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WORLD AIRPORTS Sponsored.COM by FREIGHTERS.COM
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The weekly newspaper for air cargo professionals Volume: 19
Issue: 30
1 August 2016
Amazon and UK Government to team up to test drones
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nline retail giant Amazon is teaming up with the UK Government to start testing flying drones to deliver small parcels and help understand how they can be used safely and reliably in the logistics industry. The partnership will explore the steps needed to make the delivery of parcels by small drones a reality, allowing Amazon to trial new methods of testing its delivery systems. Tests will also help identify what operating rules and safety regulations will be needed to help move the drone industry forward. Amazon’s is funding the programme, which will look at the best way to allow drones to fly safely in UK airspace. The online retailer says it could eventually see packages delivered within 30 minutes of ordering them online. Parcels are likely to weigh less than 2.2kg (5lbs) – which is around 80-90 per cent of what Amazon sells. A cross-Government team sup-
ported by the UK Civil Aviation Authority (CAA) has provided Amazon with permission to explore three key innovations. They are using drones beyond line of sight operations in rural and suburban areas, testing sensor performance to make sure drones can identify and avoid obstacles, and flights where one person operates multiple highly-automated drones. Amazon is carrying out trials in the UK, because regulations are more flexible than in other countries and is reportedly aiming for them to be operational by 2020. Amazon’s vice president of
global innovation policy and communications, Paul Misener says: “The UK is a leader in enabling drone innovation – we’ve been investing in Prime Air research and development here for quite some time. This announcement strengthens our partnership with the UK and brings Amazon closer to our goal of using drones to safely deliver parcels in 30 minutes to customers in the UK and elsewhere around the world.” He adds: “Using small drones for the delivery of parcels will improve customer experience, create new jobs in a rapidly growing industry, and pioneer new sus-
tainable delivery methods to meet future demand.” UK Government ministers want to look into the opportunity for businesses to start using drones in future, and say work will help it draw up new rules and regulations for the future so all firms can take advantage of drone technology. The CAA, the UK’s aviation safety regulator, will be involved in work to explore the potential for safe use of drones beyond line of sight and policy director, Tim Johnson says: “We want to enable the innovation that arises from the development of drone technology by safely integrating drones into the overall aviation system.”
US-based Amerijet under new ownership Top A-Z Group job for Kim
Florida-based freighter operator Amerijet has a new owner after being sold by private equity investment firm H.I.G. Capital (H.I.G.) - but no financial details of the deal were revealed. H.I.G. has more than $20 billion of equity capital under management, and has sold Amerijet Holdings, to an affiliate of ZS Fund, a middle market focused private equity firm. Amerijet operates a fleet of 10 aircraft, including Boeing 727-200 and Boeing 767-200/300 aircraft from its primary hub at Miami International Airport - offering scheduled and charter cargo services. The company has over 200 agents across 137 countries and is headquartered in Fort Lauderdale and serves markets in the Americas, Caribbean, Europe, Asia and the Middle East.
A-Z Group Ltd, publishers of Air Cargo Week, has appointed Kim Smith as Operations Manager with effect from 1 August 2016. Employed by the Group for over 15 years, most recently as Marketing Manager, she has an in-depth knowledge and wide-ranging experience of all the areas of A-Z Group’s business. In her new senior management role she will be responsible for all aspects of the company’s operations including publications, websites and industry events. She can be contacted at kim.smith@azurainternational.com.
ethiopian awards gssa contracts
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qatar set to keep on growing
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air cargo set to remain subdued for rest of 2016
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boeing optimistic for the rest of the year
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Turkish Airlines fires 211 staff TURKISH Airlines has fired 211 employees who allegedly have links with the failed coup, which took place on 15 and 16 July across Turkey. Turkish President, Recep Tayyip Erdogan has acted swiftly since the attempted coup and more than 60,000 people mainly public-sector employees have been fired following the failed coup. They have been accused of having links to a religious group led by Islamic preacher, Fethullah Gulen and his movement, FETÖ. In a statement on its website, Turkish Airlines explains: “Active as of 22 July 2016, contracts are cancelled given the nonfulfillment of performance criterion and in line with the necessary actions we are taking against the FETÖ structure, attitudes and behaviour conflicting with the interest of our country and company. “As Turkish Airlines, united with all of the heroic and honourable Turkish people in extraordinary efforts, we have acknowledged our responsibility to terminate the malevolent illegal attempt. “Under any circumstances, we have and will continue to fulfill our responsibility to contribute to democracy.”
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Tonnage surge of 18.1% for Vietnam Airlines
NEWS WEEK
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ietnam Airlines handled 124,800 tonnes of cargo in the first six months of 2016 from January to June – a surge of 18.1 per cent on the first half of 2015. The carrier also explains the Vietnamese aviation market grew by a significant 27.2 per cent compared to the same period last year, with a 37 per cent increase achieved in the domestic market. As for financial results in the first half of 2016, the company’s consolidated revenue is estimated at more than 36 trillion Vietnamese Dong ($1.44 billion) and pre-tax profits are estimated at 1,600 billion Vietnamese Dong, reaching nearly seven per cent of the target set for 2016. The airline’s parent company recorded an estimated revenue of over 29 trillion Vietnamese Dong and nearly 1,140 billion Vietnamese Dong in estimated profits, reaching over seven per cent of the target
set for 2016. Vietnam Airlines says results in the first six months were achieved despite the difficulties and challenges it faced due to economic slowdown, instability and terrorism in Europe and overcrowded infrastructures, especially at Tan Son Nhat International Airport. In responding swiftly to these circumstances, the carrier says it has captured the strong growth of the Vietnamese market, and expanded by adopting effective
ESC chairman to be on TIACA board
measures to improve its operations and make good use of favourable conditions and thanks to these measures, the business has achieved positive results with a high growth rate over the period, exceeding targets. Vietnam Airlines’ was also restructured and acquisition was completed with the signing and receipt of the share transaction payment made by ANA Holdings, which became a strategic shareholder on 1 July.
EUROPEAN Shippers’ Council (ESC) chairman, Denis Choumert has been appointed to The International Air Cargo Association (TIACA) board of directors. Choumert has been chairman of the ESC since 2012, and chairman of the French Shippers’ Association, AUTF since 2005, and is a board director for Ports de Paris and the French Rail Network, Réseau Ferré de France. He says: “Representing the end customers of the airfreight industry, I am committed to working with all partners to make airfreight more attractive to my constituents as well as more efficient, safer, and environmentally friendly.”
US and Mexico ink deal
CARGO services between the US and Mexico are likely to increase following the new Air Transport Agreement coming into force. Benefits include better market access for airlines to fly between any US and Mexican city. It was signed by US Transportation Secretary, Anthony Foxx and Mexico’s Secretary of Transport, Gerardo Ruiz Esparza on 18 December 2015 and it comes into force on 21 August 2016. Foxx says: “Cargo carriers will now have expanded opportunities to provide services that were not available under the more restrictive agreement.”
WorldNews
A NEW air cargo service from Greenville-Spartanburg International Airport (GSP) in the US to Munich Airport is set to start later this year. German car manufacturer BMW is reportedly planning on using the new twice weekly service from the South Carolina gateway, which will be operated from 5 November by freight firm Senator International. BMW’s manufacturing plant is in Spartanburg County, and it is planning to use the service for imports and exports. CARGO handler – Air Cargo Services of Vietnam (ACSV) – based at Hanoi International Airport has gone live with the Hermes cargo management system. Hanoi is fast becoming a world hub for electronics R&D and manufacturing companies and quick, secure air cargo handling plays a key role in the global footprint and product delivery of electronics innovators. Vietnam is one of the globe’s fastest growing markets.
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NEWSWEEK Air imports ban from Bangladesh GERMANY has become the third country after the UK and Australia to stop the air import of goods from Bangladesh, officials have confirmed. The move was confirmed to Air Cargo Week by an official with Germany’s civil aviation authority, Luftfahrt-Bundesamt (LBA). This comes after intelligence and security services suggested packages being moved from Bangladesh in air cargo were deemed a potential security risk. This required shipments from Bangladesh to Germany to be subject to the EU’s high-risk cargo and mail procedures and screened at a third country airport. The LBA refused to drawn on further details and the amount of cargo likely to be impacted. “We can not comment” the LBA said when asked to elaborate, adding: “We have no
statistics on this subject,” when questioned on the likely trade impact. One immediate casualty though has been German carrier Lufthansa Cargo, which stopped services from the Bangladeshi capital, Dhaka. The route was served with a Boeing 777 Freighter aircraft operated by AeroLogic, the carrier tells Air Cargo Week. It had a standard loading capacity for around 103 tonnes and was mainly filled with textiles. Textile production is very important for the Bangladeshi economy. “Security has top priority for Lufthansa Cargo. Thus, we have decided not to offer any cargo capacities from Bangladesh as long as the responsible authorities have concerns on the security situation, causing intensified security requirements,” Lufthansa tells Air Cargo Week.
Improved cargo facilites coming to KL
MALAYSIA Airports has announced details of its plans for improved cargo facilities with the launch of KLIA Aeropolis. Air Cargo & Logistics is one of three clusters to be incentivized at Kuala Lumpur International Airport in order to create what officials are hoping will become an aviation ecosystem. The aim is not only to boost KLIA as the South East Asian hub but to make Malaysia Airports a developer of ‘aviation cities’. To back this up Malaysia Airports has signed four deals, which will put some considerable resources into the facility. KL Airport Services, an aviation ground services provider is to develop approximately 450,000 square feet of additional space for their cargo operations at the Cargo Terminal (former site of the Low-Cost Carrier Terminal or LCCT). Raya Airways - Malaysia’s second designated national cargo carrier and a rising star of the air cargo industry given the growth it has achieved - has signed for the tenancy of 200,000 square feet of space at the Cargo Terminal to conduct their cargo operations.
“Raya Airways will be teaming up international industry player, Dnata and collaborating with long-standing business partner, DHL Express to optimise the project’s viability and potential,” Malaysia Airports adds. Two other companies, AirAsia and Netherlands based logistics automator Vanderlande Industries are both signed up to develop specific facilities there. The low-cost carrier intends to develop its regional distribution centre at the Cargo Terminal for Redbox – their low-cost express courier and parcel delivery services whilst Vanderlande is to set up a regional distribution centre for the management and distribution of spare parts for baggage handling systems in Malaysia. The initiative is hoping to capitalise on the high growth in specific cargo segments KLIA has seen, such as 33 per cent for express cargo volume and 102 per cent for mail cargo volume. The fastest growing air-freight trade lane will be Intra-Asia, and is projected to grow 6.5 per cent annually up to 2033.
Tigers flown to Hanoi by Cargolux
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argolux Airlines International has flown four tigers to Hanoi to support the effort to ensure the survival of the endangered animals in Vietnam. The airline used its CV Alive product to transport the three female and one male Indochinese Tigers from the Czech Republic to Luxembourg and onwards to Hanoi onboard a Boeing 747 Freighter to safety in their new home at Hanoi Zoo. Cargolux says the aircraft offers the ideal conditioned environment for the animals, including ventilation
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and temperature control systems. CV Alive guarantees specialised care by qualified staff and is International Air Transport Association Live Animal Regulations and Convention on International Trade in Endangered Species certified. Indochinese Tigers, known as Hổ Đông Dương in Vietnam, are increasingly endangered, with around 600 left in the wild, with their natural habitat decreasing due to decade-long conflicts, growing urbanisation and expanding agriculture.
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22/07/2016 12:40
NEWSWEEK Leipzig/Halle flies past 500,000t
Leipzig/Halle Airport has passed the half million tonne mark in six months for the first time in its history, having handled 512,613 tonnes between January and June 2016. Volumes at Leipzig/Halle, Germany’s second-largest cargo hub, were up 6.7 per cent during the first six months of 2016, and June saw a year-on-year increase of 8.4 per cent to 89,572 tonnes. Airport operator, Mitteldeutsche Flughafen says freight volumes have grown for the twelfth year in succession with sustained growth from the express division and
charter operations developing in “a positive manner”. Leipzig/Halle, which has two 3,600-metre runways that can be used independently of each other, has served as the European hub for DHL since 2008 and is also the home base for AeroLogic, a joint venture between DHL Express and Lufthansa Cargo. The airport says it offers the benefits of a 24-hour permit for cargo flights and links to the trans-European motorway and rail networks, including links with seaports using trains via its airfreight rail-handling centre.
DHL signs Madagascar mining deal
DHL Global Forwarding has agreed an initial three-year Global Freight Forwarding agreement with Ambatovy in Madagascar. Ambatovy is a joint venture between Sherritt International Corporation, Sumitomo Corporation and Korea Resources Corporation and a large-tonnage, long-life nickel and cobalt mining enterprise. At full capacity it will produce 60,000 tonnes of refined nickel, 5,600 tonnes of refined cobalt and 210,000 tonnes of ammonium sulphate fertilizer annually. The agreement was secured and will be managed by DHL’s Industrial Projects team which handles very large break-bulk and complex project logistics. DHL will provide on-shore and off-shore services. For the on-shore contract, it is responsible for providing import customs clearance for airfreight shipments of mining spare parts into Madagascar, with delivery
to the Ambatovy mine site from Antananarivo to Moramanga and to the plant at Toamasina through daily shuttle services. For off-shore services, DHL will provide international air and ocean freight for importation of mining equipment to support Ambatovy’s nickel, cobalt and ammonium sulphate production, consolidated at key DHL hubs in the US (Houston), Canada (Montreal), Europe (Antwerpen), Africa (Johannesburg) and China (Shanghai). DHL Global Forwarding chief executive officer of industrial projects, Nikola Hagleitner says: “Our partnership will enable Ambatovy to tap into our global expertise in project forwarding, and extensive network spanning over 220 countries and territories – enabling us to operate efficiently even in challenging and remote locations, and more importantly, facilitate global trade flows and the development of infrastructure globally.”
Ethiopian awards GSSA contracts
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thiopian Cargo has awarded contracts to Airconsult and ATC Aviation Services as its new general sales and service agents (GSSA) in Italy and France. Italian-based Airconsult contract will start from 24 June and the ATC one from 16 July. ATC has already been serving Ethiopian as a GSSA in Germany and Austria. Ethiopian Cargo services managing director, Fitsum Abady (pictured) says the appointments
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will “surely improve our accessibility to the market, increase market share and improve customer service delivery in our major cargo hub, Europe”. Ethiopian Cargo has a fleet of two Boeing 757 and six Boeing 777 freighters, and serves 35 freighter destinations.
GCC COUNTRIES
Qatar to keep growing following best year yet
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he Qatar Airways Group has celebrated its best result yet, with profits of 1.6 billion Qatari Rial ($439 million) during the 2016 fiscal year. The 2016 result compares to 373.9 million Rial in 2015, and revenue increased from 33.8 billion in 2015 to 35.1 billion, helped by reducing expenses while its cash and bank balance rose to 12 billion Rial despite significant growth in operations and unfavourable foreign exchange rates. Qatar Airways Group chief executive, His Excellency Akbar Al Baker (pictured) says: “Qatar Airways continues to lead the industry in all aspects of the business, from our strong financial performance to our award-winning on board product.” “Our fiscal 2016 year was the best yet for Qatar Airways Group, and our results reflect the discipline and dedication of the more than 39,369 men and women who proudly represent our airline and its associated brands.”
Qatar Airways Cargo (QR Cargo) continued its expansion and became the third-largest cargo operator in the world as of October 2015. QR Cargo added Dallas, Budapest, Prague, Ho Chi Minh City and New York to its network, bringing the number of freighter destinations to 54. The QR Cargo fleet is expected to grow to 22 aircraft by 2017, while the passenger fleet with bellyhold capacity continues to grow with the introduction of Airbus A350s, and more Boeing 777s and 787s. The bellyhold network expanded in the 2016 fiscal year with flights to Abha, Amsterdam, Birmingham, Boston, Durban, Fais-
alabad, Los Angeles, Multan, Nagpur, Ras Al Khaimah, Sialkot, Sydney and Zanzibar. Qatar Airways will start flying to 17 new destinations in the 2016/17 fiscal year, and has already launched Adelaide, Atlanta, Marrakech and Yerevan flights. It will increase its European network with flights to Helsinki, Finland; Nice, France; Pisa, Italy; Sarajevo, Bosnia and Herzegovina; and Skopje, Macedonia. Qatar will start African services to Douala, Cameroon; Libreville, Gabon; Lusaka, Zambia; Seychelles; and Windhoek, Namibia. There will also be services to Chiang Mai, and Krabi in Thailand, and Auckland, New Zealand.
DXB to remain mainstay of aviation in Dubai
Dubai International Airport (DXB) (pictured) will remain the mainstay of Dubai’s aviation in the coming years, as airport operator, Dubai Airports, continues expanding both DXB and Dubai World Central (DWC). Dubai Airports tells Air Cargo Week that since cargo carriers have moved operations to DWC since May 2014, growth at DXB has been from bellyhold cargo. “In the first five months of 2016, cargo volume at DXB totalled 1,055,850 tonnes, up 3.9 per cent compared to 1,015,482 tonnes handled during the same period last year.” In the long-term, DWC will accommodate for all pure cargo operators and passenger services with bellyhold capacity are gradually moving across. Among others, flydubai will move all operations from DXB to DWC by 2018. Dubai Airports has ambitious plans for DWC over the coming decades, with spill over growth coming from DXB. $32 billion will be spent on eventually expanding DWC into a five runway hub, capable of handling 260 million passengers and 16 million tonnes of cargo per annum. The cargo facility will cover eight square
kilometres at the South of the airport. The operator will also continue to improve DXB, with capacity expanding to 3.1 million tonnes by 2018 under the Strategic Plan 2020, which was launched in 2011. The airport will benefit from 30,000 square metres of additional capacity at the cargo mega terminal, and other expansions will include increasing the number of aircraft stands to 230. It says: “Dubai Airports provides airlines and other players in the logistics and transportation sector state of the art aviation infrastructure, maximum connectivity not only to the 240 destinations we connect across six continents but also by land and through sea ports within Dubai and the UAE, at a competitive price.” Dubai, along with the UAE and the Gulf Cooperation Council as a whole has invested heavily in infrastructure and diversification of its economy, aiming to make it the first choice for business, trade and tourism. Dubai Airports notes: “Ideally located between the emerging economies of the east and the developed markets of the West, Dubai offers businesses great opportunities to grow and prosper.”
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MARKET ANALYSIS
Air cargo set to remain subdued for the rest of 2016
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he air cargo industry looks set to remain subdued for the rest of 2016, a state it has been suspended in for the last few years. Airlines profits are unlikely to improve over the next 12 months, demand will probably not increase and yields are likely to keep struggling as they come under increasing pressure across the globe. Indeed, heads of cargo and chief financial officers who were surveyed in early July in the International Air Transport Association’s (IATA) airline business confidence index July 2016 confirm this. In the index, cargo chiefs predicted that freight demand will remain subdued, with 48.5 per cent predicting no-change over the next 12 months and only 42.4 per cent expecting an
improvement, which IATA says is the lowest since April 2009. Overcapacity remains an issue, with 48.4 per cent predicting no improvement in yields and 41.9 per cent expecting them to go down. Of the respondents, 65.6 per cent told IATA yields have fallen over the past three months, and another 31.3 per cent reported no change. IATA says the results of the July survey show that cargo heads do not expect any respite for yields over the next 12 months, while a combined 90 per cent of respondents expect cargo yields to remain unchanged or fall further in 2016. Despite this, IATA assures that expectations for air cargo growth in the next 12 months “remain positive”, but notes the cargo business is being held back by “structural headwinds”. In IATA’s market analysis for May, the last
month it has analysed, the association says airfreight has continued to “move sideways as hopes for a stronger 2016 fade”. Freight tonne kilometres (FTK) grew by 0.9 per cent in May, with Africa, Europe and the Middle East seeing growth while Asia Pacific, Latin America and North America all fell. Capacity in available FTK continued to grow, up 4.9 per cent, pushing the global load factor down by 1.7 percentage points to 41.9 per cent. IATA director general and chief executive officer, Tony Tyler (pictured) explains: “Global trade has basically moved sideways since the end of 2014 taking air cargo with it. Hopes for a
stronger 2016 are fading as economic and political uncertainty increases. “Air cargo is vital to the global economy. But the business environment is extremely difficult and there are few signs of any immediate relief.” Among the regions seeing growth, IATA says Europe benefitted from strong German exports, Middle Eastern expansion has slowed and Africa only saw a marginal increase. North America has seen its twelve consecutive month of declines, Asia Pacific continues to suffer from weak trading conditions and Latin American economic conditions have worsened, particularly in Brazil.
Weak global trade hitting market
CONTINUED sluggish global trade growth led to air cargo being in a “lackluster state” in May, according to the Airports Council International (ACI). There was a minimal uplift in the month at global hubs, as freight rose year-on-year (YOY) by 0.6 per cent and this looks set to be the pattern for the rest of the year. In the first five months of 2016, ACI says there was a YOY increase of 0.2 per cent and on a 12-month rolling basis volumes were up YOY by 0.7 per cent. The Middle East is the top performing region as usual, but worryingly is slowing down, up YOY by 3.3 per cent in May, up YOY for the first five months by 4.2 per cent and up YOY 6.4 per cent for the last 12 months. Europe has shown good growth up YOY in May by 2.7 per cent, the same amount for January to May, and up YOY by 1.9 per cent over the last 12 months. After growing last year, Africa saw a dip and with freight falling by 5.7 per cent in May, the most of any region, and was down 1.4 per cent for the first five months of 2016, but up 1.8 per cent YOY over the last 12 months.
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Asia Pacific, the globe’s largest air cargo market, had some good news at last, up YOY by 1.4 per cent in May, slightly up YOY by 0.2 per cent for January to May, but flat for the last 12 months. North America continued its poor performance this year and was down YOY by 1.5 per cent in May, and 2.3 per cent for the year so far. In the last 12 months it down YOY by 0.6 per cent. Latin America-Caribbean had a shocking month in May seeing a fall of 3.9 per cent as poor performing economies such as Brazil affecting volumes. The region is down YOY by 0.6 per cent for the first five months of 2016 and down YOY by 0.3 per cent for the last 12 months. International freight continues to struggle, up 0.5 per cent in May, but down YOY by 0.8 per cent so far in 2016 and up YOY by 0.1 per cent for the last 12 months. Domestic freight is performing much stronger as the likes of China grow their local markets and was up 0.9 per cent YOY in May, up YOY by 2.4 per cent for the first five months of 2016 and 2.1 per cent on a 12-month rolling basis.
MARKET ANALYSIS
Boeing optimistic for the rest of the year
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he first half of the year has certainly been a rough ride to date for the air cargo industry, but there is optimism in the air. Boeing’s Tom Crabtree (pictured), who is the US aircraft manufacturer’s air cargo airline market analyst, is sure there are better months on the horizon. He feels the industry is still on track to achieve growth in 2016 compared to 2015, and forecasts a better second half of the year. Crabtree explains: “All is not lost and our estimate is it will close at around two to three per cent growth over 2015. We need to get over the weaker start to this year as quarter one (Q1) was down on last year, but Q1 in 2015 distorts everything – when the US West coast port slowdown boosted business. “It could of course always be better, but the likes of Cargolux Airlines International and AirBridgeCargo Airlines are doing well - largely due to having global coverage.” The International Air Transport Association (IATA) said for the first five months of 2016, global freight tonne kilometres were down 0.5 per cent, but Crabtree notes April and May were positive while the next month June, in which figures are yet to be released is looking much better and showing growth of five per cent. He notes figures from Boeing’s research show quite a few carriers such as Cathay Pacific Airways and Singapore Airlines Cargo are well up in June, by around 3.5 per cent. Crabtree explains: “We have seen anemic growth. It is not just for the air cargo industry as the shipping container industry is going down and seeing anemic growth. “It is the affect of slow industrial production, which drives air cargo. We have been in a stagnant mood ever since.” He says the industry’s growth goes hand-in-hand with strong global industrial performances through manufacturing and other industries, but this is likely to pick up pace for the rest of 2016. Boeing will release its updated 20-year forecast at this year’s The International Air Cargo Association’s Air Cargo Forum in Paris from 26-28 October, giving a picture of where it sees the market in the years ahead. There are still some strong growth areas around the globe for air cargo operators and still many regions of opportunity, as economies expand and middle class populations grow. Crabtree feels the hotspots are already being exploited by the likes of Emirates, Etihad, Qatar Airways, Turkish Cargo and Ethiopian Cargo and it is not a surprise that they are performing so strongly.
Many industry analysts feel freighters are in decline and cargo carried on them will dwindle, as the likes of IAG Cargo and other legacy airlines have ditched them, and due to rising cargo capacity on passenger aircraft, but Crabtree questions this as many industry reports don’t cover every all-cargo carrier. He notes: “Based on our survey that measures air cargo traffic, freighters carry about 56 per cent and bellyhold is 44 per cent. We think it will remain at about that simply because we are talking about two fundamentally different products. “We have airlines like Emirates and IAG that need to have cargo and passengers and cargo complement each other, but freighter cargo traffic also brings belly traffic.” Moving on to some other topics, Crabtree feels any impact of the UK leaving the European Union (Brexit) is still unknown, but it is driving some added uncertainty in the marketplace. As for whether drones have a future in air cargo he is less convinced: “The freight industry is driven through low unit costs. Big aircraft have low unit costs. Drones do not deliver low unit costs. “If a drone can replace the unit cost of a truck/lorry that is a significant benefit to humanity and if it brings convenience to our
shippers and through safe delivery, then that is great.” But Crabtree only sees a bright future for air cargo and feels it will always grow despite it being more expensive than other modes, and contrary to what some might say, many shippers use air cargo as it is the most reliable mode of transport - rather than simply because it is the fastest.
Freighters and bellyhold
He says: “They are all right in the middle of the Eastern Hemisphere within Eurasia and the African continents, where there is 86 per cent of the world’s population and 60 per cent of the economic activity, which will rise to 70 per cent and by 2035 Africa’s population will grow by a further 50 per cent.” And one of the biggest factors fuelling this growth is the rising middle class populations in many countries in the Eurasian and African continents, especially across Africa and Asia. The biggest issue facing air cargo carriers is arguably overcapacity, as more bellyhold capacity floods the air cargo market while volumes have stagnated due to weak global trade. But Crabtree says from Boeing’s market research, which he says covers the length and breadth of the marketplace, especially all-cargo carriers, has found load factors are somewhere between 65-70 per cent for freighters, much higher than the overall 41.9 per cent load factor figure in May, published by IATA.
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CANADIAN AIRPORTS Seafood booming from Halifax
Perishables and agrifood boost EIA
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dmonton International Airport (EIA) is performing above forecasts in 2016, due to a strong first quarter in international cargo charter growth and perishables in June and July. The gateway’s primary market is international and the Trans-Atlantic and Trans-Pacific sectors are above target due to new capacity offerings of AFKLMP Cargo, Icelandair Cargo and Westjet on the Trans-Atlantic lane and Air China Cargo (ACC) on the Trans-Pacific lane. EIA’s director of air service development, Norm Richard says it is on track to achieve a 7th consecutive year of tonnage growth. He says: “Perishables and agrifood sectors are presently the strongest performing, which is non-traditional in Alberta due to the strength of the province’s oil and gas sector. With the temporary decline in oil and gas, added emphasis has been expended into these additional air cargo sectors with continuing success. “As the EIA air cargo community continues to establish itself as an effective international cargo hub for perishables and agrifood, our market position will be strengthened and ready for return of ‘normal state’ in the oil and gas sector. At this point we will be well positioned for continued volume growth and carrier growth.” Richard says the strategy in 2016 is on demand development (cargo and PAX) to ensure existing carriers at EIA remain success-
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ful in a challenging economic period. He says there are challenges in the Canadian market such as trade barriers, in particular restrictions on Canadian chilled beef and pork products to China. Richard says: “ACC (only freighter between mainland China and Canada) along with its interline agreements with Cargojet and Westjet Cargo, provides a premium air cargo supply chain throughout Canada, yet Canadian exporters of chilled beef and pork cannot access the market.” He says the Canadian government is in dialogue with China about the issue. Richard remains “bullish” on air service development growth and infrastructure is key. At EIA’s Cargo Village this month, Aeroterm began work on a 50,000 square foot facility, while Runway Developments will build a 30,000 square foot office/warehouse facility, Ivanhoe Cambridge and Simon Property Group a 500,000 square foot retail facility and Rosenau Transport a 211,000 square foot warehouse and truck hub connecting EIA to the West to Vancouver and East to Winnipeg. Richard adds: “Our strategy is a phased approach, ensuring capacity is slightly ahead of market growth in a fiscally responsible fashion. Our objective remains to have goods flowing through efficiently and safely, with no bottlenecks, in a responsible fashion.”
SEAFOOD exports were up 21 per cent at Halifax Stanfield International Airport in the first half of the year fuelled by an increase in lobsters moved to Asia. However, this was the bright spot as volumes at the Canadian East coast airport to the end of June fell by about three per cent on the same period last year. The airport is facing challenges as says imports are soft due to the low Canadian dollar, but that is in turn a plus for the airport’s exports, which are more competitive for that reason. Around 2/3 of cargo is flown into Halifax via freighters by Cargojet, FedEx, Korean Air and, as of 20 July, Qatar Airways Cargo with the rest on bellyhold, with much of this Nova Scotian seafood. Cargojet runs one flight a week from Halifax to Cologne Bonn, Korean one flight a week to Anchorage and then on to Incheon, and Qatar once a week to Zaragoza and on to Doha. Halifax says all these connections beyond Incheon and Doha to various Asian destinations are key parts of the solution to meeting demand for Nova Scotian seafood exports. Seafood is by far Halifax’s biggest export (representing 33 per cent of all cargo in 2015), while other commodities include
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aircraft parts, surveying, hydrographic, and oceanographic instruments, navigational instruments and appliances. The airport says given its ties to the ocean, much of this information will not be a surprise and the aircraft parts may be and firms include Composites Atlantic supplying both Airbus and Boeing from Lunenburg. Halifax primarily operates cargo services as a benefit to the economy of Nova Scotia and says cargo in the bellies can contribute to the profitability of an air service carrier, but notes it is not the deciding factor. The Nova Scotian gateway is looking to grow cargo and observes lobster exports to Asia, in particular China, have increased by 450 per cent over the past five years. But at this time, as its passenger market is too small for direct passenger service it says freighters are the answer, with carriers like Cargojet, Korean and Qatar responding accordingly, but it is looking to add to its route network. Halifax plans on developing cargo infrastructure so it can expand its cargo business and says success has increased demand for widebody apron space so it is actively working on both short and long term solutions to address that issue.
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ACW 1 AUGUST 2016
11
PHARMA NEWS ROUND-UP UPS enhances capabilities to meet needs of clinical trial market
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PS has expanded its healthcare-specific capabilities across the globe to support the growing number of clinical trials. The integrator says it has made investments in a range of specialised services, which will help pharmaceutical firms and clinical investigators move sensitive materials and specimens, particularly in and out of complex geographical areas. UPS explains it has made advancements that are specifically targeted to meet strict clinical trial logistics requirements. These include healthcare compliant development of an easy-touse shipping system for clinical investigator sites; an expansion of the healthcare control tower network, package intercept and re-icing capabilities; and upgraded operations to move temperature-sensitive biological specimens in and out of more than 60 countries more efficiently. UPS says it is well positioned to serve the expanding market, with capabilities that cover many regions, from Mexico City to Minneapolis, or Bangkok to Berlin. It has more than 50 healthcare dedicated facilities in global markets. UPS senior operations director for clinical trials, Habib N’Konou notes: “As innovation in the bio-pharma industry evolves - and with the emergence of personalised therapies and growing direct-to-pa-
tient trends - research and development activity will only increase around the world. Our cost-effective portfolio streamlines logistics for clinical trials into one global network across sometimes remote, hard-to-reach locations. “With drug research taking years at a cost in the billions, a product loss or damage, including falling out of temperature range, could mean a costly setback. Our recent improvements to our network can help reduce product loss or damage.” UPS says it mitigates risks by employing world-class airfreight and small package services for investigational medicinal products,
specimen kits, ancillary supplies, and medical devices to and from investigator sites, contract research organisations, and diagnostic centres, while its customs brokerage team, helps shippers navigate international regulations and avoid costly delays. UPS vice president of global healthcare strategy, Geoff Light adds: “Optimised logistics is an integral component of medical research and development, and our goal is to help clinical investigators reach any part of the world with maximum efficiency. We will continue to invest in the right global solutions with the aim of becoming the preeminent leader in biological specimen transportation.”
New Asian partners for Pelican
PELICAN BioThermal has expanded its operations in Asia by adding a new network of distribution partners in the region. The company has joined forces with the distributors, Pharmaserv Express of the Philippines and CMC Element of China, to further enhance its operations offering across Asia. Pharmaserv Express works closely with national health services to transport pharmaceutical products throughout the complex geography of the Philippines. CMC Element distributes a variety of health care products, including pharmaceuticals protected in temperature-controlled packaging, across the vast Chinese market using their extensive network. The latest development demonstrates Pelican’s continued growth in Asia and follows the company’s recent launch of its new operational facility in Singapore. Pelican’s senior director of sales for Asia, Benson Teo says: “We are delighted to announce the latest additions to our expanding network of dedicated distributors. We welcome Pharmaserv Express and CMC Element to our Asia operations; these well-established partners will play a pivotal part in our expansion efforts in Asia. “As the global cold chain logistics industry continues to thrive we want to further demonstrate we have the critical capabilities to support the growing Asia pharma marketplace.”
Walki boosts EcoCool
FINNISH company Walki has gone into partnership with German firm EcoCool to help it meet demand for thermal blankets and insulated shipping boxes. Both say the expansion in the home food delivery market and increased regulation in the pharmaceutical industry is driving demand for thermal blankets needed to protect cargo during transportation. EcoCool’s customers include logistics companies who ship pharmaceuticals, online food deliveries and other temperature-sensitive cargo during long flights. Ever-tightening regulation in the pharma industry, EcoCool says has put it under pressure. Walki notes it does continuous R&D efforts to help the firm comply with regulations. EcoCool’s, Florian Siedenburg says: “We are very happy with the partnership with Walki. It plays a vital part in our success, supplying us with a constant stream of sample materials to test.”
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