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The weekly newspaper for air cargo professionals Volume: 20
Issue: 27
10 July 2017
Demand surges in May, as air cargo continues to fly
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ir cargo continues to grow strongly in 2017 as demand surged again in May, according to latest figures published by the International Air Transport Association (IATA). The month saw freight tonne kilometres (FTK) grow 12.7 per cent year-on-year (YOY), up from 8.7 per cent in April, and more than three times the five-year average growth rate of 3.8 per cent. The association says the growth is consistent with an improvement in world trade, with global export orders remaining close to a six-year high in May, but the global inventory-to-sales ratio is rising, indicating the period when companies look to re-stock inventories quickly, which often gives air cargo a boost, has ended. IATA director general and chief executive officer, Alexandre de Juniac (pictured) urges some caution and the need to push on: “May was another good month for air cargo. Demand growth accelerated, bolstered by strong export orders. And that outpaced capacity growth,
OUTLOOK POSITIVE FOR EMIRATES CONVERSION DEMAND COMING FROM ASIA which should be positive for yields. But the industry can’t afford to rest on its laurels. “With indications that the cyclical growth period may have peaked, the onus is on the industry to improve its value proposition by accelerating process modernisation and enhancing customer-centricity.” In May, all regions of the world saw growth with Africa leading the way at 27.6 per cent, though it only represents 1.6 per cent of the world’s share. Latin America grew at the fastest pace at 6.4 per cent since July 2014, and has a global market share of 2.8 per cent. The biggest market Asia Pacific, which has
Robber shot dead after holding up security guards
An armed robber was shot dead and another arrested after they held up Swissport security guards at the cargo precinct of Johannesburg’s O.R. Tambo International Airport on 1 July. Airport spokesperson Leigh Gunkel-Keuler says a group of armed men held up and overpowered security guards employed by Checkport at the cargo handler’s warehouse at 10.55h on 1 July. The robbery took place on the public access land side of the cargo precinct and the robbers did not gain access to air side, but allegedly
ETIHAD CARGO PREDICTS MODEST GROWTH
made off in a hijacked cargo truck. The robbers were confronted by South African Police Services (SAPS) members and Reshebile Protection Services staff at the Kempton Park off-ramp of the highway, a few kilometres from the precinct. Two gang members attempted to fleet on foot resulting in a shootout with one robber being killed and another arrested. Swissport South Africa vice president, Bob Gurr says it is not known how many robbers were involved, or what was stolen as part of the robbery. Gunkel-Keuler says: “This speaks to the collaborative effort between airport management, SAPS and other key stakeholders in an attempt to arrest this very dire crime situation, we therefore want to congratulate our contracted security company, Reshebile Protection Services and the SAPS on this vital arrest.”
a market share of 37.4 per cent, saw 11.3 per cent growth in FTKs. Europe, the second largest market at 23.5 per cent saw a 15 per cent uplift in FTKs. North America, the third largest market at 20.7 per cent saw FTKs surge 13.9 per cent and the Middle East, which has a share of 13.9 per cent, saw FTKs go up by 10.2 per cent. In May, capacity in available FTKs increased 5.2 per cent and global load factors rose three percentage points to 45.2 per cent. IATA remains optimistic about the months ahead and is forecasting that air cargo demand will grow eight per cent in the third quarter of 2017.
Virgin adds to sales team
Virgin Atlantic Cargo has made two senior appointments to its sales team, which it says comes at a time it is seeing strong volumes. Ryan Ellis (pictured above left) takes up the position of head of global accounts while Ray Wood (pictured above right) joins the airline as regional sales manager for the UK. Ellis joined Virgin in 2010 and succeeds Steve Hughes, who left in April. Wood was previously at IAG Cargo. In the first five months of 2017 at Virgin, global volumes are up year-on-year (YOY) by seven per cent and UK volumes are up YOY by 13 per cent.
ICELANDAIR RECOVERING FROM FISHING STRIKE
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Northern Aviation to lease 3 B767F
AIR Transport Services Group (ATSG) subsidiary Cargo Aircraft Management (CAM) is to lease three Boeing 767-300Fs to Northern Aviation Services to be operated by Northern Air Cargo. CAM will lease three 767-300s to Northern Aviation Services for seven-year terms beginning with the first lease in October 2017, with the potential for additional 767-300s in 2018. The aircraft will be used by Aloha Air Cargo, StratAir, and Northern Air Cargo. Some of the leased 767-300s will replace CAM-owned 767-200/300s operating on an ACMI basis under ATSG’s Wet-2-Dry program, which allows carriers to prove their business case for 767s under ACMI arrangements, then transition to long-term dry lease agreements. ATSG president and chief executive officer (CEO), Joe Hete says: “We are pleased that NAS has come to appreciate the advantages of our midsize Boeing 767s and the benefits they can provide to regional air cargo networks like the one that NAS is developing.” Northern Aviation Services president and CEO, David Karp says: “We have already commenced hiring and training of pilots to accommodate this expansion and...are excited about providing expanded services.”
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NEWSWEEK HKIA handles record volumes during “fruitful year”
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ong Kong International Airport (HKIA) has retained its position as the busiest cargo airport for the seventh consecutive year as it celebrates a “fruitful” 2016/17 fiscal year. Cargo volumes grew 6.7 per cent to 4.6 million tonnes, an all time high, and passenger numbers and flight movements also broke all time records. Revenue increased 2.4 per cent to 18.2 billion Hong Kong dollars ($2.3 billion) though profit attributable to shareholders was down one per cent to HK$8.2 billion. During the fiscal year, HKIA started working on a third runway, known as the ‘three-runway system’, and Chinese premier Xi Jinping visited HKIA to see how the project was progressing while touring Hong Kong. Airport Authority Hong Kong chairman, Jack So Chak-kwong says: “We are grateful for his expression of the Central Government’s support of our airport’s third runway project and Hong Kong’s status as an international aviation hub.” Cargo facilities have been upgraded to cater for fast growing highvalue segments including fresh produce and temperature-sensitive pharmaceuticals. Hong Kong Air Cargo Terminals gained IATA CEIV Pharma certification in February 2017, and the airport is
working on becoming fully certified by the third quarter of 2017. E-commerce keeps growing stimulating demand for express and air mail, and Airport Authority Hong Kong says it has been exploring collaboration opportunities with Hong Kong Post and China Post to capture more cross-border e-commerce. The airport also says land in the South Cargo Precinct has been reserved for high-growth segments including cross-border e-commerce, high value temperature controlled cargo and transhipments.
Autonomous car flies ABC
AIRBRIDGECARGO Airlines (ABC) has transported a Ground Rapid Transit (GRT) prototype autonomous vehicle to Singapore in partnership with Geodis. The GRT, which can accommodate up to 24 passengers, travelled from Amsterdam Airport Schiphol to Singapore Changi Airport on a scheduled ABC Boeing 747 Freighter, where it will be used for demonstrations at various locations to show its suitability for use at medium-sized airports, business campuses and entertainment parks. ABC sent off-size cargo experts to the production factory of the Utrecht-based technology company, 2getthere, to work out a special loading plan to ensure the safe transportation of the vehicle, which measured six metres in length, 2.1 metres in weight and a height of 2.8 metres. ABC’s head of sales for the Netherlands, Denmark & Ireland, Nico Kors says the airline developed its ABC XL product for this type of shipment. He adds: “As the largest all-cargo operator from Amsterdam, we were glad to be asked to participate in this project to deliver the GRT vehicle to and from Singapore, working in close partnership with GEODIS and their customer, to get there. “The delivery of off-size shipments is a very important and growing part of our business and we expect to increase share of off-size shipments in our cargo turnover.” ABC started scheduled services to Singapore in September 2015 and is a regular carrier of off-size shipments across its global network.
WFS to handle cargo for SIA
WORLDWIDE Flight Services (WFS) has won a three-year contract to handle cargo for Singapore Airlines’ new Stockholm services. The airline launched five Airbus A350-900 flights a week connecting Singapore Changi Airport and Stockholm Arlanda Airport via Moscow, operating every Monday, Tuesday, Thursday, Friday and Saturday. WFS in Stockholm expects to handle 3-4,000 tonnes a year for Singapore Airlines and is the second new contract in Stockholm, having signed an agreement with Qatar Airways to handle 12,000 tonnes a year on board the airline’s 13 flights a week from Doha. WFS regional vice president, Marc Claesen says: “Singapore Airlines’ decision to work with WFS at yet another station in Europe is another big boost for our cargo business in the region. It also once again reflects our ability to meet the highest service standards set by the world’s leading airlines.”
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New cargo terminal opened by Ethiopian
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thiopian Airlines has opened a new state-of-the-art $150 million Cargo Terminal-II in Addis Ababa. This gives the African carrier cargo capacity of one million tonnes and once phase two opens it will give it another 600,000 tonnes. The new terminal adds to the existing Terminal 1. Covering 150,000 square metres the new facility includes a dry cargo terminal warehouse, perishable cargo area with cool chain storage, full automation, an apron area to accommodate five additional freighter aircraft and more. The inauguration was attended by Ethiopia’s Prime Minister, Hailemariam Desalegn, minister of transport, Ahmed Shide, and Ethiopian Airlines chief executive officer, Tewolde GebreMariam, other government officials and participants of the Second ICAO Global Air Cargo Development Forum in Addis Ababa. Desalegn, says: “Today, the national flag carrier has become the largest aviation group and the fastest growing airline in Africa unrivalled in efficiency with shining operational excellence. Above all, Ethiopian Airlines has played an important and irreplaceable role in the development of the economy, export and import activities and foreign exchange earnings.”
Tonnage on the up at Aeroflot
GebreMariam adds: “The new Cargo Terminal-II combined with our existing Terminal-I will give us a total tonnage capacity of around one million per annum which is the largest in the continent of Africa. This milestone will make Ethiopian Cargo & Logistics Services one of the world’s largest cargo terminals.” Ethiopian Cargo and Logistics Services operate eight freighters on 39 global routes with an average daily uplift of 650 tonnes on top of the belly capacity, 150 tonnes, to over 95 destinations globally.
NEWS WEEK WORLDNEWS BEIJING’s new international airport is developing fast and the steel structure of terminals was completed last week, according to media outlets in China. The gateway is known as Beijing Daxing International Airport and is expected to begin operations in 2019. The official name of the hub has yet to be revealed. The new airport is being built to handle two million tonnes of cargo by 2025. It will have four runways and handle 620,000 aircraft movements per year. INCHEON International Airport in South Korea saw international cargo grow year-on-year (YOY) by 7.7 per cent in May to 238,000 tonnes. The gateway says the gradual recovery in the country’s exports in core products such as semiconductors and display manufacturing equipment was one reason behind the growth. In May, total imports reached 128,455 tonnes, up YOY by 12.9 per cent and exports 125,041 tonnes, up YOY by 12.9 per cent.
IN the first five months of 2017 from January to May the Aeroflot Group handled 100,607 tonnes, a significant 44.9 per cent increase on the same period last year. In May alone, the Aeroflot Group handled 21,468 tonnes, a 44.6 per cent rise on the same month in 2016. Aeroflot, the main carrier in the Aeroflot Group, handled 86,249 tonnes, a 40.6 per cent uplift on the same five months last year and in May it handled 18,432 tonnes, a 41 per cent rise on the same month in 2016. In May 2017, the Aeroflot Group added three aircraft: two Airbus A321 and one Boeing 737-800. At the same time, two Boeing 737-800 and one Airbus A320 were phased out of the fleet. The Aeroflot Group has a fleet of 295 aircraft and the Aeroflot airline had a fleet of 197.
Rhenus makes Oz move
THE Rhenus Group has acquired Australian freight forwarder O’Brien Customs and Forwarding Pty Ltd. Rhenus will also have its own national company in Australia, Rhenus Logistics Australia. No details of the financial aspects of the deal were revealed. The O’Brien family business handles air and sea freight consignments and provides customs and warehouse services. O’Brien has its headquarters in the northern part of Melbourne. Rhenus is planning to expand the firm’s current operations in future with its network and its services. They include domestic traffic, support for imports/exports, buyers’ consolidation as well as warehouse and integrated logistics solutions. “The takeover of O’Brien and the founding of the national company to be known as Rhenus Logistics Australia enable us to cover the whole of Australia with our services. As a result of the acquisition, we’re gaining experienced employees with local expertise for the global operations of the air & ocean business unit at Rhenus Freight Logistics too,” says Rhenus chief operating officer, for ocean freight in Asia, Jan Harnisch. The new operations on the Australian continent are part of an expansion strategy in the Asia-Pacific region. Rhenus is planning to open new business sites this year in China, Vietnam, Malaysia, Indonesia and the Philippines.
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NEWSWEEK Qatar Airways operates charter flight to Brazil for DHL Global Forwarding
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atar Airways Cargo transported over 80 tonnes of oil and energy equipment to Brazil on board its Boeing 777 Freighter for DHL Global Forwarding. The cargo was flown from Zhengzhou in China to Cabo Frio in Brazil, with technical stops at the airline’s hub in Doha, and Accra in Ghana. The collaboration was Qatar Airways’ first charter flight to Cabo Frio, an airport strategically located close to the most important oil region in Brazil. Qatar Airways chief officer cargo, Ulrich Ogiermann (pictured) says: “We are very proud to support and partner with our customer DHL Global Forwarding. Respecting the same business ethics as our customers, Qatar Airways Cargo prides itself on service excellence and customer-first values.”
“Logistics plays a fundamental role in ensuring our customers meet their clients’ needs, and through our dedicated QR Charter solution, we were able to transport the oil and energy shipment for one of the biggest oil and gas companies in Brazil.”
DHL Global Forwarding head of global charters and StarBrokers vice president, Roland Zach says: “Oil and gas is one of DHL Global Forwarding’s most important industry sectors so finding a partner like Qatar Airways Cargo, who we can trust as a shipping partner is critical.” “DHL Global Forwarding and Qatar Airways Cargo have a long-standing relationship that spans close to two decades, so customers can look to both companies to deliver industry leading service excellence while always putting the customer first.” DHL Global Forwarding established the StarBroker charter division to handle charters from delicate cherries, technology products to heavy mining equipment from anywhere in the world on any type and size of aircraft. Qatar Airways Cargo’s charter division grew by 150 per cent in 2016-17 compared to 2015-16, with charters including animals, pharmaceuticals, odd-size shipments, oil and gas, art, concerts and exhibitions, machinery, mining and humanitarian relief goods.
Cargolux adds freighter routes
CARGOLUX Airlines International has added Atlanta in the US to its destinations served from its Zhengzhou (CGO) hub in China. The North American city becomes the second destination, after Chicago, to receive direct connections to and from Cargolux’s Chinese hub. The service from CGO to Atlanta, in combination with Chicago, on its flight CV9765 that originates and ends in Luxembourg. In addition, Cargolux connects Zhengzhou and Chicago with direct flights on Tuesdays, Thursdays and Fridays. Cargolux says the two additional China – US services cement its strong position in China and on transpacific trade lanes and demand on Zhengzhou flights is exceptionally strong, fuelled in part by growth in e-commerce. Demand from Asia to the Americas is also boosted by growing markets in Brazil
and Mexico that are mainly served via North America. Cargolux has also added a new freighter service to Quito in Ecuador. The first flight left on 2 July from Luxembourg and operates through Curitiba, Viracopos and Mexico before arriving in Quito. The payload is set to consist mainly of flowers and perishabes.
Turkish expands African network TURKISH Cargo continues to grow its African freighter network and has added a route to Kano – its second connection in Nigeria and adding to a service already run to Lagos. The Airbus A330 Freighter service started on 4 July operating on an Istanbul – Kano – Dakar – Istanbul routing. The carrier says Kano has a thriving leather product industry and is where manufacturers are located with exports to European countries and other important markets such as India and Sudan. Turkish recently added freighter routes to South Africa and Madagascar with weekly
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Istanbul – Johannesburg – Antananarivo services from 1 July also using an Airbus A330 Freighter. South African exports generally consist of machinery, electronic equipment, chemicals and automotive parts destined for European and American countries. Madagascar exports a variety of goods, mainly vanilla, tropical fruits and textiles for Europe and the Americas, and live crabs and sea products for the Far East. Turkish Cargo says the flights will allow diversification in terms of variety of products transported.
NEWS WEEK
American opens new London Heathrow cool chain facility
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merican Airlines Cargo has opened a new controlled room temperature facility at Heathrow Airport as pharmaceuticals and cool chain continue to remain a high investment priority. The carrier says the 1,700 square foot facility provides customers with greater capacity when moving temperature-sensitive healthcare freight to and from Heathrow, where it operates up to 20 flights a day - including two a day to Philadelphia, home to their 25,000 square foot pharma facility. This comes as American Airlines Cargo manager of cold chain strategy, Tom Grubb says it has had a really good first six months from a pharma perspective, with new investments beginning to pay off. “Most notably, in April, we saw the start of our widebody services from San Juan to our dedicated pharma hub in Philadelphia, providing customers who move sensitive healthcare products an even wider choice of flights between the two locations,” he explains. Along with the Heathrow investment, American has made pharma upgrades at Dallas/Fort Worth and in San Juan, which Grubb says are supporting hotspots where an increasing number of manufacturer operating production facilities in (and shipping through) the areas. He notes Puerto Rico is now major market because almost 30 of the world’s pharma manufacturing companies now have facilities there and with more and more drugs being produced and tailored to meet individual needs, first-rate service, handling and distribution are essential. Grubb feels with American’s daily San Juan to Philadelphia flights feeding Europe as well as an existing service to Miami connecting to South America, it is well positioned to meet that need. The next milestone is working towards IATA CEIV Pharma certification in Philadelphia, Dallas and Miami. American was the first US carrier to sign a contract with IATA to become CEIV certified. “Field operations training and assessments are now
underway. Obtaining CEIV certification will further validate the capabilities we offer,” Grubb says. The biggest pharma opportunity he believes is fostering cooperation between the shipper, logistics provider and manufacturer. “Utilising trilateral cooperation SOPs (standard operating procedures) can be developed to ensure all parties understand exactly what is expected of them. “Establishing communication and ensuring roles and responsibilities are clear to all three help ensure all temperature-sensitive
shipments are handled in the best possible way, allowing for a more streamlined process,” Grubb says. Every carrier is after a piece of the pharma pie, but Grubb believes it is not so much about competition, more about having a network and the features that provide the right services across the cold chain for the products being shipped. This he believes American does best by offering top-class facilities and service while having the global network connects time and temperature-sensitive products quick and easily across the world. “Carriers with these capabilities can meet specified customer standards, and, therefore, stand out from those which do not,” Grubb says. He emphasises American is committed to supporting and growing pharma business in the long-term and is sure air pharma growth is here to stay. “With the growth in tailored healthcare products - particularly time-sensitive biologics - as well as increased regulations and customer expectations for quality handling, air cargo will continue to play an important role in the development of the sector,” Grubb says: He adds: “This is why our initiatives to improve processes and certification efforts, such as CEIV, are so critical.”
777 route expansion for United UNITED Airlines has grown its network after adding additional widebody routes utilising a Boeing 777-300ER – which is set to boost belly cargo volumes. The US carrier will service San Francisco – Beijing beginning 6 September 2017, San Francisco – Frankfurt from 5 October 2017 and New York/Newark – Tokyo Narita from 28 October 2017. Boeing 777-300ER aircraft are already in service on United’s San Francisco – Hong Kong and New York/Newark – Tel Aviv routes and will begin service from San Francisco to Taipei on 1 August of this year. United expects to place into service all 14 aircraft in its first 777-300ER order in 2017. The airline recently announced an order for four additional 777-300ER aircraft.
US has another logistics player
GEBRUDER Weiss has formed a country organisation in the US in five locations following expansion projects in Germany, China, Hong Kong and Singapore. The logistics firm started operations in the US on 3 July, taking over Atlanta, Boston and Los Angeles from a former US joint venture and opening two further locations in New York and Chicago, which will service as the head office for Gebruder Weiss USA. In addition to transport services – primarily focused on air and sea freight – Gebruder Weiss will now offer specific logistics solutions at its new location, with the portfolio ranging from goods storage and local distribution to e-commerce. Gebruder Weiss management board member, Heinz Senger-Weiss says: “We are combining a globally consistent network with a high degree of local expertise. With this concept, we also want to strengthen our position as a service excellence logistics provider at the new locations.”
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UAE Etihad predicts modest growth DHL signs Etihad logistics MoU
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017 will be a year of modest growth at Etihad Cargo following a strong start, senior vice president David Kerr (pictured) predicts. He says the first two quarters have been the strongest for a couple of years and Etihad Cargo has enhanced its fleet and network. Etihad Cargo took delivery of an Airbus A330 Freighter earlier this year, bringing the freighter fleet to 10 – five A330Fs and five Boeing 777 Freighters. The freighter network has also expanded with flights to Phnom Penh in June and an additional Colombo – Rickenbacker – East Midlands – Abu Dhabi service. Etihad Cargo also signed a memorandum of understanding with Royal Air Maroc to cooperate on a number of trade lanes including the USA, Canada, Brazil and West Africa. Describing the outlook, Kerr says: “The rest of the year looks fairly healthy – yields have stabilised and tonnage is growing.” The United Arab Emirates is a major transhipment hub, and the majority of the cargo Etihad transports is transhipped through Abu Dhabi on trade lanes including
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Asia-Europe and Europe-Asia. Kerr says Etihad Cargo has seen its Indian business grow significantly in recent years, particularly pharmaceutical traffic, while e-commerce out of Asia and North America as a whole have also grown. He says: “As an airline group we have partnerships with other airlines which give us a lot of capacity into markets to which we do not operate directly – such as South America with Avianca Cargo.” Etihad Cargo flies to or plans to serve more than 110 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas, and the Americas, and has partnerships with other airlines. Kerr explains: “Through the capacity on our partner airlines, which we manage, we have increased our offerings on the North Atlantic route through AirBerlin; and all capacity on routes operated by Alitalia to and from Italy is sold through the Etihad Cargo brand using Etihad’s 607 air waybill number.” The Italian partnership excludes the USA, Canada, Mexico and domestic Italy. Kerr predicts the UAE airfreight market will continue to grow as the economy and population expand, and Etihad Cargo is well placed to serve it. He says: “Our country’s airlines and airports serve many of the world’s busiest trade corridors thanks to our geocentric location, modern equipment and infrastructure, and a government which has been very supportive of the logistics industry.”
ETIHAD Airways Engineering has signed a letter of intent with DHL Supply Chain to outsource its entire internal logistics function. DHL Supply Chain will manage stores, local transportation movements and associated supply chain planning for the maintenance, repair and overhaul (MRO) subsidiary of the Etihad Aviation Group, at Abu Dhabi International Airport. Etihad Airways Engineering chief executive officer (CEO), Jeff Wilkinson says: “We see this agreement as a win-win opportunity not just for Etihad Airways Engineering and DHL Supply Chain, but also for our customers around the world who will be served more efficiently and cost effectively as an outcome of the partnership.” DHL Supply Chain Middle East, Russia & Turkey CEO, David Christmas describes the partnership as a “significant business win”, continuing the long-standing relationship
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with Etihad Airways Engineering. He says: “The supply chain performance and solution has a major impact on the effectiveness of the MRO function. Our expertise and services will help Etihad Airways Engineering to progress towards its vision and meet its strategic agenda effectively. “Transforming the MRO logistics and warehousing solution will help them to remain competitive today and build capability for tomorrow.” DHL says the supply chain will be scalable in order to respond to MRO sector growth and will be able to adapt to future operational requirements. In addition to process optimisation, DHL says it will introduce several changes in the layout of Etihad’s current warehouse, improving the space already available and setting up an external off-airport warehouse able to accommodate necessary inventory and part storage.
UAE Fifth anniversary for flydubai Outlook positive for Emirates
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lydubai Cargo has built up an extensive network of 300 destinations as it celebrates five years of operations. Through expanding its own network and interline agreements, it can transport goods from Dubai across the Gulf Cooperation Council, Middle East, Europe, Africa, Russia, Commonwealth of Independent States, Central Asia and America. The airline says having successfully completed the European Union (EU) Aviation Security Validation in 2014, it has received ACC3 designation, allowing it to provide uninterrupted cargo services into or through the EU. Flydubai chief commercial officer, Hamad Obaidalla says: “Since flydubai Cargo began operations in 2012 it has become an integral part of our business. We are pleased that we have been able to offer our customers con-
sistent and efficient cargo solutions while continuing to provide flexible and innovative services.” Flydubai Cargo continues to invest in electronic cargo systems to allow customers to access a real-time online booking system, process air waybills and track consignments. The airline only uses electronic air waybills (e-AWB) and has been recognised by the International Air Transport Association for having a 100 per cent penetration rate. Flydubai Cargo vice president, Mohamed Hassan says: “Electronic air waybills are a crucial part of our operations and contribute significantly to how we operate. It has helped keep our costs to a minimum, and increase the productivity and accuracy of our cargo solutions.” Flydubai has a fleet of 58 Next Generation Boeing 737-800s and will take delivery of more than 100 aircraft by 2023.
EMIRATES SkyCargo is predicting more positive times ahead following the challenges of 2016, senior vice president cargo operations worldwide, Henrik Ambak (pictured) explains. He says 2017 has been positive following the weak start to 2016, followed by a very good peak season. The outlook for 2017 is looking good, something he feels is essential to get yields back to what he calls a “sustainable level”. Ambak explains: “It seems like we are getting into a more positive period. It is not always easy to explain, normally consultants would talk about stock levels and some of this logic does not play out the way they should but the market right now seems to have a good forward demand.” Emirates SkyCargo has been launching new products and signed a strategic operational partnership with Cargolux Airlines International. Under the agreement, Emirates will have access to Cargolux’s Boeing 747 Freighters, both airlines will develop block space and interline agreements and both airlines will be handled at the same facilities in Luxembourg and Dubai. Ambak says: “For us it is a question of how do we grow into the future. It gives us access to grow dynamically working with a partner that operates a vast fleet of freighters. We can grow the capacity we use by using their fleet.” Emirates SkyCargo has also launched new products including Emirates SkyFresh for perishable cargo. Ambak says SkyFresh
came off the back of SkyPharma, and says: “We saw an increase in verticalisation of air cargo, customers have specific needs of specific types of products requiring special treatment.” Ambak also confirms that Emirates SkyCargo is not planning to pursue IATA CEIV Pharma certification. He says: “In the summer of 2015 we contacted big pharma companies and big forwarders and gave them a choice between GDP and CEIV, and they chose GDP.” Ambak predicts a strong future with its two hubs at Dubai International Airport for passenger aircraft with bellyhold capacity and Dubai World Central for freighter aircraft. Emirates SkyCargo is transporting 1,000 tonnes of cargo a day between the two airports via trucking services. He says Dubai’s location means it can provide connections with emerging markets. “The African market is starting to grow and we see growth between Asia and Africa so in terms of geography we are in a unique position that automatically helps Emirates.”
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FREIGHTERS
EFW targets more P2F conversion programme orders
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he conversion market is buoyant and Elbe Flugzeugwerke’s (EFW) Airbus A330-300 passenger-to-freighter (P2F) conversion programme is hitting the right notes. The A330P2F programme was launched in 2012 as collaboration between ST Aerospace, Airbus and EFW. It includes the A330-200P2F, which Egyptair Cargo was the first to sign up for in December 2014, and the A330-300P2F, with DHL Express the first customer. DHL added a further four orders at the Paris Air Show last month to the four ordered at the Farnborough Air Show last year and has an option for 10 more. The first conversion is taking place at EFW’s Dresden facility and is set to be delivered by the end of this year.
EFW director of sales for aircraft conversion, Thomas Centner says both customers have been operating its converted A300-600’s for many years and it is proud both extended the number of orders before even the prototype phase is finished. “For us this is a strong sign of trust, appetite for more and a good indication that the A330P2F is regarded being the right aircraft for the future. “With redelivery of the first prototype A330300P2F to DHL in about half a year and to Egyptair in the next year we strongly believe that a number of operators will jump onboard, especially when the first larger batches of conversion candidate aircraft become available,” he explains. He adds: “The market is big and waiting for
the next step. The A330P2F can deliver and is well fitting into the trend - growing demand for express transportations at falling densities.” Both programmes EFW believes brings benefits to operators and the A330-200P2F it says is the most modern and efficient of its kind, and a really good baseline for freighter conversions. And the volumetric use on the A330-300P2F it believes is “phenomenal” given its great fuselage diameter and length of the aircraft, enabling the installation of the “most flexible” main deck cargo loading system on the market and at the same time the existing lower deck cargo compartment remains fully usable. EFW thinks both conversions offer better volumetric space availability when using market standard containers compared to its direct competitor - the Boeing 767-300ER (production or conversion).
Feedstock
There is sufficient A330 feedstock it seems and to date, EFW says there is more than 1300 A330’s in service and total orders have reached almost 1700 units, which provides a huge potential for future conversions. Centner says: “Not all of those aircraft will be converted, but the A330 family will provide the necessary market liquidity for used aircraft in a perfect ecosystem of aircraft owners and financiers, airlines and operators, services providers, MRO facilities and spares and tooling supply, pilots, mechanics and other trained staff. This is the right platform to build a successful freighter conversion programme.” EFW sees demand worldwide for its A330P2F programme with the A330-300P2F mainly in the express segment and the A330-200 in general cargo, but also express. He says: “We regard the US and the European market as mature markets with a strong replacement but still solid growth potentials. The markets in Asia, mainly China, will have a strong need to develop into regional medium widebody operations as well, which is due the further boom in e-commerce and inauguration of hub and spoke systems.” Centner explains there is further upside potential related to the new A320/A321P2F programme as like the A330P2F the A320/A321
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basic aircraft is capable of accommodating containers in the lower deck of the aircraft. If the incoming aircraft is not equipped with such a system it can be retrofitted at EFW during the conversion phase. He says: “The A320/A321P2F conversion programme is the first in this size category offering such an easy to handle and operate volumetric usability, which is offering both main deck and lower deck containerised loading. “The customer can therefore load up to 14 position in the main deck plus up to 10 container positions extra in the lower deck – a unique feature. “The new family of freighters A330F/P2F and A320/A321P2F will provide modern, easy to operate fly-by-wire technology and advanced performance. Like in the passenger market the cross crew commonality will play a key role to minimise operational cost and improve flexibility.”
Competitive marketplace
The P2F conversion market is competitive with various programmes being run and Boeing aircraft are especially prominent. Centner says it is competitive, especially in the narrowbody segment as we enter ‘Boeing dominated terrain’. “But we have a lot unique selling points to offer, which makes us convinced that both the A330P2F and the A320/A321P2F will be very successful,” he adds. And he is sure there is a big future for freighters despite the growing volumes being moved in the belly of passenger aircraft “Belly space has gained market share from traditional freighters given the enhanced capabilities of new generation passenger aircraft like 777, 787, A330 and A350,” Centner says. He adds: “But this trend is more related to general cargo and long-range missions. Express and e-commerce however are mainly overnight and off main passenger routes. “The smartphone has changed the way of consumer behaviour worldwide and B2C online trading is increasingly connected to overnight deliveries. “This requires dedicated freighter aircraft. And this market is growing worldwide, therefore we see a strong future for freighters.”
FREIGHTERS Freighter conversions demand coming from Asian market
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sia continues to be most in-demand market for PEMCO World Air Services’ (PEMCO) various conversion programmes. In April, PEMCO launched its passenger-to-FlexCombi and passenger-to-freighter (P2F) conversions for the Boeing Next Generation (NG) B737-700 aircraft, which has been well received in the marketplace. These add to the full-freighter and quick change programmes for the B737-300, a nine position fullfreighter, 11 position full-freighter and combi programmes for the B737-400 it already runs. Director of conversion programs, Mike Andrews (pictured) says while he cannot disclose the exact number of orders - it has a backlog. He also explains: “Our market size in China is also worth mentioning, seeing that PEMCO has converted roughly 70 per cent of all B737300/400 flying in China right now. Looking into the future, we’re excited for our B737NG programs, and working to make the FlexCombi a reality.” The launch customer for the B737-700FC is Bahrain-based Chisholm Enterprises, and its subsidiary Texel Air, a non-scheduled cargo airline, will operate the B737-700FC from Bahrain International Airport. Andrews says the FlexCombi concept would not exist without Chisholm. “The company vetted a number of conversion houses, and after an extensive evaluation process, chose PEMCO to bring the FlexCombi to life. Texel Air’s customers require unique services and flexibility. “Having worked together in the past on four B737 conversions, including two aircraft currently in its fleet, PEMCO fully under-
stands Chisholm’s needs, making the partnership a great fit. “We cannot disclose the exact number of orders at this time,” he explains. He feels the B737NG conversions will prove popular especially in China and Europe and feels it will be used to replace existing classic fleets. “In addition, China is a major market for express delivery with a boom in e-commerce and an increased spending ability of its middle-class,” Andrews says. Among other recent deals were in April, when it signed an agreement with South Korea-based Air Incheon to provide a Boeing 737-400 P2F, and that it will be converting two B737400s for parent company Air Transport Services Group (ATSG)
for China-based Okay Airways. In February, PEMCO also penned an agreement with rising Chinese carrier YTO Cargo Airlines for three B737-300 P2F conversions.
Freighters still in demand
MORE and more freight is being moved in the bellies of passenger aircraft but there will be continued demand for freighters, according to Boeing and Airbus. Boeing predicts in its Current Market Outlook (CMO) that 920 new production widebody freighters will be needed, worth $260 billion. This demand will mainly come from Asia Pacific, which will need 320 aircraft worth $110 billion and North America, which will require 390 aircaft worth $90 billion. Boeing says in total 41,030 new aircraft over the next 20 years will be needed valued at $6.1 trillion, with single aisle units making up 29,530 deliveries worth $3,180 billion. The US aircraft manufacturer says the widebody market is expected to need 9,130 aircraft with a large wave of potential replacement demand beginning in the early next decade. Meanwhile rival commercial manufacturer Airbus predicts a little less in its forecast, and says in its Global Market Forecast 2017-2036 that 730 freighter aircraft will be needed in the next 20 years. The aircraft manufacturer also predicts on top of the freighters that 34,170 passenger aircraft will be required over the next two decades. All these aircraft sales Airbus says will come to a combined total of $5.3 trillion and it would double the commercial aircraft fleet. Airbus says over the next 20 years Asia Pacific is set to take 41 per cent of new deliveries, followed by Europe with 20 per cent and North America at 16 per cent. In the twin aisle segment, Airbus forecasts a need for 10,100 aircraft and in the single aisle segment, it predicts a requirement for 24,810 aircraft.
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ICELAND Icelandair Cargo recovering after fishing strike hits business
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fishing strike in Iceland in the first two months of 2017 hit seafood exports at Icelandair Cargo and the carrier is still recovering. Fisherman stayed on land after a disagreement with trawler owners over wages and industry taxes. Exports of seafood were affected and as the sector makes up most of its outgoing traffic for Icelandair, it has been playing catch-up ever since. Managing director, Gunnar Már Sigurfinnsson (pictured) says the strike had a big impact. “As the strike was for 10 weeks, the Icelandic fish industry lost market share to some competitors so we are still not fully recovered because of that. “On the other hand imports have been increasing a lot as well as transit, so we have seen acceptable results despite the fisherman strike,” he says. Icelandair has added widebody capac-
ity, which has opened up more opportunities to trade lanes that were not previously on the radar. “Widebody aircraft allow us to offer service on trade lanes where we were not competitive before. We connect some range of destinations with widebody capacity today both in Europe and North America,” Már Sigurfinnsson says. He notes imports have been increasing considerably since 2016 and it is seeing strong growth in first half of 2017 as surg-
ing passenger numbers to Iceland drives demand for perishables, while the strong Icelandic Krona is also boosting imports. Seafood is the most important sector and Már Sigurfinnsson is optimistic it will gain back part of what it lost in the strike. He says: “We do have more uncaught quota left than usually at this time of the year, meaning that the fish industry can supply all markets better this summer than the summers before.” Icelandair operates two Boeing 757 Freighters, and the load factor suffered in the first weeks of the year on the exports side due to the strike, but the import load factor performed well. Már Sigurfinnsson was disappointed there was such a long strike, but results were “acceptable” considering the load factor on freighters was less than it planned, but the load factor is better than it should expect after at the first two quarters of 2017. Belly routes are becoming more and more important as Már Sigurfinnsson says it now has B767-300 aircraft instead of only B757 aircraft. More than half of the cargo Icelandair moves is in bellies and the B767 is a key pillar of growth plans. “This is a big change for us and allows us to offer much better service for our clients on key routes like London, New York, Boston, Amsterdam and Frankfurt to mention some,” he says. Már Sigurfinnsson adds: “We are constantly increasing the volume in the belly and we will continue to do so, as the product is very good and interesting for our clients.”
Modernise operations
No more freighters are planned, but it has upped freighter capacity to Europe and on the belly side it has been adding B767 aircraft to its fleet. The emphasis is now on utilising that capacity. “This capacity is flying anyway in our network and fitting well to the main trade lanes we have for Iceland,” he says. Icelandair is also working on various enhancement projects and Már Sigurfinnsson says cool chain facilities is a focus to make sure it has the best service for perishables as possible. “We are working on real-time loggers that will help us to follow shipments and then the network for freight is always increasing with more widebody capacity. We have a team working on a digital concept to mention some,” he says. Már Sigurfinnsson says future investment will centre on a structure to help modernise operations, to fulfill expectations of future customers, used to paperless and high-tech business solutions. He believes this is crucial for Icelandair to be competitive and to meet the needs of customers in the years ahead. Icelandair has also become a trustee member of TIACA. Már Sigurfinnsson feels it is a good platform to connect different air cargo stakeholders. He says: “In organisations belonging to our industry usually the bigger stakeholders are getting more attention. SME companies are running very successful businesses and do sometimes do things in a different way than the bigger ones. “We hope to have an opportunity to be active part of the organization, both learning from others and have a voice that might support the development of the industry.” The biggest opportunity he believes is that the future generation is very demanding and everything is about time and speed. “Airfreight has a great opportunity to be part of this business model if we do things properly. That means on the other hand we have to modernise our operations, both considering technique and environmental issues. This will be a big challenge, but I believe we have everything to do it successfully if we want to,” Már Sigurfinnsson says.
B&H awarded key contract
B&H Worldwide has been picked by Icelandair Group to manage time-critical, AOG and urgent airline spare shipments. The three year contract has an option for an additional two years, and covers all three Icelandair Group companies – I.T.S. (Icelandair Technical Services), Icelandair and Icelandair Cargo. B&H’s Los Angeles and Hong Kong regional offices will play a key role in the contract, with Miami and Singapore acting as regional support centres and the LA hub will be utilised to consolidate shipments and reduce costs where multiple parts are destined for Icelandair’s Chinese maintenance facility. B&H Worldwide chief executive officer, Stuart Allen says it will fully integrate with their IT platform to “drive significant efficiencies including improved communication”.
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ACW 10 JULY 2017
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TRADEFINDER Airlines
Freight Forwarders
Turkey
Caribbean
Freight Forwarders Iraq
Freight Forwarders Hong Kong
United Arab Emirates
GSSA Partner Required
USA
AZura Data Services
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