The weekly newspaper for air cargo professionals Volume: 21
AMBAK ELECTED CARGO IQ VICE CHAIRMAN
2
PROFITS EXPECTED TO FALL IN 2018
Issue: 23
4
11 June 2018
SAUDIA INAUGURATES KAIA COOL FACILITY
5
DEMAND PROVES ROBUST FOR AA CARGO
9
The future is freight A
CW special US correspondent Michael Manning met Bruce A Dickinson, VP and general manager for Boeing’s 747-8 programme. They sat down for a discussion on the 747-8F and Manning heard how the future for the iconic aircraft is freight. There is no question that the B747 as an aircraft model is entering its endgame. Much background noise in the aviation and general media is writing off the behemoth in an age of fuel-efficient, twin-engine long distance rivals. Dickerson, though, is not in the mood to consign the B747 to the scrap heap of history. He is adamant that the aircraft has a role in flying significant tonnages of cargo long after the model makes its last push back from the departure gate. Manning asked him directly: “Help us set the record straight once and for all. What is the way forward for marketing and selling the 747-8?” Dickinson’s response was that the B747-8’s potential longevity really lies in the future market for freighter aircraft. “When you look at our current market outlook over a 20 year period, there is a published market, not just Boeing, but outside sources – who build these large freighters over that 20 year period, and now they want a large freighter,” he says. “The only production freighters in that category is the 747-8 and the Boeing 777. When the large freighter retirements kick in, and when you consider MD-11s and the older 747-400 freighters, there’s a lot of airplanes that’ll be coming out over the 2019 to 2029 time period. This means a lot of replacements for those aircrafts – MD-11s first, and then of course, 747-400 freighters. Since the 747-400 freighter was built after the 747-400 passenger plane, that’s why those airplanes are still flying strong. But they can’t fly forever.” Dickinson Manning says: “Let’s recap for our readers. Boeing’s most current published forecast for World Freighter Demand is 2,370 with Large Production Boeing 747s and 777s (80 tonnes) at 550. With Wide-Body Conversions, the forecast is 400
Boeing 767s, 747s, and 777s (40-120 tonnes). The Medium Wide-Body Production forecast is 380 Boeing 767s (40-80 tones). Standard Body Conversions of 1,040 Boeing 737s and 757s (45 tonnes) is forecast.” As of 2015, Boeing notes the current number of freighters in service at 1,770, with a projected number of freighters in service to be at 3,010 (as of 2035). Airbus, by contrast, sees a market for 1,551 of their aircraft Dickinson says: “Well, Airbus doesn’t build a large freighter. I think you’re talking about their large aircraft category that’s a passenger airplane. We’re absolutely planning to have a passenger airplane on for Boeing. We have a number of campaigns out there. The reason I brought up freighters first is that we do believe the freighters will dominate the 747-8 delivery profile, into the next decade.” Manning: “What are the market forces you’ve studied that have caused cargo airlines to delay upgrading their 747-400 fleets?” In reply, Dickinson says: “Low fuel prices have generally been a factor, and airlines retaining older aircraft, be it 747-400 freighters or MD-11 freighters – this airplane has a better than 16-per cent fuel burn improvement efficiency. That’s a huge number over the 747-400. Certainly, with the age of the 747-400 freighter fleet, many of them have not gone to the significant D Check intervals where it gets very costly for long-term maintenance.” Experts have predicted that India will need over 1,600 new passenger and freighter aircraft between 2015 and 2034 to help meet the growing demand. Manning asks: “What is your perspective on the role Boeing can offer with the 747-8?” Dickinson says: “India is a clear growth area. We’ve watched that very closely for both passenger opportunities and freighter opportunities. So, all I can really say is what you’re already aware of, which is that it’s a significant, growing
Continued on page 2
aircargoweek.com
Ambak elected Cargo iQ vice chairman
E
mirates SkyCargo’s Henrik Ambak has been elected vice chairman of Cargo iQ, and the group has also welcomed board members from Qatar Airways Cargo and Swissport for the first time. Ambak brings over three decades of air cargo experience with him, having started his career in freight forwarding, moving to ground handling, before joining Cargolux to oversee all aspects of cargo and ground operations. He joined Emirates in 2014 as senior vice president – cargo operations worldwide, where he is responsible for all Emirates SkyCargo operations at its hub in Dubai, as well as more than 150 stations globally. Ambak says: “The Cargo iQ journey of close industry collaboration has rendered air cargo as the only mode of transport with a standard cross-industry quality management and measurement approach – quite a feat.” Qatar Airways Cargo vice president – global cargo operations, Nadeem Sultan and Swissport head of global operations – cargo, Hendrik Leyssens will be their companies’ first representatives on the Cargo iQ board. Sultan says: “Like Cargo iQ, Qatar Airways Cargo believes in excellence and along with my fellow board members, we look for-
Airfreight helps eco car take the road to a greener future
A school in St Paul, Minnesota turned to airfreight when students entered a global eco-car challenge. St Thomas Academy was one of many educational establishments to accept the challenge of oil giant Shell to design, build, test and drive an ultra-energy-efficient vehicle.
Jalil THE SkyTeam airline alliance has named Kristin Colvile (pictured above left) as its new chief executive officer (CEO), taking over from Perry Cantarutti who is returning to Delta Air Lines. Colvile, who is joining from Delta Cargo, has over 25 years of airline industry experience, having held various leadership roles in numerous divisions of Delta Air Lines and Northwest Airlines since joining the company in 1993. SkyTeam chairman, Michael Wisbrun says: “We’re very pleased to welcome Kristin onboard as SkyTeam’s new CEO. She joins the alliance at an important transitional phase, and we are absolutely confident that Kristin’s extensive experience will help us to build the alliance of the future for all 20 of our member airlines and their customers.” In her new position, Colvile will be tasked
Cathay Pacific to power A350-1000s with alternative fuel have been at the forefront of many initiatives to reduce the impact of greenhouse gas emissions. Achieving carbon neutral growth from 2020 is an important target that we take seriously and using alternative fuels is one of the key strategies in helping us to do so. We will continue to support the development and usage of biofuel to reach mainstream commercial viability.”
Continued from page 1: The future is freight ... of our product lineup, including the 747.” Airbus is seeking airline support for a 400-seat jetliner currently dubbed the A350-8000 as a competitive response to the Boeing 777-9. If Airbus refuses to upgrade its A380, which has shown [slow] orders, what are the implications for the Boeing 747-8’s future? Dickinson says: “I can’t speak to Airbus’ future plans for its wide-body airplanes, but we see a future for both the 747-8 freighter and Intercontinental (passenger). Remember that the technology on the 747-8 in terms of structure and engines is a
2
ACW 11 JUNE 2018
ward to further paving a successful path of process control, quality monitoring and services improvements for air cargo.” He says: “Swissport was one of the first members to join Cargo iQ and our commitment to quality delivery in our cargo operations is well recognised.” KLM Cargo’s director – performance management, Rutger Jan Pegels, and Panalpina’s global head of airfreight procurement and product management, Markus Muecke also joined the board and will continue to hold the seats for their companies.
Colvile replaces Cantarutti as SkyTeam CEO
The single-person vehicle, weighing around 114 kilograms and with a top speed of 35 mph, was sent to London via Minneapolis and Chicago in preparation for Shell Eco-marathon Europe 2018 which will take place in London, UK from 5-8 July 2018. Amy Nugent, principal of the school’s marketing agency says: “The Experimental Vehicle Team has participated in the Shell Eco-marathon Americas for many years. This will be the third year that Shell has hosted the Drivers’ World Championship in London, bringing together the winners of the Eco-marathon Americas, Europe and Asia to compete against one another. The Saint Thomas Academy team has competed in the DWC every year and was the World Champion last year.” The car boasts street-legal lighting, 4-wheel independent suspension, 4-wheel hydraulic disc brakes, full roll cage, seat belt and 5-point safety harness to protect the driver in the event of a crash. It is battery-electric powered. The move was handled by Agility Logistics. Team members and two faculty advisors will travel to London for the competition in July. The vehicle will be shipped back to the US following the competition.
CATHAY Pacific is planning to use a blend of alternative jet fuel to fly its new fleet of Airbus A350-1000s home to Hong Kong. The airline has 20 of these aircraft on order for delivery over the next four years, with the first A350-1000 departing Airbus headquarters in Toulouse, France on 19 June, with a further seven due for delivery by the end of 2018. Cathay Pacific chief executive officer, Rupert Hogg says: “We
Ambak
generation beyond the A380, so if no upgrade is done, we retain this competitive advantage. Its superior fuel-efficiency and capabilities also make it well-positioned when the cargo market recovers and as freighter replacement demand returns.” If economic conditions suggest an eventual phase-out of the 747 as a passenger jet offering, what is a projected time line for refocusing on production of the freighter version, asks Manning? Dickinson replies: “We have no plans to phase out the production of the 747 Intercontinental. The airplane still meets a unique need in the market among international carriers.”
aircargoweek.com
with building on the significant investment that SkyTeam has made into developing technology, focusing on maximising the tools and enhance seamless processes for members and customers. Former CEO and chairman, Cantarutti will be returning to Delta Air Lines to take up the role of senior vice president of alliances. Lindsey Jalil has taken over from Colvile, and will lead Delta Cargo’s commercial activities including alliances, distribution, marketing and communications, products, technology, reporting and revenue management. Delta Cargo vice president, Shawn Cole says: “She joins the team at an exciting time as Delta continues to grow its foothold and network internationally, and build closer collaboration with our global partners.”
ACW REWIND
WINE-LOVERS around the world want to get their hands on the first Beaujolais each season. Freight forwarders and airlines continue to profit from this rush, even if demand really peaked in the 1980s.
Cheers to the annual Beaujolais bonanza Volume 9 Issue 46 20 November 2006 THE ANNUAL rush to get the year’s vintage of Beaujolais Nouvear into the hands of eager consumers in time for the third Thursday of November - the first day the young wine can be drunk - is making its usual contribution to forwarders’ and cargo carriers’ revenues this month. European regulations prohibit shipments from leaving the EU before 22:00hrs on the second Thrusday of November and with the wine’s main fan base concentrated in Japan and North America, it is the air cargo sector that grabs the big business. Lufthansa Cargo transported a new record volume of more than one million bottles - around 1,450 tonnes - of the wine between 9 and 13 November, with its Lufthansa Cargo Charter subsidiary flying another 280 tonnes on three chartered aircraft. BA World Cargo estimated it carried 540 tonnes of 447,000 75cl bottles.
Heathrow decision inches forward with Cabinet approval
A
third runway at Heathrow Airport has been approved by the Cabinet, ready for a vote in parliament in the coming weeks. Speaking to members of parliament in the House of Commons on Tuesday 5 June, transport secretary Chris Grayling stressed the importance of expanding Heathrow, highlighting its significance to the national economy. Addressing MPs, Grayling said that the aviation sector contributes £22 billion to the UK’s GDP supporting 500,000 jobs and transporting 2.6 million tonnes of freight, saying “the time for action is now” as Heathrow is already full and other London airports are nearing capacity. He said Heathrow is falling behind its competitors, which is impacting the UK’s economy and global trading opportunities but a third runway would provide better connections to global markets and more flights to long haul destinations. Grayling says: “Heathrow is a nationally significant freight hub carrying more freight by value than all other UK airports combined. A third runway would allow it to nearly double its current freight capacity.” He stressed that the benefits would stretch beyond London with up to 15 per cent of slots at the new runway reserved for UK connections “spreading the benefits of expansion to our great nations and regions”.
Cainiao to develop HKIA logistics centre
A joint venture led by Alibaba Group’s logistics arm, Cainiao Network has been awarded the tender to develop and manage a premium logistics centre at Hong Kong International Airport. The centre at Kwo Lo Wan in the South Cargo Precinct of the airport will be the third largest warehouse in Hong Kong, occupying a site of about 5.3 hectares with an estimated gross floor area of 380,000 square metres. Scheduled to commence operations in 2023, the centre will become the smart hub in Asia serving the fast growing global e-commerce business, aligning with the cargo development strategy of HKIA to capture opportunities arising from increased cross-border e-commerce and related businesses, as well as the growth in the logistics business related to temperature controlled products such as pharmaceuticals. The centre is being designed to be future proof, with high specifications to attract fast growing air cargo segments including cross-border e-commerce and temperature-controlled airfreight handling. It will feature ramp access to all floors and allow the use of large scale robotics and automation, as well as environmental certification of high international standards being adopted including BEAM Plus Gold and LEED Gold. Cainiao Network are leading the venture with shareholders including China National Aviation Corporation and YTO Express. The award follows an open tender exercise held by the Airport Authority Hong Kong, which received strong bids from local and international players.
Artist impression of a third runway The news has been welcomed by industry figures across the country, hoping that after years of inaction, something might finally happen. The GMB union has called for action, with national officer Mick Rix saying: “The time for politicians dithering and delaying on Heathrow is over. This long-awaited vote is crunch time for our members across the country who stand to benefit from Heathrow expansion.”
Swiss extends QEP network to 36 stations
SWISS WorldCargo now has 36 Envirotainer QEP accredited stations, with 31 of the stations receiving the QEP Advanced accreditation. Envirotainer launched the QEP programme over 10 years ago to promote the safe handling of pharmaceuticals, with 40 companies participating, educating tens of thousands of individuals at more than 730 stations around the world. The programme is designed to promote strong distribution practices and standardise the safe handling of Envirotainer containers. Envirotainer head of global partner management, Bourji Mourad says: “Swiss WorldCargo demonstrates their commitment to providing best-in-class services to their customers, and the pharmaceutical industry by promoting best practices and industry standards, such as the Qualified Envirotainer Provider (QEP) programme. The commitment by teams on both sides is very encouraging and we expect such announcements to continue.” Swiss WorldCargo head of vertical industry – pharmaceutical and healthcare, Susanne Wellauer adds: “The QEP expert level of our Zurich hub is a clear evidence of our premium SWISS quality that extends through the whole Swiss WorldCargo network of 31 QEP advanced stations.” Envirotainer compliance manager, Chris Fore says: “QEP is both a benchmark and a means by which we engage our partners to provide consistent service and fulfil Good Distribution Practice requirements from Pharmaceutical companies. It helps pharmaceutical companies identify potential hazards and control the subsequent risks.”
He adds: “We’ve been waiting long enough for this Government to pull itself together and to put this plan to MPs and secure the future of the airport and the jobs it can and will support.” Unite trade union general secretary, Len McCluskey has urged MPs to vote for expansion, saying: “Heathrow expansion, one of the biggest construction projects in Europe, answers the demands of many Unite members across the UK – for more skilled, wellpaid and sustainable jobs. Expansion will deliver these jobs and growth to every nation and region of the UK, whilst Heathrow deliver on the work they have been doing to address environmental concerns; all at a critical time for UK workers.” The British International Freight Association has welcomed the news with director general Robert Keen expressing his hope that this is the “beginning of the end of years of procrastination”. He has expressed his concern about parliament voting on the issue, saying: “Whilst the UK Transport Secretary, Chris Grayling has previously hinted at an expedited planning procedure, with no reopening of high level arguments, the inevitable legal challenges and the convoluted planning processes that are also likely, lead me to wonder whether any expansion will be completed by the time that UK aviation capacity is predicted to run out in 2025.” Keen adds: “I hope I am proved wrong, but I won’t be booking a ticket for the opening ceremony just yet.”
Air Belgium picks Hactl
AIR Belgium has appointed Hong Kong Air Cargo Terminals (Hactl) to handle cargo for its twice-weekly service between Brussels and Hong Kong. The airline started twice-weekly services on 4 June using an Airbus A340-300 with approximately 14 tonnes of cargo capacity per flight. It has chosen Brussels South Charleroi Airport as its hub as the airport does not suffer from congestion. Air Belgium cargo manager, John Cooper says: “Cargo will play an important role in generating revenue on this new route, and we are delighted to be working with Hactl, whose impressive handling resources, and complementary road feeder capabilities, will enable us to maximise our market opportunities.” Hactl executive director, Vivien Lau says: “We welcome Air Belgium to the Hactl carrier family. Their innovative business model provides an interesting new option for cargo moving into Europe’s logistics heartland from Hong Kong and China. We look forward to supporting this new venture with premium quality handling and ancillary services.” Hactl is providing the airline with full terminal handling and documentation services in Hong Kong, and Air Belgium has also established its cargo sales office within Hactl’s South Office Block.
THE Euroavia Africa Air Cargo Summit 2018, planned for June 3-5, has been moved to November 22-23, 2018. The event will be held at the same venue, say organisers, as previously announced, the Mövenpick Hotel, Nairobi, Kenya.
Gatwick celebrates 60th birthday
Quote of the week “I won’t be booking a ticket for the opening ceremony just yet” BIFA’s Robert Keen reacts to the news that the Cabinet has approved Heathrow’s third runway
aircargoweek.com
ON Saturday 9 June, Gatwick Airport celebrated 60 years since it was officially opened in its current form. Queen Elizabeth II opened the airport on 9 June 1958, with the £7.8 million construction project taking two and a half years to complete, transforming Gatwick into a global travel hub.
Introduction of aircraft such as the Boeing 747 required runway extensions in 1964, 1970 and 1973 enabling nonstop flights to the US West Coast. The runway was extended for a fourth time in 1999 when the airport welcomed easyJet. (Pictured left, the Queen opening Gatwick Airport in 1958).
ACW 11 JUNE 2018
3
Profits expected to fall in 2018 IATA signs MoU with AFRAA
T
he International Air Transport Association (IATA) has revised its profit expectation for airlines down to $33.8 billion for 2018 due to rising fuel and labour costs. Airlines are predicted to have a 4.1 per cent net profit margin in 2018, but the net profit prediction is down from the forecast of $38.4 billion in December 2018. In 2017, airlines earned a record $38 billion, which was revised from the previously estimate of $34.5 billion, but comparisons are distorted by special accounting items such as one-off tax credits helping 2017 figures.
De Juniac Profits at the operating level have been going slowly downwards since early 2016 as a result of accelerating costs. IATA director general and chief executive officer, Alexandre de Juniac says: “Solid profitability is holding up in 2018, despite rising costs. The industry’s financial foundations are strong with a nine-year run in the black that began in 2010. And the return on invested capital will exceed the cost of capital for a fourth consecutive year.
“At long last, normal profits are becoming normal for airlines. This enables airlines to fund growth, expand employment, strengthen balance sheets and reward our investors.” The association says that inflation pressures are starting to emerge at this stage of the economic cycle. Brent Crude is expected to average $70 a barrel, up from $55 in 2017 and the previous 2018 of $60 a barrel, while jet fuel prices are expected to rise 26 per cent to $84 a barrel. Cargo demand has benefited from the largely unexpected acceleration in growth of the global economy, with businesses turning to air transport to replenish inventory, producing strong growth in 2017. Cargo demand is expected to grow by four per cent in 2017, a major drop on the 9.7 per cent growth of 2017 but in line with the 20 year trend growth rate. Pharmaceuticals, e-commerce and other premium cargo services are expected to lead growth in 2018, with yields expected to improve by 5.1 per cent. Global affairs could affect the industry’s outlook, with rising protectionism, the US withdrawing from the Iran nuclear deal, lack of clarity on Brexit, numerous ongoing trade discussions and continuing geopolitical conflicts. De Juniac says: “Aviation spreads prosperity and enriches the human spirit. That truth lays the foundation for a very important message. The world is better off when borders are open to people and to trade. And our hard work as an industry has primed aviation to be an even stronger catalyst for an ever more inclusive globalisation.”
THE International Air Transport Association (IATA) has signed a memorandum of understanding (MoU) with The African Airline Association (AFRAA) to deepen their cooperation. The MoU was signed by IATA director general and chief executive officer, Alexandre de Juniac and AFRAA secretary general, Abderahmane Berthe on the sideline of the 74th IATA Annual General Meeting in Sydney, Australia. Under the MoU, the associations will exchange information, expertise and capabilities and work together to enhance safety by assisting airlines to implement IATA Operational Safety Audit, IATA Safety Audit for Ground Operations and IATA Ground Handling Manual; promote regional air connectivity by working jointly with governments to implement the Single African Air Transport Market; encourage data sharing among aviation stakeholders; enhance security through capacity building; liberate airline funds blocked by governments from repatriation; and achieve reasonable levels of taxes and charges
by helping governments to focus on the social and economic benefits of aviation. De Juniac says: “Africa is full of potential. Unlocking the economic and social benefits of aviation is a critical element of the continent’s development. Achieving Africa’s potential, however, will not happen by chance. Continuous improvement in safety, an effective regulatory framework, and fit-for-purpose infrastructure are essential. “To achieve that; strong partnerships are key. This MoU will strengthen IATA’s already close relationship with AFRAA and help ensure that global standards and best practices form the backbone of Africa’s aviation growth.” Berthe adds: “This MoU with IATA will commit both our organisations to work together even closer on the main priorities for African aviation. In particular, we count on IATA to provide the requisite technical support across a number of areas such as improving aviation infrastructure and capacity building with national regulators.”
Al Baker to chair board of governors QATAR Airways Group chief executive, His Excellency Akbar Al Baker has assumed his role as chairman of the IATA Board of Governors for a one year term. He is succeeding Singapore Airlines chief executive officer (CEO), Goh Choon Phong and will be the 77th chairman when his term starts at the conclusion of the 74th International Air Transport Association (IATA) Annual General Meeting in Sydney, Australia. Al Baker says: “To be nominated to such a prestigious leadership position in the industry is a great honour, made all the more pertinent in the difficult circumstances in which Qatar Airways currently operates. “I look forward to continuing my work in the coming year for our great aviation industry, connecting safely the peoples of the world, a sector which will only continue to grow in the years ahead, and one in which I am most proud to work and represent one of the world leading airlines.” Al Baker was named Qatar Airways Group chief executive in 1997 and has spearheaded the growth of the airline from a small regional carrier into a major global player.
Al Baker IATA director general and CEO, Alexandre de Juniac says: “I am confident that Akbar will be a strong voice on behalf of the Business of Freedom in the face of growing challenges including creeping re-regulation and a movement away from open borders and toward trade protectionism and restrictions on the free movement of people. I look forward to working with him on these and other key industry issues.” IATA also announced that Lufthansa chairman and CEO, Carsten Spohr will serve as chairman of the board of governors from June 2019, following Al Baker’s term.
IATA heads to Seoul for 75th AGM THE International Air Transport Association’s (IATA) 75th Annual General Meeting (AGM) and World Air Transport Summit will take place in Seoul, South Korea from 2-4 June 2019. Korean Air will host the 75th AGM, which will be the first time that the South Korean capital hosts the global gathering of aviation’s top leaders. IATA director general and chief executive officer, Alexandre de Juniac says: “The aviation
4
ACW 11 JUNE 2018
aircargoweek.com
industry is looking forward to meeting in Seoul for the 75th IATA AGM. South Korea has a great story to promote. Strategic planning and foresight has positioned the country as a global hub for transport and logistics. “I am confident that Korean Air will be a great host as Seoul is transformed into the capital of the global aviation industry during the AGM. We are also delighted to be in Seoul in the same year Korean Air celebrates its 50th anniversary.”
Saudia inauguarates KAIA cool facility
S
audia Cargo has inaugurated its modern cold storage facility for pharmaceuticals and medicines at King Abdulaziz International Airport in Jeddah to meet increasing demand for sensitive, temperature controlled shipments. The refrigerated warehouse was opened in conjunction with launching FlyPharma, an innovative product designed specifically to meet the growing demand for the pharmaceutical and life sciences sector. The centre ships and stores pharmaceuticals using advanced technologies along with sophisticated active temperature control containers, which require advanced passive solution technology, especially for products needing transportation between +2-8C and +15-25C. Saudia Cargo chief executive officer, Omar Hariri (pictured second left) says: “The new facility boasts a 1010 square metre pharmaceutical handling space with double operational
capacity and conforms to the international standards of World Health Organization, the European Committee for Medicinal Products for Human Use as well as the local standards of the Saudi Food and Drug Authority.” He adds: “We have listened, as always, to our
customers, their feedback and expectations during face-to-face meetings and analysed the results of food and drug shipment surveys. We built on the feedback and results and came up with a good perception that helped us launch the new project, which is the first step taken in line with the Saudia Cargo new Transformation Strategy 2020.” The opening event was attended by Saudia Cargo chairman of the executive committee and member of the board of directors, Mohammed Abunayyan; Saudi Food and Drug Authority executive director of the branches, Abdullah Al-Ruwaiteh; along with representatives from the airport, Customs, airport government agencies and Saudia Cargo pharmaceutical clients. Saudia Cargo aims to open more facilities across Saudi Arabia in line with its vision and is planning to launch an 800 square metre specialist pharmaceutical handling facility in Riyadh offering FlyPharma services.
WORLDNEWS CARGOLUX Airlines International has banned the transport of game hunting trophies on board its aircraft with immediate effect, joining a growing list of airlines refusing to carry hunting shipments. AIR Transport Services Group subsidiary Cargo Aircraft Management has delivered a Boeing 767-300 converted freighter to Amerijet International Airlines under an eight year dry lease. A World War 2 shell was safely dismantled overnight on 1 June and 2 June at Brussels Airport. The shell was discovered during works on apron 3. All works on the apron were stopped while DOVO, the Belgian explosive ordnance disposal unit disabled and dismantled it. DOVO says there was no danger to life or airport operations.
Budapest welcomes K+N to cargo community René Droese (left) with László Szabó
BUDAPEST Airport is to welcome Kuehne + Nagel to its air cargo community when the forwarder moves into warehouse and office space on 1 July. The forwarder will lease what is being described as a “significant area of warehouse and adjacent office space” at Budapest Ferenc Liszt International Airport, focusing on the future development plans of the cargo business at Budapest Airport. Last summer, two major logistics bases were handed over to two international integrators near Terminal 1, and this summer the construction of a dedicated Cargo City will commence, with the hand over planned in the summer of 2019. As part of the BUD 2020 five-year, €160 million airport development plan, Budapest will continue investing in developing the airport’s cargo business. The airport says that as more and more Western European airports are suffering capacity issues, Budapest has favourable conditions for growth of cargo flights, which is already served by carriers including Cargolux, Turkish Cargo, Qatar Airways Cargo and Silkway, as well as passenger services with belly capacity. The Hungarian capital’s airport is welcoming four different transatlantic flights this summer, with connections to New York, Chicago, Philadelphia and Toronto, each with around 10 tonnes of cargo capacity. Budapest Airport director property and cargo, René Droese says: “I look on forwarder companies as our closest strategic partners in developing our cargo route network. Jointly, we can bring the right cargo airlines with the right capacity and flight frequency to Budapest. “We can also develop further our logistics capacities according to the needs of our partners, based on the latest technological developments. Being close to cargo operations is not only a question of convenience, but also an important factor in keeping costs under strict control.” Kuehne + Nagel Hungary national airfreight manager, László Szabó says: “We believe that keeping our fingers on the pulse of our customers’ business helps us to react rapidly and meet all of their expectations, for example, new direct overseas services to Philadelphia, Chicago or New York. This is why we are excited to partner with Budapest Airport.”
aircargoweek.com
ACW 11 JUNE 2018
5
WORLD AIRPORTS
Chicago and Doha among the stellar performers
C
argo volumes at the 20 busiest airports grew by 6.8 per cent in 2017. These airports handled a combined 51 million tonnes, about 43 per cent of global air cargo volumes, writes Neil Madden. Of particular interest was the double-digit growth recorded by three of the top 20. Shanghai’s throughput was up 11.2 per cent, which is perhaps not surprising. But the major Chinese hub was outdone by Chicago O’Hare (12.6 per cent) and Qatar’s Doha (15 per cent). As a key cargo centre, Chicago is also seeing the benefits of significantly expanded facilities. Total tonnage handled at O’Hare was approximately 1.9 million tonnes, the second consecutive year that the airport has broken all previous records.
O’Hare also benefitted from international trade with China and other Asian countries, as international freight volumes grew by 12.2 per cent. Last year saw two significant stages in O’Hare’s $220 million investment in expanding the northeast cargo campus, which is on track to be the largest cargo development built at a US airport in more than a decade when completed in the next few years. DHL selected the campus for a new 54,000 square foot gateway, expanding its existing operations, and featuring a unique onsite US Customs facility that allows for faster processing for inbound and outbound international shipments. In addition to accommodating future volume growth, the expanded operations will
Chicago O’Hare Airport
supplement the US network capacity of DHL to expedite packages at peak seasons such as the November-December holidays. O’Hare is also home to the DHL Global Forwarding facility, a 491,000 square foot office and warehouse building that houses 500 employees.
Expanding facilities
Prior to this was the opening of the second phase of the campus. The new facility opened ahead of schedule in direct response to strong demand for moving air cargo through Chicago. The 240,000 square-foot Phase II building is home to Burak, Cargolux and Swissport. Expanding new warehouse capacity gives O’Hare the ability to process greater volumes in a number of ways. The addition of B747-8 capable aircraft ramps provides 50 per cent additional capacity to handle cargo; and in its final form the northeast cargo development will deliver 800,000 square feet of warehousing and apron pavement. These investments will make room for up to 15 wide body aircraft to unload at any given time. Phase III is now expected to open in two to three years, also ahead of schedule. Qatar’s Hamad International Airport (HIA) in Doha continued its impressive performance into the first quarter of this year, following a 15 per cent rise in throughput last year. HIA handled 514,299 tonnes of cargo between
6
ACW 11 JUNE 2018
aircargoweek.com
January and March, which the airport says signifies a marked increase from the previous year. But all the more remarkable is that the figures belie the fact that Qatar has been under an economic blockade imposed by neighbouring countries for the past 12 months. Member states of the Gulf Cooperation Council (GCC) led by Saudi Arabia and the UAE imposed sanctions on Qatar for allegedly providing succour to militant Islamist groups.
Qatar withstands blockade
Nevertheless, Qatar has so far withstood the blockade. Qatar Airways found that the 18 air corridors it had been using were cut to just two overnight, as it was blocked from flying through Bahraini, Saudi or Emirati airspace. Today the airline still has to take longer routes around these zones, adding to flight times and costs and has pushed it into a ‘substantial’ loss for the year. But the Kingdom is pushing ahead with big infrastructure projects, not least the 2022 FIFA World Cup and the economy as a whole has been buoyed by the sharp rise in oil and gas prices plugging much of the shortfall in revenues. Qatar Airways even signed a letter of intent in April to buy five B777 freighters, valued at $1.7 billion at list prices, which are capable of flying 4,900 nautical miles with a payload of 112 tons.
WORLD AIRPORTS Fewer planes not stopping growth at Schiphol
C
apacity constraints and fewer plane movements at Schiphol are not stopping growing volumes to key markets, writes Michael MacKey. “Latin American cargo trade has increased strongly, up ten per cent inbound at 34,097 tonnes and up 31 per cent outbound at 20,701 tonnes,” a Schiphol official told Air Cargo Week. Helping here were increased flower imports for St Valentine’s Day and International Women’s Day. “China, which is our largest country market, showed an increase of 2.1 per cent at 30,735 tonnes from January to March 2018, compared with the same period last year, boosted by increased volumes from both freighter and belly cargo flights,” the official told Air Cargo Week. China’s drivers are less seasonal and more diverse. “We see many e-Commerce and high-tech shipments coming from China to the Netherlands and many luxury items and baby powder going out from Amsterdam to China,” the official said. Schiphol also reported fewer freighters as it gears up its strategy of moving more by bellyhold. Full freighter volumes overall for the first three months of 2018 were down 2.4 per cent, with 7.4 per cent fewer full freight air
Amsterdam Airport Schiphol traffic movements (ATMs). Belly cargo volumes eased slightly, showing a 1.6 per cent drop compared with last year’s first quarter, the official added. Schiphol cannot exceed 500,000 air traffic movements annually, a total it has reached but is looking for ways round this. As well as more belly use it has identified a trend of network planners starting to include the potential cargo business when
making decisions about new routes. “And we are very keen to further support that trend,” the official said. “To help the planners understand the benefits which additional cargo can bring, and to help them make decisions about what aircraft to operate on a route, we have created a tool that shows airlines the potential of additional cargo on intercontinental routes.”
Cape of much hope
Cape Town International Airport IT may not be one of the world’s major hubs, but South Africa’s Cape Town International Airport saw air cargo volumes grow by a staggering 52 per cent in 2017. Speaking to the Exporters’ Club Western Cape (ECWC) in May, Airports Company South Africa (ACSA) assistant general manager Gavin Scott said that between 2014 and 2017 Cape Town volumes increased by 13,000 tonnes. “At least 60 per cent of the growth we have seen - including the 52 per cent growth last year - is inbound and the rest is outbound,” he said. Currently, Cape Town handles around 87,300 tonnes of cargo a year compared to Johannesburg’s OR Tambo’s 425,000 tonnes. Much of this success has come on the back, or more precisely in the belly, of the provincial Air Access programme. This is an initiative launched in 2015 by Cape Town & Western Cape Tourism, Trade & Investment (Wesgro) along with ACSA to persuade carriers to add new direct connections with Cape Town and/or increase the frequency of existing routes. In the past two years, Wesgro has contributed to landing 10 new routes and facilitating 11 route expansions, including ones operated by ‘super-connectors’ Emirates and Turkish Airlines. To date, the focus has been on passengers rather than freight. But Wesgro and ACSA want to change that. Scott told exporters that comparisons with Johannesburg were not really relevant as OR Tambo handles large numbers of freighters whereas Cape Town is currently all belly freight. The majority of cargo moving out of Cape Town has been to Europe, but a significant increase has been seen in volumes to the Middle East, which he attributed to the ‘Emirates effect’. But Scott stated it was difficult to invest in further freight infrastructure at the airport as the current cross runway limited cargo development. With construction of a new runway expected to start in 2019 this will afford an opportunity to increase and improve the airport’s cargo facilities. Using ACSA’s own yardstick for handling efficiency, the airport group reckons that South African Airways Cargo, which handles about 13,500 tonnes at its Cape Town premises, is vastly under-utilised, whereas ACSA’s own facility, which has different tenants, is running at over-capacity. So once the new runway has been constructed that would be the time to invest in new cargo infrastructure.
aircargoweek.com
ACW 11 JUNE 2018
7
NORTH AMERICAN EAST COAST
No need to look west to find the right gateway
T
he East Coast of the USA and Canada is a crucial cargo trade lane linking some of the biggest cities in North America to European, Asian and South American economic hubs, writes David Craik. Miami International Airport (MIA) is one example, with most recent figures revealing that it recorded four per cent growth in freight tonnage through March compared to the same time last year. International freight traffic rose 1.8 per cent to 491,264 tonnes and domestic freight jumped 19.1 per cent to 84,180 tonnes, for a combined 575,444 tonnes during the month. It builds on an impressive 2017 when it recorded its best ever year for freight tonnage with 2.24 million tonnes, up by three per cent over 2016. Helping its figures have been new
carriers such as Etihad with its weekly freighter flights between Miami, Amsterdam and Abu Dhabi, and TACA Peru with weekly freighter flights to and from South America. MIA also points to recent initiatives such as designating the airport land parcel as a Foreign Trade Zone and an ocean to air perishables trans-shipment programme for its growth. Up in Canada, Halifax Stanfield airport is marketing itself as the Gateway to Canada and it appears to be paying off. Last year it recorded record cargo volumes of 34,051 tonnes, up 2.2 per cent on 2016. It states it will continue to use “our enviable position as the closest continental airport in North America to Europe to our advantage”. It vowed to continue to market the airport to airlines looking to implement new non-stop
Miami International Airport
flights to and from Europe with feed from services in Canada and the US. “With demand for new nonstop cargo air services expected to increase we will continue to invest in the airport with further enhancements to the airfield, terminal building and security infrastructure,” it adds.
Europeans look south
European airlines are certainly targeting the East Coast for further growth. IAG Cargo is looking to Nashville to take advantage of its car industry and the movement of spare parts. Virgin Atlantic Cargo has also launched a new route between Belfast and Orlando moving spare parts, machinery and general cargo. HAE Group, a GSA provider out of the UK’s East Midlands Airport, also sees huge potential. It already has a substantial salesforce on the US East Coast with offices in New York JFK, Atlanta, Washington Dulles (IAD) and MIA. “Our initial development surrounded JFK, but we have quickly spread south arising from GSA contracts and our project business,” explains HAE Group sales manager South East, Angela Howard. “Swiss Cargo is one valuable contract in Georgia, Tennessee, the Carolinas’ and Louisiana. Other important contracts include Strategic Air, Oman Air, Hainan Airlines and Ethiopian Airlines. These carriers give us access to online products around JFK, Boston, IAD and MIA.
Halifax Stanfield International Airport
8
ACW 11 JUNE 2018
aircargoweek.com
Hainan continues to expand initially Boston to Shanghai Pudong and Beijing and most recently with JFK to Chengdu.”
Different demand
HAE added that each region drives different cargo demand with JKF being strong to China and Africa and Boston continuing to see big volumes to China based on perishables. The South East is more geared to Europe and Indian markets with the Middle East also in growth. “China seems to be driven by greater domestic economic demand and Africa continues to see increased economic development with rising investment in infrastructure,” explains HAE Group VP Americas Charlie Storcks. “Some of this growth is also a result of increased oil prices and the investment that goes with this. This is visible through the increase demand for Oman Air products. The US Government business benefited from increased overseas activities and funding.” HAE added that airlines are looking to create long term, value creating partnerships in the East Coast. “Competition still remains aggressive, but rates seem to be going in the right direction,” says Storcks. The group forecasts continued strength in its project business including charters and part-charters particularly into developing regions under served by scheduled commercial lift.
NORTH AMERICAN EAST COAST
Demand proves robust for American Airlines
A
merican Airlines is also bullish about the East Coast. “Air capacity for cargo from the East Coast is very competitive and constantly changing. But so far this year, demand has been robust. Even as we come into the summer season, that pace has continued,” says AA managing director of Cargo Sales Linda Dreffein. “Especially from New York (JFK) and Philadelphia, two of our hub cities, we have strong international flight schedules to Europe and Latin America to support that demand. To put it in perspective, from New York alone, we have an average of 113 widebody departures per week. We also have a strong flight schedule to and from the East Coast with major cargo lanes from JFK and Philadelphia including London Heathrow, Paris, Frankfurt, Sao Paulo and Buenos Aires.” AA says it has seen significant growth in the amount of pharmaceutical shipments moved over the past few years thanks to its dedicated, state-of-the-art pharmaceutical facility in Philadelphia. The facility offers controlled room temperature, a refrigerated area for passive shipments, and a frozen area as well. “We have charging stations with capacity to simultaneously recharge Dreffein 30+ RKNs, and can offer 24/7 monitoring and a dedicated staff to assure quality,” adds Dreffein. “This facility allows us to handle an abundant amount of pharma, healthcare, blood and blood materials, which is supported by nearly 100 weekly widebody departures. E-commerce is also quickly becoming a larger and larger part of our business. We carry e-commerce traffic from a variety of shippers to both domestic and international destinations. Seafood, printed matter and machine parts are still an important part of our business and I expect that to continue for years to come.” In terms of present developments, the group says it has been looking at how it can better serve its customers through technology, infrastructure and process enhancements. As part of this it has created a centralised Customer Service team specifically for its customers in the Northeast. “This season we’ve also added new flights from our Philadelphia hub to Budapest and Prague, and now our Zurich flight operates from this hub as well,” explains Dreffein. “Seasonal flights are back to many European cities from both JFK and Philadelphia and we’ve upgraded our daily departures to Amsterdam and Lisbon with widebody aircraft. From Philadelphia, there are some exciting new widebodies to domestic destinations too, including San Juan and Miami.” As announced in February, AA partnered with technology vendor, IBS, to help it implement a next-generation cargo management system. “It is a web-based, fully-integrated technology platform that’ll help us transform the way we do business. It’s our largest investment to date and will position us for future growth,” says Dreffein. “While we don’t have any new routes planned currently, we see opportunities as a result of fleet routing changes. Widebodies from our hubs in the Northeast to domestic cities open new pathways for larger shipments to Latin America through Miami.”
AA flies mail to Havana AMERICAN Airlines has become the first US passenger airline to begin cargo services to Cuba by offering mail services into and out of Havana. Havana is the airline’s principal destination from the US with one daily flight between Charlotte Douglas International Airport and Havana’s Jose Marti International Airport using an Airbus A319, and four flights a day from Miami International Airport using a Boeing 737-800. American Airlines vice president – cargo operations, David Vance says: “As the leading US carrier to Cuba we are excited to launch cargo service to the island. Our teams on the ground in the US and in Cuba have worked hard to make this a reality. This new service will benefit families in both countries.” American Airlines operates nine daily flights to Cuba, with services to Holguin, Santa Clara, Varadero and Camaguey, in addition to Havana.
aircargoweek.com
ACW 11 JUNE 2018
9
ISRAEL
Israeli cargo expands on low-cost growth
I
nternational air travel to and from Israel is expanding, chiefly in the area of low-cost airlines, and this trend is taking cargo with it, writes Stuart Flitton. The biggest development is at Ben Gurion International Airport in Tel Aviv, which is expected to be classed as a large airport next year when is passes the target of 25 million passengers a year. This milestone is remarkable, given that the airport was classed as small as recently as 2013. The growth in passenger numbers, spurred by Israel signing an Open Skies Agreement with the EU in 2013, allows Ben Gurion is to be extended by more than 320 acres at a cost of about $2.53 billion. In December last year the Israel Airports Authority announced that the cargo facilities at
Terminal 1 are to be moved to new buildings on empty land to the north of the complex, with a direct link to a new airport entrance. This new cargo area will also contain extra aircraft maintenance services. Amir Mann of Ami Shinar Architects, in partnership with Moshe Zur Architects has created a masterplan for these changes with designs for a flexible cargo area that could be increased in stages. The extra passenger traffic has also meant a rise in bellyhold cargo with the number of airlines serving Tel Aviv rising to 140, 12 of which began operating to Israel in the past year. There are several all-cargo carriers operating to and from Ben Gurion, including DHL Aviation, El Al Cargo, Ethiopian Airlines Cargo, FedEx Express, Korean Air Cargo, Lufthansa Cargo,
Picture credit, Hilary Faverman Royal Jordanian Airlines, Silk Way Airlines and Turkish Airlines Cargo. They fly to the US, the UK, multiple mainland European cities, as well as Turkey, Greece, Cyprus, Ethiopia, South Korea, Jordan and Azerbaijan. The Israeli airline CAL Cargo flies daily between Ben Gurion and its European base in Liege, Belgium. Last year it increased its fleet to four B747400 open nose and door freighters after buying the last aircraft owned by Jade Cargo International, the former venture between Lufthansa Cargo and Shenzhen Airlines. The bulk of El Al’s cargo is bellyhold to its 35 destinations, including the US, Canada, China, Thailand, India, South Africa and most of the main European capital cities or commercial centres on its fleet of Boeing 747s, 777s, 767s, and 737s. El Al Cargo also has a 747-400F, which can carry payloads of 123 tonnes over distances of more than 13,400 km.
New gateway to the south
A major development expected later this year is the opening of Ramon International Airport north of Eilat, which will replace Eilat City Airport and Ovda Airport and create a new international gateway to southern Israel and the Red Sea. Facilities for cargo operations at Ramon have been designed but not yet built, however, there is the potential for a major impact on freight transport due to the airport’s size and location. It is about 18 km north of Eilat and will dramatically improve cargo access act to southern Jordan, including the resort of Aqaba, and areas of Wadi Rum and Petra, as well as the Taba area of Sinai in Egypt. Amir Mann, the owner of Mann Shinar Architects, was the design manager for the project. “We are at the last stages of construction and are at the point of registering with the ICAO (Inter-
10
ACW 11 JUNE 2018
aircargoweek.com
national Civil Aviation Organization),” Mann says. Test flights have already successfully taken place. The airport’s 3.6 km runway will be able to accommodate the largest aircraft. “The length of the runway will allow for all flights to Europe and also across the Atlantic to the US, including large cargo aircraft,” Mann says. His firm has created schematic designs for a cargo terminal. It will be up to air cargo companies to tender for and build a terminal, warehouses and other facilities. Currently, agricultural products are flown out of the country from Ben Gurion Airport, but the new Ramon airport would allow for swifter and more efficient transport. Outside working areas had been designed with large coverings to shield workers and goods from temperatures that can reach 40C.
Large share of the market
The largest freight forwarding company in Israel is DHL Global Forwarding, with more than 30 per cent of the airfreight market share. The forerunner to (DGF) Israel was established in 1982 and very quickly became the leading forwarder in Israel. By 2008 the company was bought by DGF. DGF IL handles more than 200,000 air freight shipments per year, while providing services to various industries with different needs and requirements. Its 2,500 customers include agriculture and pharmaceuticals companies, high-tech and low-tech industries, medical equipment, automotive and advanced security systems with markets worldwide. “Providing service to our customers, some of which are Israel’s largest companies, requires the utmost dedication to excellence throughout the entire logistics chain,” says DGF IL CEO Rafi Rozalis.
TRADEFINDER Airlines
Online Services
Training
Turkey
GSSAs
Freight Forwarders
United Arab Emirates
USA
Hong Kong
Freight Forwarders India
Industry Event United Arab Emirates
aircargoweek.com 11_11 June 2018.indd 1
ACW 11 june 2018
11 07/06/2018 12:45
HE PRETENDS TO KNOW WHAT HE’S TALKING ABOUT
Fly me to the moon
I
cannot believe that it will soon be fifty years since I sat in wonder on the floor in front of a flickering black and white television to watch Neil Armstrong climb out of the lunar module of Apollo 11 and into the history books. I was almost ten and this was surely the future. At 02:56 UTC July 21, 1969, Neil Armstrong spoke the now-famous words, “That’s one small step for [a] man, one giant leap for mankind.” When my friends talked about space stations or moon colonies, I would say we will have to invent airfreight shipments to the moon. Just 15
years before, Frank Sinatra’s hit ‘Fly Me to the Moon’ had become a favourite tune to millions. The moon is only a quarter of a million miles away and only a matter of time before space colonies were founded. Fifty years on and only twelve men have walked on the moon, a number that could be fitted in two people carriers. Now, 50 years on, I am too old to sit on the floor and watch TV. But I was excited to hear that FedEx is helping to mark the anniversary of Apollo 11 by supporting ‘Destination Moon: The Apollo 11 Mission’, a travelling exhibition that brings the Apollo 11 Command Module Columbia to four US cities – its first national tour since 1970/71. The exhibition also includes one-ofa-kind artefacts from this historic mission, the first to land men on the Moon. FedEx Custom Critical is donating transportation of the Apollo 11 Command Module, along with the other exhibition artefacts, such as astronauts’ star charts, survival kits, Buzz Aldrin’s space helmet. A team of experts prepared and shipped the items, relying on precision tracking, temperature and humidity control. The tour helps to set the stage for the unveiling of a completely reimagined permanent gallery at the National Air and Space Museum in Washington, DC. Destination Moon, scheduled to open in 2020. Fifty years after traveling about half a million miles to the Moon and back, Apollo 11 is now putting in another 5,000+ miles in its anniversary tour. Cousin Airway Billy Bob says he is hoping to catch it in St Louis, lucky man. It is at the Saint Louis Science Center until September, before moving to the Senator John Heinz History Center in Pittsburgh where it stays until February 2019 for moving to The Museum of Flight, Seattle where it will be on the actual anniversary and where it will stay until September 2019.
t e k c i t a t o g t ’ n e v a h We e r o m y n a to ride AS the airfreight industry uhms and ahhs over eAWBs and many lament the lack of digitisation in air cargo, last week saw a significant anniversary in the wider airline industry. On May 31, 2008, the International Air Transport Association (IATA) bid farewell to the paper passenger ticket on the eve of the industry’s conversion to 100 per cent electronic ticketing. “Today we say goodbye to an industry icon,” said Giovanni Bisignani, then-IATA’s director general and CEO. “The paper ticket has served us well, but its time is over. After four years of hard work by airlines around the world, tomorrow marks the beginning of a new, more convenient and more efficient era for air travel.” Paper tickets dated back to the 1920s. Each airline used a different form with varying rules. In 1930, the IATA Traffic Committee developed the first standard hand-written ticket for multiple trips. These same standards served the industry into the early 1970s. Automation came in 1972. That led to the birth of the IATA neutral paper ticket where the IATA logo appeared on the ticket cover. In 1983, the system was further automated with a mag-
netic stripe on the ticket back and it could be used as a boarding pass as well. At its peak, 285 million of IATA neutral paper tickets were printed in 2005. The first e-ticket had been issued in 1994. By 1997 IATA had adopted global standards for e-ticketing. But the evolution was slow and by May 2004, only 19 per cent of global tickets were electronic. That year, IATA deployed a global team of 150 people to work with airlines and system providers around the world to facilitate implementation. “In four years we achieved what many thought was impossible. We made 100 per cent ET a reality everywhere – from our largest hubs to small remote island airports with no electricity. It is an incredible industry achievement,” said Bisignani. A paper ticket cost an average of $10 to process versus $1 for an electronic ticket. With over 400 million tickets issued through IATA’s settlement systems annually, the industry would save over $3 billion each year. “An era has ended. If you have a paper ticket, it’s time to donate it to a museum,” said Bisignani on that fateful day.
Let’s party like it’s 1998 IN just three weeks, ACW is producing a special 20th anniversary supplement to mark our glorious arrival on the air freight media scene.
If you were working in the industry two decades ago and have some tales to share, send them to Airway Bill c/o the editor at james.graham@azurainternational.com.
aircargoweek.com