The weekly newspaper for air cargo professionals No. 989
9 July 2018
My big fat paint job
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HE first Airbus BelugaXL has rolled out of the paint shop sporting a special livery making it look like a Beluga Whale. The livery was one of six choices submitted to Airbus employees through a poll where 20,000 people participated, with 40 per cent voting for the smiling whale. The BelugaXL, the first of five, will undertake ground tests before taking to the skies in the summer and entering service in 2019. The Beluga is based on the A330-200 Freighter and reuses existing components and equipment.
IATA: Demand grows despite threat of trade wars
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De Juniac
irfreight has continued to grow in May at a reasonable rate with freight tonne kilometres increasing by 4.2 per cent, the International Air Transport Association (IATA) reports. Demand was down from 5.2 per cent recorded in April (revised from 4.1 per cent), and the association says growth is likely to continue at a lower pace due to the re-stocking cycle that requires quick delivery is over, the new export orders component of the global manufacturing Purchasing Managers’ Index is at a 21-month low, and global trade appears to be softening
BORN FREE TO LEAVE SWISSPORT
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as trade tensions increase. After a weak start to 2018, demand has resumed at a modest trend upwards but the rapid growth seen in 2017 is over, and IATA has revised growth for 2018 down to four per cent from its previous prediction of 4.5 per cent. IATA director general and chief executive officer, Alexandre de Juniac says: “We expect air cargo demand to grow by a modest 4.0% in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade.
AZURA APPOINTS COMMERCIAL DIRECTOR
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TIACA NURTURES YOUNG TALENT IN CANADA
“We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers.” Capacity measured in available freight tonne kilometres grew by 6.2 per cent in May, the fourth consecutive month that capacity growth outstripped demand, pushing load factors down 0.9 percentage points to 44.6 per cent. All regions of the world grew in May except Africa, where FTKs fell two per cent.
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ANTONOV FUELS THE ENERGY BUSINESS
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East Midlands Airport breaks cargo records
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ast Midlands Airport enjoyed a record year for cargo, handling almost £10 billion of goods from outside the European Union. The value of non-EU goods was up four per cent compared to the previous year, coming in at £9.935 billion. The total amount of cargo passing through the airport was the highest ever, with 358,477 tonnes being imported and exported in the 12 months up to March 2018, an increase of 9.7 per cent. Aviation Minister Baroness Sugg visited East Midlands Airport on 5 July to meet business leaders and discuss how the airport could be better served with new international connections. Speaking before the visit, she praised East Midlands’ cargo performance, saying that regional airports support the backbone of the UK’s economy and provide skilled local jobs and business export opportunities to open the UK up to the world. She says: “That’s why the Government will promote sustainable growth through our aviation strategy and has pledged to support all UK airports to make best use of their existing runways, as long as they address crucial economic and environmental planning issues.” Goods that pass through the airport fashion, Rolls Royce aero
MIAT Mongolian Airlines joins BARIG
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IAT Mongolian Airlines has joined the Board of Airline Representatives in Germany (BARIG), an association representing the interests of 100 national and international airlines. The national airline of Mongolia has operated since 1956 and serves eight destinations via
its home airport in the Mongolian capital, Ulan Bator. Besides services to Beijing, Hong Kong, Seoul and Tokyo, the airline offers non-stop flights to Frankfurt from Ulan Bator and to Berlin Tegel via Moscow’s Sheremetyevo Airport both three times a week. BARIG secretary general, Michael Hoppe says: “We are pleased to welcome MIAT Mongolian Airlines to our association. The airline records a long tradition and an interesting international route network with destinations in Europe and Asia.” MIAT Mongolian Airlines president and chief executive officer, Battur Davaakhuu says: “We highly appreciate BARIG’s work in representing airline interests vis-à-vis economic players, political bodies, airport operators and media.”
MNX picks Descartes’ ACAS system MNX Global Logistics has picked the cloudbased Descartes Air Cargo Advance Screening (ACAS) solution to comply with mandatory advanced security filing requirements for air cargo imports into the US. Created to enhance cargo security and visibility before it is in the air, ACAS is a joint US Customs and Border Protection (CBP) and Transportation Security Administration (TSA) programme requiring data to be submitted prior to loading at a foreign airport. On 12 June, ACAS became mandatory for air forwarders and carriers following the conclusion of the voluntary compliance ACAS pilot programme. MNX Global Logistics chief operating officer, Tom Belmont says: “We serve customers in the life sciences, medical device, aviation, and technology sectors with challenging requirements
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for time-critical and secure-sensitive shipments. “Descartes provides us with the technology platform to display innovation leadership, ensure cargo security, and lead the industry in standards for screening and moving high-value shipments around the world.” Descartes ACAS collects the required data, validates the format and transmits it to CBP within the required timeframes. It uses the Descartes Global Logistics Network to collect house bill information directly from air forwarders’ enterprise systems to file directly to CBP without manual intervention, increasing data accuracy and timeliness. Descartes vice president Global Logistics Network, Scott Sangster says: “We look forward to continuing to be a trusted service provider for MNX and the air cargo community.”
engines, smart phones and tablets, pharmaceuticals, exam papers, production line parts and medical equipment. East Midlands is also the airport of choice for Formula 1 teams through which they ship their cars and equipment to and from races around the world. Managing director Karen Smart says: “With more demand than ever for next day deliveries, we can only expect further growth especially in the e-commerce market. We need to ensure that we stay ahead of the game by improving our facilities so that more businesses can access international markets through EMA.”
Born free to leave Swissport
Born ERIC Born will step down as Group president and chief executive officer (CEO) of Swissport International at the end of December 2018.
He has been in his role since August 2015, and Swissport says a successor will be announced in due course. In the meantime Born will continue to perform his duties as group president and CEO. Commenting on his departure, Born says: “It has been an exciting time at Swissport and I am very proud of the high-quality services our colleagues across the globe deliver to our customers every day.” HNA Group CEO and chairman of Swissport, Adam Tan says: “Under Eric Born’s strategic and thoughtful leadership over the past three years, Swissport has cemented its place as the global leader in ground services and cargo handling for the aviation industry.”
ACW REWIND IN THE 21st century it is unimaginable that if aircraft communication broke down, walkie-tallkies would be dug out of cupboards. Twitter, Snapchat and text messages as well as mobile phones would surely fill in the gap.
Roger ... are you there? Roger. Vol 2, Issue 15 19 April 1999
BASIC HUMAN ingenuity overcame a systems breakdown when a power failure recently threatened to play havoc with operations at New York’s JFK Airport. Controllers were forced to use walkie-talkies to guide pilots to safe landings and departures when the control tower ‘s communication system was knocked out for nearly two hours. The failure, at the height of the evening rush hour, shut down a computer controlling eight radio frequencies and three telephone lines
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used to communicate with pilots in the air and on the ground. “It was hectic with the portable radios because we kept cutting each other off with our transmissions,” said Barrett Byrnes, controllers’ union representatives. In one case, a controller unable to reach the pilot of an aircraft at the head of the departure runway asked the pilot of the plane next in line to tell the first that it was clear to take off. “It was an unusual situation, but it had no impact on safety,” said Federal Aviation Administration spokesman Jim Peters.
Asiana Airlines starts using IBS iCargo
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siana Airlines has officially started using IBS Software’s iCargo cargo management system on 1 July, providing a single, fully integrated platform. In November 2016, Asiana Airlines signed an agreement with IBS Software to introduce iCargo, the next generation air cargo system encompassing cargo booking, sales, transportation and import management. After one year and eight months, system switching and employee training was successfully completed and Asiana formally applied iCargo to the company cargo system. The ‘New Air Cargo System Opening Ceremony’ was held at Asiana Town headquarters on 29 June, with more than 20 executives including Asiana Airlines president, Kim Soo-cheon; vice president of the cargo business, Kim Gwang-suk (pictured left); managing director of cargo sales, Oh Yoon-kyu; Asiana IDT managing director, Lee Chan-sung; and IBS Software executive chairman, VK Mathews (pictured right). The president says: “On the 30th anniversary of the company’s founding, iCargo has enabled us to take a new leap forward. By improving the quality of cargo transportation service and improving customer service, we will secure competitiveness to cope
cargo-partner to construct Ljubljana logistics centre
CARGO-partner will construct a modern iLogistics Center near Ljubljana Airport within the next year, increasing storage capacity six-fold resulting in over 20,000 pallet slots on more than 25,000 square metres. Construction on the logistics centre near Slovenia’s capital will commence this year, and the project applies the company’s strategic investments into strengthening its worldwide warehousing capacities. The iLogistics Center will contain over 20,000 pallet slots on more than 25,000 sqm of storage space and will include a 6,000 sqm small parts and single pack area, 5,000 sqm of cross dock and block storage space and 4,000 sqm of office space. With 44 truck docks, the facility located directly next to Ljubljana Airport, approximately 20 minutes from the city centre offers direct connections to the A2 motorway, is equipped for daily pick-up and distribution from and to the surrounding areas. Cargo-partner’s managing director in Slovenia, Viktor Kastelic says: “Our new iLogistics Center reflects the growing demand and our commitment to the Slovenian market. We are also happy to expand our team from 100 to 130 employees and we look forward to welcoming fresh talent, knowledge and skills at our modern and attractive new office.” Other logistics investments by cargo-partner include the timber-based iLogistics Center at the company’s headquarters in Fischamend, Austria with a total area of 12,200 sqm, as well as the iLogistics Center in Sofia, Bulgaria with 16,500 sqm of storage space, both taking up operations in spring 2018.
Quote of the week “I do not think printed media will ever die” AZura International commercial director, Jason Vencatasen
actively.” Mathews adds: “It has been proven beyond doubt that iCargo is the world’s No: 1 airline cargo management solution and it is indeed a proud moment for IBS. This successful cutover at Asiana stands testimony to our capability, professionalism and commitment to support the requirements of global organisations like Asiana Airlines. “Also, I hope that Asiana Airlines achieves consistent development and global prosperity with the introduction of iCargo.”
NCA resumes operations
NIPPON Cargo Airlines (NCA) resumed operations on 5 July after suspending flights due to maintenance issues. The Japanese airline, which has a fleet of five Boeing 747-400Fs and eight Boeing 747-8Fs, suspended operations on 16 June following the discovery of inappropriate maintenance records concerning the lubricating oil supply to aircraft parts. The fleet was expected to be grounded for a week but operations remained suspended for longer than expected because it took longer to verify records than anticipated. The investigation into the first aircraft has been completed and it resumed operations on 5 July with a flight from Tokyo’s Narita airport to Shanghai’s Pudong airport. NCA says the other aircraft will resume operations “as soon as the aircraft safety is confirmed”. In a statement on its website, NCA says: “We sincerely apologise for the inconvenience and worries that we caused our customers. We will do our utmost effort to check safety for resuming operation as quickly as possible.”
HNA chairman dies in fall HNA Group co-founder and chairman, Wang Jian has died aged 57 in an accident while on a business trip to France. He was in Provence, France where is reported to have fallen trying to take a picture while sight-seeing in the village of Bonnieux on 3 July. Despite receiving medical treatment he did not recover. The police are not treating his death as suspicious. The group’s board and management team, led by co-founder and chairman, Chen Feng and chief executive officer, Adam Tan released a statement, saying: “Together, we mourn the loss of an exceptionally gifted leader and role model, whose vision and values will continue to be a beacon for all who had the good fortune to know him, as well as for the many others whose lives he touched through his work and philanthropy.” HNA Group is a Chinese conglomerate based in Haikou, Hainan and its aviation investments include Hong Kong Airlines and Hong Kong Express Airways, a stake in Virgin Australia Airlines, the handling agent Swissport, and an 82.5 per cent equity interest in Germany’s Frankfurt-Hahn Airport. The company has been on a major buying spree in recent years, which has resulted in a lot of debt. HNA has been required to sell assets to reduce debts including its stake in Brazilian airline Azul and stakes in hotel groups around the world.
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WORLDNEWS TWO earthquakes have been reported near Gatwick Airport, with residents in nearby villages experiencing rumbling and shaking. The British Geological Survey (BGS) reports that the first earthquake struck Newdigate, Surrey on 27 June at 12.28 local time, measuring 2.6 ML magnitude. It was felt in Newdigate, Charlwood, Dorking and Crawley. The second earthquake struck Newdigate, which is about four kilometres from Gatwick Airport, at 05.54 on 29 June, measuring 2.4 ML magnitude, and like the first one was at a depth of five kilometres. BGS said on Twitter that a local resident reported a “loud bang and the whole house shook like a truck had crashed into it”. LEIGH Clifford will stand down as Qantas chairman in October 2018 after 11 years at the top. He will hand over the role to Richard Goyder who joined the Qantas board in November 2017 after serving as Wesfarmers Limited chief executive officer for 12 years. Goyder’s other previous roles include chairman of Woodside Petroleum and the Australian Football League. Announcing his retirement, Clifford says: “It has been an absolute privilege to lead the Qantas Board for these past 11 years. The national carrier has never been in a stronger position and that’s a credit to the management team and the 30,000 employees that make up the Qantas Group family.” ETHIOPIAN Airlines has taken delivery of its first Boeing 737 MAX, the first of 30 on order. The flag carrier of Ethiopia has taken delivery of a MAX 8, and the 737 MAX family incorporates the latest technology CFM International LEAP-1B engine, Advanced Technology winglets and other improvements to deliver efficiency and reliability. Ethiopian Airlines Group chief executive officer, Tewolde GebreMariam says: “We are glad to include the Boeing 737 MAX 8, the latest in Boeing’s single-aisle series, in our young and modern fleet of over 100 aircraft with an average age of less than five years.” SF Airlines has taken delivery of its 45th freighter, a Boeing 757-200 Freighter. The aircraft arrived at Shenzhen Bao’an International Airport on the morning of 1 July. It is the airline’s 23rd 757-200. NORWEGIAN is extending its long-haul network with flights from Stockholm Arlanda Airport to Krabi, Thailand for the winter. The service will operate twice a week on Wednesdays and Fridays from 31 October until late-March 2019 to the resort 900 kilometres south of Thailand’s capital, Bangkok. Aviation business director at Swedavia, Sweden’s airport operator Elizabeth Axtelius says: “We are pleased that Norwegian continues to expand at Stockholm Arlanda and welcome the new route.” JETTAINER has become one of the first signees to support the ULD Care Code of Conduct, intended to reduce damage and improve safety. The “Ten Rules of ULDs” intend to reduce preventable damage to airfreight containers and pallets through raising awareness, as proper handling of loading equipment could save the industry millions in annual repair costs. The recommendations include information on proper loading, adequate transport and the exclusive use of intact containers, with ULDs being perceived as important components of airfreight transport, which are largely responsible for load securing. Jettainer director of global operations, Frank Muehlenkamp who is also a ULD Care board member, says: “The ULD Care Code of Conduct is an important step towards raising awareness of this topic within the industry. We fully support these efforts and are pursuing further approaches to reduce avoidable damage, for example through our JettCare programme.”
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Indian mangoes prove a mouth watering prospect for Emirates
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mirates SkyCargo has transported record volumes of mangoes from Mumbai in May and June with growth of more than 50 per cent. Close to 1,130 tonnes of mangoes were uplifted from Mumbai to other destinations around the world using the belly space of passenger aircraft as well as freighters. Since April 2018, over 2,650 tonnes of mangoes have been on exported from India, out of which 2,142 tonnes were from Mumbai. Major markets for mango exports include the Middle East, UK, USA, Canada and other parts of Europe. India is one of the major exporters of premium mangoes in the world with the peak export season normally falling between April and June every year. The state of Maharashtra is the largest grower of mangoes in the country exporting over 30,000 tonnes every year and Mumbai is an important gateway for the mango exports. Between April and June 2018, Emirates SkyCargo also exported over 2,290 tonnes of other perishables from Mumbai, with large volumes of fruit and vegetables going to the UK and also the Mid-
dle East during Ramadan, which tends to be a busy season for perishable exports. Emirates has a fleet of 265 aircraft including 14 freighters, also offering extensive cool chain facilities at its cargo terminals in Dubai for the transport of temperature sensitive goods including pharmaceuticals and perishables.
Quintiq helps Lufthansa plan production
LUFTHANSA Cargo has selected Quintiq to improve production planning at its hubs in Frankfurt and Munich, with additional stations following in the future. The Quintiq solution is able to generate a production plan seven days in advance, based on forecasted orders and closer to the day of operations the solution will start to fill the plan with actual orders. Using rapid optimisation technology, it will manage last minute updates as full information on orders may arrive just hours before the goods are scheduled for delivery. It will be integrated into Lufthansa Cargo’s iCargo and Forecast systems, the three-way feedback loop between Forecast, Quintiq and iCargo drives more accurate plans on breakdown and build-up activities, and enables iCargo to monitor on-ground progress. Lufthansa Cargo chief operating officer, Soren Stark says: “We at Lufthansa Cargo are constantly looking for new ways to simplify operations and increase efficiency. Digitisation is key. It adds to our competitive advantage and gives value to our partners.” At the Frankfurt and Munich hubs, cargo needs to be broken down and built up for delivery to its next destination either by air or road. Quintiq will enable Lufthansa Cargo to make smarter decisions with regards to schedules and workstations for breakdown and build-up activ-
ities. The company will provide better visibility of inbound and outbound freight handling, the solution eliminates the need for long buffer time when reserving a workstation, freeing up capacity, limiting required space for storage and increase overall reliability for its customer. Lufthansa Cargo head of supply chain management, Tim Heppenheimer says: “The Quintiq team impressed us with their experience and ability to find simple solutions for our complex challenges. They were able to translate them into a powerful software solution that will improve our cargo handling operations and resource usage.” Quintiq chief executive officer, Rob van Egmond adds: “Given its massive volume of production, the increased efficiency of breaking down and building up the cargo will make a great difference to its overall business performance.”
IAG Cargo’s Critical team are here to help
IAG Cargo has introduced a new customer service team dedicated to its Critical product for shipments that must fly. The team who have experience in operational, reservations and sales sectors, will deal with all customer service matters relating to the Critical product including last minute and out-of-hours bookings, service enquiries and customer advice to track and resolve potential issues so that all shipments fly as planned. They will be based at the carrier’s London Heathrow hub and will operate between 06.00h – 22.00h every day, with the potential to extend
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to a 24-hour service in line with customer demand. IAG Cargo global products manager, Daniel Johnson says: “This new team will play an important role in ensuring that we deliver that outstanding service for our important Critical customers at every touchpoint.” Since its launch in September 2016 the Critical product has proved popular with forwarders and shippers, with 3,000 bookings in 2017 and almost 2,500 in the first six months of 2018, with Constant Climate Critical being launched in July 2017. Johnson
Emirates SkyCargo also provides supplementary protection to cargo using equipment including White Cover thermal blankets, White Containers and the world’s first Ventilated Cool Dollies. Emirates added Santiago, Chile to its network on 5 July, providing up to 15 tonnes of cargo capacity per flight to the region. The Boeing 777-200LR services will provided cargo capacity for Chilean exports including salmon and other perishables. Chile is the world’s second largest producer of farmed salmon and exports of salmon were valued at over $4.6 billion in 2017. The service will offer flight connections for cargo from Chile to destinations in East Asia, the Middle East and Russia through Dubai. Emirates has also added a second daily flight to Prague, the capital of the Czech Republic. The airline is operating a Boeing 777-300ER on the route with up to 20 tonnes of cargo capacity. Czech companies will have the opportunity to export machinery, pharmaceuticals, perishables, glass and automotive parts to markets in the Middle and Far East, South East Asia and Australia.
Take your supercar on holiday with FlightValet ETIHAD Cargo has launched ‘FlightValet’ to move cars around the world in time for the seasonal surge in demand for luxury vehicle shipments to popular holiday destinations. Each year Etihad Cargo transports hundreds of vehicles on its passenger and freighter aircraft and the new product will simplify the customers’ booking experience. FlightValet is available to those who wish to transport their luxury vehicles immediately, with a dedicated team overseeing the swift, safe and secure delivery of the vehicle to its final destination. Etihad Airways managing director for cargo and logistics, Abdulla Mohamed Shadid says: “We are delighted to introduce this new tailored product to the marketplace. Demand from our customers has grown significantly in recent years, and in an effort to improve our service offering, we have introduced vehicle handling capability at key new stations in 2018.”
The service will also offer to car dealers and manufacturers the opportunity to move vehicles globally with greater ease, particularly to cater for the Italian supercar market at Milan Malpensa Airport on Etihad passenger aircraft, as well as chartered and scheduled freighter flights. Shadid adds: “FlightValet is the latest addition to Etihad Cargo’s suite of high-value products, which includes our arts and musical instruments product FlyCulture, launched last year with the opening of the Louvre Abu Dhabi, and our signature pharma and life sciences product TempCheck, to name just a few. “This is a key part of our strategy to leverage Abu Dhabi’s natural position as a logistics centre for the world, and drive growth in air cargo high-value product segments that diversify our portfolio and reinforce our position as the air cargo partner of choice.”
AZura appoints commercial director AZURA International, publisher of Air Cargo Week, has appointed publishing industry veteran Jason Vencatasen as commercial director. This is a key role in taking the business forward, says AZura chairman William Carr. Vencatasen, who joins AZura from an aviation industry events company, is excited at the chance of returning to publishing and makes no secret of his enthusiasm for newspapers. He says: “I am 100 per cent excited about returning to publishing from events management. I do not think printed media will ever die. Digital publishing has its role, including supporting print media,
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but you cannot deny the pleasure in holding a newspaper.” The married father of four intends to begin his role by visiting clients both in the UK and abroad as well as trade events such as the Air Cargo Forum in Toronto. Carr says: “We welcome Jason on board at a time when we are pushing the business forward in our 25th year. Air Cargo Week is celebrating its 20th anniversary this year and Jason takes on his role in this significant milestone anniversary. It is exactly this professionalism that has kept AZura at the heart of airfreight media since 1993.”
Olin and Huff given new leadership roles at Amerijet
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merijet International Airlines has strengthened its leadership team with the appointments of Jon Olin and Derry Huff to senior roles. Olin has been appointed senior vice president for corporate strategy and administration, taking responsibility for developing and guiding strategic growth opportunities for the company, and leading various administrative functions for Amerijet. Amerijet chief executive officer, Vic Karjian says: “Olin rounds out a highly experienced, industry-diverse executive team for Amerijet. He brings to the company a unique strategic outlook as well as significant integrator and all-cargo ACMI aviation industry experience, adding to our foundation of strong leadership that will drive Amerijet’s current and future growth initiatives.” Huff has been promoted from Olin
vice president of strategic initiatives to vice president of sales and marketing, where he will oversee sales, marketing and development of the Amerijet portfolio of products, including domestic and international scheduled air and road feeder services, interline, charter sales, new route/market development and the management of corporate level relationships with its major forwarder accounts.
Ground broken at Rockford cargo centre
GROUND has been broken on the $10.5 million, 120,000 square foot building expansion at the Chicago Rockford International Airport Cargo Center. The event also celebrated the start of construction of a new $3.5 million ramp for cargo aircraft parking, and the ceremony was attended by government representatives including City of Rockford mayor, Tom McNamara; state representative Joe Sosnowski; US senator Dick
Durbin; and congresswoman Cheri Bustos. Illinois congressman, Adam Kinzinger has welcomed Rockford’s expansion of cargo facilities and ramp expansion system, which is part of the $677 million airport infrastructure grants across the US announced by US Department of Transportation secretary, Elaine Chao. Speaking after the ground breaking event on 2 July, Kinzinger said: “Today, the Chicago Rockford International Airport is breaking ground on expansion of their cargo facility and recognising the start of construction on the cargo ramp expansion. This is a big project and a large investment that highlights the successes of the Rockford Airport.” He added: “Improving our aging infrastructure is critical, and I’m proud to see this Administration and our Republican majority pass legislation that follows through on this priority.”
FedEx gives bears new home in Oakland
FEDEX Express has flown orphaned bear cubs from Alaska to California where they will make Oakland Zoo their new home. The two grizzly and two brown bear cubs’ mothers were designated as public threats by the Alaska Department of Fish and Wildlife so were transported from Anchorage to Oakland as part of FedEx Cares’ Delivering for Good effort to support the movement of rescued and endangered animals. The cubs, all one-year-old boys, could not be released back into the wild so Oakland Zoo built them a 2.5-acre natural habitat in the new California Trail expansion, complete with a pool, a waterfall, several dens and trees for climbing. The California Trail project, which is scheduled to open on 12 July, shows the change in California and emphasises the role humans have played in the ecology of the San Francisco Bay Area.
Animals on display will include American Bison, Bald Eagles, California Condors, Grey Wolfs, Jaguars and Mountain Lions, in addition to the bears. Elsewhere in California, Ontario International Airport Authority (OIAA) has approved a lease agreement with FedEx Express to maintain the company’s presence at Ontario International Airport for at least three more decades. Under the initial 30-year lease, FedEx Express will relocate its operations to a 51.1-acre site located in the northwest quadrant of the Californian airport, with the move expected to take place in late 2020 when site preparations have been completed. FedEx Express will invest almost $100 million to revitalise aircraft parking apron areas; consolidate and construct a sorting facility, ground support staging area, secondary and maintenance buildings; enhance perimeter fencing; and install landscaping, with improvements expected to be completed by November 2020. The OIAA will clear the northwest site by removing existing structures above and below ground and performing surface grading. It will also coordinate the environmental analysis and assessments, and any necessary removal and management, to be completed by 31 January 2019.
Karjian says: “Derry will continue to make an important contribution to the company in this new role. Being with Amerijet for almost 30 years, he has seen the company change and grow and will continue to use his vast amount of experience to propel us to the next level.” Prior to joining Amerijet, Olin spent 15 years as a top executive at Deutsche Post DHL, and was part of an executive team that completed a successful corporate turnaround and strategic sale of private-equity backed Southern Air. Huff joined Amerijet in 1989 and has held the positions of second officer, first officer and captain on the Boeing 727, as well as chief pilot and director of operations. In 2008 he moved from operations to business development, where he leveraged his extensive operations experience to support the commercial growth of Amerijet. Huff
ACS goes to San Francisco
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ir Charter Service has strengthened its presence on the US West coast, with an office in San Francisco, California. The office is the second in the state, having opened up in Los Angeles seven years ago, and is the sixth in the USA. The Los Angeles office has been one of the company’s
fastest growing locations, with 30 per cent growth so far this year. Air Charter Service Americas president, Richard Thompson says: “Some of our best clients are located in the San Francisco Bay area and we wanted to move here to better service them. We also felt that it was the next logical step in our US expansion plan, following on from opening our new Manhattan office earlier this year. “The new operation will be headed up by Loretta Mendelovits, who joined us more than four years ago and has shown great leadership skills, which will be put to good use in her new role as she takes on the San Francisco market.” Thompson says that California is the world’s fifth largest economy and is larger in area than many European countries so it made sense to have a second office in the state.
TIACA nurtures young talent in Canada THE International Air Cargo Association (TIACA) is expanding its Air Cargo Supply Chain Internship this summer to develop talent among young airfreight professionals in Canada. The programme is being headed by Air Canada Cargo and involves staff from a number of Toronto-based logistics companies taking part in a series of visits at each other’s sites to learn and explore new ways of working together. It is the second Air Cargo Supply Chain Internship TIACA has run in as many years, with a similar programme having taken place last year involving six logistics companies in Amsterdam. TIACA secretary general, Vladimir Zubkov says: “Attracting and retaining new talent is key to our industry’s future, and training programs are an excellent way to add to airfreight’s appeal and to ensure our future leaders are fully prepared to take the reigns. “TIACA takes great pride in its commitment to supporting and training the next generation of air cargo professionals, and we look forward to the program’s expansion into Canada ahead of our Air Cargo Forum Strauss there in October.”
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The internship will take place in Toronto, the host city of the 2018 Air Cargo Forum, which runs from 16 to 18 October at the Metro Toronto Convention Centre. Air Canada Cargo vice president, Tim Strauss says the airline is “proud” to support the programme, saying: “Innovative programmes like these are necessary to ensure the supply chain industry attracts the talent it needs to continue thriving. Air Canada has a strong culture of training and development and understands the value of these types of programmes. “This is a fascinating industry that plays a central role in the global economy and offers a rich diversity of career paths for young professionals. We are happy to have the opportunity to showcase our industry and contribute to initiatives that help shape tomorrow’s air cargo leaders.” In addition to the internship programme, TIACA also runs a Professional Development Workshop Programme aimed at growing management skills for air cargo professionals. The workshop is designed by Strategic Aviation Solutions International and gives participants an appreciation of the entire air cargo supply chain.
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FREIGHTERS
Yesterday’s outcast is today’s golden child
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hile the air cargo pundits debate the intensity of the air cargo market in the months to come, one thing remains clear – maindeck capacity is very much in demand, writes Donald Urquhart. And while air cargo demand has moderated somewhat from last year and new obstacles – most notably rising fuel prices and the threat of a full blown US-instigated trade war – the market still retains a robustness that that keeps last year’s severe capacity shortages alive in the industry’s collective Crabtree
memory. “Demand is definitely good and it’s a seller’s market at this point,” one air freight industry analyst told Air Cargo Week. Not since the industry recovery of 2010 – after nearly two “heinous” years – as for Boeing Commercial Airplanes regional director – airline market analysis Tom Crabtree, describes it – of the 2008/09 economic downturn has there been such robust cargo demand. And that demand caught much of the industry off guard last year resulting in a mad rush for capacity. So far this year things are looking good – not as stellar as the latter half of last year, but nonetheless encouraging. With IATA figures suggesting around 5.1 per cent growth for the first four months, the global airline body is forecasting four per cent growth going forward. At
Boeing, they are somewhat more optimistic with their analysis or airline data pointing to a six per cent growth in the first four months. Going forward Crabtree says they are looking at between four to five per cent for the remainder of the year, “driven by the fact the industry is capacity constrained.”
No one sits idle
The year-end build up of 2017, sucked up pretty much every available viable freighter that was sitting idle. That, with latent demand continuing on into the early part of this year – resulted in little or no maindeck capacity being idled. If anything, it is the opposite and indeed, the desert parking lot has never looked more barren. Available freighter capacity is all fully switched on as ‘once bitten, twice shy’ shippers and freight forwarders have even now, only halfway through the year, book up space wary of being bitten by lack of capacity for a second peak season. “Quite simply there are no freighters, wide or narrow body, that are parked looking for a home,” observes Strategic Aviation Solutions
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Int’l president and CEO Stan Wraight. “Even the charter market is struggling to find space available except backhauls etc.,” he adds.
Busy all of the time
The industry analyst noted that pretty much every available freighter that’s on the market gets picked up pretty quick. He cites the example of Etihad which earlier this year decided to phase out five A330-200 freighters. These have been placed with a “large express” company, for at least two or three months already, he says, adding that half a dozen companies were keen on picking them up. The problem he notes is that if a carrier orders from a manufacturer, there is a delivery date – some 15-24 months out – and it comes when it is delivered. The conversion market is quicker he notes, but these too have built up a substantial backlog. “Airlines are really desperate so this is the state of the market today and I would say this will probably continue into next year and even if the freight market starts turning down, the overhang of the demand will still be there so it will take some time to swing back to a balance.”
FREIGHTERS
E-commerce is not the only driver of growth
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o what is driving all this demand? With so much talk in the industry revolving around e-commerce, one could be forgiven for thinking this was the sole driver of air cargo at the moment. “It has had a tremendous impact, and consumer demand for instant gratification for delivery coupled with a need for transparency has driven demand where cheap articles compete with computers for space,” says Wraight. He adds that the integrators are feeling the pressure of Amazon and Alibaba who both have taken larger control over their logistics through dedicated air uplift through ATSG and Atlas Air in the former and SF Express and YTO in the latter. “And post offices are exploding their volumes of package airmail and carriers are struggling to find their niche in all this,” he adds. For Boeing’s Crabtree, the solid cargo demand over the last 24 months is a three-part combination. “It’s a resumption of world trade in normal channels, it is the resumption of industrial production in normal channels and e-commerce that is driving the resurgence in air cargo traffic bold on freighters and in passenger bellies,” he said. While he agrees e-commerce is indeed a key factor, he notes it’s difficult to pin down exactly how much is eCommerce because of the fact some it travels simply in postal mail bags and a significant portion is consolidated on pallets by freight forwarders. And of course a significant portion goes on the express carriers. But one thing eCommerce is unlikely to do, is influence acquisition of maindeck capacity, unless of course you’re in the express business. “Here it’s a volume issue, not necessarily value,” notes Wraight. “Do you really want to buy an expensive asset to fly bulk cargo with low yield just to play in a market? I would say no. But if you have your own products where the volume is coupled with control over revenue, then yes.” Indeed this is one big misconception with e-commerce says the industry analyst. While everybody’s benefiting from the growth of the e-commerce, but in the general freight market its generally consolidated e-commerce which is coming from forwarders specialising in e-commerce. “People still think its high-yield stuff, but it’s not. E-commerce is generally not high-yield, it’s only a small portion that is high-yield and that is generally going with the express carriers,” he says. As for the combination carriers whose cargo futures looked troubled a few years ago and resulted in a number of carriers trimming their fleets of large freighters during the downturn, Wraight says this exercise has pretty much run its course but adds that eventually they will need newer replacements if they are to remain serious about cargo. “They will need a certain amount of freighters to keep the bellies full and also offer a product that allows them to participate in the higher yield verticals, and stay a carrier of choice for major shippers,” says Wraight. “Will that mean new freighters, eventually yes, the question is how many, timing and what type. It may only happen 10 years from now, but it will happen,” he says.
Cebu to convert ATR 72s
CEBU Pacific is to enter the cargo market by having two of its ATR 72-500 passenger aircraft converted into freighters by IPR Conversions. The first aircraft will be modified and returned to Cebu’s fleet in the fourth quarter of 2018 and will continue to operate through Cebu’s subsidiary, CebGo. A large cargo door will be installed, allowing standard containers and pallets to be loaded. The aircraft will have space for seven AKE unit load device containers and carry more than seven tonnes of cargo. Cebu Pacific president and chief executive officer, Lance Gokongwei says: “We will be able to offer cargo capacity that no other carrier in the Philippines can provide. With the freighter aircraft, we will further support the growing needs of the logistics industry, especially as the Philippines’ e-commerce businesses expand rapidly and look for faster delivery schedules.” The Filipino airline says the ATR benefits from a long body, increased wingspan and a powerful turboprop engine, making it ideal for transporting high-value and time-sensitive commodities such as marine products, computing equipment and heavy machinery across the country. It also says the aircraft is suited to landing and taking-off in airports with runways less than 1.2 kilometres long, which is too short for jet aircraft, adding that only about one third of the 90 airports in the Philippines can land jets.
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OIL & GAS
Antonov fuels the energy business
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il prices have been on a roller coaster ride in recent years, with an equivalent impact on logistics providers, writes Neil Madden. From 2011 through 2013 the Brent crude benchmark price surged through $100 a barrel. But this only prompted oil exploration and production (E&P) firms to pump more black gold onto world markets, notably from unconventional sources, such as Canada’s tar sands and shale plays in the USA. The resulting glut saw prices tumble to the low $40s by 2016. Worried about losing market share to America’s shale roughnecks, Saudi Arabia cajoled fellow OPEC countries to limit production in the hope of driving many shale producers out of the market.
The ploy worked in helping to lift prices out of the doldrums. Brent, for example, has touched $70 a barrel for much of this year. But shale production has also rebounded, arguably stronger than ever, with the hottest play in town shifting from the Bakken region of North Dakota to the Permian Basin of West Texas.
Peaks and troughs
These peaks and troughs have a delayed effect on demand for cargo shipments as E&P companies usually wait to see whether a spike in oil prices looks set to last before taking a final investment decision on new drilling or reopening a plugged well. Antonov Airlines business development director Michael Goodisman points out that
Goodisman the oil and gas (O&G) sector is unusual in that relatively few decision makers can cause big changes in prices by agreeing to adjust production levels. “Such large swings in prices do have an impact on activity, and this reaches us in a delayed manner as it takes time for the O&G companies to ramp up or ramp down their activities including their requirements for project cargo airlift,” he tells Air Cargo Week.
Prices are buoyant
But with oil prices buoyant once more, the heavy lift carrier is seeing greater confidence and optimism across the sector, which is translating into additional flying. “We have seen an increase in requests as of the second half of 2017 which continued well into the first half of 2018. Within the first half of 2018, we have already achieved 73 per cent of the tonne-kilometres (TKM) flown for the whole of 2017 for this sector,” says Goodisman. Over the past 12 months, Antonov has operated more than 22 O&G flights. In terms of TKM flown, the sector made up seven per cent of total activity in 2017; but this has sharply increased to 18 per cent so far in 2018. The main destinations for Antonov’s O&G flights are Europe, Middle East and Asia including Azerbaijan, Kazakhstan, UAE, Saudi Arabia and China but the carrier also had flights to Africa and the US. Last year, regions of origin for flights were primarily from North America and Asia, while in 2018 the trend has changed to Europe and Asia. “We are hoping to see the US business significantly increase following the recent opening of our Houston office,” Goodisman continued, “as it’s hard to win business and engage properly with customers without having a physical presence in the region.” Being a Ukrainian airline, Antonov benefits from being the only AN-124 operator with an Open Skies Agreement with the USA, which
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means it can carry all cargoes, not just outsized, freely into and out of the US, without needing to go through the no-objection process each time.
Modernise the fleet
As cargoes for the O&G and wider energy sectors are becoming larger and even heavier, Antonov is continuing to invest in fleet modernisation and life extension programmes. To date, Antonov is the only operator to offer two AN-124-100M-150 versions, which feature airframes modified to carry 150 tonnes, with the rest of the AN-124 fleet to be modernised in due course. O&G installations are often in fairly remote places, which can prove tricky for logistics providers. Antonov normally provides airport-to-airport service. Most of the time flight enquiries entail forwarders and brokers that arrange the doorto-door aspect of the delivery. But on occasions, Antonov can provide assistance if asked to help with door-to-door aspects.
The Antonov advantage
Goodisman also points out that the AN-124 can land on a relatively short runway compared to the similar-sized B747F. “This allows us to operate to more airports, hopefully closer to final destination,” he adds. “In addition, as an operator of ramp aircraft, we do not require high loaders, so again this can get us closer to final destination for some projects.” A further benefit of the Antonov fleet is that some aircraft have been designed to operate from unprepared airstrips and their robust landing gear can handle different type of runway surfaces. “The AN-22, for example, is an excellent aircraft for unprepared strips and has been used for particularly challenging airfield conditions,” says Goodisman.
OIL & GAS
Softrader moves to the cloud
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upplying oilfield equipment, including spare parts, is a time-critical business. Components like valves and piping need to reach their final destination as quickly as possible as lost production at the wellhead can run into hundreds of thousands of dollars. UK software Softrader has supported valve and pipe traders, who often rely on air cargo, for more than 25 years. Now, the company has launched a cloud-based browser system that enables suppliers to handle all major workflow tasks from enquiry to invoicing, including order entry, purchasing, stock control, document creation and storage. “Few advances in software for business in recent years have been as significant as the move toward browser based systems,” says Softrader managing director Jono Slack. “One of the biggest advantages of these systems is that all data is hosted in the cloud, not only is it easily accessible securely from any computer or mobile device with an internet connection. IT costs can be kept to a minimum with no need for in house servers.” Clients can raise and lower their user numbers with easily depending on their requirements thanks to a quarterly billing model based on a monthly fee per user. By using this pricing model, Softrader has managed to provide a system with much lower starting costs, the company says, especially for those that require little data transfer from an old system. In these cases, the software can also be implemented very quickly.
Kerry Logistics take stake in Saga Italia
KERRY Logistics has acquired a majority stake in Saga Italia, a Milan-based logistics company with specialist know-how in the fields of project logistics, heavy lift services and material management. The acquisition adds the Republic of Congo, Uganda and Egypt to Kerry’s network, and new offices in Kazakhstan, Turkmenistan, the United Arab Emirates, Russia and US. Founded in 1985, Saga Italia provides end-to-end solutions tailored to customers’ project requirements. More than 150 logistics professionals manage projects for multinational corporations across the globe, particularly for customers in the oil and gas industry. Saga Italia’s range of services also include a complete suite of international freight forwarding services covering air, ocean and overland transportation. Kerry Logistics managing director of Europe, Thomas Blank (pictured left) says: “With this step, we continue to build upon our expertise in project logistics which currently spreads across China, The Philippines, Indonesia, The Commonwealth of Independent States, and India. Saga Italia’s specialised knowledge further strengthens our activities and will support us to tap into the immense business opportunities as more Belt and Road projects get off the ground. With Saga Italia on our team, we are able to provide a platform to consolidate our project logistics capabilities across the globe.” Saga Italia owner and managing director, Marco Oriolo (pictured right) adds: “By joining Kerry Logistics our services are leveraged by an extensive network in Asia and Europe. We are looking forward to a successful future as part of the Kerry Logistics team, driving the businesses of our customers through innovative logistics solutions.”
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SAUDI ARABIA
The times are a changin’ in Saudi Arabia
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audi Arabia is changing fast, writes David Craik. Women have been given the right to drive, music can be played in public and you can even go to the cinema. The Kingdom’s Vision 2030 project, led by the youthful Crown Prince Mohammed bin Salman, is also set to revolutionise Saudi’s economy which has been so heavily reliant on bountiful oil deposits for the last few decades. Vision 2030 recognises that the Kingdom faces a future of waning oil deposits and demand given the global rise in renewables. In order to maintain current living standards, the Kingdom realises that it must boost private investment and find diverse income streams. The project identifies the nation’s logistics sector as playing a pivotal role in luring some of that non-oil trade to and from the Kingdom. As part of a nine-point logistics transformation strategy it has called for changes to the air cargo sector to “enhance the efficiency and service quality of air cargo transport, through increased liberalisation and private sector participation”. It wants to modernise airport cargo facilities and eliminate bottlenecks, automate the import/export process and speed up clearance times. According to consultants A.T.Kearney an impact is already being seen with clearance times at airports down from 3.4 days in 2016 to 1.2 days in 2017. The number of documents needed for importing and exporting has also fallen by over 75 per cent. Another aspect of the plan is to develop a wider national transport infrastructure structure leading to better sea to air and rail to road connectivity. Crucial to this will be the ability to attract more private investment. It is already happening – an example is the 2016 award of a 20-year contract to SATS to become the first international cargo handler to build and operate a cargo terminal in Dammam.
Jeddah expansion
More recently, just this June, Siemens Postal, Parcel & Airport Logistics (SPPAL), won a contract to expand and modernise a large airfreight centre at King Abdulaziz International Airport in Jeddah. The terminal belongs to Saudi Airlines Cargo Company (SACC) with Siemens equipping it with state-of-the-art cargo logistics and intelligent software to cope with an expected “considerable
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increase” in capacity. “This development enables SACC to maintain minimum ground handling times,” SPPAL chief executive Michael Reichle, tells Air Cargo Week. “By doing so we will contribute to the airline’s efforts to further increase its competitiveness. At the same time, Siemens is supporting the customer’s growth plans and promoting economic development in Saudi Arabia and the entire Middle East.” Reichle adds that one of the goals of the development is to increase the cargo capacity at King Abdulaziz International Airport to around 820,000 tons per year. “We are implementing a fully automated storage system with 700 positions for unit load devices (ULDs) and six elevating transfer vehicles (ETVs),” he says. “Thirty-three conveyor lines form the interface to the airside. In addition, the facility has around 50 build-up and break-down workstations for containers of various sizes. On top of that, Siemens is setting up a large air-conditioned area with over 170 storage positions for perishable goods in dedicated refrigerated and deep-freeze rooms. The intelligent Siemens software Cargo Compact is responsible for control of the entire warehouse system. The project also covers long-term maintenance of the systems.” Reichle has high hopes for future demand as Saudi Arabia looks to diversify its economy. “SACC is Saudi Arabia’s leading cargo airline, transporting cargo to over 250 destinations in Asia, Africa, Europe and the United States,” he states. “They use the country’s unique geographical location and their optimal freight connections to build bridges between East and West.” The 75,000 square metre cargo handling facility has double the area of the current offering, estimated at 35,000 square metres. The first phase of the project is expected to end November next year while the second phase begins June 2020 and ends December 2021. Saudia Cargo, which has 17 freighter aircraft, has also announced a move to train and hire 280 Saudis as part of Vision 2030. They will study cargo and logistics including warehouse management and equipment handling of dangerous materials, eventually leading to a position as an operations officer or freight officer at Saudia Cargo. Operationally it is also eyeing expansion. It has opened a new cold storage facility at King Abdulaziz International Airport to handle pharmaceuticals and medicines and cater for rising demand for food and drug volumes.
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It intends to open similar facilities throughout the Kingdom and is currently planning to launch a specialist pharmaceutical handling facility in Riyadh offering FlyPharma services. Internationally, Saudia is eyeing up further growth in South Africa where it recently appointed ATC Aviation Services as it general sales and service agent. It also wants to further expand in India where exports to Saudi Arabia include fruit and vegetables, machinery and raw materials. Imports to India from Saudi include oil and leather.
New Saudi Arabia
What then of international operators? What do they make of the new Saudi Arabia? Crane Worldwide Logistics recently opened a new office in Dammam offering airfreight services and utilising nearby King Fahd International airport. It describes Saudi Arabia as an “upcoming logistics hub” driven by the nation’s economic diversification. In addition, UPS Worldwide Express Freight service has expanded to Lebanon, Latvia, and Lithuania and added an outbound service to Saudi Arabia this year. Norway’s Avinor also sees growth potential in Saudi Arabia particularly around salmon. Avinor director cargo Martin Langaas, says: “Saudi Arabia is a high income region and we are seeing huge growth in demand for airfreight capacity for salmon and other seafood,” he states. ”Indeed, in 2017, 2,560 tonnes of Norwegian salmon were flown directly to Saudi Arabian gateways. As a result of the GCC Customs union, a lot of Norwegian seafood enters Saudi Arabia via the Dubai and Bahrain gateways due to more effective customs. Also some of the salmon is shipped to UAE, and then resold and shipped to Saudi Arabia. The main markets are in Dammam, Jeddah and Riyadh.” Langaas says the whole region including United Arab Emirates, Saudi Arabia, Oman, Kuwait and Bahrain saw around 11,000 tonnes imported in 2017. That is an increase of 100 per cent since 2014. “We expect a continuing sharp increase in export to Saudi Arabia especially. We are also confident that within a few years the market will sustain a direct freighter from Oslo to Saudi Arabia,” he states. From driving to movies to the air – Saudi is ready to take off.
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