised cargo. A supplemental type certificate (STC) will be developed under licence by a third party. The STC modification will be available worldwide, perhaps from the sec-ond half of 2017.

Air Inuit vice president and chief operating officer, Christian Busch says: “With its excel-lent airfield performance – especially on gravel

runways – the Q300 aircraft is well adapted for remote operations like those required to sup-port Canada’s resource industries and Northern Communities.”

Busch continues: “The Q300 aircraft has

served us well in our passenger, char-ter and cargo operations in Nunavik and other markets for many years, and we look forward to enhancing our cargo services with three Q300 large cargo door freighters.”

Bombardier Commercial Aircraft vice president and general man-ager, customer services, Todd Young says: “The cost-effective Bombardier Q Series aircraft continue to prove their high value with more than 150

operators around the world. The passenger to freighter conversion will offer an outstanding opportunity for additional utilisation of the robust, reliable platform that the Q300 aircraft provides.”

Qatar Airways Cargo: ‘phenomenal growth’

Qatar Airways Cargo flew 1.52 million tonnes of freight over the course of 2015, up by 37.5 per cent on the

figure for 2014.Broken down, that growth

stemmed from an increase in the cargo it flew into Doha of 29 per cent, export traffic up by 10 per cent and transhipped volumes up by 39 per cent over the 2014 equiv-alent figures.

Qatar Airways chief officer cargo, Ulrich Ogiermann says: “At a time when international air cargo traffic grew only 2.5 per cent in 2015, it makes us very proud that our year-on-year figures from 2014 to 2015 show that we have grown our ton-nage by 37.5 per cent.”

He goes on: “We have achieved this phenomenal growth through a combination of fleet and net-work expansion, creative interline agreements and by deploying capacity on expanding or untapped markets.”

Further growth is expected this year, and the carrier has already added a new freighter connection

to Dallas/Fort Worth Interna-tional Airport (in January) and added a fourth weekly freighter frequency to Los Angeles Inter-national Airport (also at the beginning of this year). Plus, Qatar Airways Cargo is to add three new all-cargo connections to Budapest, Prague and Ho Chi Minh City this month (March).

Bellyhold capacity will also be available on new passenger services launching this year to locations including Adelaide (Aus-tralia), Atlanta and Boston (both US), and Birmingham (UK). Qatar also launched new scheduled pas-senger service connection to Los Angeles (US) that was inaugurated on 1 January.

Also in January, the freight car-rier welcomed a seventh Airbus A330 Freighter and first nose-load-ing Boeing 747 Freighter into its fleet. It now operates seven A330Fs, eight Boeing 777 Freight-ers and one 747F, while the fleet is expected to encompass 21 freight-ers by 2017.

Qatar Airlines Cargo has trans-ported 118 show jumping and dressage horses from Belgium to Qatar for the CHI Al Shaqab event, which took place in Doha from 2 – 5 March.

The horses were transported between Liege and Doha on three specially chartered 777 freighters equipped with air stables. The pre-cious cargo travelled with almost

90 vets and grooms, as well as 30 tonnes of equine equipment.

The airline’s QR Equine service includes specifically designed air-craft with controlled temperature zones, spacious horse stalls and capacity for dedicated grooms to accompany the horses. In Doha, Qatar Airways Cargo’s Live Animal Facility offers air conditioned hold-ing stalls, a paddock and on-site veterinary personnel.

Ogiermann says: “We take great pride in providing the highest stan-dard of services on the ground and in the air for our equine guests, and we are committed to ensuring that they are handled with the utmost care by our team, just as we do with everything that we transport.”

Bombardier to offer new Q300 large cargo door conversion

Volume: 19 Issue: 9 7 March 2016

aircargoweek.com

NEWSWEEK

2 ACW 7 MARCH 2016

Chapman Freeborn: flexibility is key to success

IAG Cargo has seen revenue increase by 3.2 per cent in 2015 to one billion euros ($1.1 billion) from 992 million in 2014, despite cargo volumes falling.

Cargo volumes fell by 2.6 per cent from 897,000 tonnes in 2014 to 874,000 tonnes in 2015. In the fourth quarter, revenue increased by 4.9 per cent to 281 million euros while cargo volumes remained at 236,000 tonnes.

IAG Cargo chief executive officer, Andrew Crawley observes: “These are resilient results in the face of challenging market conditions, where excess capacity and reduced demand are leading to significant price and yield pressures. These structural changes to the market further reinforce our strategy of aggressive cost discipline coupled with a focus on growing our premium product offering.

“These results show our determination to maximise profitability and our new revenue management system, Optima, allows us to manage our capacity and set price more effec-tively,” he adds.

“In 2016 we will be making major infrastructure announcements which will deliver next generation facilities and premium product experience for our customers. In addition we will launch key cargo destinations such as Lima, San Juan and, San Jose, California and San Jose, Costa Rica. We will also be completing the full integration of Aer Lingus Cargo, which will open previously unavailable markets and flows for our customers,” Crawley says.

ETIHAD Cargo has taken delivery of a new Boeing 777 Freighter, the 11th freighter operated by the cargo wing of the UAE’s flag-carrier. The aircraft entered commercial service on 1 March.

The freighter is one of two additional aircraft whose order was confirmed at the Dubai Air Show last year, these aircraft forming part of the wider $67 billion fleet order that was made in 2013 for 199 aircraft. The two additional freighter aircraft are valued at $637 million at list prices and the second freighter is expected to arrive in Abu Dhabi in March.

Both new aircraft will be equipped with nine seats, allowing Etihad Cargo to carry additional grooms as part of its Sky Stables programme, which is dedicated to horse transport. They will be the first aircraft in the Etihad fleet to be equipped in this way.

Etihad takes delivery of new B777 freighter

The cargo charter market has been a strong source of busi-ness of late for Gatwick Airport-headquartered Chap-man Freeborn Airchartering,

says director of cargo/business develop-ment Pierre Van Der Stichele.

New business has derived in the main from humanitarian assistance pro-grammes for which Chapman Freeborn has provided support, including the April 2015 Kathmandu earthquake disaster and the Syrian crisis still with us today. The broker also has an ongoing charter programme in South Sudan involving two aircraft – an Il-76 and a Hercules – air-dropping food.

Chapman Freeborn has also success-fully served the project cargo sector. Business there continues to be good too, Van Der Stichele says, despite the drop in

oil prices that may have had an impact on exploration and the launch of new prod-ucts but has not yet significantly impacted the number of charter flight being booked to support ongoing projects (which he describes as ‘sustainment flights’, usu-ally involving the transport of spare or replacement urgently needed parts and equipment).

Flexibility is key in the charter broker business, Van Der Stichele observes, and it forms a keystone of Chapman Free-born’s offering, whether it be for ongoing projects, part charters or time-critical, last-minute operations. That flexibility is perhaps becoming ever-more important as the business changes.

Not only is the process of arranging and executing a cargo charter that much more complex now than it was, say, 20 years ago, there are now fewer specialised cargo

charter carrier operators and more main-line carriers who offer a charter offering, he points out. The latter offerings can be somewhat limited in nature, and the legacy carriers are not all as responsive as they should be in the rapid-response world of chartering.

“We are always looking at redefining our structure to best fit the market and the times we live in,” says Van Der Stichele. A large part of that is making sure that we always have the right people in the right place, he adds.

As evidence of that, in December last year Chapman Freeborn confirmed that it has established a new office in Katowice, Poland. The charter broker is looking to expand its operation in the country, which also includes a Warsaw office with 80 employees.

n Air Cargo Charter Brokers Topic, p8

IAG Cargo reports on mixed results

aircargoweek.com

NEWSWEEK

3ACW 7 MARCH 2016

L ufthansa Cargo is to sell the bellyhold capacity of Eurowings’ long-haul flights from the start of the summer schedule on 27 March.

Low-cost carrier Eurowings, which currently flies to more than 130 destinations across Europe from seven German gateways, as well as to locations further afield from Cologne-Bonn International Airport, forms another part of the Lufthansa Group enterprise.

It will offer long-haul capacity to destinations such as Bangkok and Phuket in Thailand, Cancun in Mexico, Varadero in Cuba and the Dominican Republic and the move will significantly broaden Lufthansa Cargo’s offering out of Cologne-Bonn.

Lufthansa Cargo board mem-ber with responsibility for product and sales, Alexis von Hoensbroech comments: “By

integrating Eurowings’ belly capacities, the ser-vices we provide our customers become all the more attractive.

“Eurowings’ growing network is an ideal complement to our previous connections,” he notes.

Eurowings chief executive officer, Oliver Wagner, adds: “Lufthansa Cargo is the lead-ing cargo airline in Europe and has extensive experience in marketing the belly capacity of

passenger airlines. This collaboration will help us make optimum use of the cargo holds on our long-haul jets.”

In addition to the freight capacity of Eurow-ings, Lufthansa Cargo also offers customers freight space aboard Lufthansa and Austrian Airlines’ passenger aircraft, as well on the main deck of its fleet of 17 Boeing MD-11 and Boeing 777 freighters.

Lufthansa Cargo carried a total of 1.6 mil-lion tonnes of freight and mail last year. While this figure was down by two per cent on 2014, the freight carrier actually increased capacity by a similar figure over the course of the year. Getting the right balance between the freight capacity Lufthansa Cargo makes avail-able to the market and changing demand will be key to success this year.

Lufthansa to sell Eurowings’ lower deck capacity

Airlines in Asia Pacific have seen freight tonne kilome-tres (FTK) fall by 0.7 per cent in January as cargo volumes remain weak, according to the Association of Asia Pacific Airlines (AAPA).

FTK fell by 0.7 per cent to 5.1 billion while capacity in-creased by 2.6 per cent to 8.5 billion available FTK. The load factor fell by two percentage points to 59.6 per cent com-pared to 61.6 per cent in January 2015.

AAPA director general, Andrew Herdman (pictured) says the passenger industry is looking positive despite cargo proving weak. “For the region’s carriers, the continued strong growth in passenger demand was a very welcome start to the year, against a backdrop of volatile markets and an increase in global economic risks.

“The usual lift in air cargo ship-ments seen ahead of the holiday season had been somewhat muted, as seen in the continued weakness in air cargo volumes.”

WorLdNeWsKUEHNE + NAGEL (K+n) says it enjoyed “a record result in earnings” in 2015 with profits rising by 5.4 per cent to 679 mil-lion swiss francs ($680 million), in part thanks to “efficiency programmes and the succesful implementation of strategic initiatives”. Airfreight volumes rose year-on-year by 4.7 per cent to 1.25 million tonnes despite airfreight revenue falling to four billion francs in 2015 from 4.2 billion in 2014. K+n says it enjoyed “sig-nificant wins” in the pharma, aerospace and perishables sectors.

STATISTICS from WorldACD Market Data reveal that global air cargo volumes rose by just 0.3 per cent year-on-year in Jan-uary, while the yield as measured in Us$ dollars fell by 16 per cent year-on-year. The decline in yield was suffered despite the significant fall in jet fuel prices.

Panalpina’s airfreight volumes decline

PANALPINA saw its profits increase to 88.2 million swiss francs ($88.4 million) in 2015, despite weakness in its air-freight division.

Profit increased from 86.5 million swiss francs in 2014, despite revenue falling from 6.7 billion swiss francs to 5.8 billion swiss francs in 2015.

Panalpina’s airfreight volumes fell by 2.5 per cent to 836,200 tonnes, while the division’s earnings before in-terest and tax fell to 88.5 million swiss francs from 112 million swiss francs in 2014. The company says that the lower volumes were due in part to oil and gas and automo-tive customers shipping less cargo.

Panalpina chief executive officer, Peter Ulber – who will soon move up to the position of chairman – notes: “We have maintained profitability in a year that was character-ised by a soft market, the low oil price, negative currency impacts and high iT investments on our end. The results prove our resilience in more difficult times.”

During 2015, Panalpina acquired its egyptian agent, Afifi, and opened new offices in Morroco, Kenya and Myanmar. it also acquired Kenya’s second largest airfreight forwarder, Airflo, which specialises in exporting perishables.

“With a good number of initiatives already launched and new ones to come we are aiming to outgrow the air and ocean freight markets in 2016,” Ulber concludes.

aircargoweek.com

AAPA: tonnages fall in January

NEWSWEEK

4 ACW 7 MARCH 2016

Business brisk despite challengesThe first two quarters of 2015 were among the most profitable in the six-year histo-ry of Surrey, UK-headquartered charter broker Chartersphere, reveals managing di-rector Paul Bennett (right). Performance was buoyed for Chartersphere, as for many other charter brokers, by the fallout from the US West Coast port strikes during that period.

The summer period was typically quieter, Bennett continues, while the final quarter saw a less frenetic market than pre-vious years at peak period. But, “So far, 2016 has started well, with business brisk. In short, the cargo charter market continues to prove both tough and unpre-dictable, but we remain confident of another profitable performance in 2016.”

The broker is handling recurring charters for the food industry, such as weekly flights moving perishables from Eu-rope into Africa and the Middle East. Over the last 12 months, Chartersphere has also in-creased its share of the European automotive market, which involves the regular transport of urgently needed car parts around Eu-rope. It is also continuing to provide military charters, a monthly series of flights usually moving into and within the Middle East.

“The ongoing lull in business confidence worldwide remains by far the biggest chal-lenge facing the air cargo sector,” Bennett considers. “Turmoil in the global economy continues to keep business confidence low across all industrial sectors and geographical regions.

“Problems in Russia, China and most re-cently Saudi Arabia, combined with the oil

price slide and volatility in financial markets mean that economic forecasts continue to be gloomy,” he says.

“The charter market is particularly suscep-tible to the fallout from this global fragility because while there will always be a demand for air charter, in a climate of risk-aversion it is increasingly used as a last resort,” Bennett suggests.

“Since our inception in 2009, we have been making the most of technology

to ensure that we can always pro-vide our customers with the best possible service,” Bennett says. “From day one, all our IT systems have been cloud-based, meaning brokers can access the latest

information at all times, from any-where in the world.” Plus: “During

2015 we focused on growing our on-line presence and updated our website.”Last year, Chartersphere also expanded its

cargo offering by introducing on-board cou-rier services. This development came about organically as a response to requests for the service from existing clients, mainly in the automotive industry.

However, “The biggest and most exciting recent development for Chartersphere was the introduction of our new passenger ser-vices,” Bennett recalls. “Operations began in December and include both group and private air charter solutions. Offering a com-prehensive portfolio of charter services will benefit the cargo side of the business, as we can act as a one-stop shop to clients seeking different types of charter. Now we really do encompass the whole charter sphere.”

n Air Cargo Charter Brokers Topic, p8

Executives from Miami International Air-port (MIA) operator Miami-Dade Aviation Department (MDAD) have met with the City of Miami Springs mayor, Zavier Garcia,

and city manager Roland Gorland, to discuss the opportunities available to companies in the city that will result from MIA’s relatively new-found sta-tus as the only US gateway designated as a freight hub under the International Air Transport Asso-ciation’s (IATA) Pharma Certification Program. MIA recieved the IATA certification in November.

The airport handled pharma product worth

nearly $3.3 billion in 2014, up by 79 per cent on 2010, and is looking to further expand its traffic throughput of these high-value commodities.

“The global pharma industry is estimated to be a $400 billion business,” says MDAD director Emilio González. “As fast as our pharma traffic is growing, and with the most refrigerated cargo space on air-port in the country, we are still only one per cent of that industry in dollar value.

“That means there is untold potential for growth in this market, and our IATA designation will only help accelerate our upward trend.”

TURKISH Airlines saw its cargo revenue fall in 2015, despite tonnages increasing and profits breaking the $1 billion barrier.

Total cargo revenue fell from $973 million in 2014 to $935 million in 2015, despite the volume of cargo and mail carried rising by

8.7 per cent to 720,440 tonnes.Revenue from cargo carried

on the carrier’s passenger air-craft fell from $554 million to $540 million, while revenue from freighter operations fell from $419 million to $395 million.

Turkish Airlines chairman of the board and executive commit-tee, Ilker Ayci says: “It has been a challenging year with fierce competition in the global aviation industry, combined with political

and economic instabilities and significant currency fluctuations.”

The carrier’s total revenue fell from $11 billion in 2014 to $10.5 billion in 2015, al-though profit increased from $845 million to over $1 billion.

MIA prepares for pharma development

Turkish faces fierce competition

ACW 7 MARCH 2016 6

A ir Cargo India, which was held at the Grand Hyatt in Mumbai between 23 and 25 February, certainly had all the makings of a successful event and it delivered on all fronts, cover-

ing a range of pertinent issues across the supply chain.

As much of the air cargo community seeks to meet tough challenges posed by falling yields, over-capacity and ever-more demanding secu-rity regulations, the South Asian market remains something of a jewel in the crown of the air freight industry.

However, despite it being the second fastest growing market in the world, delegates heard in the session entitled ‘India, a global air cargo force – potential and pitfalls’ that there needs to be improvements across the whole national airfreight

supply chain.Lufthansa Cargo executive board member

Alexis von Hoensbroech (below), one of the panelists, noted: “We see great potential and growth in India over the last few years. This is a country which has far more potential but to unlock this the key is infrastructure, bureau-cracy and digitisation.”

He explained that he means infrastructure in this sense to refer not only to airport cargo

facilities, but also to the need to provide relief from congestion on roads right

around the country. Von Hoens-broech also pointed to a need for more cold chain facilities in India to meet the significantly growing demand being seen in the pharma-ceutical and perishable sectors.

Cutting back on bureaucratic red tape in business is another area

where improvement is required, von Hoens-broech told delegates: “Not only at government level, but within our own supply chain. It means things take far too long – (working) through all the paperwork.

“The long wait times are not necessary for air cargo and paper processes make them longer. Speed is king in air cargo.”

As for digitisation, he noted that India can really make a difference in this area, as the nation has a young, bright tech-savvy popu-lation, and the industry needs to rid itself of the large volumes of paper that accompany air freight shipments, a change that would undoubtedly improve the efficiency of the sup-ply chain. He believes that – if India can do this – much else can follow and its airfreight sector will grow and grow.

Saudia Cargo’s vice president for commer-cial, Rainer Mueller (right), called for the creation of IT plat-forms to support air cargo operations that are common right across the industry, and that might be partic-ularly valuable in a market such as India’s.

He is perplexed as to why this has not yet occurred, noting that the passenger side of the aviation sector has had such commonality in place for many years: “What I do not understand is why we did not manage that in 30 years. We need to get our act together.”

Mueller also suggested that carriers could fly to more than one Indian airport on international freighter services, to improve the offering and reduce overall costs, while he is unhappy about the time it takes to clear cargo through gateways across the country – a task that can sometimes

take up to seven days.In terms of this latter issue, he feels that every

part of the supply chain can markedly improve its performance: “Why are we accepting that those who are clearing the cargo are leaving it for two or three days in the warehouse? Why aren’t we sitting with the forwarders and our customers and letting them know it isn’t good (enough)?”

Panelists also suggested that airlines could be incentivised to launch domestic freighter ser-vices in India, which would provide a further boost to the country’s airfreight business.

From the cargo charter perspective, Air Charter Service’s chief executive officer, Justin Bowman (below, on the right), told delegates that he wants to see quicker access granted in India for operators of charter flights: “If you are lucky you can get a permit in three days, but it can take 30-40 phone calls to get. Compare this to Hong Kong, for example, which can take only five telephone calls.

“The Indian authorities do not make it easy to operate (charters). The issue is of ad-hoc air-lines being able to operate quickly. There should be five or six hubs and the authorities should make it 24 hours (a day) - making it easier for shippers with just-in-time shipments.

“We can assist shippers’ with exports, but we need to get them to the rest of the world and the only way is to make it easier and quicker for us.”

For Qatar Airways’ vice president of global sales for cargo, Daniel Parker (below, second from the left), the value of the industry in India must be sold to shippers.

He singled out the Indian pharma market as of particular importance here – now the second biggest market of its kind in the world – and says investment must be made in this sector. Moreover, using economies of scale in pharma and other booming markets offers potential for ready expansion in India, he concluded.

Air Cargo India event in Mumbai delivers the goodsAIR CARGO INDIA REVIEW

aircargoweek.com

B uild to grow is often the way that emerging economies develop and expand, and delegates at Air Cargo India heard that this certainly applies in India.

The country’s aviaton hubs, especially its tier two and three-sized airports, need better infrastructure to

grow their air cargo traffic and meet rising demand, according to panelists in the session ‘Delivering the Make in India vision to the world the air cargo way’.

The session was moderated by the International Air Trans-port Association’s global head of cargo, Glyn Hughes, and the need for construction of more infrastructure came to the fore when Hughes asked panelists what advice they would give Indian Prime Minister, Navendra Modi about what is needed to develop the nation’s air cargo market. Modi revealed in a letter to dele-gates that airfreight plays a key role in the government’s ‘Make in India’ initiative, which it launched this year and which aims to boost the country’s manufacturing sector.

Delhi International Airport’s head of cargo business and chairman of The International Air Cargo Association, Sanjiv Edward, said he wants the government to “commit to develop

the infrastructure to make the industry grow”, especially India’s regional gateways. He added: “For India to grow we need to develop our gateways and a commitment to infrastructure in our gateways to get this place on the world map.”

Air India executive director for cargo, D Murali agreed, explain-

ing that regional airports need cargo infrastructure similar to that of the major Indian hubs such as Mumbai, Delhi, Bangalore and Hyderabad. “The six metros have the infrastructure and the other airports have the potential but don’t have the warehouses or facilities which are so important for cargo to be cleared.

“There are a lot of major infrastructure problems and we are unable to move cargo at smaller airports; we need to connect to the major hubs,” he said. “The airports authority have started (on this) and maybe in the future we will have the infrastructure and we can then connect cargo to the major hubs.”

Chapman Freeborn chief executive officer, Russi Batliwala feels that the airfreight sector needs to be sold more effectively in India: “I think we are there, we have the carriers, the airports, the infrastructure but what we don’t have is people selling, and it is something the forwarders need to concentrate on.

“The air cargo industry is flexible and has many benefits, but we need to go out there and tell the shippers this and sell it.”

One area needing attention is the dwell time of cargo at hubs, which Mumbai International Airport’s head of cargo and vice president, Manoj Singh, said is a “challenge” and must be reduced.

Infrastructure development regarded as a priority

7ACW 7 MARCH 2016

AIR CARGO INDIA REVIEW

e-commerce is changing the face of the air cargo industry and logistics companies are having to adapt and mould their busi-ness models accordingly.

economic forecasts suggest that the e-commerce business in India will be worth $36 billion this year, up from $16 billion in 2014 – and will top $100 billion by 2020. Delegates at Air cargo India heard in the session ‘e-commerce: delivering the fu-ture’ that there is a need for collaboration and partnerships right across India’s supply chain to meet the growing demand, as well as to exploit the opportunities on offer.

Jeena & Co country head for express and commercial, rajiv Khanna said that in 2015 e-commerce represented two per cent of the company’s business, but in five years’ time this will reach a figure of five per cent.

He considers that there are many associated challenges for freight forwarders such as Jeena: “The whole paradigm of cargo is going to change. Less time, more work at a lower price and with greater visibility of every milestone.”

Khanna pointed out that logistics companies wanting to capture e-commerce business need to adjust their pricing struc-tures, and urged reforms to make it easier to handle cross-border e-commerce.

His firm partners with Alibaba.com for e-commerce and Al-ibaba’s head of business for India e-commerce, Al-Nahiyan Gangani, commented that there is a problem due to the frag-mentation of the nation’s supply chain. Alibaba needs partners and is working with them across India, he said.

Connect India e-Commmerce Services chief executive offi-cer, Lr Sridhar also believes that partnerships are important, and feels that in India the main challenge in this regard is the country’s complex geography.

Sridhar said: “Going forward, the last mile is going to be a very big challenge. If you can connect the last mile to the single villages of the country – e-commerce can spiral 10-20 times.”

e-commerce is booming in India and Jet Airways Cargo vice president Pradeep Kumar, remarked that, from Jet’s point of view, the opportunities are extensive. He urges partnerships be-tween all links of the supply chain and said that his carrier wants to offer final mile delivery provision, and is looking at how it can do it, especially in India’s tier two and three-sized cities.

Aramex’s regional manager for South Asia, Percy Avari, also senses that these are interesting times for those in freight for-warding, due to the impact of burgeoning e-commerce.

“We have previously focused on the satisfaction of a few thousand customers. It has turned around. It is no longer a few thousand, but millions of customers. It is not so much about on-time delivery but the experience of customers. We now need to have a conversation with all of them.”

Changing the face of air freight

aircargoweek.com

ACW 7 MARCH 2016 8

A ir Charter Service (ACS) has con-firmed that it opened a new office in Sydney, Australia, on 1 February – the company’s first operation on the Australasian continent.

ACS commercial director, Justin Lancaster commented recently: “We are delighted to be opening our twentieth office – and our first in Australasia. We now cover all six major conti-nents. Our Hong Kong office has built up a strong customer base in the region over the past few years and we felt now was the right time to have a local presence in order to strengthen the cur-rent relationships and to help build new ones.”

This recent expansion is continuing on a strong base. ACS’s latest financial year, which runs between 1 February and 31 January, was “our best ever year”, Lancaster confirms.

Performance was excellent and it was a record 12 months for ACS’s cargo business, he says.

The UK-based extensive commercial cargo charter business was hit somewhat by the down-turn in oil and gas prices which impacted that particular industry – a staple of many charter brokers’ work – but the fact that records could be set despite the decline in that aspect of the charter business is indicative of the flexibility and coverage that ACS now enjoys.

Indeed, thanks to ACS’s large number of offices located around the world and its exper-tise in other cargo charter business areas such as humanitarian and relief operations, “We can roll with the punches” posed by a difficult air cargo charter sector, Lancaster observes.

“The oil and gas work will come back,” he continues, though it may take some time, with oil prices likely to remain depressed for many months yet. Other commercial charters are of course still being booked – the pre-Christmas period saw ACS handle charters to move large numbers of hoverboards from the Far East into

Western markets, for example.Last year also saw ACS handling large num-

ber of charters carrying humanitarian relief to locations as dispersed as Africa and Syria. April’s earthquake that caused so much suffering in Kathmandu and elsewhere in Nepal was also a major focus of the broker’s efforts for much of 2015 – and, what’s more, ACS is still booking space on flights into the country now as the country continues with the recovery process. The fact that the charter broker has an India office allowed it to get people on the ground in Nepal very quickly and enabled it to play an important role in the relief effort.

Finally, another big contributor to ACS’s record year was its On Board Courier (OBC) division, which – says Lancaster – “smashed all expectations” subsequent to being recre-ated and reinforced as a major part of ACS’s offering. “OBC has been a huge success for us,” he points out.

ACS builds on ‘best ever year’ with new marketsAIR CARGO CHARTER BROKERS

THE Freight division of London’s Gatwick Airport-based charter broker Air Partner has made “good progress” of late, says Richard Smith (pictured), now head of products and up until January the compa-ny’s product director freight.

“We have continued our work with gov-ernment aid agencies to assist in a number of geopolitical crises,” he explains.

“We have benefited from our continued focus on developing stronger relationships and a good reputation with freight for-warders, and our ‘Red Track’ (online order confirmation and real-time tracking) tech-nology has contributed to the success of our aircraft-on-ground business. We also recently signed a memorandum of under-standing with Air Cargo Integrators of the UAE to develop their freight charter and global airfreight products.”

Smith continues: “We have seen good growth in our UK, German and US busi-nesses, albeit from a low base. Oil & Gas has been a particular area of focus for us as well, and we have continued to grow our client base here.

Like many charter bro-kers, Air Partner is often required to work in some very challenging places and conditions.

“We are very often called upon to fly to/from remote destinations that cannot be accessed by scheduled services – such as

when we are working for our oil & gas cus-tomers or acting in response to a natural disaster,” Smith notes.

“These sorts of environments can be challenging in a number of ways, ranging from the lack of infrastructure to inhospi-table weather conditions, and therefore it is extremely important to have the right expertise, knowledge and supplier net-works in order to operate the flight safely – and especially when the deadline is tight.

“Over the last couple of years, for ex-ample, we have done a lot of work helping counter the Ebola crisis in Africa, using our contacts to secure overflight permits and landing permits to make sure that life-saving supplies have been delivered

as quickly as possible.” Internal improvements have helped Air Partner to keep

on top of things. Thus, for example, having aviation consultancy firm Baines Simmons that Air Part-ner acquired in August last year under its wing means the charter bro-ker can offer its oil & gas

customers bespoke safe-ty and airworthiness audits

and assessment services. “This added-value arrange-

ment is a first for the offshore charter jet industry and we have received great feedback on the initiative,” Smith enthuses.

Air Partner invests in internal improvements

aircargoweek.com

ACW 7 march 2016 10

Despite the struggles of a number of South American economies, CEVA Logistics’ head of the South America cluster, Nadia Ribeiro (pictured), tells Air Cargo Week (ACW) that the com-

pany is on the up.Although Argentina, Brazil and Venezuela are

struggling with recessions, CEVA is strength-ening its position in the Peruvian perishable

export market and increasing market share in Argentina, Chile and Colombia, she notes.

Ribeiro tells ACW: “We are well positioned in the region in both the key markets and indus-tries. In addition, our focus on productivity has enabled us to manage some difficult trading areas and we have secured a number of import-ant customer wins that set the foundation for CEVA’s continuous growth and consolidation in South America.”

Volume growth has started slowly in 2016, which Ribeiro predicts will set the pace for the year, but she believes CEVA is set fair for growth. “Our successful operating model, in combina-tion with the know-how and expertise of our regional teams, our obsession with impeccable execution and investments in business develop-ment and product development provide us with the necessary footprint and tools to increase our market share despite overall market conditions.”

She says 70 per cent of CEVA’s exports from South America are perishables, supplemented by automotive and industrial goods. Imports mainly consist of high tech, automotive, energy and industrial goods.

One thing that is noticeable is that perishable exports are seeing more regional competition. Ribeiro gives the example of asparagus, saying: “For decades Peru was the leading exporter around the globe. Today, Mexico produces a good, quality product and is exporting at a steady volume.”

South American airfreight faces stiff com-petition from seafreight, which is particularly hitting pharmaceuticals, automotive and elec-tronic trade. The region also suffers from poor infrastructure, though this is improving, and complex customs regulations, particularly in Brazil, Argentina and Colombia.

Though complex customs regulations would

ordinarily be seen as a challenge, for CEVA it is also an opportunity. Ribeiro explains: “We have specialised experts in customs clearance in most countries, which paired with our 100 per cent compliant policy pro-duces a unique added value portfolio w h i c h we can offer to our customers, especially our Century and Multi National accounts.”

Ribeiro does not expect a boost in volumes as a result of the Rio Olympics in the summer but the Zika virus could result in demand for char-ters if a vaccine is developed. “I would think that if a vaccine is developed in the short term there could be some specific charter opportunities driven by pharma companies to some affected countries.”

SOUTH AMERICA

THE whole Latin America region suf-fered in 2015, with Brazil being hit particularly badly by political and economic problems, but RIO-galeão Cargo (pictured), the freight operation at Rio de Janei-ro’s RIOgaleão Airport, grew its market share.

RIOgaleão Cargo’s director, Pat-rick Fehring (pictured), tells Air Cargo Week that it did well last year despite the challenges, helped by being at Brazil’s second largest airport, a stable bellyhold network and by a reduction in freight clearing times of 20 per cent.

He tells ACW: “After one and a half years of the new concession, we have created strong relationships with all our partners in the supply chain, working closely with freight forwarders, shippers and government agen-cies on reducing logistics costs.”

Fehring says Brazil is likely to face another difficult year in 2016, but there are reasons to be optimistic. Airfreight rates from Europe to Rio are low and competitive warehouse fees are available.

“We will proactively assist customers in reducing their logistics costs in 2016 by switching to RIOgaleão as their gateway to Brazil,” he says.

Brazil’s pharmaceutical market is expected

to grow strongly, and Fehring says RIO-galeão’s modern pharma centre has been well received by customers.

“Together with IATA CEIV [International Air Transport As-sociation Center of Excellence for Independent Validators], which

we hope to gain by August of this year, it is another pillar of our growth

strategy for 2016, and will make us first choice amongst those pharma cus-

tomers that require ever more stringent and reliable facilities and processes.”

European trade has received a boost, with Cargolux having just started regular Boe-ing 747 freighter services to Rio this month (March). Together with 150 tonnes of belly-hold capacity a day on carriers such as TAP and British Airways, Rio is an attractive op-tion. “We now have a very good European product and are positioned as a cost-effec-tive and efficient alternative to Viracopos and Guarulhos,” Fehring says.

The Olympic Games are expected to give cargo a boost for the year. Fehring expects up to 25 charters and 11 freighters for hors-es, something RIO has upgraded facilities to cope with. “Given our spare capacity, the Olympics will not interfere with our regular cargo operation, which is good news for our regular customers.”

Rio on the up despite instability in Brazil

CEVA well positioned to grow in a challenging region

aircargoweek.com

Freight Forwarders

Freight Forwarders

azfreight.com : Featured Company Listings

11ACW 7 MARCH 2016

TRADEFINDER

Turkey

Airlines

USA

Hong Kong

Cargo Handling

United Kingdom

Associations

Germany United Arab Emirates

Charter Brokers