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TNT takeover byFedEx to close 25 May

60 secondswithsarah nichol

mixed startto 2016 foruae hubs

benefits forlufthansa andcathay

facilityupgrades forchep

The weekly newspaper for air cargo professionals

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FEDEX Express has declared its offer for TNT Express “unconditional” and says the settlement date for the 4.4 billion euro ($5 billion) takeover will be 25 May this year.

The US integrator says 88.4 per cent of all shares are committed for the deal at an offer piece of eight euros a share.

The offer was first made back on 21 August, 2015, and has cleared the final hurdle from authorities after gaining ap-proval from the Chinese government’s ministry of commerce. The takeover had already been given the go ahead by the European Union, and the US.

The remaining TNT Express shares can be tendered during the Post-Closing Ac-ceptance Period, commencing on 19 May 2016 and ending on 1 June 2016.

FedEx Express president and chief ex-ecutive officer, David Bronczek says: “We are pleased with the outcome of the pub-lic share offer. 25 May, 2016 will be a profound moment in the history of these two great companies.

“Together, we will transform the global transportation industry, connecting even more people and possibilities around the world.”

The Transported Asset Protection Associa-tion (TAPA) is urging law enforcement agencies and insurers to share data on cargo crime to help the industry reduce the risk of theft.

The association says reported crimes have hit a three-year high in Europe, Middle East and Africa (EMEA), with an average of almost five incidents a day.

TAPA explains that 444 incidents were reported in the first quarter (Q1) of 2016.

This was a 115 per cent increase on the same quarter in 2015, and included 29 major losses that were valued at more than 100,000 euros ($113,031) per shipment.

The highest single loss was eight pallets of perfume worth 600,000 euros from a trailer in Lastrup, Lower Saxony in Germany.

TAPA EMEA chairman, Thorsten Neumann (pictured) says: “We need much more crime intelligence from across the EMEA region if industry is to help the police tackle this issue.

“Similarly, we are asking more insurers to help us gain a better understanding of the true level of cargo crime, which remains massively under-reported.”

TAPA says 86.2 per cent of cargo thefts occurred in four countries, with 131 incidents in the UK, 126 in the Netherlands, 86 in Germany and 40 in Sweden.

Food and drink recorded the highest number

of incidents, followed by clothing and footwear, computers, furniture and

household appliances, cosmetics and hygiene, and tools and build-ing materials.

Other products stolen by cargo thieves included tobacco, tyres, toys and games, bicycles, metal,

sports equipment, pharmaceuti-cals, car parts, cash and phones.Cargo thefts involving trucks

dominated recorded crimes in Q1 with 56.3 per cent of losses or 250 inci-

dents involving Theft from Vehicle. There were a further 53 cases of Theft from Trailer and Theft from Facility was reported 25 times along with 12 hijacking crimes.

freight volumes fall in Q1 across world’s airports

Worldwide airfreight grew by 1.1 per cent in March, with domestic growth making up for

international weakness, Airports Council International (ACI) says in its March 2016 FreightFlash.

The world’s gateways are reporting a mixed picture, while ACI notes accumulated freight traffic for the first quarter (Q1) of 2016 fell by 0.3 per cent, com-pared to Q1 in 2015.

Significant airfreight declines were posted by hubs in the regions of Asia-Pacific and North Amer-ica in February and March. Both received a boost at the start of 2015 due to the US West Coast seaport strike.

In March, international volumes were down by 2.1 per cent with North America down by 11.9 per cent, followed by Latin Ameri-ca-Caribbean at 4.1 per cent, with Asia Pacific seeing a 0.5 per cent fall. The Middle East saw the larg-est rise in March, at 2.9 per cent, followed by Africa at 1.3 per cent and Europe at 0.5 per cent.

However, domestic volumes

rose nine per cent in March with North America seeing the biggest rise at 12.6 per cent, followed by Asia Pacific at 6.4 per cent. Latin America-Caribbean was down 4.3 per cent and Europe 2.7 per cent.

ACI says airfreight has been hit by industry-wide capacity growth, which is in collision with falling demand, while global trade growth remains subdued.

In March, many regions’ hubs

saw mixed results, with North America seeing double-digit growth in Memphis and Louisville, while other large gateways includ-ing Chicago O’Hare and New York John F. Kennedy saw declines.

In Asia Pacific, major hubs like Singapore Changi and Delhi expe-rienced growth, but Tokyo Narita was down by 10 per cent.

In Europe it was variable, with Frankfurt and London Heath-row declining, but Paris Charles de Gaulle and Amsterdam saw growth, while Istanbul declined 14.2 per cent and Brussels, which was affected by the terrorist attacks of 22 March, contracted by 22.4 per cent.

Volumes in Latin America-Ca-ribbean were dragged down by weakness in Brazil and falls at Bogota and Lima of 5.1 per cent and 13.4 per cent, respectively.

Qatar drove growth in the Mid-dle East making up for weakness in Dubai and Abu Dhabi.

Africa saw a surge in Casa-blanca and Dakar was up a massive 19.4 per cent, but Johannesburg remained flat and Nairobi fell 6.4 per cent.

Volume: 19 Issue: 20 23 May 2016

aircargoweek.com

tapa calls for action as cargo crime increases in Q1

NEWSWEEK

2 ACW 23 may 2016

It’s all positive in April in Hong Kong

LATAM AIRLINES GROUP made a profit of $102.2 million in the first quarter of 2016, de-spite cargo continuing to struggle due to weakness in Brazil.

The group, which consists of LAN and TAM, and affiliates, turned the result around from a $39.9 million loss in the same period last year, helped by lower fuel prices, local currency devaluations and efficiency initiatives. It comes despite cargo revenue falling by 21.2 per cent to $275.9 million due to weakness in the Brazilian domestic and international market, and yields struggling due to depreciation of local currencies, particularly the Brazilian real.

LATAM chief executive officer, Enrique Cueto says: “Initiatives such as continued ca-pacity adjustments on both domestic and international operations in Brazil, fleet plan restructuring, and additional cost reduction measures, all serve to strengthen the Compa-ny and will allow us to maintain a solid financial position.”

The group saw a 9.8 per cent decline in cargo traffic with yields down 12.7 per cent during the quarter. It cut capacity in available tonne kilometres by 3.4 per cent by reducing freighter operations by 8.9 per cent and utilising the bellyholds of passenger aircraft. The load factor was down by 3.6 percentage points to 51.2 per cent.

Cargo struggles for LATAM but profit up

IAG CARGO will start a new route to Santiago from Heathrow Airport this winter as it targets the perishables and pharma markets.

The British Airways Boeing 787-9 service, IAG will offer a weekly lift of up to 3,360 tonnes into Latin America (LATAM) and it will become IAG’s longest direct route. Flights will run four times a week to and from Santiago.

IAG’s head of sales, Camilo Garcia says perishables and pharmaceutical goods are the key export commodities for this region and it adds to the carrier’s network in LATAM.

IAG is to also increase capacity to the Middle East by splitting Abu Dhabi and Muscat flights and Bahrain and Doha services into four separate flights, which will increase ca-pacity to the region by 83 per cent.

IAG ups capacity to LATAM and Middle East

Hong Kong International Airport’s (pictured) cargo vol-umes rose by 1.2 per cent in April to 365,000 tonnes, with Europe and Mainland China

seeing the largest growth, and tranship-ments increasing.

The airport has continued its recovery, which started in March, following a slow start to the year, with January and Feb-ruary seeing declines. Cargo in the first four months is down by 1.2 per cent com-pared to 2015 to 4.35 million tonnes. The growth in April has been attributed to a 10 per cent increase in transhipments.

Airport Authority Hong Kong gen-eral manager market and connectivity development, Henry Ma says the hub will soon welcome three new routes, including Cathay Pacific’s bellyhold flights to Madrid four times a week.

Cathay Pacific Cargo saw cargo and mail volumes increase by 2.1 per cent in April to 147,643 tonnes though it is still down 1.8 per cent year-to-date.

Between January and April volumes were down 1.8 per cent to 569,638 tonnes. Revenue tonne kilometres increased by 0.6 per cent to 853.9 million but were down 3.4 per cent between January and April to 3.3 billion.

Cathay Pacific’s load factor was up 0.9 percentage points in April to 63.5 per cent

but down 3.3 percentage points to 61.7 per cent from January to April.

Cathay Pacific general manager cargo sales and marketing, Mark Sutch says: “April saw a better-than-expected per-formance for our cargo business, at least in terms of tonnage. We managed capac-ity astutely and were able to capture shipments out of key markets, including Mainland China and India, which led to a small improvement in load factor.

“India remains a focus for our cargo business at the moment and we operated a number of additional services to and from the country in April in response to strong demand.

“The big issue at the moment is yield, which remains under intense pressure due to the overall softness of the mar-kets and the big increase in competitor capacity.”

aircargoweek.com

NEWSWEEK

3ACW 23 MAY 2016

Hong Kong Air Cargo Terminals (Hactl) has handled four Arctic foxes travelling to Montreal for rehoming, flown on an Air Canada Cargo Boe-ing 777-200.

The females, Chi Chi and Cindy, along with the males, Siu Chu and Yau Nam, were transported to Hactl’s SuperTerminal 1 in a refrigerated truck, and then held in a climate-controlled area of the handling agent’s Livestock Handling Centre before their flight from Hong Kong to Montreal. The foxes are being rehomed from a local wildlife centre to the Quebec Aquarium.

Air Canada Cargo director cargo sales & ser-vices, Asia & Pacific, Garry Blagrave says: “We were delighted to play a part in the re-hom-ing of these beautiful animals, and hope they will be very happy in their new, permanent environment. We are very grateful to Hactl for its invaluable assistance with this delicate shipment.”

Meanwhile, Alaska Airlines has helped kick

off the summer salmon grilling season by trans-porting 80,000 pounds of fresh Copper River salmon to Seattle.

The first flight landed at Seattle-Tacoma International Airport at 06.00h on 17 May with 20,000 pounds of fish on board, followed

by another three with another 60,000 pounds.Alaska Air Cargo continues to work with

Alaskan seafood processors, Ocean Beauty Seafoods, Trident Seafoods and Copper River Seafoods to bring the fish to Seattle and Anchorage, before they are shipped throughout the Pacific North West, US and beyond.

Over in Australasia, Qantas Freight has transported 300,000 commemorative poppies for the Chelsea Flower Show to honour ser-vicemen and women who have fought in wars, conflicts and peacekeeping operations over the last 100 years.

The 300,000 handcrafted crocheted poppies were transported from Melbourne to London, and packed and loaded into 35 cubic metres of bellyhold space, approximately half the avail-able cargo space in the Airbus A380.

The poppies will flow from the show grounds into the Royal Hospital Chelsea to honour the servicemen and women during the show, which takes places from 24 to 28 May.

Arctic foxes, salmon and poppies all part of a week in air cargo

UPS will expand its operation in San Antonio (US) – dou-bling the site’s package processing capacity and adding alternative fuel vehicles and a CNG fueling station.

The integrator says the expanded ground sorting facili-ty will be retrofitted with automated sorting systems and have twice the package processing capacity and additional capacity is needed due to business growth and increasing customer needs in South Texas.

The expansion will add about 171,000 square feet, bring-ing the building’s footprint to more than 330,000 square feet.

The building serves UPS customers in Bexar, Comal, Gua-dalupe, Wilson, Medina and Kendall counties.

The building’s team will continue to provide package pick-up and delivery services during the project, which is expected to be complete mid-2017.

WorldNewsDHL GLOBAL FORWARDING has ap-pointed Oliver Wu as country manager for Cambodia. He will report directly to Clement Blanc, managing director for Vietnam, Cambodia and Laos.Based in Phnom Penh, Wu will lead and manage DHL Global Forwarding’s busi-ness in Cambodia, and be responsible for driving growth in international freight forwarding, transportation, warehous-ing, and value-added logistics services.

CEVA LOGISTICS has named Alain Souto to the role of vice president of global contract logistics in the aero-space operations sector. He will report to chief operating officer for contract logistics, Brett Bissell. One of Sou-to’s first priorities will be to drive the standardisation of CEVA’s existing aero-space operations.

Turnover up at GEFCo in 2015THE GEFCO Group generated a turnover of 4.2 billion euros ($4.7 billion) in 2015, up three per cent on the 4.05 billion in 2014.

However, EBITDA (earnings before interest, taxes, depre-ciation and amortization) in 2015 was 131 million euros, an 18 per cent fall on the 160 million euros achieved in 2014.

Higher turnover it says was due to an expanded customer portfolio, efficient cost management and the Group’s ‘as-set-light’ business model.

Lower EBITDA was put down to decline in oil prices, the economic crisis hitting hard countries such as Russia and Brazil.

GEFCO says difficulties experienced by car makers in Latin America and Russia were also reasons for the setback.

GEFCO Group chairman of the management board, Luc Nadal explains: “GEFCO achieved good results in 2015 in an unsteady global economic context and succeeded in further enhancing its position of global logistics solutions provider.”

aircargoweek.com

San Antoniodevelopment for UPS

NEWSWEEK

4 ACW 23 may 2016

UK cargo community needs to collaborate

THE UK air cargo community would find it much easier to influence government avi-ation policy if it collaborated more closely, Heathrow Airport head of cargo, Nick Platts believes.

Speaking at the Multimodal 2016 sem-inar, ‘Future of UK Airports’, Platts tells delegates attending the event in Birming-ham from 10-12 May, that one united voice would benefit the air cargo industry.

He cited the community at Amsterdam Airport Schiphol as the ‘international benchmark’.

Platts says: “I think that a community speaking with one voice would be an enor-mous benefit to the UK. Unfortunately I can’t see it happening as no one talks to each other.”

Coyne Airways chief executive officer, Larry Coyne says his company no longer operated out of the UK as it was easier to operate out of Amsterdam.

He rejectes a suggestion all cargo air-ports would be advantageous to operators like Coyne: “We are keen to see a balance of freighters and bellyhold cargo at an air-port as that is how you get efficiency.”

Manchester Airports Group director of sustainability, Neil Robinson, adds that the UK needs to look at short, medium and long term needs.

He explains: “Mainland European air-ports are absorbing UK volumes, impacting on connectivity and reducing overall GVA

performance. We need all stakeholders to speak with one voice on policies such as the environment and noise control.”

Delegates to Multimodal also heard that driverless vehicles, 3D printing, robots operating warehouses and new forms of energy are likely to pose greater challenges to supply chains than ever before and the continued growth of e-commerce.

These factors will not only change the way supply chains are managed, but also how infrastructure itself is used, says Stagecoach board member and chairman of Transport Systems Catapult, Will White-horn: “Robotics and autonomous vehicles will also change the way we use road and rail networks and we will certainly see au-tonomy in road haulage vehicles in the next few years.”

Doddle chief operating officer, Peter Louden also explains how the rate of technological change was outstripping a company that was only three years old, but has already developed a network of parcel stations at sites around the UK.

He says: “When we set up our first shops we were putting in expensive touch-screens for example, but when we wanted to set up Doddle Neighbour we realised we could do that by providing the whole store on a mobile phone so that people could set up a parcel shop in their front room - e-commerce is far outgunning every other development.”

Aeronautical Engineers (AEI) has signed an agreement to provide up to 30 12-pallet position Boeing 737-800SF conversions but says the

customer remains undisclosed.The deal is for 15 firm orders with an addi-

tional 15 options and AEI says the modifications will begin in late 2018 with deliveries beginning in 2019.

To date, and including this announcement, AEI has received a total of 80 firm orders and com-

mitments for its 12-pallet position 737-800SF.The conformity aircraft for the 737-800SF

conversion programme is currently on location at Commercial Jet’s facility in Miami.

AEI says the 737-800SF converted freighter will be able to accommodate 11 88 x 125 AAA full height containers or pallets and one AEP/AEH container for a total of 12 positions.

Depending upon the aircraft model and air-craft weight limits, the 737-800SF will be able to carry a payload of more than 23 tonnes, AEI says.

New Asian HQ for Pelican BioThermal

PELICAN BIOTHERMAL has opened a new Asia headquarters in Singapore, which it says signals a significant development in its expanding presence and support net-work in Asia.

The new facility will act as the headquar-ters for Pelican’s Asia operation and be the central base for the company’s Asia sales office, Credoon Demand rental fleet depot

and the regional distribution hub for their Credo reusable and Chronos ranges of tem-perature-controlled shippers.

The headquarters is also the location for the firm’s Asian state-of-the-art service cen-tre, providing capabilities to refurbish and repair the Credo reusable line of shippers.

Alongside providing a Credo on Demand designated depot and product inventory, the new office will be co-located with Pelican’s distributor for Singapore, Enviropac.

It follows the company’s recent announce-ment of its partnership with Zuellig Pharma in Asia and further enhances the extensive range of products and services offered by Pelican BioThermal in the region.

This new Singapore centre is the latest expansion by Pelican, who, in the past 12 months, has opened service centres in Asia, the UK and on the US East coast.

Another 30 conversion orders for AEI

aircargoweek.com

Justin Burns ACW: How have the first months of 2016 been for IAG Cargo and has business met your targets?Nichol: Our Q1 2016 results have been respectable in the face of a challenging market. We have continued to focus on premium products, strong cost control and strict capacity management and are confident that our strategy is appropriate for the current market conditions our industry is experiencing.

Justin Burns, ACW: What are your plans to grow your cargo business in 2016?Nichol: We will continue to focus on growing our premium products this year, in particular our time and temperature sensitive offerings. We are always looking for new opportunities and partnerships and we will continue to do so this year. Our new route launches into Latin America including Lima, Peru and San Jose, Costa Rica will offer our customers greater capacity, flexibility and choice when it comes to shipping goods to Latin America and across our wider network.

Justin Burns, ACW: Are there any particular cargo sectors and markets you are focusing on?Nichol: We are seeing growth in the pharmaceutical market and expect this upward trend to continue, as a result we offer Constant Climate enabled stations across our network. With the continued growth in e-commerce traffic we are also anticipating continued demand for Prioritise, our express product, across multiple markets. In terms of perishable flows Latin America continues to perform well with products such as asparagus, vegetables, fruits, flowers, fish and meat important exports.

Justin Burns, ACW: Are there any plans to increase the number of routes you operate and to other regions?Nichol: This summer we are launching three new routes into Latin America. From May 2016, we will operate direct flights from London to San Jose and Lima. We will also have a service from our hub in Madrid to San Juan. In addition to expanding our network in Latin America, we will be expanding our reach in South Africa. From this winter we will operate flights to Cape Town three times a week. New routes on our Iberia network into China will also see us expand our network for customers.

Justin Burns, ACW: How do you see the air cargo marketplace at the moment?Nichol: 2015 was a year where the market forces of supply and demand became increasingly imbalanced – few would argue that that there has been a shift from this over the start of 2016. From our own perspective, these structural changes to the market further reinforce our strategy of aggressive cost discipline coupled with a focus on growing our premium product offering.

Justin Burns, ACW: What are the principle business challenges?Nichol: Airfreight capacity growth has exceeded demand for a number of years. To tackle this, we believe that sensible capacity management is the only viable course of action for our business. That is why in 2014, we chose to remove freighters from our fleet and sign subsequent capacity agreements with partners such as Qatar and Finnair, meaning we are still able to grow our network, remain competitive and support our customers.

Justin Burns, ACW: Do you see further consolidation of airlines and cargo operations?Nichol: We continue to look for opportunities to collaborate with partners where we see such co-operation offers a clear customer benefit.

Justin Burns, ACW: Where do you see the air cargo industry in 10 years’ time?Nichol: I would certainly expect that the industry would have made significant digital advancements towards a paperless operation. With the predicted continued growth of e-commerce, I would hope that air cargo would be the mode of choice within the supply chain due to its flexibility and timeliness.

5ACW 23 may 2016

IAG Cargo continues to form partnerships and pick up carriers like Aer Lingus as it continues to grow its bellyhold strategy. Is this approach paying off for IAG and in what segments is it targeting growth?Air Cargo Week spoke to IAG’s chief financial officer, Sarah Nichol about the state of the industry.60 withSARAH NICHOL

Seconds60 SECONDS

SARAH NICHOL

aircargoweek.com

ACW 23 MAY 2016 6

S harjah Aviation Services at Sharjah International Airport has become the first facility in the Middle East to become International Air Trans-port Association (IATA) Center of

Excellence for Independent Validators (CEIV) certified.

The certificate was handed over to Sharjah Airport Authority chairman, His Excellency Ali Salim Al Midfa by IATA CEIV project lead, Ronald Schaefer at Sharjah International Airport. Shar-jah Airport Authority director, His Excellency Sheikh Faisal bin Saoud Al Qassimi and Sharjah Aviation Services head of cargo, Gonzalo Jacob were in attendance, as well as representatives from cargo airlines, freight forwarders, consol-idators and government entities.

When receiving the certificate, Al Midfa said: “The new Pharma and Healthcare handling facility will serve an important segment of our clients, who are dealing with these kinds of del-

icate items that need an advance temperature controlled technology of storage, care in han-dling and shipping, as it affects the human life.”

Al Qassimi added: “The new CEIV Pharma cer-tified facility by IATA with its GDP compliance

incorporates all the official recommendations and guidelines concerning the transportation and distribution of pharmaceutical products for human use and represents a real added value for all the stakeholders in the logistics chain and their customers.”

Sharjah Airport Authority has also signed a memorandum of understanding with Shar-jah Police Headquarters and Department of

Seaports & Customs to strengthen security requirements to international standards and to attract freight companies dealing with interna-tional firms.

Al Midfa signed the agreement with Shar-jah Police Ports and Airports director, His Excellency Colonel AbdulSalam AbdulRahman bin Faris, and Sharjah Seaports and Customs Department director, His Excellency Moham-mad Mir AbdulRahman.

When signing the agreement, Al Midfa said: “Sharjah International Airport maintains its reputation and efficiency in dealing with all kinds of shipments. The airport has modern facilities and equipment that provide the best services and transactions.

“This MoU will increase the level of co- operation with other parties, as well as freight companies that deal with the airport.”

AbdulRahman added: “We are keen to sim-plify transport procedures to ensure the smooth movement of goods between ports and the container centre, and we’ll provide a container detector to make sure shipments undergo scru-tiny to further ensure public safety.”

Sharjah gains IATA CEIV Pharma certification and signs MoUUAE

The United Arab emirates’ largest airports have seen mixed results, with Abu Dhabi International Airport and Dubai World Cen-tral (DWC) (pictured) seeing falls and Dubai International Airport growing.

Abu Dhabi has seen cargo volumes fall by 4.4 per cent in the first quarter from 200,127 tonnes in 2015 to 191,407 tonnes this year. DWC, which is home to 18 scheduled freighter opera-tors, saw volumes fall by 6.9 per cent from 213,006 tonnes to 198,295 tonnes. Dubai Inter-national Airport saw growth of 3.4 per cent to 615,444 tonnes.

Dubai International and DWC’s operator, Dubai Airports chief executive officer, Paul Griffiths (pictured) says: “Our focus is not only on quantity, it’s also on quality. We are continually striving to enhance the customer experience.”

In Dubai, Dubai Airports has ambitious plans to expand DWC, which will eventually

result in a cargo capacity of 16 million tonnes a year. DWC opened cargo operations on 27 June 2010 and the airport operator will spend $32 billion developing Al Maktoum In-

ternational at DWC, covering an area of 56 square kilometres. At present it has a

capacity of one million tonnes per annum and its location in the vi-cinity of Jebel Ali Port and Free Zone means air-sea connectivity is achievable in four hours.

The ambitious project even-tually give DWC five runways,

measuring 4.5 kilometres each, which it can operate simultaneous-

ly. Stands for 400 widebody aircraft, with 200 each for Code e aircraft, which in-

cludes Boeing 777s and Airbus A330s, and Code Fs, which includes Boeing 747-8s and Airbus A380s. An eight kilometre cargo fa-cility will be constructed at the South of the airport. Dubai Airports hopes this will mean DWC will have ample capacity to expand for predicted future demand.

aircargoweek.com

Mixed start to 2016 for UAE hubs

D nata is happy with how business in Dubai is going despite reduced military traffic causing a slowdown, senior vice president – UAE cargo, Bernd Stuck tells Air Cargo Week.

“In our part of the world, not everything is rosy but it is pretty good, we are actually celebrating, we had a good year. The cargo market has seen a small shrinkage through Dubai, partly caused by a reduction in military traffic to Afghanistan,” Stuck explains.

Low fuel prices also mean that fewer airlines are doing transit stops in locations such as the Middle East. Stuck comments: “Low fuel prices makes it quite attractive to fly direct from China to the rest of the world.”

Dnata celebrated crossing the one billion dirham profit ($287 million) a year mark for the 2015-16 financial year while reve-nue grew to 10.6 billion dirhams and cargo handled fell by six per cent to 689,000 tonnes across the UAE. At Dubai World Cen-tral (DWC) (pictured), dnata has now handled over one million tonnes of cargo since 2011.

The Emirates Group’s financial year starts on 1 April, and Stuck is happy with how things have gone in the first month.

“Fresh into the new year we are quite pleased … Our expectations are Dubai International will continue from last year, we see devel-oping good healthy loads.”

Stuck says dnata has six warehouses at Dubai International Airport but the hub suffers space constraints, based in the mid-dle of Dubai city.

“We gave one freight gate back to airport operator, Dubai Air-ports for Emirates, which gave us a challenge with the existing warehouses.”

Due to capacity restraints, airlines are gradually moving oper-ations to DWC, Emirates SkyCargo moved freighter aircraft to DWC and passenger flights with bellyhold capacity remain at Dubai International.

When DWC opened in 2010, it was just for freighters, but started passenger flights in 2013, and as this expands bellyhold capacity will increase.

Stuck says: “Space constraints at Dubai International is the big-gest challenge … Emirates is growing, flydubai’s relocation will free up some space.”

At present there are about 300 flights a week, of which 220 are freighter. Increasing numbers of passenger airlines with belly-hold capacity are using DWC, including flydubai. Stuck comments: “Next year, if flydubai relocates to DWC, it will reflect a volumes of about 50-60,000 tonnes, so increasing quite a bit.”

DWC will be expanded over a number of years, and by the time this is finished; it will have five runways and a 16 million tonne cargo capacity.

Not all rosy but dnata still happy with performance

7ACW 23 may 2016

UAE

EmiratEs has continued to expand its network with new routes to locations particularly in Asia, while upgrading and increasing services around the world.

The network expansion has primarily come from passenger services with bellyhold capacity though the freighter divi-sion, Emirates skyCargo has been leasing a Boeing MD-11 Freighter to fly between Dubai and Phnom Penh since April.

New services launched this year include services to Pana-ma from 1 February, Boeing 777-200LR flights to Auckland in New Zealand, daily flights to Cebu and Clark in the Phil-ippines from 30 March, and connecting the Chinese cities of Yinchuan and Zhengzhou. Emirates will start daily Boeing 777-300ER flights to Yangon in Myanmar and Hanoi in Viet-nam from 3 August.

The airline will be upgrading a number of services with in-creasing numbers of Boeing 777s. From 2 June, Emirates will replace the Airbus A340-300 it was using on Tunis ser-vices with a Boeing 777-300 and the Airbus A330-200 used on Istanbul sabiha Gokcen airport has been replaced by a 777-300. On 1 February it also started using a 777-300ER in Africa, replacing the A340-300 used on Lusaka and Harare flights.

Existing routes will also receive additional flights through-out 2016, with Geneva in Switzerland to become a twice-daily 777-300ER from 1 June, followed by Los Angeles to become twice daily from 1 July with another Airbus A380 and Bang-kok becoming seven times a day on the same day with a 777-300ER.

This will be followed on 4 July with a third daily flight to Cape Town in South Africa also using a 777-300ER and Colombo in Sri Lanka will become five times a day from 1 Au-gust. London will receive its 10th daily service on 1 October with a fourth flight to Gatwick airport using a 777-300ER, complementing the six flights from Heathrow airport.

The Emirates Group’s profits increased to 7.1 billion dir-hams ($1.9 billion) in the 2015/16 financial year, despite revenue falling four per cent to 85 billion dirhams due to unfavourable currency exchange rates. Emirates SkyCargo revenue declined nine per cent due to 11.1 billion dirhams, also due to weakening major currencies and falling yields. Cargo revenue fell despite volumes increasing by six per cent to 2.5 million tonnes.

Emirates Airline and Group chief executive and chairman, His Highness Sheikh Ahmed bin Saeed Al Maktoum remains confident despite ongoing challenges such as the strong US dollar against major currencies as will the looming threat of protectionism in some countries.

,

aircargoweek.com

Emirates route expansion

8 ACW 23 May 2016

C athay Pacific and Lufthansa have set up a highly integrated bilateral co-operative partnership which is a major step-up for both carriers.

Not only does it cover the commer-cial aspects and the physical handling of goods but moves the two carriers towards acting as equal partners down the line.

“We will not act as competitors anymore on the routes between HK and Europe but as one team with joint sales approaches to the market. Customers will therefore ben-efit from the combined offer of both carriers,” Lufthansa Cargo tells Air Cargo Week (ACW).

“We will coordinate our activi-ties very closely and this is a major change compared to rather loose alliances (such as WOW in the past),” the German carrier tells ACW.

This brings with it a number of significant changes with both sides pledged to work-ing closer on network planning, sales, IT and ground handling.

“Joint sales on both aircraft families will be automised and that includes a close co- operation in IT aspects. We do also want to offer customers a one stop shopping in as many loca-tions a possible - so want to have handling in

one facility at an airport wherever possible,” Lufthansa adds.

The joint network will cover more than 140 direct flights a week

between Hong Kong and 13 Euro-pean destinations, Cathay Pacific Cargo director, Simon Large (pic-tured), points out. Cathay’s large

number of direct connections to multiple European destinations

complements Lufthansa’s strength in

Frankfurt and across Europe through its dense feeder-network.

The co-operation will also focus on service enhancements. For example, customers will be able to access the entire joint network via the booking systems of both partners. Joint han-dling, initially at the Hong Kong and Frankfurt hubs, will also make things easier for customers since there will be just one point for export drop off and import delivery.

As for the timeline first shipments will be moved early next year.

“We will start from HK to Europe and then roll out the other direction later. When starting with HK-EU we will already have the mentioned har-monisation in sales processes, IT etc completed. That is the reason why we expect the real start of the co-operation not earlier than beginning of 2017 - but we are convinced that we need to have these alignments achieved before we go to the market,” notes Lufthansa.

Cathay will be Lufthansa’s third cargo part-ner after ANA und United Airlines and further partnerships are not ruled out.

THE FAR EAST

PRECISION AIRCRAFT SOLUTIONS has confirmed two large conversion orders as e-commerce keeps China’s air cargo sector buzzing.

Precision has received eight new orders for Boeing 757-200PCF passenger-to-freighter conversions - two from China Air Cargo, a new cargo airline, and eight from China Post-al Airlines.

“We believe the Precision freighter and our full-service engineering team add tremendous value to any fleet,” says Precision president, Gary Warner.

The news comes as China’s third-largest ex-press delivery company, YTO Express Airlines, plans to introduce at least three widebody freighters to its fleet by 2018, according to reports.

The carrier’s fleet currently comprises three 737-300Fs and five additional char-tered freighters plus belly space on domestic passenger aircraft. In February, it ordered 10 737-800 converted freighters with options for 10 more, the first of which will be delivered in 2018.

Adding to the buzz YTO is now, according to press reports in China to be looking at inter-national markets with a special emphasis on overseas purchasers of Chinese goods.

“There is growing demand for fast and effi-cient international express services between Chinese manufacturers and foreign buyers, especially in emerging markets such as Africa, the Middle East and South America,” says YTO Express chairman, Yu Weijiao.

YTO recently opened branch offices in Rus-sia, Zimbabwe, Japan and South Korea, and is planning to open warehouse and transit cen-tres in at least four other countries this year.

Supplementing this is the growing sophis-tication of the Chinese air cargo eco-system.

Air China Cargo (pictured) has signed a Global Master Lease Agreement with cold chain solutions firm Envirotainer.

Air China Cargo is also rolling out cold chain product this spring plan further network ex-pansion this year, and identified five stations – Beijing, Shanghai, Singapore, Frankfurt and Geneva – as launch stations in its first phase of implementation.

aircargoweek.com

Partnership benefits for Lufthansa and Cathay

China is buzzing - drivenby e-commerce

C hina and Singapore have moved on with project that imaginatively blends air and rail freight from as far afield as Europe.

Called the Chongqing Connectivity Initiative (CCI), after the city it is based in, the two sides hope the CCI

can catalyse further development both economically and of infra-structure in China, according to Chan Chun Sing, Minister in the Singapore Prime Minister’s Office.

“Both leaders noted the good progress of the initial phase of implementation of the CCI,” a Singapore government press release explains after a meeting between Chan, and Chongqing party chief Sun Zhengcai.

On the aviation side, Singapore’s Changi Airports Interna-tional (pictured) and their Chinese counterparts will explore ways to work together Chan tells Singapore media outlets. Var-ious government ministries and the Prime Minister’s Office in Singapore were contacted by Air Cargo Week - but declined to elaborate whilst confirming the gist.

“The team is also working on a masterplan to link up the air-port, river port and rail network in Chongqing. This is to create a seamless network for companies to have different options to

transport their goods around the world,” Singapore media outlets report.

The hope is the new routes, could lower the costs of European goods arriving in Singapore by up to 60 per cent, because of the CCI. A parallel hope is the initiative will catalyse broader logistic network development in less-developed Western China.

European goods will be transported via the Yuxinou freight rail between Germany and Chongqing in a 12-day journey, stored in tax-free zones and sent by air to Singapore, Chongqing mayor Huang Qifan told a mid-April seminar.

The mixed rail-air route via the 11,000km Chongqing-Xinji-ang-Europe International Railway will shave logistics costs by 60 per cent as airfreight now costs five times that of rail freight, compared with the cost of transporting European goods, such as luxury products, via air to Singapore, Huang said.

There are plans for 50 such Europe-Chongqing-Singapore cargo trips this year and 100 next year, with the first having started on 28 April, Huang says.

“If we do this well, we can also send goods to Bangkok, Kuala Lumpur, Taiwan or Hong Kong, or cities that are four to five hours’ flight away from Chongqing,” Huang tells the CCI seminar in the South Western city of China.

The CCI, whose theme is modern connectivity and modern ser-vices, has identified finance, telecommunications, aviation and logistics as its priority areas of collaboration.

Chongqing officials say they have some 260 initiatives worth $115 billion suitable for the CCI.

9ACW 23 MAY 2016

THE FAR EAST

THE International Air Transport Association (IATA) has re-affirmed its opposition to air cargo regulations issued by Indonesia’s Transportation Ministry.

IATA believes that the regulations especially No 32/2015 will hamper the air cargo sector without the benefit of im-proved safety.

“IATA supports supply chain security processes where cargo is screened or secured as early as possible in the supply chain. However this requires solid security measures including facility security, screening that is appropriate to the nature of cargo and conducted by trained personnel, and maintaining the sterility of the supply chain i.e. avoiding tampering with secure air cargo” IATA’s regional director for airport, passenger, cargo and security in Asia Pacific, Vinoop Goel tells Air Cargo Week.

“In the case of Indonesia, airlines have expressed con-cerns that some of these elements may not be in place, at least not in a way which addresses the increased threat environment,” he adds.

Ministerial Regulation No 32/2015 required an additional stage of cargo inspections at international airports. Logistics companies are now required to have their cargoes screened by regulated agents (RAs) in Line 2 (unrestricted) areas be-fore proceeding to move to Line 1 in secure areas.

Concerns have arisen about the time implementation will take as well the risk to cargo’s security in moving to Line 1 from Line 2 especially as most RAs lack screening expertise.

“We urge Indonesia’s DGCA to provide more time for train-ing, auditing and certifying regulated agents, the entities appointed to screen cargo off airport. Indonesia should also issue detailed guidance material. At least, we need the au-thorities to allow airlines re-screening at the airport if this is the airline’s choice (warranted by its risk assessment) or the requirement of its regulator,” Goel adds.

Also causing concern within the sector is the recently signed Ministerial Regulation No. 74/2015 on freight for-warding and logistics companies. This ups the minimum capital requirement for freight forwarders and logistics com-panies to 25 billion Indonesia Rupees (Rp) ($1.93 million), sharply up from the current Rp 200 million, and has led to widespread fears of job losses in the industry.

Garuda Indonesia has confirmed its goal for cargo to gen-erate a fifth of all revenues via co-operation with other firms in the form of “joint operation” such as with state-owned post office company PT Pos Indonesia and international companies, the national news agency Antara reports.

aircargoweek.com

Project to blend air and rail freight taking shape

IATA opposesIndonesia regulations

ACW 23 may 2016 10

A ir cargo carriers are now taking the management of their unit load device (ULD) fleets more seriously.

Jettainer’s managing director, Carsten Hernig (pictured) says

more urgency has come about because there is cost pressure with few options to act and ULD management is one of the last they see.

He notes the launch of awareness campaigns to prevent and reduce damages by the Interna-tional Air Transport Association (IATA) and ULD Care have also had an impact.

Hernig explains: “ULDs also influence flight security. That is why it is important the ground handlers take care of the containers, since it is not only about costs but also about security. We have rolled out a massive awareness and prevention-training program for thousands of ground handling staff.

“They all receive training in order to enhance the ULD fleet and prevent unnecessary dam-ages. This will significantly reduce cost and time

for repair incidents.“Jettainer is the only company to maintain

such programs themselves. By funding and providing this training, we are taking the ini-tiative to prevent damage to the containers and improve the situation.”

Hernig feels ULDs have developed from an asset nobody was interested into an important part of the logistics chain, mainly due to light-weight and technical innovations, which has seen ULDs become more and more of a focus.

In the first months of 2016, Jet-tainer has registered growth and acquired new customers who are being integrated, which will be detailed at Air Cargo China in Shang-hai next month.

He notes it has a large number of potential customers in the pipeline and it confirms that ULD management is a “very hot topic”.

All markets are being targeted by Jettainer - and the bigger the airline and its ULD fleet, the higher level of efficiency to be gained. Hernig says: “Smaller niche carriers are also important as potential customers. For example, low-cost and regional carriers who are going into long-haul or widebody operations for the first time may also need ULD expertise.”

Jettainer sees the current market trends in ULD management as IT support, automati-

sation and other procedures, along with closer co-operation with players on

the ground, like damage prevention or ground handling supervisors, which is gaining more and more importance.

Hernig expects a “sudden new player” from the material side entering

the scene with something revolutionary rather than a slow ongoing development of

the existing technology.He adds: “Furthermore, there are experiments

with foldable ULDs, which we have had success-ful experience with for special transports, such as horse transports.”

Jettainer has founded its own co-operation with a manufacturing firm in order to revolu-tionise the pallet. Making the base lighter (from composites rather than aluminum) it says will further reduce weight in air cargo. Hernig adds Jettainer will follow its line of organic growth and new customers will be joining and exist-ing contracts extended this year meaning it will continue to “grow strongly and successfully”.

The importance of ULD management has never been higherUNIT LOAD DEVICES

CHEP AEROSPACE SOLUTIONS is expanding its infrastructure to boost the service it pro-vides its growing list of customers.

President Dr. Ludwig Bertsch (pictured) says it will open two unit load device (ULD) repair facilities in partnership with new car-riers so it can repair the ULDs at the hubs of airlines.

This he says will also help reduce the costs incurred through the repositioning of dam-aged ULDs and free up “valuable space” for revenue generating cargo.

In Auckland, CHEP has moved to a new fa-cility and in Frankfurt it will move to a new purpose-built repair station in August, while it has increased its floor space at its Heathrow, Brussels, Washington Dulles, Chicago O’Hare and East Midlands stations.

This year, Bertsch says CHEP’s other focus has been working on renewing contracts and it has extended its ULD management partner-ship with Cargolux, Scandinavian Airlines, Fiji Airways and Air Europa.

On the operations side, it has celebrated the first year of its partnership with Cathay Pacific Airways. The carrier increased its ULD pool last year by almost 50 per cent.

Bertsch says this has been “quite chal-lenging” but offered new opportunities for co-operation and adds: “We have imple-mented a new ULD accessories management system for Cathay, which means we manage the supply and distribution of straps, lashing ropes, studs, pallet net repair kits and other accessories.

“In addition to increasing the safety of air-

line operations with certified accessories, we were also able to re-duce Cathay’s costs related to purchasing and distributing ULD accesso-ries within their network.”

CHEP has been appointed by CargoLog-icAir to manage their ULD fleet and signed several new contracts with carriers, which it will reveal soon. Bertsch says: “These new carriers’ stations offer an excellent overlap with our existing network, which increase the benefits for members of our pool. The new mainline carrier is one of the largest airlines within its geographical region and will add air-ports to our network.”

The core of CHEP’s strategy is to win more contracts is widebody operators in Europe, the Middle East, Asia and the Americas, as Bertsch says it presents it with its main ULD management and repair prospects.

He notes: “Our customer portfolio is a healthy mix of network, cargo and leisure car-riers, which provides great station overlaps and synergies.”

CHEP is also cooperating with major ULD manufacturers to help improve the design and materials as Bertsch says its in-house repair management software provides great insights into the weak points of ULDs.

The marketplace is buoyant and Bertsch says outsourcing has “gained momentum” driven by large carriers such as Cathay out-sourcing ULD management. He adds: “The interest is growing and more and more ULD management tenders are being announced.”

aircargoweek.com

Facility upgrades andcontracts for CHEP

Freight Forwarders

11ACW 23 MAY 2016

TRADEFINDER

Turkey

Airlines

USAUnited Arab Emirates

Iraq

Freight Forwarders

Hong Kong

Lithuania

Cargo Handling

United Kingdom

Associations

Worldwide

United Arab Emirates

Charter Brokers

Airports

Freight Forwarders

Belgium

Freight Forwarders

India

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