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16 JUNE, 2014 | No. 779

newsThE World’s BEsT-rEad air Cargo NEWspapEr

www.aircargonews.netaircargo100% SCREENINGWhy it won’t workAMERICA’S controversial plan to require 100 per cent pre-screening of ocean containers arriving at its seaports looks doomed to failure as forwarders point out the

flaws in the project Page3

KING OF THE JUNGLEHow to ship a lionKENYA AIRWAYS flew a lion called Simba from Amsterdam’s Schiphol Airport to Lilongwe Wildlife Centre in Malawi. A roaring success? Find out on . . .

Pages12and13

US CARRIERS . . 1

Delta Cargo moves closer to passenger

US CARRIERS . . 2Robbie Anderson leaves United CargoROBBIE ANDERSON has left his post as the head of United Cargo. No reason for his departure has been given by the airline Page3

DELTA Air Lines Cargo is to move closer to its passenger division. It comes with the news that charismatic cargo leader

Tony Charaf is to retire

Page3

Cathay flies back to top of e-league

PRINT DIGITAL ONLINE

INADEQUATE airport, road and rail infrastructure is threatening the pro-mising economic growth which Latin America has enjoyed in recent years, writes Thelma Etim.

The continent should be building on those gains by augmenting its com-

petitiveness across international mar-kets and global supply chains – but instead is plagued by excessive inter-nal transport and logistics problems.

Average freight transport prices for trade between the USA and all its trade

Continued on page three

China shows rest of the world how to do it

Latin America held back by chaos

CATHAY PACIFIC has won back its lead in the global e-freight race, writes Thelma Etim.

Latest statistics show that the Hong Kong-based carrier is pres-ently ranked as the airline operating the most e-AWB shipments, according to IATA’s April top-10 league table (see latest chart, right).

Cathay’s e-AWB penetration reached 45.7 per cent, overtaking second-placed Emirates’ 28.5 per cent, with Korean Air (21.4 per cent) in third.

Global penetration reached 14.3 per cent in April – beating March’s record of 200,000 e-AWB shipments.

Top forwarder is DHL Global Forwar-

ding, followed by DB Schenker and Panalpina.

Leading origin airports are Hong Kong followed by Dubai – and top countries of origin are China, followed by the UAE, with the USA in third.

VIP AIRCARGOShipping animals by air is a highly specialist niche, ThelmaEtim finds Pages 4, 5, 10, 11, 13

HOW TO PROSPER ASA SMALL FREIGHTER OPERATORCAL Cargo Air Lines of Israel makes a

success of operating two B747Fs Pages 6 and 7

Space satellite shipments rocketSPACE satellites have become big air cargo business says heavy metal carrier Volga-Dnepr Airlines.

The outsized freighter operator has seen a significant increase in shipments for the aerospace industry, with 22 flights moving space satellites over a 12-week period to the end of May.

One of its latest was the Express AM6 from Krasnoyarsk in Russia to Baikonur, Kazakhstan in preparation for its launch later this year.

Volga-Dnepr’s An-124-100 freighter, which carried the 25-tonne shipment, also transported support equipment for the satellite, which was protected by a hi-tech container to ensure its optimal cleanliness and temperature.

On May 20, a further eight satellites were carried on a single IL-76TD-90VD cargo flight from the Czech city of Pardubice to Yasnyi, the Russian spaceport. Produced in the UK, Canada, Japan, the Netherlands and Spain, they were delivered on behalf of Air Charter Service, a longstanding customer and are scheduled to be launched onboard a rocket called ‘Dnepr’.

Andrei Rassadkin, regional sales director of Volga-Dnepr Airlines, reveals that from March to the end of May the airline operated 22 satellite flights, including six in May carrying a total of 14 satellites.

“We see significant growth in this industry, which is fast-growing and dynamic, and the manufacture of space satellites is increasing as the number of launches and spaceports being built increases,” he says.

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AIR CARGO NEWS | 16 JUNE 20146 THE INTERVIEW

You maY think that the era of all-cargo airlines with a couple of B747 freighters is now past, but at least one

longstanding player in the business is still thriving and looking to ex- pand.

Cargo air Lines (CaL) was founded in 1976 to provide export lift for Israel’s agricultural producers and today operates two B747-200Fs. But in this era of high fuel prices and growing long-haul belly capacity, chief executive Eyal Zagagi is still eyeing growth opportunities on five continents.

It is perhaps worth addressing the aircraft issue first. The carrier’s -200Fs are factory-built with nose doors, which Zagagi says is critical for handling the kind of outsize shipments that can fly only on freighters – and a key advantage in an industry that is increasingly switching to B777Fs that do not have this facility.

But the carrier realises the need to upgrade and has sourced two B747-400Fs (also factory-built) for deliv-ery in august and october. They will replace the -200Fs on CaL’s core services between Tel aviv, Liége in Belgium and New York JFK, but what will then happen to the -200Fs has not been decided. “We are still considering what to do with them and are looking at several options,” says Zagagi.

The B747Fs are not CaL’s only maindeck lift. It also codeshares with TNT on its B777F flights from Liége to JFK and back. This makes the carrier one of the most high-frequency maindeck operators be- tween Europe and the uSa, accord-

ing to Zagagi, with daily flights, and pick-ups and deliveries in both directions.

and while CaL is a private com-pany which does not publish results, Zagagi insists it is profitable. “We are surviving very well, with annual revenue of around $150m, and we are growing,” he says.

How then has CaL managed to thrive when other small maindeck airlines have not? a key answer is its focus on vertical segments whose needs can be met only by all-cargo services. Zagagi says two thirds of its business is non-standard. “We like to say that non-standard is our stand-ard,” he says. “It is what has enabled our company to be profitable year after year.”

Its original specialisation of peri-shables exports for Israeli growers is still important, but it also carries a lot of pharmaceuticals, live animals, aircraft engines, oversize items, fine arts and even orchestral instru-ments and equipment. To handle these it has its own ground handling company – Liége air Cargo Handling Service (LaCHS), a Belgian outfit that it acquired outright in 2005 – and a network of dedicated trucks operat-ing throughout Europe and the uSa.

Perishables exports from Israel are a smaller part of the mix than they were 10 years ago, though Tel aviv-Liége traffic (and vice versa) still accounts for 60 per cent of vol-umes. CaL is the largest maindeck carrier into Israel, since EL aL has only one freighter, though, with its belly capacity added in, the national carrier is a larger cargo operator.

But Israel is not a growth market these days – “static or even slightly

declining” is how Zagagi describes it. Industrial exports have risen to offset some of the decline in perishables ex- ports, but where once CaL’s traffic was more export than import, these days it is the re- verse.

“Tel aviv will al- ways be a strong part of our bus-iness and we are proud of our lead-ership in the Israeli market,” Zagagi says. “It is an excellent market for us and we want to main-tain that business. But as a percentage of our total reve-nue and profit we want it to become smaller through the expansion of

business outside of Israel.”To this end, despite still being

headquartered in Tel aviv, CaL’s

main hub and centre of gravity is now Liége. Zagagi and his team are looking for oppor-tunities to grow their operations from there to new parts of the world.

He stresses that this is a measured process. “We are a small airline and always will be, and so we have to add new links at a pace we can swallow.” But he does suggest that the pace is being stepped up a bit. “We have been grow-ing moderately, but we are now taking on the challenge of finding more significant growth,” he says.

one example of this can already be seen. JFK has always been the carrier’s uS base, but it has now

THE AIR CARGO NEWS INTERVIEW

Still room for a niche freighter

specialistDespite the rise of belly cargo,

opportunities for a small all-cargo operator remain, as Peter Conway found out from EYAL ZAGAGI of

CAL Cargo Air Lines

‘We are a small airline

and always will be, and so we have

to add new links at a pace we can

swallow’

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AIR CARGO NEWS | 16 JUNE 2014 INTERVIEW

added some eastbound ser-vices out of Moncton in Can- ada, where CAL’s was the first B747 to land on the newly ex- tended runway. “We initially expected demand mainly from the seasonal lobster and sea agriculture business,” ad- mits Zagagi. “But we soon

realised they could also pro-vide us with year-round cargo from other customers, for example in the oil and gas sector.”

The carrier is now looking at the possibility of a third destination in North America – perhaps Atlanta – and at other opportunities in South America, Africa and the Far East. “In years to come we expect to have more lines, but

we will do so selectively,” says Zagagi. “We don’t want to duplicate the services of the bigger carriers, but we think that by being small and flexi-ble we can take advantage of opportunities they do not.”

The B747-200Fs could come into play here, with one poss-ibility being to base them in Africa. In this context it is interesting that LACHS – which until now has serviced only CAL – has just taken on its first third-party customer in the shape of Africa specia-list ANA Aviation, which has recently moved its operations from Ostend. Zagagi admits that he might not be averse to developing some cooperation in this direction.

The possibility of basing aircraft in Africa also explains what otherwise might be a puzzling aspect of CAL’s ex- pansion wishlist – the inclu-sion of the Middle East. Clearly geopolitical consider-ations limit the options for an Israeli company in this re- gion, but the situation might be different for African-reg-istered aircraft. Zagagi says the option of having the B747-400s EU-registered is also being considered.

As for the Far East, CAL already serves this market in- directly, feeding cargo from Asia to Liége via interline partners and then shipping it on to Tel Aviv. This gets over the problem of overflight bans imposed on Israeli carri-ers by its regional neigh-bours.

Not all aspects of Israel’s political position are a disad-vantage, however. While many Western carriers have had to introduce new security meas-ures in the wake of 9/11, tight security has always been part of CAL’s DNA. Zagagi says this can help to win sensitive or valuable charter business.

“Our procedures and pro-cesses in conjunction with

the Israel authorities are ex- tremely rigorous, and we also have to be very sensitive about what we carry and where we fly to and from. But that gives us a critical advan-tage with some types of cus-tomer,” he says.

CAL is IOSA-registered, has ISO-9000 for its LACHS oper-ations, has EQUIP (Enhanced Qualified User Program) acc-reditation from CSafe, and is recognised as a Quality Equipment Provider (QEP) by Envirotainer. The last of these even chose LACHS to be its Liége station.

Armed with all these ad- vantages, Zagagi remains op- timistic about the future,

saying that while the growth of long-haul belly capacity is a threat “we don’t think it is terrible.

“We will continue putting

the emphasis on our verticals and looking for the more luc-rative opportunities,” he says. “We do carry general cargo of course, but our focus will be

on the higher yield areas that only freighters can serve.”

7

FACT FILE

Since its founding in 1976, CAL Cargo

Air Lines has built up a network offering

dedicated air cargo services worldwide.

A privately-owned company, it carries

some 100,000 tonnes of cargo annually,

exporting mainly fresh agricultural produce

and industrial materials from Israel and,

via its Liége, Belgium hub, importing

heavy machinery, automobiles, sensitive

and sophisticated industrial and scientific

equipment, as well as livestock and

hazardous materials from around the world.

CAL has stations in Asia, covering China,

India, Taiwan, Hong Kong, Thailand and

Japan; as well as across Europe and the USA,

where its biggest operation is in New York

Challenge accepted.

Oil rig drill across the Atlantic?

600 horses in two weeks?

Rock concert world tour?

45 ton turbine?

5 helicopters in 1 plane?

900,000 live bees?

Radioactive shipment?

2-8°C Pharma storage?

Urgent oversized aircraft engine?

The world's most delicate flowers?

Airtight risk management for Pharma?

www.cal-cargo.comTel: 718 553 8100

Your non-standard cargo is our standard.

Dedicated to non-standard cargo, CAL offers one of the mostfrequent EU-US-EU freighter services in the industry, operatingdaily flights and pick-up/deliveries across Europe & North America.

Challenge accepted

‘We don’t want to

duplicate the services of the bigger

carriers, but we think that being small and flexible, we can take

advantage of opportunities they do not’

Next Air Cargo News interview: Chris Welsh, secretary general,Global Shippers Forum

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