GLOBAL A
I
R
C
A
R
G
O
W
E
E
K
MANAGEMENT
A
I
R
C
A
R
G
O
W
E
E
K
WORLD AIRPORTS Sponsored.COM by FREIGHTERS.COM
FREIGH
FR
Shrivelled?
Never with us. If you’re worried about your perishable cargo’s freshness being compromised, don’t be. We’ve got it covered. Shipment integrity is top-of-mind with our range of innovative Emirates SkyFresh solutions for temperaturesensitive cargo. Coupled with state-of-the-art transit and cool-chain facilities in Dubai, super quick transfers and our network of over 150 destinations across 6 continents, all professionally powered by our dedicated team of experts - would you want it any other way?
skycargo.com/skyfresh
The weekly newspaper for air cargo professionals Volume: 20
Issue: 29
24 July 2017
K+N perishable network grows with two acquisitions
K
uehne + Nagel has expanded its global perishables network with the acquisition of Commodity Forwarders Inc (CFI) an airfreight forwarder of perishables products in the US, and Trillvane Ltd, one of the largest perishables specialists in Kenya. These it says will add more than 150,000 tonnes of perishables to the forwarder’s perishables network and further “strengthens its position in providing end-to-end international and domestic fresh chain solutions”. CFI was established in 1974 by Alfred Kuehlewind as one-man office in Los Angeles shipping strawberries to Europe, and now operates 14 locations throughout the US including Alaska and Hawaii with more than 700 employ-
ees, specialising in airfreight export and import as well as distribution of seafood, all kinds of agricultural products, flowers and greens. The acquisition of Trillvane Ltd will enable Kuehne + Nagel to strengthen its position in perishables operations between Kenya and Europe, in particular to the UK. The company has 130 employees and is specialised in the export of flowers and vegetables and is located at Jomo Kenyatta International Airport in Nairobi. Kuehne + Nagel member of the management board responsible for airfreight logistics, Yngve Ruud says business potential in the “steadily growing global perishable sector is huge”. The forwarder says that all parties in the deals agreed not to disclose the purchase price
Heathrow third runway decision delayed again
A vote by Members of Parliament (MP) in the House of Commons on whether a third runway will be built at Heathrow Airport has been postponed again – to the first half of 2018. In October last year the government formally gave its approval to building a new runway but announced it was delaying the vote for about a year until winter 2017/18 after speculation Prime Minister Theresa May was worried about Conservative MPs refusing to back it. The general election being held in June and Brexit negotiations are thought to have put back the voting timetable.
Chris Grayling, the transport secretary says the government is fully committed to realising the benefits that a new northwest runway (artist impression pictured left) at Heathrow would bring. He says the expansion will bring economic growth, boost jobs and skills, strengthen domestic links and increase and develop international connectivity as the UK prepares to leave the European Union. Grayling adds in a written ministerial statement: “The timing of the election, in particular the need to re-start a select committee inquiry into the draft Airports NPS [national policy statement] means we now expect to lay any final NPS in parliament in the first half of 2018, for a vote in the House of Commons.” Heathrow was given the backing over a second runway at Gatwick Airport and the expansion is supported by the British International Freight Association and Freight Transport Association.
and both transactions are subject to customary closing conditions and clearance by merger authorities. Meanwhile, net turnover increased by 8.2 per cent at Kuehne + Nagel in the first half of 2017 with the airfreight division seeing strong growth particularly in premium sectors. Airfreight volumes increased 18 per cent with new business gained in the pharma, aerospace and perishables industries, while strict cost control and productivity increases due to automation countered margin pressure. Earnings before interest and tax (EBIT) in the airfreight sector was up 2.7 per cent to 151 million Swiss francs (CHF) ($156.8 million) and net turnover increased from CHF 2.6 billion in 2016 to CHF 3 billion in 2017. Fellow heavyweight forwarder Panalpina saw airfreight volume growth of seven per cent in the first half of 2017 to 473,100 tonnes, driven by the strong growth of Far East trade lanes. The forwarder estimates overall market growth was about eight per cent. Overall gross profit was CHF 294.6 million, down on the CHF 304.5 million in 2016.EBIT in airfreight increased from CHF 33.1 million to CHF 39.1 million.
Hactl picked by Virgin
Hong Kong Air Cargo Terminals Limited (Hactl) has been appointed as the cargo ground handler for Virgin Australia’s new services from Melbourne to Hong Kong. Hactl will provide terminal handling and all documentation on the five-times-weekly flights which began on 5 July, using Airbus A330-200 aircraft with 14 tonne bellyhold capacity. Cargo sales on these Virgin Australia flights will be marketed by Virgin Atlantic Cargo, which also sells space on Virgin Australia’s existing long-haul services from Sydney, Brisbane and Melbourne to Los Angeles. Hactl has handled cargo on Virgin Atlantic’s daily flights between Hong Kong and London Heathrow since they began in 1994. Virgin Atlantic Cargo’s managing director, John Lloyd says: “Having worked together for over 23 years, the Hactl team are well aware of the high service levels we expect for our customers.”
KLM BUILDING AGAIN AFTER TOUGH TIMES AMERICAN SEES ROOM FOR MORE GROWTH AT MIA QATAR AIRWAYS HELPS START NEW DAIRY INDUSTRY STRONG DEMAND FOR AIRCRAFT AND SERVICES
4
6
10
12
HNA takes 60% stake in Rio Galeao Airport HNA Infrastructure has made its first move into Latin America by taking a 60 per cent stake in the operator of Rio de Janeiro’s Antonio Carlos Jobim Galeao International Airport. The HNA Group subsidiary will acquire the equity stake from Rio de Janeiro Aeroportos (RJA) from Odebrecht for 60.1 million reals ($18.8 million) and pay an additional 1.01 billion reals in concession fees. It has agreed to sell nine per cent of its stake to Changi Airports International (CAI), meaning HNA and CAI will hold a 51 per cent stake and a 49 per cent stake in RJA respectively. HNA Infrastructure CIO, Guanghui Ma says: “This investment is a reflection of HNA Group and HNA Infrastructure’s steadfast commitment to furthering ‘the Belt and Road’ Initiative in order to meaningfully strengthen the cooperation between China and Latin American countries, particularly on development and infrastructure projects.” Galeao Airport is the largest international airport in Rio and provides significant access to the Brazilian and Latin American region, and HNA says the deal will significantly enhance its footprint and resources overseas and specifically in Latin America.
aircargoweek.com
NEWS WEEK Airports in Germany post strong tonnage in 1H2017
G
ermany’s cargo gateways continue to see strong growth as Leipzig/Halle Airport and Frankfurt-Hahn Airport saw upticks in the first half of 2017. The country’s second-largest freight hub Leipzig/ Halle handled 540,984 tonnes, a 5.5 per cent increase on the same period in 2016. Europe’s fifth-largest cargo airport after Frankfurt, Paris, Amsterdam, and Heathrow, has now posted increases in tonnage for 13 years in succession. In the first half of 2017, Frankfurt-Hahn (pictured) saw a strong surge as it recorded record growth. The gateway handled 49,000 tonnes of freight from January to June – a gain of 52 per cent compared with the first six months of 2016. In June alone, the airport handled 8,670 tonnes, a rise of 101 per cent compared to June 2016. During the last few months, the airport’s two biggest cargo-clients Silk Way Airlines and Nippon Cargo Airlines have increased their freight volumes. Frankfurt-Hahn Airport senior vice president for cargo sales and business development, Roger Scheifele is also pleased with development of the cargo flights by the logistics company Senator
International and Air Atlanta Icelandic that started last year. “With two weekly connections to the USA we see a stable development with the potential of more growth for this client,” says Scheifele. The growth is also based on a strong charter business. Earlier this year, Frankfurt-Hahn was bought by the HNA Airport Group of China. Meanwhile, also in Germany, LUG air cargo handling has won a contract to handle belly and freighter cargo for Emirates at Frankfurt Airport from October this year. Emirates runs three Airbus A380s and Boeing 777 belly services a day and eight 777F flights a week to Europe’s busiest cargo gateway.
China Airlines goes for WFS
WORLDWIDE Flight Services (WFS) is now offering China Airlines its full range of ground handling services in Honolulu after winning a new cargo handling contract. WFS has served China Airlines in Honolulu since 2001 when it was first awarded a passenger services contract. In 2005, it also won the airline’s ramp handling contract, and in May 2017, WFS successfully bid to handle China Airlines’ cargo business. The airline currently operates a daily service from Honolulu to Tokyo-Narita in Japan, and twice-weekly flights to Taipei. WFS senior vice president for sales & business development in North America, Ray Jetha says the company is proud China Airlines continues to show confidence in WFS in Honolulu.
Flywell to be Antonov GSA in India ANTONOV Airlines has appointed Flywell Aviation as its general sales agent (GSA) in India. New Delhi-headquartered Flywell Aviation has offices in Mumbai and Bangalore, and provides services to the defence, aerospace, oil and gas, rail and construction sectors as well as other businesses. Four senior members of staff with 55 years of logistics industry experience between them will support Antonov’s activities across Flywell’s Indian offices. Antonov Airlines business development director, Michael Goodisman says India is a very important market for the AN-124-100 and has potential for the AN-225 and AN-22. He says Flywell have been very active in the Indian air charter market for a number of years and has a good track record. Goodisman says Flywell has a long experience within the Indian market, and the region is important.
Emirates and flydubai join forces
EMIRATES and flydubai are to join forces as they seek to gain benefits from each others global and regional strengths – which is set to boost cargo tonnage and efficiencies for both. The two Dubai-based airlines will continue to be managed independently, but will leverage each other’s network to scale up their operations and accelerate growth. They will further develop their hub at Dubai International Airport, aligning their systems and operations. The partnership is working to optimise the networks and schedules of both and help feed more traffic into each other’s networks. The partnership will be rolled out over the coming months and is set to begin in final quarter of 2017.
aircargoweek.com
ACW 24 JULY 2017
3
NEWSWEEK
AF-KL-MP sees digitisation as key enabler and will keep investing
D
igitisation is the key enabler in air cargo to get rid of waste and mistakes, and Air France KLM Martinair Cargo (AF-KL-MP) is going to invest heavily in it, says Marcel de Nooijer (pictured second right). The Air France KLM Cargo executive vice president & managing director of Martinair Holland told journalists that the airline strives to be the choice for customers by focusing on the key element of quality with transparency, and doing so at a competitive price. He made the comments following the official launch of KLM Cargo’s new sorting system at Amsterdam Airport Schiphol, which is capable of handling more than 2,000 items per hour. De Nooijer says: “Our commercial proposition is not a secret, it is about high quality, ensuring a smooth and consistent customer journey but with a new element with a clear focus on service delivery to our global customers and focusing more on small and mid size enterprises.” He says this is possible due to digitisation. De Nooijer says the airline can offer a service engagement in a much more precise
way and he believes AF-KL-MP is a front runner. “We clearly made a choice to deal with customers not only by the digital lane but also in a local manner. We are in nearly every market ourselves with our own people, not with GSAs but we do it ourselves.”
De Nooijer says the airline does not want to be in a world where staff have to continuously re-enter data from one party to another, because this is how mistakes happen. He says: “It is essential to have a flawless data process running through our total process. Heavily investing in the renewal of our legacy IT systems, ensuring new partnerships are fundamental building blocks and we are seeing the initial results kicking in because we see ourselves in a much better shape than one or two years ago.” De Nooijer says customers have praised AF-KL-MP’s digital interaction including the myCargo toolbox for booking shipments. It allows customers to book shipments with certain requirements and the system will offer alternative options to the one selected. He says: “Customers are helped intuatively and this saves a lot of time in terms of calling and speaking.” The system also allows constant tracking with notifications of changes. De Nooijer says more than 40 per cent of customers are using the system, which shows the customers are also willing to embrace change.
KLM building again after tough times AIR France KLM Martinair Cargo (AF-KLMP) is starting to build again after several tough years, KLM president and chief executive officer, Pieter Elbers (pictured) says. He made the comments in a press conference following the opening of AF-KL-MP’s new sorting system at Amsterdam Airport Schiphol. Elbers explains that a major aim was to reduce the amount of physical work staff have to do. Some staff have been moved to other areas or retrained, while others are being used for a flexible layer, and KLM has already reduced staff numbers. Elbers says: “We are at the end of that process. We start to build again and invest in the future. In order to do that we need these people on different types of jobs than we had before.” The investment in the new facility at Schiphol cost “tens of millions of euros”, and Elbers points out that investments used to be around €1 million a day but this was stepped up to two and now it is nearing three million. He says: “When we embarked on the large change at KLM, we said we are going to change the company. We are going to cut costs on the one hand but invest on the other.” Elbers says a lot of effort has gone into new aircraft including Boeing 777s and 787s, and the freighter fleet will not see further cuts. He says the airline has always invested heavily in aircraft but it is also focusing on digital upgrades. Elbers says: “This investment is part of the big plan to restructure the company and ensure we are 98 years old and we are
4
ACW 24 JULY 2017
aircargoweek.com
preparing the company for the future. “It is my sincere belief that you can only run a company if you continue to invest, and we had a few years of belt tightening policies but it should go hand in hand with investments.” He says the new sorter at Schiphol is a perfect example of the investment, which will enable KLM to grow in the future. Elbers admits when Air France KLM Cargo executive vice president, Marcel de Nooijer came to him with the investment proposal, cargo was struggling but the team convinced him the work was necessary to keep the airline relevant into the future. KLM saw a reduction in market share at Schiphol because of reducing the number of freighters. Elbers says rather than complain about the decision the airline is focusing on market segments where it can grow. Elbers says: “With our unique network of 200 destinations and our facilities here [at Schiphol], we believe we can compete. “These investments are more than just numbers but part of a bigger change in the company.” He adds that cargo is essential to run a network the size of KLM’s in a country the size of the Netherlands., saying: “There is no way to run a network with over 200 destinations with 82 direct long-haul destinations without cargo.”
Tabloid page bled.indd 1
18/07/2017 13:28
MIAMI
American sees room for more growth at its key US hub
M
iami International Airport (MIA) represents a key hub for American Airlines Cargo due to its extensive links into the Americas and perishables unsurprisingly make up much of the cargo volumes. The carrier runs about 340 flights out of MIA on a daily basis to 132 destinations and it is the airline’s largest international gateway. American Airlines’ director of cargo sales for MCLA, Lorena Sandoval (pictured) says MIA is the major hub for imports and exports for Latin America (LATAM) with per-
ishables a key growth driver of business from LATAM into Miami, but notes it is a challenging marketplace to operate. American operates one-third of all directflights between the US and LATAM from MIA and widebodies account for 25 per cent. She says the carrier sees more potential growth out of MIA and notes the cargo industry is growing at MIA, supported by better market conditions and improvement in trade. “Demand is up, and our customers continue to show their confidence in us by giving us greater parts of their business,” Sandoval says. Seasonality also plays a pretty significant role in how much American ships and when from MIA, but even when commodities are out of season, it sees an offset from other origins. Sandoval gives an example of if salmon production from Chile is down - it might see an
increase in agricultural products from Peru and Argentina. The most buoyant trade lanes at MIA are LATAM lanes, which are always some of the strongest, though there is always some shift between countries depending on the time of year. “Air cargo is all about supply chain speed, particularly where perishables are concerned. Our sheer number of frequencies and our ability to connect customers’ freight shipments from LATAM to Europe and Asia make MIA an integral part of our network,” Sandoval says. “MIA is our most important cargo hub globally by weight. It’s been a vital part of our network since it was established in 1989,” she adds. Perishables are the largest percentage of air exports from LATAM for American and into MIA and it moves salmon and fruit from Argentina and Chile; asparagus, mangoes and berries from Peru; and flowers from Colombia and Ecuador. However, external factors outside of America’s control have affected the perishables market, particularly relating to weather, that have had an impact on trends and demand. Sandoval says the current ‘avocado crisis’ in Europe is happening as a result of supply issues from key producers in areas like LATAM, therefore demand for the fruit continues to rise from other locations around the world. She adds: “But, even when we see fluctuations in demand in traditional markets, we often still have plenty of airfreight options - either moving existing commodities to brand new markets, or
identifying completely new products to move. Of course, a lot of that still comes up via MIA. “Our opportunity lies in providing support to the exporters in LATAM countries who are looking to open up even more markets and create more demand.” Sandoval says imports heading to LATAM include computers, mobile phones and computer chips, as well as spare parts for mining companies, while a new area of business is the packaging industry, as more and more companies become involved in e-commerce. American has also been upgrading its facilities at MIA and in late 2016, it completely re-envisioned the layout of its MIA facility. Sandoval explains: “We expanded the available space there by more than 35 per cent, which is a huge benefit for our customers. “At the same time, we have been able to introduce five new receiving doors that have considerably improved the overall customer experience and visibly reduced truck waiting times on the dock. “We offer a full temperature-control program to and from MIA. Our ExpediteTC service is our premium product for temp-controlled healthcare goods, which is an important component of our service offering through the hub.” American looks ideally positioned to grow further at MIA, especially as the LATAM region is back on track economically.
IN the first five months of 2017 tonnage was up 5.8 per cent at Miami International Airport reaching 934,639 tonnes with domestic up eight per cent and international 5.5 per cent. The top growth regions are Mexico, up 308 per cent, the Middle East, up 114 per cent, Europe, up 11.7 per cent and Asia, up 9.8 per cent. The biggest region for volumes is Latin America and Caribbean, which was up 2.7 per cent. Pharma is a key focus area and is led by the Pharma.Aero organisation it started last year with Brussels Airport, which now has 16 members. It jumped 48 per cent by value in 2016 to $4.4 billion and more growth is expected. This year, the Miami-Dade Aviation Department will launch a massive sustainability project with electric utility FPL Services for
the MIA cargo area that will install tens of millions worth of lighting, air conditioning and water system upgrades, and other conservation measures to significantly reduce MIA’s carbon footprint and increase energy efficiency. MIA has completed the planning phase for a major capital improvement project to prepare for future growth in cargo operations. The Cargo Optimization, Redevelopment and Expansion Program (CORE) project, is a long-term plan to modernise cargo operations and double capacity from two million tonnes to four million. MIA is set to grow further as its application to the US Department of Commerce to designate it as a Foreign Trade Zone (FTZ) site has been submitted to the Commerce Department’s FTZ Board, and it expects approval later this year.
Perishable supply issues
Miami hub’s tonnage continues upwards
6
ACW 24 JULY 2017
aircargoweek.com
MIAMI Future looking bright for Amerijet as LATAM recovers
T
he first six months were a good start to the year at Amerijet, but the carrier is also facing challenges that are endemic to the industry as a whole. Amerijet operates a seven-strong freighter fleet of Boeing 767-300/200 aircraft from its primary hub at Miami International Airport to 38 destinations throughout the Caribbean, Mexico, Central and South America. Within the USA, Canada and Mexico, the carrier partners with premium regional and local asset-based carriers to provide full truckload, less-thantruckload and expedited services. The all-cargo airline says it is not sheltered from the struggles that the industry is facing in the Americas region where it operates, and it is also impacted by lower yields, competition and overcapacity in markets it services. Senior vice president of business development, Pamela Rollins adds: “However, our export volumes are up year over year. We moved up into the sixth position for total freight volumes exported from Miami as published by the Miami Airport statistics. We continue to focus on providing the absolute best service to all our customers.” When looking at the performance of key trade lanes, Amerijet looks at performance on a regional basis and it says the Caribbean and Central American markets are showing slow growth and Mexico’s imports and exports have increased due to the automotive industry while South America is just starting to slowly turn around. Miami is seeing a rapid increase in the transportation of pharmaceutical and biomedical products the carrier explains, and the airport reported a year-on-year rise of 48 per cent in value of pharma shipments in 2016. Amerijet is keen to tap into this growth and earlier this month gained IATA’s CEIV Pharma certificate, becoming the first US all-cargo airline to obtain the certification, which is set to further drive its pharma business.
to live animals, temperature controlled, heavy freight, as well as pharmaceuticals and biomedical shipments. The fact that Belgium has a large pharmaceutical industry and Amerijet is a CEIV certified airline will accelerate the development of a pharmaceutical trade lane between Brussels and Amerijet’s service region,” says Rollins. And there might be more connections to follow as Amerijet is evaluating other new routes and additional frequencies, but
notes it plans its growth “strategically and carefully.” Facility enhancement and development is also on the radar and Amerijet says the expansion of its facility is currently the biggest challenge and opportunity. “With the expansion of our fleet and cargo volumes, the company is looking at various options including a new facility at the Miami Airport that can provide adequate space as well as technology enhancements for future growth opportunities,” Rollins adds.
LATAM on the recovery path
As an all-cargo carrier, the company sees growth in e-commerce. “Customers are buying more via the internet, and online retailers are promoting time-definite deliveries. This has resulted in the increase of express logistics services. Miami is still the largest air cargo gateway to Latin America and the Caribbean. Although the Latin American market has been faced with an economic standstill in countries like Venezuela, and rapidly declining yields throughout South America, large economies such as Brazil, Argentina, Peru and Colombia are showing signs of recovery,” Rollins adds. The focus for the rest of 2017 is on keeping the customer experience at a high level and Amerijet explains it will continue to invest in the expansion of its fleet and facilities in an ongoing effort to improve their overall reliability and performance. There are other investment areas. “We will also continue to invest into technology; Amerijet recognises the demand for better end-to-end visibility and transparency. Our new website is scheduled to launch within the next two months, the site will provide our customers with a customer-tailored portal offering complete shipment visibility and service flexibility,” Rollins says. Amerijet has been very proactive in modernising its systems for customers. The company has the capability to connect directly with their customers through Electronic Data Interchange messaging, into their own back-office systems or through Descartes, CHAMP and other providers who use the Cargo-IMP standard for exchanging cargo data, allowing customers to save time, diminish paper waste, and reduce errors and manual processes.
Brussels bound
Next year will mark a major move as in the second quarter of 2018 - Amerijet starts operating its first transatlantic service to Brussels Airport. Adding a European gateway is very important to Amerijet for several reasons. “The transatlantic route is a natural progression of our expansion that started in the mid-1990s when Amerijet opened its first general sales agent office in Europe. Brussels Airport has a strategic location, which allows Amerijet to provide a seamless connection between Europe and Amerijet’s network in the Caribbean, Mexico, Central and South America,” explains Rollins. But why start with Brussels? “As an all-cargo carrier, Amerijet is able to transport all types of cargo, from hazardous materials,
aircargoweek.com
ACW 24 JULY 2017
7
SOUTH AFRICA
Security at OR Tambo condemned by police minister
S
outh Africa’s minister of police, Fikile Mbalula has expressed his shock at the poor quality of policing and security at O.R. Tambo International Airport. The comments were made following a meeting with politicians, police representatives and management at the airport on 10 July following a spate of serious crimes committed at the airport. He cited a number of violent incidents including an armed robbery where criminals impersonated police officers to steal 20 million rand ($1.5 million), a cash in transit occurring on 1 April where it was blown up with explosives on the R24 highway. Other concerning incidents Mbalula highlighted were a carjacking and murder at the airport on 15 May and an armed robbery at a Swissport warehouse on 1 July, and another
armed robbery on a truck containing valuable goods coming from the airport that took place as he was about to receiving the briefing. He had already visited the hub on 6 June, and said: “I visited O.R. Tambo International Airport and met with airport management, to assess the state of security, and. I must admit that I was shocked by the low level of policing and police visibility at the airport. “I shared this concern with our parliamentarians in Parliament that same day, and assured them that appropriate steps will be taken to correct the situation.” Mbalula says there are a number of challenges including police corruption as well as ineffective and inefficient policing and crime intelligence. He claims: “Simply put, part of the challenge is corruption and collusion where police officers are in cahoots with criminals. An obvious lack
of police command and control is highly concerning and without it, the ability to effectively manage deployed personnel at the airport will remain a major challenge.” It has been agreed that a number of measures need to be taken as part of a sustainable security plan including more effective vetting of airport staff. Further measures will be taken including a more senior police officer being deployed to the airport to lead the policing operation. Mbalula promises a joint deployment to the airport including crime intelligence, Hawks and
detectives, operating out of an operations room where crime will be monitored on a daily basis at the airport and report to Mbalula on a weekly basis. Stakeholders will also work on a master plan but Mbalula makes clear he wants criminals to find it hard to commit crimes in South Africa and that corrupt police officials will find their days numbered. He says: “We will not tolerate a state of lawlessness where criminals do as they please in our country.”
SAA five-year plan to stabilise
SOUTH African Airways (SAA) says it has made “significant headway” in putting together a five-year business plan to address challenges and bring financial stability. The airline admits to having a weak balance sheet, relying heavily on government guarantees to remain operational and has not been profitable in recent years. It describes the situation as not only undesirable but also unsustainable, and this has led to the development of the turnaround plan. SAA says the plan is anchored on five main pillars that identified areas where the business must focus as necessary interventions to set a foundation to lead to commercial sustainability.
8
ACW 24 JULY 2017
aircargoweek.com
Acting chief executive officer, Musa Zwane says: “SAA has been in contact with its lenders to renegotiate the management of its loans, a normal occurrence when loans become due and payable. “The airline has government guarantees totalling R19.1 billion. By 30 June, R9 billion will be due and payable and only one lender has expressed a desire to have its loan paid back.” SAA is not sharing any details as engagements with lenders “remain sensitive and confidential”, though Zwane says: “The renegotiation of the terms of the loans are ongoing and SAA is optimistic that the airline will continue to operate, honour its obligations to its customers, suppliers and partners.”
SOUTH AFRICA
Tonnage picks up but yields remain weak for Cargolux
A
fter a slow start to the year, tonnage has picked up again though yields are still a problem, Cargolux Airlines International country manager – South Africa, Stuart Gow tells Air Cargo Week. He says the year started slowly, as to be expected over the Christmas/New Year period but there has been a strong increase in tonnage until the end of June, which was better than last year. Commenting on the outlook, Gow says: “While the first half looked good, we are now entering the usual quiet period between July and midSeptember. After that, we expect the markets to be strong until year end.” He describes the import market as “very diverse”, mainly consisting of high value finished products, computer equipment, machinery, chemicals and temperature controlled
pharmaceuticals, while automotive equipment is also an important commodity. Oversized shipments, automotive parts, aircraft engines and mining equipment are Cargolux’s main focuses for exports, and Gow says: “Our advantage is the operation of our 747 fleet that is ideally suited for large, heavy and outsized shipment that can be accommodated by the aircraft’s nose door.” Gow says South African operations are running smoothly and successfully, saying: “For Cargolux, the South African market looks very positive and we foresee good development potential in the coming years.” “For the immediate future, we have to overcome the technical recession that the country has recently entered into, but going forward we believe the airfreight demand will be strong in both directions” he adds.
New board chosen at Dube TradePort
DUBE TradePort Corporation has welcomed the newly appointed board and thanked the outgoing one for their work. Bridgette Gasa remains chairperson of the board, while Paulos Ngcobo has been appointed deputy chairperson, with Themba Ndlovu, Mpumelelo Zikalala, Bavelile Hlongwa and Nokhana Moerane joining as board members. Gasa thanked the outgoing board, saying: “It has truly been a pleasure to serve alongside you, Adv Carol Sibiya, Mr Velenkosini Mtshali, Mr Graham Muller and our beloved Mr Mewa Ramgobin who sadly passed away last year.” “The energy that you have imbued, with the spirit of this organisation, will continue to guide us in achieving the ultimate vision of Dube TradePort.” Dube TradePort Corporation is located 30 kilometres north of Durban in South Africa’s KwaZulu-Natal region. The 3,000 hectare development is home to King Shaka International Airport, and is the only facility in Africa combining an international airport, dedicated cargo terminal, warehousing, offices, retail, hotels and agriculture. It consists of a passenger and airfreight, and is surrounded by development zones consisting of the Dube Cargo Terminal, which claims to have had no cargo losses since its inception in 2010; the Dube TradeZone, 77 hectares growing to 300 of specialised industrial estate within the Special Economic Zone; Dube City, 12 hectares of premium office, retail and hospitality space; Dube AgriZone, providing facilities and technical support for propagating, growing, packing and distributing high-value perishables and horticultural products through the supply chain; and Dube iConnect, the precinct’s IT and telecommunications provider. Air Seychelles started twice weekly Airbus A320 services between Durban and Mahe on 30 March, operating the five hour 20 minute flight on Thursdays and Saturdays. Dube Cargo Terminal also welcomed an Antonov AN124-100 on 30 March, which was delivering 80 tonnes of specialised parts forming part of the main furnace at the local oil refinery. The cargo terminal had previously welcomed an AN-124100 in 2013 to deliver an acid cooler for a mine in New Caledonia.
aircargoweek.com
ACW 24 JULY 2017
9
FOOD LOGISTICS Logistical challenges wide-ranging for the supply chain
F
ood logistics can prove challenging but Quintiq says its IT planning software helps businesses optimise and plan their supply chains. Customers include YRC Freight and DHL Express and KLM Catering Services, which deliver in-flight meals for passengers. Quintiq senior solution architect for the North American Logistics Group, Robert Oliver says the software helps address challenges in food logistics. He says one of the biggest is maintaining constant temperatures across multiple modes of transportation. Others are maintaining food safety, which is of paramount importance for food logistics. “The aspects of freshness and shelf-life are not common in other industries, but is a key driver of many of the logistics decisions in this industry. Other challenges include
supply uncertainty and volatile weather conditions,” says Oliver. Quintiq’s supply chain planning and optimisation solution helps companies tackle these challenges in different ways, he explains. Oliver says: “It enables visibility into the estimated arrival time of goods, taking into consideration all inputs into the system. For over-the-road logistics, it can provide dynamic route planning, choosing alternative routes
when changes occur, and restructuring of the supply chain if necessary. “Vehicle fleet planning can be optimised as well, for optimal utilisation of the vehicles and all cooling zones – this is essential in fresh food logistics. Additionally, it provides end-to-end visibility with real time monitoring allowing for an immediate response to disruptions.” For carriers like DHL Express, Quntiq, provides full transportation logistics planning capabilities, including demand planning, dispatching, routing, capacity utilisation, and pricing optimisation. It also offers workforce planning capabilities that are directly tied into the Quintiq Planning solution. Oliver says the software supports any transport mode including road, rail, sea, air, and pipeline, as well as any intermodal services. For DHL Express, Quintiq says it software helps the express carrier to organise the pick-up and delivery of 1.8 billion complex dispatch
shipments annually for its global clients. Using Quintiq’s Logistics Planner, DHL has been able to streamline their dispatch processes, which Oliver says improves its customer service helping DHL recognise a significant reduction of pick-up and delivery costs. He adds: “In addition, Quintiq has helped DHL lower its carbon footprint, increase the productivity of dispatch, and reduce the number of missed pick-ups which results in a higher level of service quality. Quintiq is deployed at DHL in over 80 countries.” Oliver says Quintiq’s planning software can also drive performance gains by increasing the efficiency of delivery patterns, which means getting the right product to the customer when they need it without compromising quality. “It can optimise production and inventory for fresher goods with an improved shelf-life and, with centralised planning, throughput can be increased and bottlenecks minimised along with the associated risks of inventory obsolescence with integrated end-to-end planning,” Oliver says.
Qatar Airways helps start new dairy industry
QATAR Airways Cargo has transported the country’s first two shipments of 230 Holstein cows from Europe on a Boeing 777F as part of a project to set up a new dairy industry in Qatar. These initial shipments are part of a 4,000-head herd that will be making their way to Qatar, as it looks to get around the air, land and sea blockade implemented by its Gulf neighbours Saudi Arabia, the UAE, Bahrain and Egypt. Upon arrival at Hamad International Airport the cattle are transferred to Baladna Farm, a huge livestock farm in Qatar. Last week, Qatar Airways ran a charter flight to transport Hungarian pedigree calves from Budapest to Qatar for breeding purposes. The carrier has been appointed to charter more than 20 cattle shipments from Europe, the US and Australia in the next few weeks. Qatar Airways chief officer for cargo, Ulrich Ogiermann (pictured) says: “We are truly a part of history, helping launch the country’s newest industry, producing dairy products to meet local demand. The cattle charters involve a great deal of skill and coordination to
10
ACW 24 JULY 2017
aircargoweek.com
ensure the flight from the points of origin to Doha was smooth and safe.” He adds it was able to meet Baladna Farm’s requirements with tailor-made solutions to transport the cattle from various continents swiftly into Doha. Power International Holding chairman, Moutaz Al Khayyat says: “With the arrival of the dairy cows, we aim to meet 30-35 per cent of the imported milk demand in the country within two months.” Baladna is a subsidiary of Power International Holding, and has built special cowsheds with a temperature control system to ensure a comfortable environment for the cattle. Baladna Farm, built over 700,000 square metres, includes 40,000 Awassi sheep. The farm also houses 5,000 goats and an animal feed mill yielding 100 tonnes per day. The blockade against Qatar has seen Saudi Arabia, the UAE, Bahrain and Egypt close their airspaces to Qatar, while Saudi has closed its land border, where near half of Qatar’s imports came from. Each accused Qatar of supporting terrorist groups – which it denies. Last month, the four countries made a 13-point ultimatum to Qatar, which called the demands “unreasonable”.
TRADEFINDER Airlines
Airports
Turkey
Lithuania
Freight Forwarders Caribbean
Freight Forwarders Hong Kong
Industry Events
United Arab Emirates
USA
AZura Data Services
aircargoweek.com
ACW 24 july 2017
11
NEWSWEEK Strong demand this year for Atlas Air’s aircraft and services
A
sia Pacific and Europe are proving to be the strongest trade lanes this year for Atlas Air Worldwide as it targets a strong second half of 2017. Executive vice president and chief commercial officer, Michael Steen says it has been an exciting start to the year. Earnings in the first quarter (Q1) were in line with the company’s expectations and its outlook for earnings growth for the full year. Atlas will report its second quarter 2017 and half-year results on 2 August. “Our Q1 reflected a solid seasonal performance driven by demand for our aircraft and services. “We have seen
strong demand, and this is evidenced by a number of new customer agreements, which include, Cathay Pacific, Yangtze River Express, and Asiana Cargo,” Steen explains. Atlas expects adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with its 2016 results. For the full year, it forecasts block hours will increase approximately 20 per cent, with more than 75 per cent in ACMI and the balance in Charter. Steen notes the global airfreight market is experiencing a “significant, broad-based increase in demand.” He says general airfreight in 2017 is expected to grow at roughly double 2016’s 3.6 per cent pace, with global express growing by 5-6 per cent per year, and cross-border e-commerce increasing at a strong double-digit rate.
“We are seeing positive market indicators for airfreight. For instance, the PMI Index is up, and there has been a significant increase in shipments of semiconductors. From a geographic standpoint, the strongest growth is in the Asia-Pacific region to the US and Europe,” Steen explains. ACMI business is performing well and is fuelled by its fleet of Boeing 747Fs. Two 747800Fs were placed with Cathay Pacific (in May), and one 747-400F with Yangtze River Express (in June), which Steen says demonstrate the market’s appetite for Atlas’ ACMI offering. These agreements he says are running smoothly and are a “further testament to Atlas’ keen focus on and continued expansion in the fast-growing Chinese and Asian markets.” He says ACMI is delivering growth on both a revenue and block-hour basis and earnings have been positively impacted by the acquisition of Southern Air. While it has not yet provided guidance for 2018; it continues to focus on further growth opportunities in ACMI. Atlas has expanded its fleet to include 777s, 767s and 737s over the past few years as it looks to provide customers with a larger array of services in various markets, or applications globally. Steen is confident Atlas will see continued
growth opportunities both in ACMI and CMI in multiple markets over the next several years. Steen went on to say that Atlas is very focused on delivering the service and level of quality it has committed to deliver to Amazon. “This will continue to be our top priority as we ramp up from the four aircraft we had in service in May to the 20 aircraft we expect to have in service for Amazon by the end of 2018.” Steen notes Amazon did comment in their 1Q17 earnings call that current Prime Air operations have gone “very well” and they have “great relationships with third-party carriers.” The Atlas fleet is approaching 100 cargo and passenger aircraft and will exceed that number as it ramps up to full service with Amazon. It has approximately 70 per cent of its fleet deployed in the fast growing express and e-commerce segments, and says it will continue to expand in these segments. Steen concludes: “Looking ahead, we want to maintain our competitive advantage in modern, efficient aircraft and will continue to manage our fleet prudently in response to customer demand. “In addition to our long-haul 747s and 777s, all of which are performing very well, we are also interested in 767 and 737 aircraft for regional and domestic applications, where we see strong customer interest in 2018.”
HK continues its upward growth curve VOLUMES at Cathay Pacific and Cathay Dragon have remained strong with cargo and mail volumes growing 12.8 per cent in June. The two airlines carried 170,476 tonnes in June, and revenue tonne kilometres were up by 11.3 per cent to 974,353 million. Capacity increased by 4.8 per cent in June to 1.4 billion available cargo/mail tonne kilometres, and the load factor was up four percentage points to 68.3 per cent. The first half of 2017 has remained strong with 11.5 per cent growth in cargo and mail carried to 965,687 tonnes while load factors have risen four percentage points to 66.2 per cent. Cathay Pacific general manager cargo commercial, Mark Sutch says: “The new Tel Aviv service has built good airfreight demand and we received an overall boost from shipments of fresh produce, speciality goods, toys and automobile parts between Asia and the US.
“Furthermore, our two wet-leased freighters are now operating at full capacity and are generating good revenues on North American routes. Looking ahead, the airfreight market remain strong and this should continue through to the start of the traditional high demand season in September.” Volumes at Hong Kong International Airport (HKIA) continue to soar with 11.3 per cent growth in the first half of 2017. HKIA handled 2.3 million tonnes between January and June, with a throughput of 410,000 tonnes, representing year-on-year growth of 11.4 per cent. Exports grew by 17 per cent in June with transhipments up by 10 per cent.