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The weekly newspaper for air cargo professionals Volume: 18
Issue: 40
12 October 2015
Pacific rim free-trade agreement struck
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he biggest world trade agreement in decades was struck in Atlanta (US) on Monday, 5 October when 12 countries rubber-stamped the Trans-Pacific Partnership (TPP) agreement. Trade ministers from the US, Japan, Mexico, Canada, Australia, New Zealand, Peru, Chile, Singapore, Brunei, Malaysia, and Vietnam, reached a consensus on the regional free-trade agreement. Talks in the US took five days, as each country looked to protect their own interests in different industries, including pharmaceuticals, car
manufacturing, agriculture, domestic dairy and poultry markets. TPP still has to be ratified by each of the 12 member nations’, including the US Senate, but if adopted it will cover approximately 40 per cent of the global marketplace and about 800 million of the world’s population. The TPP agreement has seen five years of negotitations and if implemented would see common standards adopted with lower trade tariffs, modernisation of customs border clearance processes with the aim of ensuring a level-playing field for competition.
In the US, supporters of TPP say it will substantially accelerate the flow of goods through supply chains in a region with the world’s fastest growing economies, but those against it say the TPP will negatively affect jobs and businesses, as it will make foreign goods cheaper. The Airforwarders Association (AfA), Boeing and UPS are among firms who gave their seal of approval to the TPP agreement. AfA board president and chief executive officer (CEO) of Hassett Express, Michelle Halkerston, says: “Lowering tariffs and streamlining customs border clearance opera-
tions are music to our ears as this will spur increased trade both to and from the United States. “As freight forwarders, we recognise that liberalised trade agreements are critical to business both large and small that seek to expand their markets.” Halkerston explains more than one in five US jobs depends on exports and imports, and trade-dependent jobs have more than tripled over the past two decades as a series of bilateral, regional and multilateral trade agreements have been implemented. Boeing president and CEO, Dennis Muilenburg, says free-trade agreements create new opportunities for US companies and their workers. He adds: “It’s critical we provide our manufacturers and exporters with the best tools to compete on a level-playing field in markets worldwide.” UPS hailed the agreement and says the pact is vital to the US economy, supporting global growth and spurring job creation. The integrator says it will encourage good regulatory practices, and promote transparency.
Equity firm completes takeover of WFS Platinum Equity has completed the acquisition of Worldwide Flight Services (WFS) from LBO France. The deal was agreed in April. No financial details of the deal have been disclosed. Platinum Equity head of European investment, Bastian Lueken, says: “We are excited about the prospects for WFS and are working with the management team to execute on the company’s long-term growth strategy.” WFS operates at over 145 major airports in more than 22 countries on five continents and serves 300 airlines globally. It handles about four million tonnes of cargo and 50 million airline passengers per annum. WFS chief executive officer and president, Olivier Bijaoui, says: “This is a proud day for
WFS and the best possible news for our customers and employees all over the world. “It is the start of a new and exciting chapter in our long history and with Platinum Equity’s operational support and financial strength we can now build on the growth we have achieved in recent years. “Our collaboration will enable WFS to provide even more possibilities for our customers and to explore new avenues of growth.” Platinum Equity is a private equity firm investing from a $3.8 billion buyout fund, focused on acquiring businesses, which it says can benefit from the firm’s operational expertise. The company has substantial experience in transportation, logistics and distribution services, including aviation.
The deal continues the trend of cargo handlers changing ownership. Swissport, one of WFS’ main competitors was picked up by Hainan Airlines’ parent company, the HNA Group in a deal worth 2.7 billion Swiss francs ($2.8 billion) last month. The cargo handling firm was purchased by HNA from PAI Partners.
TRADITIONAL PHARMA SHIFTING TO SEA LuxembouG IMPORTANT DESPITE SIZE
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CARGOLUX EXPANDS ITS FLEET
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growth continues at Turkish cargo
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TIACA calls for action on migrants THE International Air Cargo Association (TIACA) has called on world political leaders to work together to find solutions to the ongoing migrant crisis in Europe. TIACA secretary general, Doug Brittin, says: “We must act together now to stop this human tragedy, and TIACA, which has in-depth expertise on global security issues, is prepared to offer its support in any way it can. The tremendous influx of refugees in Europe has a terrible human cost and is also impacting our members and our industry.” TIACA says the crisis has resulted in increased wait times at border crossings at the Channel Tunnel and had a significant financial impact on European air cargo logistics. The Dutch Association for Transport and Logistics claims if controls were established across all Schengen borders, adding a one-hour delay to crossings, the cost for Dutch carriers alone would be 600 million euros a year ($675 million). TIACA says the International Air Transport Association notes 30 per cent of air cargo comes from or goes to Europe, and problems have a direct impact on a major part of global air cargo volumes.
NEWSWEEK
Boeing forecasts volumes growth of 4%
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irfreight volumes are expected to grow by about four per cent in 2015, compared with passenger increases of six per cent, according to the Boeing Commercial Airplanes vice president of marketing, Randy Tinseth. Tinseth delivered the Boeing current market outlook at a press event, which Air Cargo Week attended at Luxembourg Airport on 29 September, where Boeing was delivering Cargolux’s 13th Boeing 747-8 Freighter. He says he expects after the challenges faced, particularly in 2011 and 2012 that cargo growth should catch up with passengers by 2017. Tinseth says: “This year air cargo is expected to grow by three to four per cent. We have seen two years of growth after stagnation in 2011 and 2012.” Boeing says in 2015 up to July Chinese carriers have seen the largest increase vol-
umes, up by 19.5 per cent, followed by the Middle East at 13.9 per cent. Europe has seen a decline of 0.3 per cent while Latin America is down by 7.2 per cent. Between 2015 and 2034 Boeing says Africa is expected to grow annually by 6.9 per cent followed by the Middle East
at 6.3 per cent. Asia Pacific is expected to grow by 5.7 per cent while North America is expected to see the smallest rise, at 2.9 per cent. Tinseth says: “Some regions will grow at faster rates. These regions will become more important for the market.” Boeing predicts that 920 freighters will be delivered up to 2034, with demand being led by large widebody aircraft leading the way at 650 units. The manufacturer predicts there will be 270 medium sized freighters but no new smaller aircraft as they will be passenger to freighter (P2F) conversions. Boeing expects there to be 1,420 conversions up to 2034. Commenting on expected P2F demand, Tinseth explains: “P2F is a very important segment, if you look at the express market segment, you need smaller single aisle flights. Conversions make the most sense.”
Boeing names BCF launch carrier YTO AIRLINES is to be Boeing’s launch customer for the Boeing 737-800 Boeing Converted Freighter (BCF) programme.
The Chinese express carrier, based in Hangzhou (China) operates Boeing 737300 Freighter aircraft on domestic and international routes. Boeing says the 737800 will be the first next generation 737 to be converted. Boeing Commercial Aviation Services vice president of sales, Rick Anderson, says: “We are honoured that YTO Airlines chosen to partner with Boeing as it expands its operations and freighter fleet. “We are confident the 737-800BCF … will provide the airline with a competitive advantage in the marketplace.”
Volatile markets impact TNT THE economic volatility in Brazil, China and Australia affected TNT’s performance in the third quarter of this year. In the Dutch courier firm’s trading update, it also explains the management team are focused on “executing the company’s three to five-year tunraround and transformation strategy Outlook” outlined in February. FedEx has bid $4.8 billion to take over TNT and the European Commission is looking into the deal and set to give recommendations by the end of 2015. TNT says in the update: “During the third quarter, TNT made progress in implementing Outlook and continued to achieve underlying revenue growth. Customer satisfaction increased further, fuelled by service improvements and new services. However, the economic volatility in Brazil, China and Australia weighed on TNT’s performance in
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these parts of the world. “In its Domestics segment, TNT faced competitive pressures in Australia, compounded by the drop in commodity markets, and the ongoing costs of modernising the company’s Australian infrastructure. The Domestics segment’s performance was also affected by substantially lower margins in TNT’s French operations.” TNT notes it is on track to invest about 300 million euros ($337.6 million) in its transport and IT infrastructure in 2015. The main investments will be completed by the end of 2016. TNT anticipates third quarter operating income will be materially lower than the same period last year. It expects to achieve year-on-year improvements from 2016 onwards. TNT will elaborate on its third quarter performance on 26 October 2015.
Shift of some pharma to sea freight
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raditional pharmaceutical air cargo is shifting to sea freight due to the lack of standardisation in handling, according to Swissport executive vice president for global cargo, Nils Pries Knudsen (pictured). He tells Air Cargo Week this shift comes despite the amount of pharma it handles rising over the last two years and pharma being the largest product group to contribute to global air trade growth. “This shift is partially due to a lack of compliance standardisation in the pharma air cargo segment. We are undergoing GDP (good distribution practice) audits at several stations. How important this is can be seen in our Brussels station. The unit has had significantly more pharma cargo since their International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) pharma certification,” Knudsen says.
Swissport’s busiest stations for pharma cargo are in Europe and the US. Knudsen says with 30 stations in Europe and 18 in North America, Swissport is in a strong position in these markets.: “Israel as home to one of the largest generic drug manufacturer, TEVA, is another important pharma market. Then there are the BRIC countries (Brazil, Russia, India and China) which are becoming more relevant to the pharma and consequently the cargo industry.” Knudsen says pharma is vital for carriers,
Joint venture to start in Belgium
as it has had an average growth rate of 11 per cent over the last 14 years. Pharma does present challenges, and the biggest in air cargo is there is no international standard for handling products. “Different carriers use different procedures, which holds a lot of potential for errors due to the many variations of how cargo is handled. Also, shipment data isn’t proactively shared among all involved parties. Again this is detrimental to efficient and effective handling of pharma cargo,” Knudsen explains. Swissport has chiller and freezer facilities at 60 stations. Three stations are GDP compliant with eight about to be certified.
NEWS WEEK WorldNews SWISS INTERNATIONAL AIRLINES’ new Boeing 777-300ER will enter service in the course of the coming 2015/16 winter schedules on the service between Zurich and New York from early 2016. The carrier is also adding frequencies to the Zurich-Sao Paulo and Zurich-Miami routes and expanding its offer from Geneva, with additional seasonal services to Russian and Portuguese destinations. SCHIPHOL GROUP chief commercial officer, Maarten de Groof, will leave his role on 1 April next year. The group, which operates Amsterdam Airport Schiphol, says the move was made after a consultation with the supervisor board. Schiphol Group will start work soon to find a successor to de Groof.
THE Lufthansa Cargo and All Nippon Airways (ANA) Cargo joint venture starts in Belgium on 25 October. Once the winter flight schedule launches, customers in Belgium can send their cargo directly from Brussels to Japan for the first time. As of 25 October, ANA is offering a daily connection between Brussels Airport and Tokyo’s Narita International Airport with a Boeing 787-8 Dreamliner. Customers in Belgium will also benefit from the collaboration between ANA Cargo and Lufthansa Cargo on routes between Europe and Japan in the form of more and faster connections, more capacity, flexibility and time savings. In total, clients in Germany, France, Austria, UK and Belgium have over 90 weekly direct flights between Europe and Japan to choose from, as well as selected feeder and de-feeder flights. The flights connect 11 airports in Frankfurt, Munich, Dusseldorf, London Heathrow, Paris Charles de Gaulle, Vienna and Brussels, as well as Tokyo Narita, Tokyo Haneda, Nagoya and Osaka. At eight stations the partners have co-located their handling or work together with the same ground handler.
Swissport exits Gatwick Airport
SWISSPORT is to withdraw ground handling operations at Gatwick Airport, which have been taken on by Aviator. The two firms have signed an agreement for the transfer of operations and the transaction will become effective on 9 November 2015 and is including ground handling related assets, contracts and staff. Both companies will work closely together to ensure a smooth transition. Swissport says it has successfully restructured its operations at Gatwick after a difficult trading period in summer 2014 with a number of operational issues, and since then continued to meet and exceed its operational delivery targets. The company says: “Nevertheless, following the recent loss of tender with British Airways and the completion of a thorough business review, Swissport has taken the decision to withdraw from providing ground handling services at London Gatwick. “No other locations in the UK are affected. The employees at London Gatwick and the customers of Swissport LGW have been informed.” Swissport Cargo Services, Aspire Lounges, Flightcare Multiservices and Airport Agencies remain unaffected by this decision and will continue to operate at Gatwick.
ACW 12 OCTOBER 2015
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NEWSWEEK CEIV pharma certificate for Cargologic
CARGOLOGIC has gained certification as a Center of Excellence for Independent Validators (CEIV) from the International Air Transport Association (IATA) for the handling of pharmaceutical products at Zurich Airport. The cargo handler explains handling of temperature-controlled pharma products is becoming increasingly challenging owing to global regulatory conditions.
Cargologic says the certificate is confirmation that it is ensuring the quality of all temperature-sensitive airfreight shipments entrusted to it in all stages of handling, storage and transport. Cargologic managing director, Marco Gredig, says the firm has been working hard to ensure product integrity of pharma shipments. “This further enhancement of their quality service offering goes in line with our constant aim to respond to the needs of the industry and provide participants in the air cargo value chain with the tools to ensure that they are operating to the highest standards for the transport of what in many cases are life-saving drugs and medicines,” Gredig explains. Cargologic plans to apply for IATA CEIV certification at Basel and Berne airports.
3PL division booming at Volga-Dnepr VOLGA-DNEPR GROUP says its growing third-party logistics (3PL) division in Russia and the Commonwealth of Independent States (CIS) has organised the delivery of over 190 tonnes of shipments for the project engineering company, Telekom-Zapad. The cooperation started with Volga-Dnepr delivering a 3PL shipment of cable samples to Yakutsk in the Russian Far East, located 450 kilometres south of the Arctic Circle, using bellyhold cargo capacity of a passenger aircraft. Transportation of further shipments was completed by road and rail and Volga-Dnepr says it has also provided cargo warehousing, packing and insurance services.
In support of this customer, Volga-Dnepr explains that its logistics team has so far arranged deliveries over a total combined distance of 71,000 kilometres. Volga-Dnepr Airlines head of logistics, Georgiy Shklyanik, says: “The customer was satisfied with our service performance for the first shipment and returned to us with a requirement for a series of cable shipments for the Yakutsk Fuel and Energy Company. “Some 190 tonnes of cable were carried by road and rail from Moscow to Kysyl-Syr and Bolshaya Markha in the Yakutsk region. “Most recently we have arranged the trucking of a five tonne outsize low-voltage switchboard from Minsk, Belarus, to Yakutsk. We are now seeing a growing level of enquiries for our logistics services.” Volga-Dnepr’s logistics division provides in-house ground logistics support for Volga-Dnepr Airlines and AirBridgeCargo Airlines. The division puts on direct 3PL services to outside organisations using all modes of ground transport and services contracted from other airlines. Volga-Dnepr explains that it now works with more than 120 sub-contractors based across Russia and in the CIS region and also now serves more than 100 customers in the area.
1st Boeing 787-9 delivered to IAG Cargo
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AG Cargo has taken delivery of its first Boeing 787-9, which will be operated by British Airways and will fly on its Heathrow Airport to Delhi service from 25 October. The airline will be taking delivery of five 7879s this year and has 22 on order. IAG Cargo will take delivery of 11 in 2016, one in 2017 and the final five in 2018. The aircraft will have a capacity of 22 tonnes and positions for seven pallets, which it says will give it one more position than either the Boeing 747-400 or the Boeing 777-200. The 787-9 has three cargo holds, the front one will be temperature sensitive, able to cool cargo down to one degree centigrade. The middle one will be warmer and more suitable for live animals and the back hold will be for last minute shipments and e-commerce. IAG Cargo UK & Ireland commercial manager, Andy Jaye, says: “This aircraft is a step up [for
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temperature control]. On older aircraft it still can be managed but this [787-9] is a step up.” The 787-9 will be operated on what IAG Cargo describes as its most profitable cargo routes, including India, where it expects pharmaceuticals to transit in London on the way to North America. The aircraft will be used on its services to Abu Dhabi and Muscat from November 2015, Kuala Lumpur from December 2015, and US flights to Austin in February 2016 and San Jose in May 2016. When the 787-9 is used on the twice-daily service from London to Delhi, it will replace one of the 777-200s operating the route. As part of its fleet upgrade, IAG Cargo has 12 Boeing 787-10s on order, which it is expecting to receive in either 2018 or 2019. British Airways has 18 Airbus A350-1000s on order and Iberia is due to receive A350-900s. Jaye says: “We will have an entirely next generation fleet by 2018.”
LUXEMBOURG
Luxair Cargo finalises expansion projects
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uxair Cargo at Luxembourg Airport (pictured) has finalised plans for dangerous goods and live animal infrastructure and is working on how to improve facilities for outsized cargo without disrupting existing operations. The dangerous goods facility will have a capacity of 75,000 tonnes a year as well as a 1,000 square metre area with dedicated sprinkled storage area and shelters. Luxair Cargo says it will have fully licensed staff available to handle all classes of dangerous goods including radioactive. The live animal facility complies with all European Union regulations and has space
for up 50 horses. Luxair Cargo says it handled 1,950 horses in 2014 and is expecting a 15 per cent increase in 2015. It will have a dedicated centre for live birds. Luxair Cargo manager of business development and contracts, Antoine Decker (pictured) says: “Having finalised these projects, we are already working to implement our next big challenge. Increase the outsized handling area
without compromising the ongoing operation. Our knowhow in handling outsized and heavy shipments made it necessary to increase the dedicated area by about 6,000 square metres.” The outsized cargo area covers 7,500 square metres of space but expansion permitting, this will go up to 13,500 square metres. The area handles goods including aircraft engines, oil and gas equipment, vehicles, helicopters and heavy industry equipment. The outsized area has a capacity of 100,000 tonnes a year.
Cargocenter management
At the Cargocenter, Luxair Cargo has been using truck parking management software to improve acceptance and delivery processing time. Decker says Luxair Cargo uses live data on tablet computers to identify bottlenecks so it can plan accordingly and keep operations running smoothly. Decker says: “The requirements
of the customers are getting more and more precise and thus we have to adapt by being more being more sophisticated in our processes.” He continues: “Our aim here in Luxembourg is to have our Cargocenter designed for a high volume full freighter hub operation and not to only build warehouse facilities to supply handling services for changing rotating customers carriers.” Lux-Airport, Luxembourg Airport’s operator says it has room to expand and it has increased the number of cargo aircraft parking stands. Lux-Airport commercial director, Jerome Le Bris says Luxembourg’s location in Europe is something airlines can take advantage of. He says: “We are particularly keen to develop our portfolio of regular airlines, who can take advantage of our excellent geographical location, our efficiency, and a strong political support towards logistics in general.” The airport will be expanding the cargo apron so it can increase the number of aircraft handling positions from eight to twelve. In May, Lux-Airport signed a memorandum of understanding with Hong Kong Air Cargo Terminals to promote transporting pharmaceuticals in accordance with Good Distribution Practices. At the time, Lux-Airport chief executive officer, Johan Vanneste said: “I am convinced this is a very interesting and unique development for shippers of valuable pharma shipments.”
Luxembourg important despite size Luxembourg’s size can make airfreight a challenge so it has to use its location in Europe to its advantage. Panalpina tells Air Cargo Week (ACW) that industrial activity accounts for three per cent of Luxembourg’s gross domestic product (GDP) while construction makes up 10 per cent of GDP with the rest being made up for in the service industry. Panalpina’s country manager for Luxembourg, Helmuth Scholz (pictured) tells ACW: “The local market is obviously very small with just a handful of companies that import and export goods.” Despite this, the freight forwarder says Luxembourg can prove to be a very lucrative market. Scholz continues: “Thanks to our expertise and service offering here in Luxembourg, the country’s advantageous geographical location, the established infrastructure and a highly qualified workforce with an international mindset, we can attract airfreight from international customers.” One area Panalpina is seeing noticeable increases in are pharmaceuticals. Scholz tells ACW: “We have further increased our healthcare business with temperature controlled shipments.”
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Scholz continues: “Healthcare products are clearly the most important goods we handle at our airfreight gateway in Luxembourg. This business has grown in the past few years. We also handle significant volumes of high tech goods, telecommunications equipment, machinery and automotive parts.” Panalpina employs 150 members of staff at Luxembourg Airport’s Cargo Center. Scholz says: “Panalpina’s processes are tried and tested and the company’s operations at the Cargo Center are not only GDP [Good Distribution Practice] compliant but also officially certified to this standard.” Panalpina has 20,000 square metres of warehouse space at Luxembourg Airport. Panalpina says: “Being officially GDP and TAPA-A [Transported Asset Protection Association] certified, ensures that pharmaceuticals and high value cargo are handled in the safest possible way.”
LUXEMBOURG
2015 growing strongly but next year could be slower
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argolux Airlines International says 2015 started very well, helped by the US West coast seaport strike, which gave the carrier a boost on Trans-Pacific charter flights. Cargolux executive vice president of sales and marketing, Niek van der Weide tells Air Cargo Week (ACW) the carrier has seen tonnage grow by 4.9 per cent. He says: “The harbour strike in the US West coast generated strong demand to the USA from all areas by air, resulting in very full flights to the USA, such as extra charters especially Trans-Pacific – USA.” Van der Weide continues: “For the rest, we see moderate growth overall. We have seen good increases to the USA and Middle East compared to 2014, which is also due to increased frequencies, especially to the Middle East [for perishables and consumer goods].” He tells ACW: “The charter business has been
very good for us with healthy growth in 2015. We have seen a good increase in flights in addition to the period of the harbour strike.” The one area to see a decline is the oil and gas industry. Van der Weide tells ACW: “Oil and gas cargo has decreased, especially large pieces, as many projects have been deferred by the large oil and gas companies.” As for the rest of the year, van der Weide says he expects growth to continue though for 2016, capacity will probably increase faster than tonnage. He tells ACW: “The expectations for the last quarter of 2015 are reasonable. We expect to see an increase compared to the last few months but we do not expect a huge peak.” As for 2016, van der Weide says: “2016 is very hard to predict. We do not expect large growth. The capacity will grow by more than demand.” In May this year, Cargolux officially launched its eight core products, which van der Weide
Cargolux expands its fleet
says are based around “competences as an allcargo carrier”. The eight products are CV classic, for general cargo, CV jumbo, for outsize and heavy products, CV power, for cars, aircraft engines and helicopters, CV hazmat, for dangerous goods, CV pharma, for pharmaceuticals, CV fresh, for per-
ishables such as flowers, CV alive, for animals, and CV precious, for items such as artwork and semi-conductors. Van der Weide tells ACW: “Our current Cargolux product portfolio … allows our customers to easily identify themselves with our products and expertise.”
Cargolux Airlines International took delivery of its 13th Boeing 747-8 Freighter, out of an order of 14 on 29 September. The 13th 747-8F, named ‘City of Redange-sur-Attert’ has a paint scheme designed by Belgian artist, Philippe Cruyt. Cargolux took delivery of its first 747-8F in September 2011 and is expecting to receive the final aircraft in 2017. Cargolux president and chief executive officer, Dirk Reich (pictured) said at the time: “The 747-8 Freighter perfectly suits our worldwide network and its nose loading and cargo carrying abilities help us maintain our leading position in the airfreight industry.” When taking delivery of the 13th 747-8F, Reich told journalists Cargolux was looking at buying up to an additional five 747Fs for a Chinese airline based in Zhengzhou, under the project name Cargolux China. At the time he said Cargolux had had constructive meetings with Chinese shareholders and a decision should be made by the end of the year. He told journalists: “We will start with three 747s then expand to five aircraft. It has to be decided whether it will be a -400 or an -8.”
Partnerships to drive growth So far in 2015, Cargolux Airlines International has signed a joint venture with Oman Air and celebrated its first anniversary of partnering Henan Civil Aviation and Investment (HNCA). The first Oman Air – Cargolux flight arrived at Muscat International Airport on 16 April where management signed the joint venture onboard a Cargolux Boeing 747 Freighter. The partnership was expanded with a second flight to Chennai (India) on 11 August. At the time, Cargolux executive vice president of sales and marketing, Nick van der Weide said: “India will be a very important market for Cargolux in the future and we will look at further expansion soon with planned addition of Bombay as a second destination.” When celebrating the first anniversary of the HNCA partnership in June, Cargolux signed two memoranda of understanding with HNCA to establish a Chinese joint venture cargo airline and potentially set up maintenance and engineering activities in Zhengzhou. Cargolux operates seven weekly flights between Zhengzhou and Luxembourg. It is anticipating it will transport 200,000 tonnages of cargo annually between Luxembourg and Zhengzhou by 2017. In April, Cargolux started twice-weekly Trans-Pacific flights between Zhengzhou and Chicago (US) on Tuesdays and Fridays. At the time, Cargolux president, Dirk Reich said the flights were an important milestone in the partnership with HNCA.
ACW 12 OCTObeR 2015
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TURKEY
Cargo hub of the future drives Celebi’s ambitions
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he Celebi Group continues to grow its customer base through high quality cargo handling and warehouse services, the firm’s chief executive officer, Onno Boots, tells Air Cargo Week. He explains that the Asia-Turkey market is one of the largest trade lanes for Turkey’s high- tech, automotive and industrial sectors, and that Celebi is proud to welcome Korean Air (pictured) as a customer, thanks to strong connectivity and a ground capacity of 12,000 square metres. “The pharmaceutical freight market is another critical and high growth segment where Celebi has expanded its cold chain capabilities for increased capacity at the highest service standards,” Boots explains. “With the addition of new cold rooms and specialised customer service teams, we are developing enhanced cargo services in line with
the highest standards for a wide range of temperature controlled products.” Celebi is developing a strategic investment and growth plan for the next five years. In cargo terms, the company will invest in advanced technologies, network capabilities and infrastructure that will allow customers to become more efficient and reliable across their total supply chain. “In today’s aviation industry with fluctuating demands, increased competition and changing supply chains we aim to create even more value for our customers and business partners. We are looking forward to the opening of the new airport and are already fully engaged to make this a great and innovative success for Turkey and Celebi,” Boots explains. The global cargo industry is currently slowing down and changing, he explains, saying that this creates both opportunities and challenges for
stakeholders in Turkey. Boots stresses that cargo has in the past been defined based on the physical shipment and the organisation around it from A to B, but this he says is changing.
Opportunities and challenges
“In today’s world, supply chains are increasingly defined based on the end-user requirements. E-commerce for example has penetrated almost all industries, affecting their supply chain designs and logistics approach. With the ‘internet of things’ and ‘3D printing’ this trend will accelerate to an even bigger supply chain transformation in the near future,” he explains.
“The Turkish air cargo industry can make a quantum leap when regulators, investors, operators, carriers, agents and ground handlers are joining forces together. Turkey has a huge potential as a fast developing economy with a big domestic market and international growth,” he adds. Boots is clear where the industry needs to go to develop and grow in the future. “To make air cargo highly process-driven we need to build efficient and sustainable infrastructures like the new airport, implement simple and smart technologies like e-freight and support industry growth through seamless international and domestic connectivity,” Boots says. And Celebi he says, has big ambitions and is aiming to reap the rewards that Turkey’s cargo market will bring: “Istanbul and Turkey have been a social, cultural and economic transit point for centuries. Celebi wants to make it the cargo hub of the future, together with our industry partners.”
Building synergy the plan at MNG MNG AIRLINES ground operations director Serkan Eren, tells Air Cargo Week its strategy is to focus on building on the “synergy between its airside/landside interfacing fully-certified cargo warehouse and other added value services for its air cargo operations”. He adds: “There are also plans to increase scheduled and transit air cargo services and create network establishments, especially for insufficiently served markets.” The airline plans to expand its existing product range, Eren continues. This means developing from its current role as a longterm ACMI [aircraft, crew, maintenance and insurance] transport provider into a business with full responsibility for transport contract management. This will allow for greater flexibility, MNG hopes. The carrier is also looking at combined intermodal transportation, to reduce transit times and line haul costs for transferring cargo units from one mode to another. MNG has implemented this in a number of markets, especially within the Far East, Africa, the European Union, and the Middle East. The air cargo sector in Turkey benefits from the country’s geographic location,
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Eren believes. This, he says, “ensures a prominent role within the future transit networks of air cargo, especially reducing the transit time within African and Far East destinations”. “The biggest challenge is to establish Turkey, particularly Istanbul, as a transit cargo centre for intermodal shipping methods and logistics. Fierce competition exists – and is on the rise in the Turkish air cargo market and this competition is pushing all the companies in this market to increase efficiency, and to struggle to be cost-effective.” Eren predicts the Turkish airfreight market will continue to grow in 2015 in parallel with the country’s economy, which is growing at between three to four per cent.
TURKEY
Growth continues at Turkish Cargo but challenges ahead
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urkish Airlines continues to grow its cargo offering, adding new routes and developing its infrastructure and tapping into the opportunities its prime location present. It has been a big year for the carrier’s freight arm, Turkish Cargo, and the company has just launched a new IT system to back up its expansions and route extensions. The tailor-made system, known as COMIS (Cargo Operation Management Information System) went live worldwide on 1 October, Turkish Cargo vice president of sales and marketing, Halit Anlatan, tells Air Cargo Week. At the start of 2015 the company opened a new cargo facility with a total area of 75,000 square metres, 45,000
square metres of which is covered. Anlatan says that the new operational centre allows the airline “to move more flexibly, to provide better service”. It has also significantly increased the actual storage capacity, allowing the airline to handle 1.2 million tonnes per year. The facility’s 41 special cargo rooms have a total area of 3,700 square metres, consisting of temperature controlled areas, live animal rooms, and has sections for dangerous, vulnerable, valuable, and radioactive cargo. Turkish Cargo is also constantly expanding its network of routes, Anlatan says: “In terms of new freighter routes, we added Doha, Bahrain, Hanoi, Chicago, Dakar in 2015, and we currently fly to 52 freighter destinations. In total, we carry cargo to more than 277 destinations with 298 aircraft, 10 of which are freighters.” Like many other stakeholders, Turkish Airlines is looking forward to the opening of the third airport in Istanbul, which Anlatan sees as a big opportunity for Turkish Airlines and for
Solmaz looking to grow
Turkish Cargo in terms of slot capacity, new facilities, and integrated, easy operations. But there are challenges for the airline, he explains and these, include “the current political and economic situations in neighbouring countries,
economic fluctuations and uncertainty in the world”. “We will endeavour to open new cargo and passenger destinations in potential niche markets to avoid this uncertainty”, Anlatan concludes.
SOLMAZ GROUP has new clients from the defence industry, Yalcin Dorman, general manager of transportation, says and aims to extend its client portfolio within the sector. The group has focused on the Middle East, Commonwealth of Independent States and African markets, serving the textile and automotive industries, Dorman says. Solmaz also works with the pharmaceutical sector, dealing with materials used in clinical trials. Solmaz has been operating customs bonded warehouses at Istanbul’s Sabiha Gökçen International Airport (SAW) for more than two years, explains Dorman, and has temporary warehouses at SAW, Istanbul, Ankara, Antalya and Izmir airports. Dorman explains multinational companies control the air cargo business in Turkey, and profit margins are decreasing but this is changing, as Turkish Airlines, Pegasus Airlines, and Atlas Global are growing and investing in cargo aircraft. Istanbul’s third airport, to be operational in 2017, will have a positive impact, making Turkey, he believes, the world’s largest transit cargo hub. Solmaz, he confirms, would like to open a warehouse at the new airport.
New services boost Sabay BUSINESS grew by 45 per cent in the first half of 2015 at Sabay Logistics and its chairman and chief executive officer, Bulent Ayman, explains to Air Cargo Week, this is in part due to the introduction of new destinations to its air and ocean consolidation services this year. Ayman also explains in 2015 the firm launched new air consul services on its Guangzhou and Qingdao (both in China) to Istanbul routes, a service it already provides on flights from Shanghai (China), Seoul, Hong Kong, and Taipei to Istanbul. Sabay is working to promote routes in Turkmenistan, Azerbaijan and Iraq, he confirms. Ayman sees the world economy as a challenge, but is confident of Turkey’s prospects. He explains: “In 2015, worldwide trading is dropping down. China especially is not growing well. On the other hand, the Chinese Government has devalued the local currency three times. Those common economic problems are also affecting the Turkish economy. “A parliamentary election will be held in November 2015, and we have Kurdish terrorist problems in the eastern part of Turkey. Those internal problems are having a negative effect on investments in Turkey. But, we believe that Turkey will not stop growing. Turkey has a stable, still-growing economy, and is a trusted country for foreign investments.”
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FREIGHTERS
High demand for freighters in specialist cargo
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ntegrators would like to link freighter operations in the Middle East with Southern Africa, according to HAE Group director, Neville Karai. Karai tells Air Cargo Week: “I believe that linking the Middle East with Southern Africa is something many of the integrators would like to do with frequency themselves other than using com-
mercial air or network connectivity via Europe.” Freighters will always be in demand for integrators like FedEx and DHL, Karai also feels, as they want to operate them for hub, schedule and service delivery requirements. He explains that specialist cargo aircraft have a key role in augmenting seasonal capacity and feed or de-feed from combo-carriers to and from their hubs.
Karai says due to the unstable environments continuing around the Middle East there will be high demand for civilian contractors to use freighters across the region and on the African continent. “This continues in Afghanistan and Iraq. The horn of Africa and other emerging markets will need freighters,” he adds. “Finally there are two trade lanes of Asia – Africa and Asia – South America where demand still needs to be satisfied.” As the reliance and the use of freighters wanes, Karai says much of the use of the aircraft now is for specialist cargo and in emergency situations. “Increasingly with the amount of widebody capacity around the world on a scheduled basis, freighters appear to be of reducing significance to the general cargo market, outside of their specialist capabilities in terms of oversize, main deck height and operational capability in terms of commodities,” Karai explains.
Karai says one area there always be a need for freighters is in areas of conflict, development or in disaster-struck zones such as responding to the earthquake in Nepal on 25 April this year. HAE is seeing demand in specialist areas and regions, Karai says: “For us its tactical lift for projects, key areas of conflict and developing markets. From a customer standpoint this is large contracting organisations, non-governmental organisations and consumer goods such as electronic items into the developing world. “The Middle East still has demand, to and from East and West Africa, trans Atlantic West bound and from North America into South America.” Karia says that HAE finds many variables affect the use and cost of freighters, such as the origin, destination, size and commodity dependency: “For us and our projects there is (an affect) for general cargo less so unless it is somewhere capacity doesn’t exist. Freighters can help here,”
Worldwide fleet to double over next 20 years BOEING predicts in its World Air Cargo Forecast the world’s freighter fleet will rise more than half during the next 20 years, as demand for air cargo services more than doubles. Some say this as an optimistic outlook, as the market is slow, yields are falling, and carriers are suffering overcapacity issues. Many airlines are also moving cargo on widebody aircraft on Boeing 777 or 787s with bigger bellyhold capacity. Boeing is sure freighter use will continue as they offer “significant advantages”, including more predictable and reliable volumes and schedules, greater control over timing and routing, and a variety of services for outsize cargo that cannot be accommo-
dated in passenger aircraft. Boeing says freighters carry about 72 per cent of all air cargo carried between Europe and Asia, as well as 43 per cent of cargo between Europe and North America. Boeing notes: “Freighters will carry more than half of the world’s air cargo for the next 20 years, even as lower-hold cargo capacity expands faster than freighter capacity. With air cargo traffic more than doubling by 2033, the world freighter fleet will grow by more than half, from the current 1,690 aircraft to 2,730 aircraft by the end of the forecast period.” Boeing projects 840 new production freighters will be delivered over the next 20 years, with more 70 per cent large freighters.
Boeing gains orders but none for Airbus FREIGHTER orders are still slow but Boeing did pull of some deals at this year’s Paris Air Show on 15 June, but rival Airbus has been lagging behind. In Paris, Taiwanese carrier EVA Airways (pictured) signed for five Boeing 777 Freighters worth a total of $1.5 billion, the first 777Fs to join its fleet. Qatar Airways ordered four Boeing 777F in Paris to add the four it confirmed and four options announced in January 2015. In Europe, Cargolux Airlines International revealed on 29 September it is looking at buying up to five more Boeing 747 Freighters as it considers whether to launch a Chinese airline, under the project name
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Cargolux China. In July, FedEx signed a deal to buy 50 Boeing 767-300 Freighters as part of its fleet modernisation programme. In bad news last month for Boeing, Nippon Cargo Airlines scrapped orders for four Boeing 747F valued at $1.5 billion. Boeing says it has 143 unfilled orders for various freighter models.
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NEWSWEEK Upgrade planned by American AMERICAN AIRLINES (AA) Cargo is planning to upgrade its Dallas-Fort Worth International Airport (pictured) to Frankfurt Airport from a Boeing 767-300 to a Boeing 777 from 5 November as part of its expansion in Germany. AA Cargo regional manager for Germany and Switzerland, Gisela Schork, tells Air Cargo Week the German market is performing above expectations and is expected to continue to do so into 2016. Schork says AA Cargo has been using Airbus A330-200s
for German services from Philadelphia and Charlotte and flights to Germany have been daily to meet demand. Schork says: “The addition of new routes, such as Frankfurt – Miami, the introduction of Munich as a destination and the use of larger, more fuel efficient aircraft are all proof of the importance the German market bring to the airline, especially Cargo.” She explains despite the strong demand, AA Cargo has closed its seasonal route from Frankfurt to Miami on 30 September and Dusseldorf to Chicago will be closing on 24 October. AA Cargo is investing in pharmaceuticals, and Schork says the opening of its dedicated pharmaceutical facility at Philadelphia has been well received. The airline has increased its sales team to help focus on pharma and high value products.
Atlanta flying high for CAL Cargo
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AL Cargo Airlines tells Air Cargo Week (ACW) it has had a good start to 2015 as it starts twice-weekly flights to Atlanta but has shelved plans for services to China. The airline launched flights to the US city on 25 September from Liege Airport in Belgium. In May this year, CAL chief executive officer, Eyal Zagagi, told ACW the airline was considering flights to a Chinese city such as Shanghai, but economic problems in China meant CAL decided it was not viable. Zagagi tells ACW: “We saw what was happening in the market [in China], we had to conclude this was not the right thing to do. We started to look in a different direction. Atlanta is very strong, stable, with a significant need for something like CAL … Atlanta flights are full, it looks like a very positive start.” He notes CAL had been looking at other US cities such as Chicago but did not feel it was viable. “Asian carriers are flying around the
globe from Asia to the US via Europe with very low rates.” Zagagi says Atlanta is well positioned on the East coast of the US for cargo from states such as Pennsylvania, Virginia, North and South Carolina, Florida and Texas. CAL is expecting to move automotive parts. The airline is working on a product call CAL AUTO for automotive parts, which Zagagi says is very important for Atlanta. Zagagi explains: “[Atlanta] has very good access for trucking, it is very convenient. It seems to be a good area to push our products such as pharma and automotive.” He adds CAL is considering other locations. “We are also looking at Halifax [Canada] as a potential step.”
Africa aided by Air Partner
AIR PARTNER has transported 90 tonnes of aid from Belgium to the Central African Republic to support the United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA). Air Partner chartered a Boeing 747 Freighter from Liege Airport to fly the supplies to M’Poko International Airport in Bangui, the capital of the Central African Republic. The aid was flown on behalf of Ecolog International to support the MINUSCA project, which is concerned with security, humanitarian, human rights and political crisis in the region. Air Partner director of freight, Richard Smith, says: “We are delighted that we were able to leverage our extensive experience of arranging time-critical operations to logistically challenging destinations in support of the MINUSCA project.” The charter company says Bangui is a very challenging airport because of limited scheduled services and a lack of fuel supplies. Air Partner says despite this, the operation ran to time and plan. The shipment included 50 tonnes of frozen food requiring temperature sensitive storage. Smith continues: “In circumstances such as these, time is of the essence and ensuring food supplies reach those in need as quickly as possible is our top priority.”
Transaero’s future up in the air
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eroflot has pulled the plug on its acquisition of struggling fellow Russian airline Transaero after the carrier failed to come up with an offer for the state airline’s proposed purchase of a 75 per cent stake before the tender deadline. Last month, Aeroflot said it would buy a 75 per cent stake in debt-laden Transaero, the second biggest carrier in Russia, whose net debt reportedly stood at 106 billion roubles ($1.6 billion) at the end of last year. Aeroflot chief executive officer, Vitaly Saveliev, adds in a statement: “Aeroflot undertakes that all obligations to Transaero’s passengers will be fulfilled. Passengers will be guaranteed transportation or a refund in the event that a flight is cancelled.” Russian authorities have not ruled out that Transaero may go bankrupt and the government has ordered a halt in sales of tickets for Transaero flights.