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The weekly newspaper for air cargo professionals Volume: 18

Issue: 44

9 November 2015

IATA names Miami Airport as pharma partner

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iami International Airport (MIA, pictured) has been named as the first pharmaceutical freight hub in the US by the International Air Transport Association (IATA). The gateway was made designated partner in IATA’s Center of Excellence for Independent Validators (CEIV) Pharmaceuticals Certification programme at the Air & Sea Cargo Americas conference and exhibition in Miami last week. MIA is just the second airport around the world to be made a partner, joining Belgium’s Brussels Airport. To achieve this, it brought together a pharma community, including cargo airlines, ground handlers and freight forwarders, which will now undergo specialised training through IATA’s CEIV programme. MIA was recognised for organising its pharma logistics providers to undergo IATA’s initiative, which certifies that these valuable, temperature-sensitive products are transported in accordance with global best distribution practices.

The designation by IATA also highlights the airport’s leadership as a safe and efficient logistics hub for pharma. MIA is operated by Miami-Dade Aviation Department and its director, Emilio Gonzalez, says: “As the first designated pharma freight hub in the US, we have the goal and expectation of increasing as well as attracting new pharma business from untapped markets across the globe.” Gonzalez points out that, last

year, approximately $3.3 billion worth of pharma products were moved through MIA, and pharma cargo volumes moving through the hub have risen by 79 per cent since 2010. Pharma, he points out, is a $300 billion industry and the airport is aiming to tap into the opportunity the market presents. “With this designation our expectation is that we will quickly be the ‘go-to’ airport for pharma products. We can only grow and

grow, and this designation brands Miami as the airport of choice for pharma,” Gonzalez remarks. He explains that the airport has been working with IATA on being made a designated pharma hub because it is seeking to tap into the extensive opportunities available in this market such that it can expand its cargo business. Thiswill involve further diversification away from the fish, flowers and fruit which have traditionally been the staple cargo moved through the airport. He explains that the likes of American Airlines Cargo and LAN Cargo are set to be involved in the programme at MIA and says that six or seven air cargo operators will be part of the community. Gonzalez adds that Miami is also looking to grow its cargo volumes in other industries, including manufacturing. The Air & Sea Cargo Americas conference and exhibition is held every two years. Taking place at the Miami Airport & Convention Center, more than 6,000 delegates were expected to attend over the three days of last week’s event.

Air cargo load factor at its lowest level since 2009

The International Air Transport Association (IATA) says there was a very limited recovery in air cargo volumes in September. Air cargo traffic, as measured in flown freight tonne-kilometres (FTKs), rose by one per cent compared to the same month of 2014. But with all regions’ airlines reporting capacity growth, the freight load factor fell to 43.2 per cent in September, its lowest point since 2009. IATA’s director general and chief executive officer, Tony Tyler comments: “Although slightly improved from August, the global trend is fragile, and the improvement is narrowly based. “The 2.8 per cent growth reported by European carriers reflects positive trends in trade with Central and Eastern European economies as well as a general improvement in manufac-

turing in the Eurozone. But the largest air cargo region, Asia Pacific, was only just in positive territory, held down by weak regional trade.” Middle Eastern airlines fared the best, their traffic rising by 7.5 percent, but both North American and Latin American carriers recorded falls in their flown FTKs. Over the course of the first nine months of 2015, member airlines’ freight traffic rose by 2.4 per cent compared to the same three quarters of 2014. IATA says that there is reason for optimisim, despite current performance, which is said to be largely tracking struggling trade patterns. The recently agreed Trans-Pacific Partnership

(TPP) may help, Tyler suggests. He points out: “We have high hopes that the TPP will deliver its promised benefits to participating economies with air transport – cargo and passenger – playing its role as one of the catalysts for growth.”

Heathrow’s plans for expansion bring high praise

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ABC still on the up despite the weak rouble

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aeroflot struggles continue Demand and capacity the challenge

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Panalpina to acquire major stake in Airflo PANALPINA World Transport has confirmed that it is to acquire a majority stake in Kenya’s second-largest air freight forwarder, Airflo. The shares are to be acquired, subject to regulatory approvals, from Dutch Flower Group (DFG) as the result of a deal struck last week. Airflo specialies in the export of fresh cut flowers, plant cuttings and vegetables out of Kenya to markets including the Netherlands and the UK. It handles the movement of up to 1,500 temperature-controlled shipments per week and more than 40,000 tons of freshly cut flowers every year. “The acquisition of Airflo further expands our presence in Africa and makes us an important player in the Kenyan flower market,” observes Panalpina chief executive officer (CEO) Peter Ulber. DFG’s CEO, Marco van Zijverden, notes: “Managing the cool chain for fresh cut flowers is a crucial component of our success. By going together with a strong global player such as Panalpina, we can ensure that all customers – growers, importers and retailers – will continue to receive the quality service that they are used to.”


NEWSWEEK

Geodis completes OHL 3PL acquisition

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eodis has achieved all the necessary regulatory approvals and officially completed its previously announced acquisition of Tennessee, US-based third-party logistics (3PL) services provider Ozburn-Hessey Logistics (OHL). The combined enterprise will take in more than 38,000 employees and serve approximately 165,000 customers. It is expected by Geodis to generate an annual turnover in the region of 8 billion euros ($8.7 billion). As well as other modal solutions, OHL offers airfreight capacity in the bellyold of passenger services, on dedicated freighters and on cargo charter missions. It also offers many related freight forwarding services, such as customs brokerage. “The acquisition is a great achievement for Geodis and a signficiant step towards

our ‘Ambition 2018’ strategic plan – to be the global growth partner for our clients,” enthuses Geodis chief executive officer (CEO) Marie-Christine Lombard (pictured, credit S Vergez). “This acquisition allows us to offer a

market-leading set of solutions on a gobal level with enhanced expertise at each phase of the supply chain.” Kim Pedersen, executive vice president, Geodis Freight Forwarding, remarks: “With the acquisition of OHL, Geodis is strengthening its business on the trans-Pacific and trans-Atlantic air trades. “Our combined volumes will make us a market player with over 300.000 metric tons of air volumes globally. With the strong presence of OHL in the US and Asia we will further accelerate our growth ambitions, and bring strong competitive advantages and solutions to our clients” OHL CEO Randy Curran insists that the merger of the two companies “makes oustanding sense”. According to Geodis, OHL operations will all in time be rebranded under the Geodis name.

Air France KLM reports on mixed freight results

THE AIR FRANCE KLM Group has continued to restructure its freighter business, the carrier confirmed when it released its third-quarter results. Its freighter capacity was reduced by 30 per cent compared to the same three-month period of 2014 as the European carrier group met what it described as the combined challenges of “weak global trade and structural air cargo industry capacity”. Bellyhold capacity remained stable year-on-year (YOY). With costs down, helped by lower fuel prices, losses in the Group’s freighter business were reduced to 81 million euros ($88 million) in the third quarter compared to 102 million euros in the same period of 2014. However, with cargo volumes carried down by 3.6 per cent YOY, the load factor declined by 1.3 percentage points to 58.5 per cent. The Group made a profit of 480 million euros in the third quarter and between January and September it reduced its losses to 158 million euros. All of the Group’s Boeing MD-11s will be retired by June next year, with just five dedicated freighters likely to be flying by the end of 2016. That strategy should, Air France KLM believes, see its freighter business return to operating break-even in 2017.

Fraport’s profits rise, but tonnages continue to fall AIRPORT operator Fraport has seen profit over the first nine months of this year increase by 19.1 per cent to 261 million euros ($285 million), despite cargo volumes (excluding transit cargo) at its primary gateway, Frankfurt Airport, falling year-on-year. Fraport’s profits were up from a level of 219 million euros in the same period of 2014, while in the third quarter profit rose by 23.9 per cent to 158 million euros. Fraport executive board chairman Dr Stefan Schulte comments: “With the trend of the first half continuing in the third quarter, both our [passenger] traffic and key financial figures have developed positively in the year to date.” In the third quarter, Frankfurt Airport saw cargo volumes fall by 3.9 per cent to 511,117 tonnes. Over the nine-month period, cargo tonnages were down by 2.7 per cent to over 1.5 million tonnes.

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Heathrow’s plans for expansion bring high praise

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eathrow Airport has confirmed its intention to invest £180 million ($277.6 million) in a 15-year project intended to double its current cargo traffic. The airport’s chief executive officer, John Holland-Kaye announced the blueprint for the growth on 3 November. The money will be spent on cargo facilities, processes and people. The plan includes the creation of a specialist pharmaceutical storage area to cater for rising demand for high value, temperature-sensitive medicines and other cool-chain goods, while the airport’s freight forwarder customers are also expected to benefit from more efficient handling of transit cargo. Heathrow also aims to be the first airport to be 100 per cent digital in its cargo shipping. Working with airlines, the International Air Transport Association, the UK’s Department for Transport and Her Majesty’s Revenue and Customs, it is to “fully implement

e-freight”. The airport will also build a new truck parking facility with waiting areas for drivers, catering for over 100 vehicles, secure parking, access control, toilets and showers, as well as dining facilities. Holland-Kaye remarks: “Cargo is essential for UK plc and Heathrow is its global freight connector, with 26 per cent of all UK goods by value going through the airport. “This investment plan will significantly improve our cargo facilities to support British businesses to keep the economy moving, connecting exporters to the world and helping the government reach its £1 trillion export target by 2020.” The news of Heathrow’s expansion has been welcomed in many parts, not least by the

UK’s Freight Transport Association (FTA). The FTA believes that improving the airport’s infrastructure will halve processing times from about eight hours to four by reducing congestion and providing smoother processes. FTA director of global and European policy, Chris Welsh (pictured) enthuses: “Heathrow’s planned investment and increased freight capacity is exactly the type of commitment that FTA has long been asking for. “The significance of airfreight is often overlooked but today’s announcement illustrates that Heathrow Airport has listened very carefully to ourselves and the freight industry,” he adds.

NEWS WEEK WorldNews FLYUS, A GENERAL sales and services agent (GSSA) based in the Netherlands has said that it is expecting to put as many as seven pallets of freight on each of the recently launched All Nippon Airways (ANA) Boeing 787 flights linking Tokyo to Brussels. FlyUs is acting as ANA Cargo’s GSSA in the new online station. ALBAN FRANÇOIS has been appointed vice president of global cargo at Brussels Airlines. From 1 January, he willl be responsible for rolling out the carrier’s new new commercial cargo strategy. AN ANTONOV AN-12 has crashed after take-off near Juba International Airport, South Sudan, on 4 November, killing perhaps as many as 40 people who were either in the aircraft or on the ground.

C2K agrees new standards

A CARGO 2000 (C2K) working group has agreed new quality standards as part of the wider drive of the C2K International Air Transport Association interest group to implement new standards across the whole airfreight industry. At a meeting in Vienna, C2K’s Technical Working Group finalised revised Airport-to-Airport specifications and addressed the final post-implementation issues of those new specifications. The document defines the standard processes and measures at air waybill level for all movements, both from airport at origin and to airport at destination, followed by airlines, forwarders and ground handlers. Also in Vienna, the Working Group and launched a revision process for its Door-to-Door (D2D) process definitions. A new D2D task force, including forwarder and carrier representatives and established to revise D2D specifications, will hold its first meeting this month (November). The new definitions are expected to be formally adopted in 2017. Finally, C2K’s Audit and Certification Programme is also being refreshed, in preparation for a relaunch next year.

WFS seals deal on FCS shares

WORLDWIDE FLIGHT SERVICES (WFS) has completed the acquisition of a 51 per cent share of Fraport Cargo Services (FCS) in a move that, it says, confirms “its strategic partnership” with Frankfurt Airport’s biggest airline-independent freight handler. WFS executive chairman, president and chief executive officer, Olivier Bijaoui, comments: “The closing of this major transaction is a milestone for WFS. Synergizing our combined strengths and expertise, we will further position the joint FCS company as the biggest handler at one of the world’s most important cargo hubs. This collaboration will build upon FCS’s decades of successful operations in the dynamic air cargo handling market.” Frankfurt Airport operator, Fraport executive board member and executive director of labour relations, Michael Müller adds: “The goal of our strategic partnership is to expand FCS’ global reach in the rapidly moving and highly competitive air cargo industry, to achieve sustainable success, and to strengthen Frankfurt’s role as Europe’s leading air cargo airport in the international logistics chain.”

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NEWSWEEK Turkish launches new all-cargo routes

TURKISH CARGO Turkish Cargo has launched new weekly freighter services to six different destinations: London, New York, Atlanta, Amsterdam, Kinshasa and Doha. The airline started weekly US links to Atlanta Hartsfield-Jackson International Airport on 25 October and John F Kennedy International Airport on 29 October. On 27 October, Turkish Cargo began flying to Kinshasa International Airport each week,

and on 29 October it launched new weekly all-cargo services to Stansted Airport and Amsterdam Airport Schiphol. Turkish Cargo also inaugurated a new service to Hamad International Airport on 7 November. The Atlanta, New York and Kinshasa links are all flown by Airbus A330 Freighters. The Atlanta and New York rotations feature a stop in Shannon, Ireland, while the Kinshasa service also includes a stop in Nairobi, Kenya, on the return leg. The connection to Stansted is operated by Airbus A310 Freighter, the aircraft flying on to Amsterdam before leaving for the next leg of the return trip to Istanbul. Finally, the Doha link involves a landing at Noi Bai International Airport in Hanoi (Vietnam) and at Delhi’s Indira Gandhi International Airport on the way back to Istanbul.

More hold-up on Manston Airport sale MANSTON AIRPORT (pictured before its closure) in Kent, in the south-east of England, will not be subject to a compulsory purchase order (CPO), Thanet District Council having rejected the idea again. The council had deferred the decision to carry out the CPO in December 2014, but when the UK Independence Party (UKIP) took control of the TDC in May 2015, it had pledged to reopen the airport. The TDC had been unhappy with indemnity partner RiverOak, which had set up a company, RiverOak Aviation Associates, to manage the project, as the council says it would only fund the CPO, not the purchase of the land or development of the airport, with funds to come from private investors. The council comments: “From the documentation so far provided to the council by RiverOak, it appears that those investors will not be investing until after the confirmation of the CPO by the secretary of state, which would be after any inquiry conducted by a planning inspector.” Having taken legal advice, the TDC says it will not continue with the CPO. It explains: “There remains the lack of evidence that financial resources are in place or proposed to be in place to acquire the land prior to the confirmation of the CPO despite the fact that the council is obliged

to attempt to purchase the land by negotiation in parallel with the CPO process.” The council also observes: “There is insufficient evidence currently available for the cabinet to be satisfied that a proposed CPO is likely to be successful which would justify its entering into an indemnity agreement.” Morerover: “There is good reason to consider the principle of the CPO alongside the decision to enter an indemnity agreement.” In May, after UKIP took control of the council, the leader of UKIP in the TDC, Chris Wells, told Air Cargo Week: “I want Manston re-opened as soon as possible. UKIP supports the concept of the CPO. I believe the judgement made by the previous [Labour TDC] administrations was flawed.”

UPS invests in US facility modernisation

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PS is to expand its US airport footprint with modernised package sorting facilities at Columbia Metropolitan Airport, the upgrade expected to be operational before the end of this year. The improvements will see automated sorting systems introduced to move packages through the sort process, capturing package data and routing the packages to appropriate load positions. UPS says that six-sided decode tunnels will replace traditional scanning to capture package information from address labels. Plus, packages will be given ‘smart labels’ to make local deliveries faster and more efficient. UPS president of the South Atlantic district Dwayne Meeks says: “UPS is constantly reinvesting in our people and assets to enhance performance throughout our fully integrated delivery network. Developing and implementing technology that refines the package sorting process is part of that continual effort.” UPS handles 10 flights a day at Columbia Metropolitan Airport. It has a 315,000 square foot facility on the 57-acre site in the state of South Carolina. UPS will also be tripling the size of its Centennial ground package sorting facility in Louisville, which, though separate to its Worldport international air hub, will support express

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services due to its proximity to the airport. It will invest $300 million to increase the size of the facility to 838,000 square feet and the express sevrices giant says that the development should be finished by 2018. Pick-up and deliveries will continue as normal while work is being carried out. UPS president of the Ohio Valley district Lou Rivieccio notes: “UPS has worked with Kentucky economic development officials to be a catalyst for business growth in the area and to link with our air operations as a gateway for global trade.” The Centennial hub will be retrofitted with automated conveyors to move packages, capturing data and routing information to send to load positions. Like the Columbia facility, the Centennial hub will have six-sided decode tunnels to replace traditional scanning to capture package information from address labels. Smart labels will also be employed.


NEWS WEEK Loss in Q3 for Lufthansa Cargo

IAG sees freight traffic fall

LUFTHANSA GROUP’S profit increased by 262.7 per cent to 1.7 billion euros ($1.9 billion) in the third qaurter of this year, helped by selling its stake in JetBlue, but its cargo division made a loss in the threemonth period. The Group says 500 million euros of the 1.7 billion euros profit came from selling its equity stake in JetBlue in the first half of 2015. Revenue for the whole airline over the first nine months of 2015 increased by 7.4 per cent to 24.3 billion euros compared to 22.6 billion euros in 2014. Lufthansa Cargo’s earnings before interest and taxes (EBIT) halved to 35 million euros between January and September because of weak performance from May onwards. In the third quarter, between July and September, Lufthansa Cargo made an EBIT loss of 22 million euros. Lufthansa chief executive officer and chairman of the executive board, Carsten Spohr (pictured), says: “We are delighted to be able to present these encouraging results, which confirm that we are on the right track, and that our chosen strategy is having its desired effect.” Spohr says the fall in fuel prices is noticeable but Lufthansa will not become dependent on it. He says: “We cannot expect

IAG CARGO has seen its third quarter commercial revenue rise slightly to 238 million euros ($262 million), up from 236 million euros in the same period of last year. For the quarter period from 1 July to 30 September, market conditions “remained challenging”, the carrier notes. This placed pressure on yields, which fell 4.5 per cent at constant exchange rates, with volumes 4.7 per cent down year-on-year. IAG Cargo chief executive officer, Steve Gunning, says: “We have made the point in the past that the air cargo market has established a ‘new normal’, with excess capacity and reduced demand leading to significant price and yield pressures. “In Q1, the West Coast port strike in the US gave the air cargo market some respite from this new normal, but the past two quarters have seen a return to more challenging

to fly for too long with a tailwind of low oil prices. We must continue to work hard on the competitiveness of our cost structures. Here we have already identified cost savings of around one billion euros for 2016.” Revenue from the logistics segment, which covers Lufthansa Cargo, Jettainer and Lufthansa’s stake in AeroLogic, dipped by 0.2 per cent to 1.7 billion euros. Freight and mail traffic fell by 0.9 per cent in the nine-month period to 1.2 million tonnes, it dropping by 4.3 per cent in the third quarter to 400,000 tonnes. Over the first three quarters of 2015, the load factor declined by 3.2 percentage points to 65.8 per cent, with the third quarter seeing a decline of 4.7 percentage points to 62.4 per cent. Lufthansa says global airfreight demand was strong in the first quarter of 2015, before then losing momentum. The carrier is also facing expanding bellyhold capacity from Middle Eastern and Turkish carriers. In February Lufthansa Cargo received its fifth Boeing 777 Freighter but it plans to cut its Boeing MD-11 Freighter fleet from 14 to 12 aircraft at an unspecified date in the future.

conditions. In light of this, our strategy and operational model is more relevant than ever; with a strong focus on cost control, premium products and smart partnerships critical to our success. “We have made good progress over the quarter against all these strategic goals, and our decision to remove our wet-lease freighter capacity from our fleet and focus on a partnership model has proved justified.”

FedEx added to AMI’s door-to-door service

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ir Menzies International (AMI) has added FedEx to its Quick2Ship doorto-door express product, which has operated in the US since 2011. The extension of the programme to include FedEx brings new destinations, additional frequencies and extra capabilities to Quick2Ship’s global coverage. Quick2Ship is AMI’s global door-to-door product, which provides all-inclusive quotes from any US zip code to any address worldwide. It is only accessible by bona fide airfreight agents who have established credit facilities with AMI. The system provides instant online quotes which are stored for 10 days, and can then be converted to bookings without re-entering details. Quick2Ship also provides full online tracking and tracing for every shipment. The Quick2Ship product is primarily targeted at the up to 13 kilogramme sector, with shipments generally comprising one or two pieces; however, Quick2Ship has been used to move everything from a small envelope to an entire X-ray machine.

AMI’s general manager of express services for the US, Olga Lebedyeva, says: “Quick2Ship has been highly popular from the outset, and has grown by 15 per cent in the past year. “It has proven particularly popular for shipments originating outside our main gateways, where agents appreciate the all-inclusive service and pricing for their minimum shipments, as a labour-saving alternative to quoting for and arranging collection, and delivery direct to the carrier’s hub.” Lebedyeva adds: “Quick2Ship provides exactly what freight agents demand today: quality, convenience, speed and economy. We believe this addition of FedEx capacity and frequencies will add to the product’s appeal.”

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EASTERN EUROPE AND CIS

ABC still on the up despite the weak rouble

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irBridgeCargo (ABC) Airlines has seen a year-on-year tonnage growth of 18 per cent in the first nine months of 2015 to 344,130 tonnes, and has also been expanding its network throughout the year. In September alone, the airline saw a 28 per cent rise to 42,480 tonnes. ABC says its freight tonne kilometres increased by 35 per cent in September. ABC senior vice president, sales and marketing, Robert van de Weg, (pictured) tells Air Cargo Week (ACW) that this comes despite the weakness of the rouble hitting imports, particularly flowers from Europe. He explains to ACW: “[The] Russian market is import-oriented and we have seen some decline in imports, which is associated with the decreasing value of the rouble decreasing purchasing power in the country.”

“Overall we do not expect [to see] the cargo market booming or falling, since the issue with the rouble and oil price volatility will still be in place. However, we are always ready for quick moves if there are increases in demand and if the market will be above our expectations.” As for route expansion, van de Weg points out that ABC does not have any plans for Russia, as it already covers Moscow, Yekaterinburg, Novosibirsk, Khabarovsk and Krasnoyarsk.

Van de Weg continues: “During the first nine months of 2015 imports from Europe fell by 37 per cent, the main drop was related to flower imports, while imports from the US dropped by 11 per cent. Imports from Asia were down 15 per cent.” As for the rest of the year, van de Weg notes:

More international routes

ABC is planning more destinations outside of Russia, having launched Helsinki, Hanoi (Vietnam), Los Angeles (US) and Singapore this year, which he says have all seen stable volumes to Russia. He observes: “Even though the main driver of the expansion to these destinations is to accommodate traffic in and out of Asia; as a side-effect we will also be able to cater for existing Russian import volumes.” The twice-weekly Boeing 747 Helsinki service started on 26 January from Moscow’s Sheremetyevo International Airport and returns to the Russian capital via Frankfurt (Germany). When announcing the service in

January, van de Weg said: “This new service from and to Helsinki will allow us to support the import and export flows which require direct Helsinki service. Furthermore we will also offer trucking services to the Baltic region and Scandinavia.” The carrier started twice-weekly flights to Hanoi on 1 April from Sheremetyevo via Hong Kong International Airport. Van de Weg said at the time: “AirBridgeCargo believes that entering the Vietnamese market comes as a logical next step in developing the strategically important Asian market.” ABC also launched twice-weekly services to Singapore on 3 September. At the time Changi Airport Group assistant vice president for cargo and logistics development, James Fong commented: “The new service by AirBridgeCargo marks a significant milestone for Changi Airport, as it opens up new cargo opportunities between Singapore and Russia.”

Transaero calls a halt to operations

The future of Transaero Airlines looks bleak after reports that the co-owner of S7 Airlines, Vladislav Filyov has withdrawn an offer to buy a stake of at least 51 per cent in the debt-ridden carrier. Russian state-owned airline, Aeroflot, was seriously considering buying a 75 per cent stake in Transaero, but pulled out of the deal. Transaero ceased operations on 26 October. All Moscow flight operations were moved to Vnukovo Airport prior to operations ceasing, with the airline saying: “It is of particular importance that Transaero will concentrate all its operational resources in a single airport hub.” On 26 October, Transaero’s air operator’s certificate was cancelled by Russia’s aviation authority, the Federal Air Transport Agency. The head of the agency, Alexander Neradko, said on 28 October that the carrier could not count on its certificate being resumed. He advised Transaero staff

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to consider other jobs, such as working for Aeroflot. On 30 October, Aeroflot announced it was prepared to hire up to 6,000 former Transaero staff. Neradko observed that the airline is burdened by debt in excess of 250 billion roubles [$3.9 billion] and is being denied refuelling and maintenance at more than 40 airports in the Russian Federation, as well as at many foreign gateways. Between 2009 and 2014, Transaero had seen cargo and mail volumes increase from an annual 712,000 tonnes to more than a million tonnes. In 2014, the airline made a loss of 19.3 billion roubles, compared to 16.4 billion roubles in 2013. This was despite revenue increasing to 117.3 billion roubles. Transaero’s fleet consists of 20 Boeing 747s, 14 Boeing 777s, 18 Boeing 767s, 45 Boeing 737s, two Airbus A321s and three Tupolev 214s.


EASTERN EUROPE AND CIS Aeroflot struggles continue

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eroflot has seen cargo and mail volumes fall by 4.6 per cent to 111,170 tonnes in the first nine months of 2015, with September seeing tonnage halving. In September, cargo and mail volumes fell by 47 per cent to 7,942 tonnes, with international and domestic traffic both seeing dramatic declines. The year had started badly, volumes falling by 11.5 per cent between January and March to 33,833 tonnes. After this, volumes recovered, with every month between April and August showing improvements. Aeroflot has added new routes to its network and upgraded services. It has upgraded connections from Moscow to Russia’s Far Eastern Federal District, covering the cities of Vladivostok, Khabarovsk, Yuzhno-Sakhalinsk and Petropavlovsk-Kamchatskiy, to Boeing 777s. On 27 October, Aeroflot started Airbus A330 flights from Moscow to Sokol in Russia’s Magadan Region, because Transaero

had ceased operations. On 26 October, Aeroflot increased its services to Kazakhstan, with flights from Moscow to the cities of Astana, Almaty, Aktau, Atyrau, Aktobe and Shymkent. Aeroflot has been expanding its fleet, taking 14 Boeing 737 Next Generations intended for Transaero, having signed a leasing agreement with Sberbank Leasing. Aeroflot deputy chief executive officer for finance and network and revenue management, Shamil Kurmashov (pictured) says: “Today’s agreement with Sberbank Leasing is the first step towards adding these aircraft, which were originally intended for Transaero, to the Aeroflot Group fleet. Transaero’s fleet and routes will be transferred to us, together with half of the company’s employees – around 6,000 people.”

Airport volumes falling

Airports across Russia are struggling, with many of them seeing double-digit volume falls, according to Airports Council International (ACI) Europe. ACI says that, between January and August, Moscow’s main airports experienced large falls. Volumes through Domodedevo International Airport (pictured) fell by 19.9 per cent to 82,984 tonnes, while freight traffic at Sheremetyevo International Airport fell by 8.2 per cent to 95,942 tonnes. Things are not much better at other Russian airports, with Pulkovo Airport in St Petersburg seeing a 12 per cent decline to

14,114 tonnes. Koltsovo International Airport in Yekaterinburg’s volumes fell by 19 per cent to 11,738 tonnes. Novosibirsk International Airport experienced a decline of 20.1 per cent to 12,758 tonnes. ACI notes that, in August, Domodedevo saw a decline in cargo traffic of 19 per cent to 11,520 tonnes, while Sheremetyevo’s fell by 3.5 per cent to 12,262 tonnes. Smaller airports also struggled in August, Pulkovo’s cargo volumes dropping by 11.9 per cent to 1,939 tonnes, Novosibirsk’s down by 19.7 per cent to 1,878 tonnes and Yekaterinburg’s falling by 16.6 per cent to 2,022.

Russia-Ukraine flights stopped All direct flights between Russia and Ukraine stopped on 25 October because of continued disagreements between the two countries. Russia says that Ukraine has improperly accused Russian carriers of violating Ukrainian law by flying to the disputed Crimea region. Meanwhile, Ukraine’s State Aviation Administration believes that Russia’s aviation authority, Rosaviatsia, has been limiting

Ukrainian airline operations. In September, the Ukrainian minister of infrastructure, Andrew Pivovarsky said that Ukraine will protect the country’s economic interests. But Rosaviatsia has responded by confirming: “In response to the unfriendly actions of Ukraine, Russia was forced to take balanced measures and ban flights of Ukrainian airlines in Russia from the same date.”

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Asian GSSAs

Air Logistics eyes the future and further growth

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orldwide general sales and services agent (GSSA) Air Logistics Group is expanding, and ready to capitalise on anything the Asian GSSA market can offer. The Paris-headquartered group has grown its network to 27 offices across the Middle East and Asia Pacific regions, Vikram Singh (pictured), managing director Middle East & Asia Pacific, tells Air Cargo Week. Among them are offices in Shanghai in China, Kuala Lumpur in Malaysia and Bangkok in Thailand. In fact, the Asia Pacific offices account for almost a third of the Air Logistics Group portfolio. “We have made significant investment in our expansion to provide our airline partners with a competitive edge in our increasingly competitive industry,” Singh explains.

“We continue to build professional local teams to provide an alternative to the existing local heroes and to be prepared for new opportunities. This has enabled us to add value to our airline partners in ways they did not expect.” Air Logistics Group has long been known for this strategy, placing one experienced member of staff in each new office, to be supported by – and to train – local staff. Singh notes that total cargo management for small to medium-sized airlines also represents a rapidly growing aspect of the Air Logistics

Group portfolio offering in the Asia Pacific region. The company has invested in the IT and revenue optimisation systems needed in order to offer this, he says. Indeed, investing in the latest IT systems has always been a priority for the Group. According to Singh, the Asian market is suffering right now from unprecedented airfreight overcapacity. Such cargo space creates new opportunities but also makes the environment very challenging, driving down rates and making it that much more difficult for operators to make real profit.

Global brand attracts talent from airline industry

“The industry needs highly qualified people in every location, which is not always easy,” Singh insists. But Air Logistics Group is well placed in this regard. “As a global brand we are able to attract and retain talent from the airline industry, which is an important factor for our partners and customers. We also focus on training and providing our local teams with a sustainable career for the future.” Air Logistics Group has a realistic approach to the market, based on research and analysis, he says. This helps it to deliver exactly what it promises all its airline partners, Singh concludes.

HAE: ASEAN changes are critical THE planned ASEAN Economic Community (AEC) integration offers potential for growth for the Derby, UK-based HAE Group, says director Neville Karai (pictured). The economic consolidation of the Association of Southeast Asian Nations (ASEAN) countries will take effect on 31 December 2015, and is expected to have significant economic benefits for businesses operating in the region. Among its five core principles are the free flow of goods, free flow of services and free flow of investment, all of which could have a potentially enormous impact for GSSAs operating in the ASEAN member countries. Karai notes: “The planned AEC integration offers the company an opportunity to expand and to develop new products in the region. As a result, HAE has recruited new business development staff at our company in Bangkok, Thailand, targeting regional development and to support the Asia-Europe trade lane.” He adds: “The AEC also offers carriers, integrators and e-commerce providers with cross-border opportunities via different

modes of transport and regional hub capabilities that thus far have been limited to air-to-air connections.” Karai describes the GSSA market in Asia as “highly fragmented, with many local heroes and cluster or area independent networks”. This means that GSAs need to find some way of differentiating themselves from their competitors. He explains: “In a market where yield is under pressure, it is vital for GSAs to offer something different to build their presence and relevance. It is not uncommon for GSAs to be brokers of other services, such as charters, and creating services using block space commitments with airlines to be a capacity provider on a consistent basis.”

Air China puts its faith in ACP Worldwide

AIR CHINA has selected ACP Worldwide as its GSA in South Africa. ACP Worldwide is selling capacity on the airline’s new nonstop, direct flight between China and Africa. The first inbound flight took place on 29 October, with the first outbound flight taking off the following day. Boeing 777-300ER services operate to

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Johannesburg’s OR Tambo International Airport three times a week from Beijing. “Air China has a very large network and we will be looking to support not just cargo destined for Beijing but also to cities beyond, most notably Shanghai, Chengdu and Guangzhou,” says ACP Worldwide’s country manager, Dawn Bailey.


Asian GSSAs

APG extends its airline reach

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PG has been appointed general sales agent for China’s Xiamen Airlines in four additional countries – Vietnam, Portugal, Turkey and the United Arab Emirates. The partnership will see APG provide full sales and marketing services, in addition to call centre facilities, in the new markets. Prior to entering into this agreement, APG had a GSA contract with Xiamen Airlines covering 10 countries, having added Australia, France, the Netherlands, the UK, Canada and the Philippines last year. Xiamen Airlines is the fifth-largest carrier in China, and the only Chinese carrier with an all-Boeing fleet. It launched its first route into Europe – and its first long-haul flight – this summer. Xiamen Airlines will fly between Xiamen and Amsterdam three times a week in the summer season and twice a week during the winter. APG continues to strengthen its presence in Asia. In October, it was appointed as GSA rep-

resentative in Hong Kong, Japan, Malaysia, the Philippines, Singapore, and Taiwan for Solomon Airlines, the national carrier of the Solomon Islands. It assumed GSA responsibilities in Canada, France, Germany, the UK, and the US at the same time. The airline’s general manager - operations and commercial, Gus Kraus, confirmed that the arrangement committed APG to providing Solomon Airlines with full sales and marketing and call centre activity with immediate effect. “APG Network has a demonstrated reputation and a solid knowledge of local market conditions in the countries where it operates,” he said. “Add to this a proven track record in service delivery, all of which makes it an obvious choice to partner with Solomon Airlines.” Operating from its headquarters in Paris, APG Network has 111 associates and service partners worldwide, giving it a presence in 176 countries and commercial relationships with more than 180 airlines.

Quality vital to compete QUALITY of GSA service always has the potential to attract the best carriers, the Federation of Airline General Sales Agents (FEDAGSA) general secretary, Glenn Shires, says. “There are a lot of GSSAs, not all of them worthy of the name, but they drive the service price down, as newer airlines in Asia are more likely to just take the cheapest,” he explains. But Shires believes that quality is the answer. He says: “Quality, if properly capitalised, will win through and attract the best (not necessarily largest) carriers in the end. Quality GSSAs will be innovative in the services they provide, attain accreditation and membership of our trade bodies and deliver the full range of services the more intelligent carriers are now seeking.”

Asia is facing the same challenges and opportunities as other markets, Shires says, although he points out that “the region’s rates of growth just make them more obvious as growth strains things, and then we see lower quality providers used”. Shires notes that other regions don’t benefit from the same industry growth, and may be facing other challenges, but with the market in Asia remaining very competitive, GSSAs will continue to chase “too little business”. Based in Geneva in Switzerland, FEDAGSA is a not-for-profit organisation that represents more than 50 general sales agents. Membership benefits include the provision of expert assistance with bid tender opportunities as well as help with bonds and guarantees.

Next up on Network: Singapore NETWORK AVIATION Group is to open an office in Singapore in 2016, sales director Andy King tells Air Cargo Week. The Gatwick Airport-based group has been operating in India for more than five years, he explains, with offices in Chennai, Delhi, Goa, and Mumbai, and in China since 2013. Globally, Network Aviation Group represents 20 airlines, handling 70,000 tonnes of air cargo a year. King adds: “Our primary airline customers are carriers serving Africa and the

Caribbean, and whilst this market remains stable, there has been a marked decrease in rates this year, and this shows no sign in changing.” “Excess capacity, particularly from the Middle Eastern carriers, and a reduction in trade to Europe from the Far East, are the main reasons behind this. But we are confident that, with our expertise in the markets we serve, and our local contacts, we will maintain our market share.”

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DENMARK

Demand and capacity challenges

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he imbalance between demand and capacity is proving troublesome for Scandinavian Airlines (SAS) Cargo, which joins other carriers across the globe facing the same challenge. SAS Cargo Group president and chief executive officer, Leif Rasmussen (pictured), tells Air Cargo Week that this issue is proving to be the biggest headache for the airline right now. “Capacity is growing more than demand and consequently negatively affecting yields. Other challenges are the increasing costs related to the different parties controlling parts of the value chain and the lack of digital innovation within the industry,” he says. Rasmussen explains that, generally, SAS Cargo is performing well; however, general market conditions are impacting results in comparison to expectations. “The strongest region is the Nordic one, but we see growth in almost all regions in terms of tonnages. We see some lanes above average

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growth and others performing just average. Market trends are generally weak,” he explains. Demand for cargo capacity has been inconsistent, Rasmussen says, and he notes that SAS Cargo is finding there are big differences depending on country, region and seasonality. “In general we are focusing on pharmaceuticals and other high yield products. From some countries we are transporting textiles, perishables and from others computers, furs, etc – and of course it depends on seasonality,” he adds. Route development is also on the agenda for SAS Cargo, which has added a bellyhold service from Stockholm to Hong Kong, and will soon sell capacity on flights from Stockholm to Los Angeles (US), as well as from Copenhagen and Oslo to Miami (US).

Freighters targeted by Billund BILLUND AIRPORT is looking to attract freighters and to spread the word in the air cargo industry as to the benefits it offers to carriers as a freighter destination. The airport’s cargo manager vice president, Jan Ditlevsen, tells Air Cargo Week that building the gateway’s freighter business up remains the priority, while continuing to ramp up awareness of Billund as a primary destination for all-cargo aircraft. Ditlevsen explains that the volume of total cargo traffic handled so far this year is unchanged compared to 2014, at 52,400 tonnes. Imports are down by 1,500 tonnes, but exports have risen by about the same amount. Ditlevsen says he is expects growth next year. “The export (market) to China and the Far East is still very strong, and we expect further growth into 2016,” he says.

The nature of the cargo passing through Billund is varied, Ditlevsen notes, the airport being located in the Danish industrial heartland, which manufactures products including high-value electronics, wind turbines and advanced machinery. “Apart from that, we handle a lot of fresh fish, live animals, charters, e-commerce and express cargo,” he informs.

Competition continues to grow SCANDINAVIAN AIRLINES (SAS) CARGO is fighting intense competition in its market from other European carriers, but Emirates Airlines and Qatar Airways are pushing it to another level, says SAS Cargo Group president and chief executive officer, Leif Rasmussen, by continuing to increase capacity. SAS Cargo is currently focusing its efforts on growing volumes by giving customers a more personalised service. It has, for example, launched a new advanced booking

portal with instant confirmation. Rasmussen tells Air Cargo Week: “We are focusing on the need of the customer and trying to differentiate. We are developing our business model in order to take advantage of digitalisation.” He continues: “We constantly invest in digitalisation of our processes and in our way of communicating to our customers, as well as in having a strong focus on a high customer satisfaction score to live up to our proposition ‘we make airfreight easier’.”


TRADEFINDER Freight Forwarders

Airlines Turkey

Italy

China

Jamaica

Freight Forwarders Hong Kong

Freight Forwarders Iraq

Spain

Freight Forwarders

United Arab Emirates

USA

Industry Events

USA

Associations Worldwide

Germany

ACW 9 NOVEMBER 2015

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