INTERNATIONAL EDITION

MARCH 2010

Asia Goes Regional Bijaoui Builds From Within What Price GSSA?

March, 2010 Volumecontents 13, Number 3

EDITOR Simon Keeble [email protected] • (704) 237-3317 EUROPEAN EDITOR Leadership Martin Roebuck [email protected] WFS continuity inspires success +44.(0)20-865-70138 20 CONTRIBUTING EDITORS Roger Turney, Ian Putzger SE Asia CONTRIBUTORS Mindy Long, Peter Conway Growing closer to home COLUMNISTS 24 Brandon Fried, Gabriel Weisskopf PRODUCTION DIRECTOR GSSA Ed Calahan [email protected] Keeping the yield — and the customer

CIRCULATION MANAGER 28 Nicola Stewart [email protected] IT ART DIRECTOR SIA Cargo becomes a CHAMP CENTRAL COMMUNICATIONS GROUP [email protected] 32 PUBLISHER Steve Prince [email protected] Nagpur ASSISTANT TO PUBLISHER Sweet or sour prospects? Susan Addy 34 [email protected] • (770) 642-9170 DISPLAY ADVERTISING TRAFFIC COORDINATOR Linda Noga [email protected] AIR CARGO WORLD HEADQUARTERS WORLD NEWS 1080 Holcomb Bridge Rd., Roswell Summit Building 200, Suite 255, Roswell, GA 30076 (770) 642-9170 • Fax: (770) 642-9982 4 Europe

WORLDWIDE SALES U.S. Sales Thailand 8 Middle East Associate Publisher Chower Narula Pam Latty [email protected] (678) 775-3565 +66-2-641-26938 12 Asia [email protected] Taiwan Europe, United Kingdom, Ye Chang Middle East [email protected] 16 Americas David Collison +886 2-2378-2471 +44 192-381-7731 [email protected] Australia, New Zealand Fergus Maclagan Hong Kong, Malaysia, [email protected] 24 Singapore +61-2-9460-4560 Joseph Yap DEPARTMENTS +65-6-337-6996 Korea [email protected] Mr. Jung-Won Suh +82-2785-8222 Japan [email protected] 2 Editorial 37 Opinion 40 Bottom Line Masami Shimazaki [email protected] +81-42-372-2769 3 Viewpoint 38 People/Events

CUSTOMER SERVICE OR TO SUBSCRIBE:?? (866)624-4457 Air Cargo World (ISSN 1933-1614) is published monthly by UBM Aviation. Production offices are at 3025 Highland Parkway Suite 200, Downers Grove, IL 60515. Telephone: (630) 866-4457. Air Cargo World is a registered trademark of UBM Aviation©2010. Periodicals postage paid at Downers Grove, IL and at additional mailing offices. Subscription rates: 1 year, $58; 2 year $92; outside USA surface mail/1 year $78; 2 year $132; outside US air mail/1 year $118; 2 year $212. Single copies $10. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Direc tory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. Air Cargo World is not responsible for unsolicited manuscripts, photographs or artwork. Please enclose a self-addressed envelope to guarantee that materials will be returned. Authorization to photocopy items for internal or personal use is granted by Air Cargo World, provided the base fee of $3 per page is paid directly to Copyright POSTMASTER: Send address change to: Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC Air Cargo World 3025 Highland Pky Ste 200 at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking 100 or more copies, please contact Downers Grove, IL 60515 the magazine directly. Member of Audit Bureau of Circulations Ltd. POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone For more information visit our website at 866-624-4457. www.aircargoworld.com Cover photo by Neil Abt. ACW MARCH 2010 1 editorial It’s all Greek

ufthansa’s planned pilot strike and the UPS furlough of 300 pilots suggest the Great Recession is not over. Just as German Chancellor Merkel’s administration doesn’t want her elec- torate to pay for Greece’s fiscal profligacy, Lufthansa pilots appear equally disinterested in being undermined by the company’s lower-cast subsidiaries. LMany years ago, a last marketing gasp of “Fly the Flag” by a jingoistic British Air- ways was meant to encourage the long-term loyalty of both employee and customer. Today, embroiled in debt, times have obviously changed for BA. Who cares about an airline unless it provides generous pensions and user incentives? So the latest moves by Lufthansa and UPS echo that of Air France-KLM in send- ing a warning signal to the industry: There aren’t any guarantees any more. Despite President Barack Obama’s export initiative designed to create two mil- lion jobs and “double exports over the next five years,” the Federal Reserve says US Simon Keeble [email protected] unemployment will be 9.7 percent in 2010 and remain between 7.5 and 6.6 percent by 2012. So good luck with that export-led growth. Obviously the two airlines are more re- alistic about a US economic turnaround. With a reported $13 trillion in debt and the possibility of a double-dip recession this year, the US is in no position to provide the economic demand to support the current level of air cargo supply. Currently the US government spends 29 percent of every tax dollar on military activity, 21 percent on health and 20 percent on debt interest. A mere three percent is spent on education and one percent on transportation. Since 2001 US taxpayers have wasted $1.05 trillion on wars in Iraq and Afghani- stan. Apart from the incalculable human misery caused by such behavior, it is money that could have been spent on improving the US economy and lowering unemploy- ment. Now, as some of the world’s leading cargo carriers have indicated, it’s time to reach for the “pull here in an emergency” lever. Unfortunately for Lufthansa’s pilots, their employer seems to have other options available in trying to balance long-term cost and revenue. Ironically, German workers now have to wait until aged 67 to qualify for full retire- ment benefits while Greeks can take their Euro-based pensions 10 years earlier. So Lufthansa management and Chancellor Merkel face respective prospects of laying off Germans while underwriting a further €20 billion ($27 billion) of Greek debt to pay that country’s youthful pensioners. Fortunately for UPS, the economic challenge of a Eurozone “social contract” is not their problem. They’ve just got an American one.

2 MARCH 2010 ACW viewpoint Haiti: a logistical Rubik’s Cube

he aftermath of Haiti’s devastating earthquake Later, as the emphasis shifted from search and rescue, has presented aid organizations with one of food and blankets towards medicines and sanitation, their biggest and most logistically complex re- the freight forwarder networks became more involved. lief efforts in recent times. Chapman Freeborn’s Despite almost 40 years of experience, Haiti was a offices worldwide had chartered 106 flights as steep learning curve for us. Could we get the slots we Tat mid-February, 34 of them directly coordinated from wanted? Who was coordinating this? We were all highly our US headquarters in Fort Lauderdale, Florida. dependent on the US Air Force giving us slots in the be- Three criteria determined our choice of aircraft: what ginning, and we needed the shipper or the NGO to con- cargo did the client want carried, equipment was avail- firm what supplies were being carried and to emphasize able, and could that airplane type get the slot? On one what was most essential. Everything was desperate, but occasion we ran one of our own leased B747s, based of course the authorities had to prioritize. in Sharjah and normally deployed to Afghanistan, into We got the inevitable crank callers saying we should Port-au-Prince (PAP) with 100 tonnes of cargo on behalf be doing everything for free. We had to point out you’re of USAID. With the well-publicized difficulties at PAP, not charging the man in the street who has just lost we sometimes had to double up on two narrowbodied everything, but the aid organizations. You have to go in aircraft where a slot wasn’t available for a widebody. lean and mean to secure the flights. Clients are coming The US military came in for criticism for taking con- to you on the basis of your quality, service and reputa- trol of the airport and turning away relief flights. Our tion. Everything comes at a cost, but you’re not going to European offices experienced that. Flights coordinated abuse your rights. in Barcelona or Berlin might be halfway across the At- In all these emergencies you reach a bottleneck stage lantic, working on the assumption they would get into where so much relief is coming in that the ground in- PAP, before being diverted to Santo Domingo (SDQ) in frastructure can’t cope. The US military has cleared the the Dominican Republic. main roads now and aid is reaching the rural areas. Even aircraft transiting via the US were sometimes We’re still moving goods in on a couple of flights per affected. It seemed that US-originating and US-flagged week. As the risk of disease increases, typhoid and anti- planes were getting priority access, though I have a malarial drugs are becoming more important. A lot of degree of sympathy for those who were trying to im- these supplies are still being flown in, but this is getting pose some control. There was no ATC and no ground gradually easier as PAP resumes normal commercial handling — the equipment was antiquated and all the operation. planes needed high loaders. Haiti is so close to the US geographically that we Fuel was another massive issue, requiring tankering would expect demand for airfreight to reduce steadily or, for the Hercules, Antonovs and smaller Boeings, an as the docks at Port-au-Prince come back into full use. intermediate stop on the return flight. This resulted in a Puerto Rico, a huge producer of pharmaceuticals, is just 5-10 percent payload penalty. around the corner. At the peak of demand, we got around half our flights But it’s clear that, from whatever source, Haitians into PAP while the rest had to go in via SDQ. We had are going to need outside assistance for a long time to one or two more unusual destinations, too. Four flights come. went into the US base at Guantanamo Bay, Cuba, from where the Navy took control and positioned cargo onto Gavin Deeks is vice president sales and marketing the USS Vincent. for Chapman Freeborn Airchartering, Inc. Based in We had a mix of clients, mainly NGOs, associated the US, he has been particularly involved in coordi- government divisions and charities in the first instance. nating his company’s Haitian relief efforts. ACW

ACW MARCH 2010 3 EUROPEworld ASIAnews MIDDLE EAST AFRICA AMERICAS Yield lags as carriers begin slow climb back Schenker ir France-KLM and British Airways Ahave both reported a slight upturn in cargo volumes. raises A 2 percent increase in January, combined with a capacity reduction of 11.4 percent lower, improved AF-KL’s load factor by 8.5 contract percentage points to 64.3 percent. The car- rier said Asian traffic had seen a “marked recovery”, with unit revenue slightly ahead logistics of a year earlier. The Asia-Pacific region grew by 7.7 percent in revenue tonne-kilometer terms, and the Middle East by 3.9 percent. bar Cargo revenue fell 26 percent in the Oc- tober-December quarter, an improvement on a year-over-year loss of 38 percent in the first half. This reduced cargo losses to €29 million ($39.7 million). he phrases are perhaps the automotive, consumer, electron- AF-KL said restructuring of its cargo all too familiar. Long- ics and medium-sized engineering business was beginning to bear fruit, and term relationships, stra- sectors, with the focus on the main it had also benefited from increased Asia- tegic alliances and work- trade lanes between Germany, the US Europe activity as customers replenished T ing partnerships… this is and China. inventory. However, a competitor told Air the stuff of contract logistics, which Cargo World that AF-KL’s decision in Sep- by tradition calls for any agreement tember to ground six freighters came at between shipper and service provider “exactly the wrong time” just as exports “DB Schenker is to weave in these elements. from Asia picked up, leading to capacity Service providers, if they are doing shortages and increased yields. taking careful aim their job properly, will often become a British Airways World Cargo reported a seamless adjunct to a manufacturer’s turnaround in third-quarter volumes, with and adopting a supply chain. Both are working to a a 3.2 percent increase year over year to 1.2 common cause, and the edges can billion freight-tonne kilometers. Yield con- highly selective become blurred as to the role of cli- tinued downward, shrinking 15.9 percent. ent and customer in the supply chain Cargo capacity over the first nine approach in its process. months of BAWC’s trading year was down German forwarder DB Schenker 4.9 percent compared to last year but yield “Go for Growth” has signaled a different intent with decreased by 21.7 percent. Excluding the its recent announcement of a radi- impact of exchange rate movements, yield program. cal shake-up in its entire approach to decreased by 30 percent. high-end contract logistics business. BAWC financial controller Rachel Izzard The company says it intends to Detlef Trefzger, CEO of Schenker said: “We’ve seen a marked improvement in raise the bar high above standard contract logistics, explains: “We in- the quarter, helped by a particularly strong global logistics solutions – and ex- tend to give our customers in these peak, but there’s still a long way to go until pects to grow this part of its business sectors and markets a clearer commit- we return to the level of performance we significantly faster than the industry ment to greater quality of care, stable last saw in 2007. “ average accordingly. processes, solutions and technical in- She added: “Our premium product port- But DB Schenker is taking careful vestment in our logistics business.” folio continues to perform well, particularly aim and adopting a highly selective One key ingredient of the four-year our temperature-sensitive shipment product approach in its “Go for Growth” pro- program will be the recruitment of up Constant Climate, which has now been rolled gram. Key industry targets will be in to 200 extra specialit staff, brought in out across more than 50 stations.” ACW

4 MARCH 2010 ACW AMERICASAMERICAS AFRICA AFRICA MIDDLE MIDDLE EAST EAST ASIAASIA EUROPE EUROPE

largely from outside the tra- ditional forwarding sector. “Over the next “This will be a strategic grouping and intelligent few years we combination of operational expertise and industry expect strong knowledge,” says Trefzger. “We will be looking world- growth to wide for staff who have ex- pertise in the business sec- come from the tors and target markets we have identified.” Americas, central Just how does DB Schen- linked with the closer development ker intend to set about impressing its of our networks and, importantly, is and southeast customer base with what it describes mainly based on the growth strate- as a more, rather than less, standard- gies of our global customer base.” Europe as well as ized approach to global logistics? DB Schenker appears to have iden- “A large and significantly growing tified contract logistics as one of the Asia Pacific.” proportion of our business is with more reliable sectors in a highly fickle market. pany’s working relationship with the “During 2009 the contract logistics airlines changing greatly in view of business has shown a rather more the routes it is prioritizing. robust reaction [than other sectors] “DB Schenker already has a full to the economic slowdown,” Trefzger set of preferred carriers, with stan- says. “Over the next few years we ex- dard working procedures and long pect strong growth to come from the and lasting relationships,” he says. Americas, central and southeast Eu- “Most of these airlines have already rope as well as Asia Pacific.” indicated their support for this ini- He denies cherry-picking favoured tiative.” logistics sectors, such as automotive, Does all this mean that the global and of targeting high-earning trade contract logistics business is in line leading global companies, well-known lanes. for a step change? for their excellent supply chain solu- “Contract logistics in our view is “Already before the global down- tions,” says Trefzger. a global business and while we will turn our customers were expecting “The aim of our efforts is to leave focus on these key sectors and mar- more flexibility, particularly in regard the pure supplier stage and become kets, we will also aggressively pursue to volume changes,” says Trefzger. a strategic partner, recognized for ex- growth in other regions and other “What we see happening is a shift ceeding our customers’ in more responsibilities towards the expectations.” logistics service provider, who will Most of these cus- also be asked to provide more value- tomers, he maintains, added services such as co-packing demand identical logis- and even light assembly work.” tics solutions in all their Greater flexibility will particularly main markets, but tailor- be required in terms of response to made for their particular changing volumes. needs, with one single “The variance of volume changes is global quality manage- increasing, which in turn will demand ment system. new logistics solutions and business The intended pay- models to be adopted. We now be- off? “We will grow sig- lieve that only if you can offer a cus- nificantly above market tomer a replicable solution, which can level, with the aim of al- easily be transferred from one region most doubling revenues by the end of sectors in order to further strengthen to another, will you be able to gener- the program,” Trefzger says. our overall logistics business.” ate a sustainable value contribution “The entire program is also inter- Nor does Trefzger see the com- in global contract logistics.” ACW

ACW MARCH 2010 5 EUROPE ASIA MIDDLE EAST AFRICA AMERICAS

Oil and gas sector looking up as recovery gathers pace n upbeat Cargolux believes cluding fuel surcharges, of around Athe crucial oil and gas mar- 20 percent. “In the early part of the ket is “picking up speed” year, people tried to hang in for two and hi-tech goods, which took the or three months and hope to get out biggest hit among all airfreight ship- of the situation. In a way that was ments last year, will recover strongly logical since most airline costs are in 2010. Robert van de Weg, senior fixed, but it was a killer for yields,” VP sales and marketing, said perish- Van de Weg said. ables traffic would grow back more “There was still overcapacity until slowly but had in any case been less mid-September, especially ex-Asia. affected by the downturn. Capacity was finally withdrawn in Robert van de Weg The new Cargolux Italia subsid- the expectation the problems would iary, which began operations last last, but the industry was wrong- 200s from October to December, in- year out of Milan’s Malpensa airport, footed as the market bounced back. creasing to three in the lead-up to added a weekly Johannesburg ser- The last three or four months was Christmas. It will retain one of the vice on Feb. 21 and a Japanese ser- phenomenal. It started late, but I aircraft throughout this year, sup- vice is also still under consideration. have never seen such a strong peak porting its fleet of 14 B747-400 Cargolux Italia was formed to season.” freighters, until the belated arrival of serve Europe’s second largest mar- Demand for airfreighted goods its first B747-8 freighter. ket of Italy and to cover southern increased as a result of destocking Van de Weg said this was now Europe more efficiently, Van de Weg n the first half. “Customers put the scheduled for delivery in December said. Operating exclusively into Lux- brake on, expecting a long reces- 2010, with two more to follow next embourg “posed logistical complexi- sion, but consumers kept buying and year. Cargolux is a launch customer ties, especially from large originat- people ran short of inventory,” Van for the aircraft, with a firm order for ing markets such as Hong Kong and de Weg said. “Supply managers are 13 and purchase rights for an addi- Shanghai”. still bearish on consumption, and tional 10. Tonnage across the business was playing on the safe side. We expect A return to market growth should down 11 percent last year although, it will take six or 12 months before help to reverse Cargolux’s signifi- against the backdrop of a 14-15 per- this effect irons itself out.” cant, but as yet undeclared, losses cent decrease in airfreight volumes With inventories still low, the re- for 2009. The company has mean- worldwide, Cargolux reckons to covery continued into January. Al- while recapitalized, with sharehold- have slightly increased its share of though normal seasonal factors ap- ers injecting $100 million after ma- the market from 4 percent in 2008. ply, yields are now almost back to jority shareholder SAirlines sold its The biggest issue through the cri- their 2007-08 level. stake. Discussions with potential sis was a decline in base yield, ex- Cargolux wet-leased two B747- new investors are continuing. ACW

In The News... ($277 million) including “cargo initiatives” such the world’s largest sovereign wealth fund, is re- as a salary freeze. A rights issue is also planned ported to have bought a 15 percent stake in Lon- Air France has signed a letter of intent with with details to be announced in April…Libyan don Gatwick for £125 million ($195 million) FedEx to sell two B777 freighters of which it all-cargo startup Madina has added to its ser- from Global Infrastructure Partners, which never took delivery. The launch customer for the vices into Paris Vatry airport with two fl ights a acquired the airport last year for £1.5 billion… type, with fi ve fi rm orders and three options, Air week from Istanbul…Irish regional agency Shan- Kuehne + Nagel has founded a wholly-owned France last year sought to defer deliveries of all non Development claims the future of Shannon subsidiary in Belarus after previously working the aircraft because of surplus Airport can only be secured by through representative offi ces in Minsk and maindeck capacity. It has leased building an international cargo Brest. The logistics group said Belarus occupied a a second B747-400ERF to Air- hub because of the continued strategically important position between Europe, BridgeCargo…In a further decline in passenger numbers. Russia, Kazakhstan and China…Despite adverse tightening of its Core SAS rescue It has asked the cash-strapped weather in January that caused fl ight cancella- plan, the Scandinavian carrier is Irish government to commit €7 tions, Fraport, owner and manager of Frank- to implement additional cost sav- million to the project…Abu furt airport, reported a 32.2 percent increase in ings initiatives of 2 billion kroner Dhabi Investment Authority, freight volume to 157,600 tonnes. ACW

6 MARCH 2010 ACW

MIDDLEworld EAST news AFRICA AMERICAS EUROPE ASIA Gulf economies are on the up UAE aid igher energy prices and general initiative Hgrowth in the hydrocarbon sector will help the Gulf Cooperation Council countries to make a steady econom- fl ies to ic recovery this year, believes Emirates NBD, the largest bank in the Middle East. Improving export demand will also stimu- late the non-energy sector across the region, Haiti’s said Tim Fox, chief economist at the bank, and Gary Dugan, chief investment officer of private banking, in their annual investment rescue outlook. Fox was encouraged that the global economy was stabilizing. “Globally, trade has started to recover, and economic growth athi Buhazza, is returning,” he said. But he warned that as president and governments withdrew stimulus measures, CEO of Maximus economies were unlikely to return to their FAir Cargo, aims to historic growth rates until 2011. involve the inter- With companies performing better than national aviation community expected across the GCC market in 2009- in Care By Air, once his hu- 10, Dugan predicted “positive surprises manitarian aid initiative has on corporate profits”. Continuing strong established itself in the Unit- energy prices, boosted by increasing demand ed Arab Emirates. parent, economically sustainable in- from India and China, would bring gradual Humanitarian missions represent ternational logistics network within growth in the region’s GDP this year. between 5 and 7 percent of annual which scheduled and charter carriers Dugan said the energy, technology and activity for Abu Dhabi-based Maxi- fill empty cargo space on their flights green sectors would lead the way, and there mus. The charter operator signed an with food or other essential supplies would be “increased appetite for mergers agreement with Red Crescent in Feb- at no markup. and acquisitions” ruary 2007 to fly aid cargo at cost to According to IATA figures, airlines A survey by management consultant A T disaster-hit ar- are achieving Kearney ranks the UAE as the 11th preferred eas around the 70 percent uti- destination country in the world for foreign world. lization, which direct investment, and places Dubai as the “Typically you Buhazza said city of choice in the Middle East despite its would look for a amounts to 4 financial crisis. profit margin of million tonnes The FDI Confidence Index showed that 10-15 percent of unfilled hold global investors still recognize Dubai’s but I didn’t like space per week. unique location, infrastructure and value the idea of us Taking on board proposition as a hub to access the regional making money aid cargo will market. from humani- reduce the cost The city maintains its reputation for tarian flights,” of airlift for hu- “ease of doing business” and more than 80 Buhazza said. “We agreed to charge manitarian agencies but is not in itself percent of investors in Dubai either plan to only direct operating costs such as a charitable proposition, he argued. maintain or increase their current level of fuel, parking and overflying.” Participating airlines can negotiate investment levels in the next three years. He wanted to do much more and down some of their supplier company Dirk Buchta, MD of A T Kearney Middle last year founded Care By Air togeth- charges, and a decrease in unit fuel East, said: “Dubai is the destination of er with Etihad Airways and Abu Dha- and milage costs will enable them to choice for regional FDI and has the strength bi Airports Company (ADAC). The maintain profit margins. and talent to rebound.” ACW ultimate aim is to establish a trans- Care By Air saw its formal launch

8 MARCH 2010 ACW ASIA EUROPE AMERICAS AFRICA MIDDLE EAST

social responsibility agenda into the a reduced rate.” fabric of their organizations.” Fixed costs represent only 34 per- Sheikh Hamdan Bin Zayed Al cent of Maximus’s overall flight costs Nahyan, ruler of Abu Dhabi and chair- but fuel accounts for 54 percent, man of the Red Crescent Authority handling 3.6 percent and war risk (RCA), said the pioneering initiative insurance 2.5 percent. “If charities added a new dimension to the UAE’s could save 20-25 percent, including already high-profile role in the hu- the operator’s margin, it would be a manitarian field. tremendous saving and could allow The launch members are working them within the same budget to op- on a charter that will establish basic erate 13 or 14 flights instead of 10,” at the Dubai Air Show in November, guidelines and responsibilities for fu- Buhazza said. when Buhazza, Etihad CEO James ture partners. “Not only will this result in an in- Hogan and ADAC’s senior VP opera- “We’re hoping first to develop the crease in the number of overall relief tions, Ahmed Al Haddabi, signed a model across the UAE and we’re flights, but it could improve respon- memorandum of understanding on talking to operators such as Emir- siveness by reducing lead time. It will behalf of the founder members. Rep- ates and Air Arabia,” Buhazza said. also give the relief organisations addi- resentatives of the UAE Red Crescent But he wants to extend the scheme tional exposure through the partners’ and the UN World Food Programme more widely across suppliers and has networks and marketing activities. (WFP) also signed the document. already won support. In the last few years Maximus has Al Haddabi said: “With a sustain- “ADAC has waived all charges for delivered aid in its own right to vic- able business model behind it, I hope aid flights. The insurer of our four tims of the Asian tsunami, the Myan- that Care By Air will demonstrate to Ukrainian-registered aircraft has mar cyclone and earthquakes in Pak- many other companies how they can removed war risk surcharges and istan and Indonesia. With attention creatively and financially integrate a we’re talking to fuel suppliers about turning to Haiti since January, the

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ACW MARCH 2010 9 MIDDLE EAST AFRICA AMERICAS EUROPE ASIA

operator has been able to organize aid Haiti, while the operator also twice the model has been refined in the flights alongside its colleagues in Care chartered Emirates B747-400s to de- UAE, foreign operators will be in- By Air for the first time. liver tents and food. vited to join the effort and he hopes Etihad Crystal Cargo operated an Awareness of Care By Air on the governments can be persuaded to 88-tonne payload MD11 freighter into international stage will increase drop overflight charges. Santo Domingo, delivering medical when DIHAD, the Dubai Interna- Maximus’s AN-124 and one of its and other supplies for Red Crescent tional Humanitarian Aid and Devel- IL-76s now proudly carry Care By and Khalifa Welfare Foundation. opment Conference, takes place in Air stickers. Buhazza looks forward A Maximus IL-76 in North Africa April. to the day when the symbol is as fa- was chartered by the company’s Lon- Developing the “management miliar worldwide as the logos of the don sales office and flew to Austria core” of Care By Air will take a lot charities for which airlines fly in to pick up 22 tonnes of supplies for of time, Buhazza accepted. But once times of need. ACW In The News... cent at 102,000, partly as a result of eight new look for this year remains cautiously positive.” A new air services agreement between Austra- airlines calling. Long-haul budget airline AirAsia Air Arabia currently serves 59 destinations from lia and the UAE allows Emirates and Etihad X has terminated its Kuala Lumpur-Abu Dhabi its hubs in Sharjah and Casablanca, and will be- to operate up to an additional seven services a service citing “commercial reasons”, but said it gin operating from a third hub in Egypt in the week each into hubs such as Sydney, Melbourne, hoped the move would be temporary. However, fi rst half of 2010…Munich Airport will provide Brisbane and Perth from March 2011, as long as Ukraine International Airlines has added fre- operational consultancy and on-the-ground sup- they make a stopover at a regional airport such quencies to its Abu Dhabi-Kiev service that was port for Bahrain International Airport as it as Cairns, Darwin or Adelaide. Under a previ- launched only in September, increasing to fi ve prepares for a $4.8 billion expansion. Bahrain ously agreed entitlement, both carriers can also B737 fl ights per week…Lebanese national car- aims to become a global logistics hub with the add seven extra unrestricted services a week rier Middle East Airlines is to launch a service development of Cargo Oasis, an expanded han- from March 2010. Etihad currently operates 21 from Beirut to Brussels from June, resurrecting a dling facility that will treble air cargo capacity to services a week to Australia, and Emirates 70. route it last operated in 1996. It will serve Brus- one million tonnes a year…An inaugural meet- Air Arabia will also be allowed to operate up sels three times a week using an A320…Sharjah- ing of the Supply Chain & Logistics Group to seven services a week from March 2011. Aus- based low-cost carrier Air Arabia recorded a net in Muscat, Oman, attracted more than 100 tralian airlines have been awarded reciprocal profi t for the year to December 31 of 452 million senior professionals from the sector. An Omani rights…Abu Dhabi Airports Company has dirhams ($123 million) 11.4 percent below its chapter of The Chartered Institute of Logistics reported a 7.0 percent increase in cargo traffi c 2008 fi gure. Turnover was Dhs2 billion, a decline and Transport (CILT), the international authority for last year. Passenger numbers rose 7.3 percent of 4.5 percent on the previous year. ..Chairman for logistics training and certifi cation, has been and the total number of fl ights was up 9.6 per- Sheikh Abdullah Bin Mohammad said: “Our out- formed. ACW just relax 16 years of unbroken air cargo services to the Caspian - go to www.coyneair.com Serving Tbilisi, Baku, Yerevan & western Kazakhstan

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www.munich-airport.com worldASIA MIDDLEnews EAST AFRICA AMERICAS EUROPE China cited for ANA to benefi t unfair trade from JAL red ink? s Hong Kong airport reported Aa 52.3 percent year-on-year increase in export cargo traffic in January, a Washington DC-based think- tank claims China’s share of the US non-oil goods trade deficit has tripled since 2000 as a result of unfair trade practices. Citing data from the US Census Bureau, the Economic Policy Institute (EPI) argues that while the US non-oil goods trade defi- cit, which is dominated by manufactured products, fell from $387.8 billion in 2008 to $283.0 billion in 2009, China’s share rose in the same period from 68.6 percent to 80.2 percent. Robert Scott, EPI senior international economist and director of international pro- grams, said, “China has captured a growing share of US and world markets for manu- factured products through a wide array of unfair trade practices including currency manipulation, export subsidies, widespread suppression of worker rights and wages, and tariff and non-tariff barriers to exports.” Scott claims China has purchased large volumes of foreign exchange since 2000 in order to suppress the value of its currency. Last month the People’s Bank of China’s eset by red ink, Japan’s in- of JAL Cargo and Nippon Cargo Air- said its total foreign reserves had increased ternational operators are lines materializes. $453 billion to total $2.4 trillion in 2009. struggling to chart a profit- According to sources in Tokyo, “China took advantage of the rest of able course cargo was not addressed in the ne- the world during the financial crisis by Much of the vision for gotiations between Delta and JAL. increasing its share of US markets for manu- Bthe restructured JAL remains to be The NCA merger has been the pre- factured products. The United States should unveiled, but one thing became clear ferred option on JAL’s side, but that take a leadership role in organizing an effort by mid-February — it would not be scenario has receded into a hazy to end China’s currency manipulation,” part of a transpacific bellyhold behe- distance in recent weeks. NCA par- Scott declared. moth. The new management declared ent NYK declared that the merger A recent study by the EPI claims China’s that JAL would remain with its One- could be initiated by the summer at glass industry received $30.3 billion in sub- world alliance partners and not join the earliest, citing lack of progress in sidies from 2004 to 2008 and that China’s up with the rival SkyTeam. A union the talks. The original schedule had flat-glass sector received approximately with Delta would have created a jug- envisioned negotiations being com- $4.8 billion during that same period. gernaut controlling about 60 percent pleted by March, with the merger be- “Unless China can be persuaded to of the passenger market between the ginning in April. After JAL declared remove its thumb from the scale and fair US and Japan. bankruptcy, a report claimed that a competition can be restored, US glass man- It might have also created a part- senior NYK executive had said the ufacturers will face continuing pressures to nership of two carriers shorn of their marriage talks might be called off, downsize or close plants,” said Scott. erstwhile freighter fleets. Delta has due to strings attached to it, such Since 2001 the US glass industry has already bowed out of the main deck as NCA taking over some 3,000 JAL contracted 30 percent with a loss of nearly business, and JAL seems headed in cargo employees. 40,000 jobs, the study noted. ACW the same direction, unless the merger There has been speculation that

12 MARCH 2010 ACW AMERICAS EUROPE ASIA MIDDLE EAST AFRICA

NYK’s stance could be a bargaining business altogether, a source close to cit. The domestic passenger market, ploy, but the logistics giant is visibly JAL stated. which accounts for the lion’s share less enthusiastic about putting mon- A longhaul freighter fleet would of its business, is expected to remain ey into activities involving planes or not fit into the new JAL, which will sluggish. Management clearly views ships. The marriage of NCA and JAL be radically different from its present international expansion as the way Cargo had been regarded as a way shape. Management intends to shed forward. New routes to Europe and to turn two outfits that were losing 14 international routes and about Asia have been announced, and an money into a profitable venture, but 15,000 employees. With the 747 fleet order for 28 shorter-range B787-3s, the extent of their problems and the on its way out, observers predict that which could fly on domestic sectors, slump in business has undermined the restructured JAL will be a region- was converted to longer-range 787-8s that outlook. Already under pressure al and domestic carrier. in January. from shareholders to limit its expo- Rival ANA is poised to benefit the On the cargo side, ANA is due to sure to asset-based activities, NYK most from JAL’s transformation. When receive its fifth converted 767-300 management is reluctant to embrace members of the Japanese cabinet freighter from ST Aerospace this a move that could remain a burden on floated the idea of ANA taking over quarter and recently added Hiro- its balance sheet. JAL’s international routes prior to its shima to its network of cargo flights In his new year’s message to em- bankruptcy filing, ANA was quick to converging from Naha airport on Oki- ployees, NYK president Yasumi Kudo dismiss this scenario. nawa, the hub for its all-cargo opera- announced that the company’s busi- ANA is not facing a smooth ride tions. But while ANA’s cargo activities ness was being restructured into two itself. The airline suffered a 9.8 bil- may be on the rise, the fruit has not segments — asset-based and non- lion yen ($108.7 million) loss in the been sweet so far. In the last quarter asset-based activities — and that the quarter ended Dec. 31 and main- domestic cargo revenue was down 6.1 focus would be on the latter in the tained its full fiscal year forecast of percent, while international revenues near future. a 28 billion yen ($311 million) defi- dropped 9.3 percent. ACW Last year NYK whittled down its container ship fleet from 115 to just over 90, and two of NCA’s 747-400Fs that had been leased to Cargo B were Development/Investment Opportunity grounded, but these capacity cut- backs were not sufficient to restore profitability, Kudo stated. “If things go on like this, there will be no change in the prospect that it will become dif- ficult to maintain our liner trade and air cargo transport business,” he con- tinued. In response to strong demand, NCA is looking to increase its trans- pacific flights this spring, but this will be done through greater utilization of its current fleet of eight freighters. “Inside the Fence” Opportunities at The two planes that had been Northwest Florida Beaches International Airport parked since Cargo B’s demise have now been leased to AirBridgeCargo. • Approximately 1,400 acres of vacant greenfield land available for commercial If the merger plans with NCA were development not to proceed, JAL would likely exit • Northwest Florida Beaches International, designed as a fully LEED® Certified Airport, the freighter business. Management to start passenger and freight service May 2010 has indicated — but not yet con- • Southwest Airlines and Delta Airlines are anchoring passenger service at the new firmed — that it is looking at getting airport rid of its B747-400 passenger fleet. • Opportunities include parcels of all sizes with direct runway access, as well as select Without the critical mass of those off-runway parcels to accommodate both traditional airfield and compatible non- 36 747s, the fleet of five 747-400Fs traditional airfield based users stands no chance of being maintained in an organization that is looking to For more information please visit: divest itself of the lossmaking cargo WWW.JLLNEWFLAIRPORT.COM

ACW MARCH 2010 13 AMERICAS EUROPE ASIA MIDDLE EAST AFRICA

Kingfi sher to fl y Heathrow and Hong Kong

he government of India has ing various options for fund Tapproved Mumbai-based King- raising and our plans are on fisher Airlines to operate A330 track.” services between New Delhi, London Referring to the appoint- Heathrow and Hong Kong. ment of the Seabury Group The company also has won rights as advisors, Mallya added, to link New Delhi, Mumbai, Dubai and ”Given the tremendous equity towards ensuring that the Leadership Bangkok with an A320. No date has that Seabury enjoys with global inves- Team is supported by and has access been given for the start of the new tors, Kingfisher Airlines is benchmark- to seasoned advisors with proven ex- services. ing itself against the best in the world. pertise in aviation”. Vijay Mallya, chairman and CEO “At a time when the industry is fac- Kingfisher reported a loss of $232.6 of Kingfisher, said the airline might ing remarkably difficult challenges to million for nine months to Dec. 2009 now acquire new aircraft sooner than becoming profitable, the appointment — two percent more than the same planned. “We are actively pursu- of Seabury is a proactive step taken period in 2008. ACW

In The News... Worldwide Flight Services (WFS) cover- ing Dublin, Shannon and Cork and renewed Airbus says Asia-Pacifi c airlines will buy its existing contract covering Manchester for 8,000 aircraft by 2030 worth $1.2 trillion. three years. SIA will increase to fi ve fl ights The manufacturer’s latest forecast says car- a week its B777 fl ights from Manchester go traffi c will increase 6.3 percent per year this summer. The airline plans to replace the throughout the region. This compares with a B777-200 with -300 capacity to increase global forecast average of 5.2 percent. Airbus cargo volume to 20 tonnes per fl ight... says the Asia-Pacifi c region will continue to Singapore Airport Terminal Services dominate the global airfreight market with (SATS) has become Cargo 2000 certifi ed. airlines growing their all-cargo fl eets fi ve The Changi-based cargo handler will be times to 1,500 aircraft by 2030. John Leahy, with Shenzhen, China-based Hercules Logistics able to work to the industry standard quality Airbus COO Customers, says that by 2030 the re- & Forwarding to “deliver seamless solutions management system that is supported by many gion will be the world’s largest air transport mar- that improve the procurement and transporta- of its 43 airline customers...The GAC Group is ket with airlines carrying around 40 percent of all tion of products from Asia,” according to John providing logistics support to the Formula One airfreight...Sichuan Airlines has taken delivery Boultier, president and CEO of Swan Logistics... (F1) AT&T Williams team for a global program of the fi rst of three A330-200 aircraft leased that visits 19 countries on fi ve continents in from AerCap Aviation Solutions. The Chinese nine months. The company is also support- airline, which operates 44 A320s, will use the ing the new Williams Technology Centre in aircraft to connect its base at Chengdu with Qatar, the fi rst F1-related technical centre domestic and regional destinations as well as outside Europe...IATA says the Asia-Pacifi c new points in Europe...Hong Kong Airlines region has overtaken the US to become the has signed an MOU for six more A330-200s world’s largest aviation market. The associa- bringing its order total to 23. Established in tion notes the region’s two biggest markets, 2006, the company will use the aircraft to India and China, face completely different expand its route network within Asia as well circumstances. India’s challenge is to reduce as to the Middle East and Europe...AirAsia costs and improve infrastructure, while Chi- says it expects its cargo revenue to grow by na is adjusting to new global trade patterns. over 40 percent this year. The carrier plans to fo- Korean Airlines had a profi t of $134 million in Speaking in Singapore, IATA CEO Giovanni Bisig- cus on the South Asia region with new services the fourth quarter of 2009 thanks to a 22 percent nani said he hoped the Asia-Pacifi c region would from Kuala Lumpur to Chennai, Bangalore and rise in cargo revenue to $822 million. “With the take advantage of the business opportunities in Hyderabad and from Penang to Chennai. Low- turnaround in world cargo demand and the pick- developing sustainable second-generation biofu- cost subsidiary AirAsia X plans to launch services up of export volumes, the airline expects that this els. “Five airlines have successfully tested biofuels from Kuala Lumpur to Mumbai and New Delhi... business segment will be the growth driver again and we expect certifi cation within 2011 at the lat- UK charter broker Air Charter Freight has in 2010 and revenue generated will reach another est. Aviation biofuel is a $100 billion plus business opened offi ces in HongKong and Istanbul, Tur- peak,” it said...Singapore Airlines Cargo (SIA) opportunity. And I hope that this region will play a key...Swan Logistics has formed a joint venture has extended its cargo handling agreement with key role in its early development.” ACW

14 MARCH 2010 ACW This ad was scheduled to run in the next edition. , s Pacific Gateway, With Canada everything gets there sooner than you think.

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1742-EN_AirCargo_Air.indd 1 28/05/09 10:07:06 worldAMERICAS EUROPEnewsEUROPE ASIA MIDDLE EAST AFRICA London site for green jet fuel

he Solena Group, a bio energy and Tfuels company based in Washington DC, is to build Europe’s first sustain- able jet-fuel plant to provide British Airways with green fuel from 2014. The self-contained facility, located east of London’s City airport, will convert 500,000 tonnes of waste biomass per year into 16 million gallons of fuel. Every year, London produces nearly three million tonnes of organic waste, mainly from food. Nearly two thirds of it is currently burnt Chapman Freeborn chartered the AN-225 to fly nearly 150 tonnes of oil and gas equip- in incinerators or buried in landfill, which ment from Houston’s intercontinental airport to São Paulo, Brazil last month. According produces CO2. to the company it was the first time the aircraft has been used in South America. The The new project will enable major sav- equipment will form part of a Petrobras oil refinery project in Paulínia, about 90 min- ings in greenhouse emissions by diverting utes drive north of São Paulo. 250,000 tonnes a year from landfill, thus avoiding the production of methane while generating 20MW of electricity a year from Carbon management renewable sources. Dr Robert Do, chairman and chief execu- tive of the Solena Group said, “The Solena becomes supplier issue British Airways BioJetFuel project will effi- ciently convert biomass into clean renewable fuels and electricity and is completely carbon s Washington DC expe- James Mulva, chief executive of neutral. The plant will be a state-of-the-art rienced record snowfalls ConocoPhillips explained, “House cli- renewable fuel manufacturing facility, distinct last month, the Obama mate legislation and Senate propos- from a standard waste to energy incinerator administration’s attempt als to date have disadvantaged the facility. It will not produce any polluting emis- to pass meaningful cli- transportation sector and its consum- sions or undesirable by-products.” mateA change legislation was hit by the ers, left domestic refineries unfairly The new facility is expected to create sudden withdrawal of BP and Conoco- penalized versus international com- 1,200 jobs in the east London area and re- Phillips from a CEO-led group lobby- petition, and ignored the critical role duce local landfill tax bills. ing for greenhouse gas reduction. that natural gas can play in reducing Currently, local governments pay for the In leaving the US Climate Action greenhouse gas emissions.” disposal of waste to landfill through a tax Partnership, the two oil giants said Meanwhile a report by AT Kearney on producers. This is currently £40 ($63) per the proposed legislation grants free on behalf of the Carbon Disclosure tonne and will rise to £72 ($113) per tonne emission allowances to coal-burning Project (CDP) says carbon manage- by the time the new plant is operational. utilities while charging oil companies ment is becoming a key part of cor- Based on the projected annual through- for their CO2. porate supply chain strategy for ma- put of 500,000 tonnes of biomass waste, BA The likely result, they suggested, jor global companies. calculates this will save £36 million ($56.5 would be a cap on consumer elec- In a summary of 710 corporations, million) in landfill costs for local authorities. tricity bills and a hike in aviation and six percent of the CDP supply chain BA’s CEO Willie Walsh said, “This unique trucking fuel costs. members said they have dropped partnership with Solena will pave the way for Together with also-departing Cater- suppliers because they failed to man- realising our ambitious goal of reducing net pillar, the companies said they would age their carbon output. A further carbon emissions by 50 per cent by 2050.” now take a more focused approach on 56 percent of the 44-strong member- Solena has patented a plasma gasification climate change by pushing for spe- ship that includes Cathay Pacific Air- technology capable of producing a synthetic cific policies that would benefit them ways announced they would do so in fuel gas from the thermal conversion of bio- rather than the principle of reducing the future. AT Kearney noted that based hydrocarbons. ACW planetary emissions. many companies report significant

16 MARCH 2010 ACW AFRICA MIDDLE EAST ASIA EUROPE AMERICAS

commercial benefits in addressing not efficient you can’t be sustainable standing of our supply chain foot- climate change issues. or in the long term, profitable.” print and help suppliers realize the Financial services giant Allianz SE The CDP supply chain program business advantages that accompany reported that a carbon reduction mar- is designed to promote information efforts to reduce greenhouse gas ket of 4.9 gigatonnes valued at $126 sharing among companies that have emissions.” billion is providing a “huge” portfolio begun to integrate a carbon manage- Among the logistics suppliers is of opportunities. ment strategy into their supply chains Deutsche Post DHL that has includ- “They arise from instruments of — and the logistics companies that ed its “GoGreen” carbon measure- climate change mitigation such as the provide services to them. ment program into the company’s Kyoto mechanisms (emissions trad- CDP CEO Paul Dickinson noted, business strategy overseen by CEO ing, clean development mechanism ”It is clear that some companies are Frank Appel. and joint implementation) or at the now requiring their suppliers to ad- Founded in 2000, the CDP is an level of national policies such as subsi- dress carbon management as a core independent non-profit organization dies for renewable energy (for exaple business issue. This is no longer a that has assembled a database of the energy feed-in law in Germany),” ‘nice to have’ for the leaders, it is be- corporate greenhouse gas emissions said the company. coming a ‘need to have’ and we ex- and climate change information from Tony Prophet, responsible for the pect to see this trend growing across 4,500 companies worldwide. However Personal Systems Group’s worldwide the whole business sector.” the latest AT Kearney study show that supply chain at Hewlett-Packard, said Matt Kistler, Walmart senior vice only 20 percent currently report their optimizing a supply chain around en- president of sustainability, added, supply chain emissions. vironmental sustainability creates an “We are asking suppliers to publicly The CDP collects climate change effect far beyond the corporate head- report their greenhouse gas emis- data on behalf of 55 public and private quarters. “Operational efficiency ben- sions, reduction strategy and actions sector purchasing organizations and efits every stakeholder in the chain, to the Carbon Disclosure Project. from 534 global institutional investors all the way to the customer. If you’re By doing so, we gain a better under- with $64 trillion in assets. ACW

OUR NATURE IS TO TRANSPORT CARGO. The new Cargoitalia is the original “made in Italy” of air cargo. North America, Middle East and Far East are the destinations of a global network connecting Italy to the world.

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ACW MARCH 2010 17 AMERICAS EUROPEEUROPE ASIA MIDDLE EAST AFRICA

The AA subsidiary will operate a daily nonstop flight as Haiti services resume well as two flights via Santo Domingo and Santiago in the Dominican Republic. PS and American Airlines have resumed scheduled Ralph Latortue, consul general of Haiti in Florida, com- services to Haiti. UPS said it is delivering to the mented, “We are very grateful to American Airlines and UPort-au-Prince and Petionville areas of Haiti but American Eagle for their continued commitment to Haiti. due to the “unstable situation of the local infrastructure, Not only are they the first passenger airlines to return to service guarantees to and from Haiti remain suspended”. Haiti, they were the first commercial airlines to start bring- American Airlines operated its first commercial flight ing relief supplies to help our people.” since the Jan. 12 earthquake from Miami to Port-au-Prince Since the earthquake, the two airlines have operated on Feb. 19. 30 flights to Haiti transporting relief workers, medical On March 12, American Eagle will begin a new ATR-72 personnel and more than 400,000 pounds of humanitarian service into Haiti from its hub in San Juan, Puerto Rico. aid. ACW

In The News... providing $500,000 over the next two years to de- fi lm director was asked to get off a Burbank, CA- velop sustainable transport projects across Mexico bound fl ight when he couldn’t fi t into his single US Airways has appointed Globe Air Cargo, in conjunction with the World Resources Institute standby seat. Earlier he’d bought two seats on a part of European Cargo Services, its general sales Center for Sustainable Transport (EMBARQ)...The later fl ight. Apparently cargo wasn’t an option... and service agent for the UK and Ireland. Globe company also donated its logistical services to Miami-based Aeronautical Engineers Inc has will market US Airways’ 30 tonnes a day capac- ship two giant pandas on behalf of the Smithso- launched a passenger to freighter conversion pro- ity from Gatwick, Heathrow, Manchester, Glasgow nian and Zoo Atlanta from Washington, Dulles to gram for the MD-81/82/83 and MD-88. AEI ex- and Dublin to Charlotte, NC and Philadelphia, Chengdu, China on a B777F last month...Ameri- pects initial certifi cation by the summer of 2011 PA...Lufthansa Cargo has added Atlanta to its can Airlines (AA) has enhanced its Business with the FAA, EASA, and CAAC. Confi gurations growing Aerologic B777F network and reported ExtrAA program to allow “nearly all” customers to will include 12 88” x 108” containers or eight an 18.6 percent increase in tonnage for January earn travel awards when booking cargo whatever 125” x 88” pallets...Supply chain management 2010 over the same period last year... Worldwide the shipment size. Previously, the program only company OHL has tied up with software provider Flight Services helped Virgin Atlantic to deliver applied to online bookings...Boeing’s latest and MainStreet Commerce to create an end-to-end nearly 80 tonnes of aid to Haiti on behalf of Shel- largest B747, destined for Cargolux later this solution for mid-size online merchants “that can terBox, an international relief charity. Virgin year, had its maiden fl ight on Feb. 8. The company be implemented in a matter of weeks,” said OHL... Atlantic carried the boxes for free from the UK has orders for 76 such freighters...According to Chris Chapman, founder and chairman of Chap- via WFS in Miami...North Carolina-based Old Do- OAG, global airline capacity has risen for the sixth man Freeborn Airmarketing, has become the minion Freight Line, the sixth largest LTL carrier consecutive month. The data information compa- latest inductee to The International Air Cargo in the United States, said its 2009 revenue fell to ny says global frequencies increased 4.0 percent Association’s (TIACA) Hall of Fame. Together $1.25 billion from $1.54 billion the previous year. in February 2010 compared to the same month with work for logistics providers, the company Net income was $34.9 million for 2009 compared a year ago. The only regional decline was within also supports many NGOs including various UN with $68.7 million in 2008...YRC Worldwide North America where frequency and capacity agencies, Oxfam, Médecins Sans Frontières, the is offering customers a “Green Balance Calcula- dropped 1.0 percent and 2.0 percent respective- International Committee of the Red Cross and tor” to help offset emissions associated with their ly...Agility Logistics entered a plea of not guilty USAID...Alaska Air Cargo says to meet US shipments via certifi ed carbon offset projects. The in an Atlanta, GA court on Feb. 8 as it continues Transportation Security Administration (TSA) regu- calculator evaluates eight transport activities that to negotiate a settlement on fraud charges relat- lations it has increased the cutoff time for sea- produce or infl uence carbon emissions including ing to $8.5 billon of US government contracts. food shipments on passenger aircraft. Freight not fuel, rail miles, air miles, electricity, hotel nights, Lawyer Richard Deane told the court that “the pre-screened by shippers under the TSA’s Certifi ed employee commuting, rental car miles and em- company is in active negotiations and we hope Cargo Screening Program (CCSP) will have to be ployee reimbursed miles...Penske Corporation this can be resolved”...Virgin Atlantic is hoping delivered to the airline four hours prior to fl ight responded to an appeal from the Clinton Bush the European Commission will not echo the US departure. The airline has also increased its secu- Haiti Fund by donating 40 diesel vehicles worth a Department of Transport’s tentative approval of a rity screening surcharge to $0.04 a pound with reported $1 million for delivery via Dania Beach, AA/BA alliance on the North Atlantic in exchange a $2.00 minimum charge per shipment...Smiths FL - just south of Fort Lauderdale airport — to Hai- for giving up four slots at London Heathrow. Virgin Detection, Lufthansa Cargo and Covenant ti...Ypsilanti, Michigan-based National Airlines, CEO Steve Ridgway said, “The DOT has given BA Aviation Security are providing a one-stop, a subsidiary of National Air Cargo, was persuaded and American Airlines the ability to legally collude TSA-approved security solution for the US logis- by children from the American Heritage School in on prices and schedules and capitalize on their al- tics industry. The new partnership will offer freight Del Ray Beach, FL to fl y a DC-8 with 60,000 lbs ready dominant position”...the National Associa- forwarders and shippers ground handling, security of humanitarian aid to Port-au-Prince on behalf tion to Advance Fat Acceptance wants a boycott screening and equipment, warehousing, training of charities Avitat and World Harvest...FedEx is of Southwest Airlines after a publicity-seeking and transportation. ACW

18 MARCH 2010 ACW

SERIOUS ABOUT CARGO — and growing the managers of tomorrow

man who started working for his fa- ther’s business at the age of 22, and has built it over the last A30 years to become the world’s big- gest company in its sector, has either been very privileged or possesses a unique talent. Olivier Bijaoui, executive chair- man, president & CEO of Worldwide Flight Services (WFS), does not ac- cept that he had a silver spoon in his mouth back in 1979. SFS, as the company then was, had only 20 staff when he joined. On the question of his own abilities, he can hardly be expected to com- ment. But something has gone right for a company that handled 3.2 mil- lion tonnes of cargo last year, services 300 airlines at more than 120 airports, and today employs 11,000. international gateway. American Airlines’ parent AMR, which Where he has been lucky, Bijaoui Aeroports de Paris was formed as several years before had moved its acknowledges, is in working for a owner/operator of CDG, and promptly ramp, passenger and terminal servic- series of owners that have encour- took a stake in France Handling, along- es into a standalone company, AMR aged his entrepreneurial instincts. side the two forwarder stakeholders. Services Corporation, offered to buy And what comes through clearly in “We were small but painful to out the Bijaouis. conversation is that he has striven to France Handling. We offered flex- “AMR gave us the chance to grow keep in place the founding principles ibility and some form of competition. and I pushed my father to accept this. of quality, personal development and There would have been monopoly We needed a powerful shareholder a human approach to customer care. pricing otherwise,” Olivier Bijaoui to make the necessary investment to The story began when Claude Bi- says. compete. I took the view we could be jaoui founded an airfreight forward- He had “got the taste” for SFS by a network under someone who had ing business in Paris in the 1960s. In doing odd jobs in his school holidays the means,” Olivier Bijaoui says. those days, forwarders also acted as from the age of 14, so there was no AMR was mainly active in the US cargo handlers. When IATA regulated resentment when he joined the com- but had operations in Brussels and against this on the basis that it created pany formally and worked through Madrid. “These were just for Ameri- potential conflict of interest, France different roles in administration, ac- can to begin with. We lived under Handling was set up to serve carriers counts and HR. “People knew me the AA umbrella and it was a diffi- at Paris’s Orly airport — though was from the start. I had done manifest cult sell. Airlines were nervous and still owned by two large, established entries, I had tied pallets. It brings wanted their interests protected. But forwarders that had provided most of you respect.” we had the trust of SFS customers the service there before. Bijaoui moved up to MD and had in France and were able to offer the One airline customer, Air India, already been running the business for guarantees of neutrality they need- was unhappy with this arrange- two years when his father emigrated ed,” Bijaoui says. ment, so Bijaoui Senior took on its to the US in 1983 and launched a han- “AMR left me a lot of leeway to handling. He continued as a small dling business in Miami. grow, to create what became a Eu- independent operator when Charles Over the next 10 years, SFS built ropean cargo handling organization. I de Gaulle opened as France’s major a turnover of €100 million. In 1993, was still an entrepreneur.” leadershipseries Continuity

A Frankfurt station was “It’s important to behave not America,” Bijaoui says. Sta- opened in 1998 and WFS, tions closed and the compa- as the company was now as a global group, but as a ny was forced to reduce its known internationally, be- global headcount by 2,000. gan offering passenger ser- conglomerate of medium-sized Yet WFS has just picked vices in London and aircraft companies that share standards, up a three-year contract to refueling in Hong Kong. handle Air China’s cargo AMR Global, looking quality, security, principles and at London Heathrow, rep- to divest its non-core as- resenting 11,000 tonnes sets, sold AMR Services to proximity to management.” a year. Towards the end a strategic investor, Castle of last year, the company Harlan, in 1999. Expansion boosted its volumes at continued with the acqui- mains in control of French operations CDG by over 6,000 tonnes sition of Aerolink, a cargo handler today. a month after signing contracts with in Canada and the US, and MAS, a “The systems were not too difficult 12 new airlines including Korean Air- ground handler in Miami with other to migrate. But the change of mental- lines, which alone accounts for 2,000 stations across the US. WFS moved ity is a more sensitive question when tonnes, and TAM Airlines of Brazil. into the cargo sector at Heathrow you have bought someone in this way. In another landmark deal an- when it took over Ogden at the be- You have got to treat them with re- nounced in October, United Cargo, ginning of 2001. spect,” Bijaoui emphasizes. US Airways and Air Canada awarded Revenue grew to €300 million in By late 2006 WFS was the world’s three-year contracts at Boston, WFS’s 2 ½ years under Castle Harlan, but number three handler, with a turn- first cargo operation at the airport. the owner wanted out and closed a over of €550 million. But as with Under the agreement, the company deal with French construction group previous owners Vinci three days before 9/11. it was no longer a “As a public company, Vinci could key strategic asset decide who they wanted in manage- to Vinci, which had ment. They had many subsidiaries, just bought a road all managed by trusted individuals,” toll company. Bijaoui says. Menzies ex- “For me, as a Frenchman, it was pressed some inter- easier in some ways. Vinci supported est but in the auc- me in building warehouses wherever tion that followed, I could secure land. They were sup- a French equity portive and respected entrepreneur- firm, LBO France, ial skills. We developed €140 million took over. LBO worth of assets. Those were great has backed Bijaoui years.” through good times The highlight was the acquisition and bad — in the of France Handling. It was a €100 last 18 months, giv- million business compared with just en developments in €55 million domestically at SFS, still the global economy, the operating name in France at that mainly bad. time. In the first half of 2009, tonnage took over the lease of United Airlines’ “It was July 2, 2005,” Bijaoui re- shrank by more than 15 percent. 28,000 sq ft warehouse, and handles calls, clearly relishing the memory. Things improved in the second half as significant quantities of seafood for “It gave me great pleasure to walk in Servisair in Paris went bankrupt and the three client airlines there. there as owner.” WFS picked up new business, but for The big news in 2010 is the devel- Crucially, he won the battle for the full year, tonnage was 3.2 million opment of two greenfield cargo ter- hearts and minds and this character- tonnes, down from 3.5 million in 2008, minals. WFS has won a contract for izes the deals WFS has done down the and turnover fell back from €600 mil- a minimum of five years to operate years. France Handling’s president, lion to €540 million. the Dube Tradeport Cargo Terminal Christian Maudry, stayed on and re- “We lost people, especially in North at the new international airport in

ACW MARCH 2010 21 leadershipseries Continuity

Group, last year launched sists. “Management Olivier Bijaoui— ground handling operations has to remain ratio- the biography at Delhi and Cochin air- nal. We don’t change Mid- Works in SFS, his father’s Paris-based airfreight ports. JVs are a necessary our opinion every five 1970s forwarding and handling business, in his school aspect of operating in coun- minutes. If you know holidays. Goes on to earn Masters degrees in tries such as India and Thai- cargo well, and have land, Bijaoui points out. He the means to restruc- business and international law at La Sorbonne talks highly of the quality ture, you can remain University ethos at Bird Group, whose profitable and pick up 1979 Joins SFS full-time diverse interests range from new business. In this 1980 Takes charge of Orly operation ground handling to GSA op- market situation, po- 1981 Becomes MD of SFS erations, training and IT. tential customers go 1983 Olivier’s father emigrates to Miami and launches a WFS India launched for the capacity of a handling business ramp and passenger han- global organization to 1996 SFS acquired by AMR Services, formed several dling services for a number maintain service qual- years earlier to provide handling services to Ameri- of carriers in June 2009 and ity, and look to people can Airlines. Olivier appointed VP Europe has won a 25-year conces- they know will still be 1998 WFS opens regional office in Hong Kong, marking sion to build and operate there in future. its first move into ramp handling, passenger ser- a cargo terminal at Delhi “You don’t often win ramp and which is scheduled to open cargo business together. Different de- vices and baggage handling in Asia in the third quarter of 2010, partments will usually go for differ- 1999 AMR Corporation sells WFS to strategic investor creating a truly integrated ent service providers. The parameters Castle Harlan. Olivier becomes senior VP interna- handling business. are different — we’ve got a significant tional operations and takes charge of cargo opera- Meanwhile, in a third ma- trucking network, for example, that tions worldwide jor infrastructure develop- isn’t relevant on the passenger side. Sept Vinci Group acquires WFS. Olivier is initially chief ment, WFS is doubling the The bigger upside for those with good 2001 operating officer for the whole operation world- size of its Copenhagen han- geographic coverage comes from wide, then becomes president and CEO dling facility to 100,000 sq ft. bundling multi-station cargo agree- 2002 Vinci takes 100 percent control of ground handler Continuity and consisten- ments.” EFS, in which it previously held a minority stake cy is a recurring theme. “A The fact that the same small team few years ago, as handlers has been in place at the top for almost 2005 WFS acquires France Handling, its one-time larger built glamorous passenger two decades has been fundamental competitor and market leader in France business, cargo was looked to WFS’s relative recent success, Bi- down on as a dirty job tak- jaoui believes. “No other operator has 2006 LBO France acquires WFS ing place at the back of the a management that’s been together as airport,” Bijaoui says. long as us, because during restructur- 2008 WFS takes a 60 percent stake in BA Regional “Then some analysis by ing, companies usually shelve their Cargo KPMG found that of all air- management.” port activities, cargo was to- Asia Pacific and the Middle East is Durban, South Africa, which opens wards the top of the profitability table run from Hong Kong by Barry Nass- in May. The 160,000 sq ft cargo ter- together with private aviation. A lot of berg, an ex-AMR man Bijaoui has minal will sit in a trade zone housing people who had been ignoring cargo known for 20 years. He goes back freight forwarders, logistics compa- suddenly wanted to be in it. But you even further, 24 years, with Emilio nies, manufacturers and distributors. can’t build a network in one or two Fernandez, formerly of France Han- A dedicated “Agri Zone” will provide years — it takes 15 years to develop a dling, who heads up Europe. His glasshouses and post-harvest facilities cohesive service network.” counterpart at the North American to streamline perishables exports. Old attitudes have resurfaced dur- HQ in Irving, Texas, is Adolfo Morales, Durban represents WFS’s first air- ing the downturn, he comments. 18 years with WFS. port contract in Africa. “It’s a huge “Competitors are not as serious as Alongside these three chief operat- deal,” Bijaoui says. “The presence of us about cargo. I’m 55 percent cargo ing officers is Pablo Garcia, global VP WFS is important and we have an op- and most of the others are weighted of sales who came up from the Madrid portunity to shape it. We don’t do ev- 80:20 or 70:30 in favor of the passen- operation, and Xavier Lansade, chief ery possible deal, but when we go for ger side.” financial officer. Below this small top it, it’s a big commitment.” This has not hurt WFS dispropor- tier, Bijaoui says, “you’re immediately WFS India, a joint venture with Bird tionately in recent months, he in- down to regional level, then there is

22 MARCH 2010 ACW managers. People know there is in- and there will be a lot more consolida- ternal progression and they can be tion within the sector”. promoted to the top level. We don’t He still holds to this view. “We have like to raid the opposition. Our man- probably performed the best num- agers for tomorrow are already in the bers-wise [of the leading players] in organization.” the last three years. At the end of the A year ago, Bijaoui predicted that crisis, we will be in a stronger, more by the time the industry emerged dominant position. There has not from recession, “the operating land- been consolidation yet but we will see scape will have changed dramatically it during 2010.” ACW

the functional split between ramp and passenger handling and cargo in each Ready country”. A fan of those HSBC advertise- ments that highlight the importance of for understanding local cultural differenc- es, Bijaoui stresses: “We want to be the world’s local handler.” It’s a given China! that native Chinese managers are best equipped to look after local customers in China, but he applies this philoso- phy even within individual countries. A manager from the US west coast manages Los Angeles, for example, on the basis that customers are likely to respond better than to someone para- chuted in from New York. The human dimension remains im- portant to WFS. It believes in a per- son-to-person service ethic, flexibility in client relations and good commu- nication. Bijaoui claims this reduces staff turnover, too. There was a posi- tive response from Virgin employees who joined WFS when the company took on handling in the US for the carrier, and likewise when it picked up United’s Heathrow business. “You Meet the world’s largest growth market at a single have to convince them you’re a qual- location. And take part at the industry’s most im- ity organization that respects people portant exhibition in China. See you in Shanghai! and can offer opportunities. “It’s important to behave not as a www.transportlogistic-china.com www.aircargochina.com global group, but as a conglomerate of medium-sized companies that share standards, quality, security, princi- Organizers: Munich Trade Fairs International Group, Munich Trade Fairs (Shanghai) Co., Ltd. Trade Fair Management: Munich Trade Fairs (Shanghai) Co.,Ltd. ples and proximity to management. Information: A-Z Group Ltd | Tel: +44 (0)1737 645777 | [email protected] We have strong, committed long-term Hotline (+49 89) 9 49-1 14 98 | Fax (+49 89) 9 49-1 14 99

ACW MARCH 2010 23 With local markets more buoyant than traditional longhaul destinations, intra-Asia airfreight is set to flourish if it can fight off competition from road.

n December DHL Global For- manifestation of this development is As a result of a growing concentra- warding decided to sign up addi- the impending launch of Vietnam’s tion of electronics manufacturing near tional capacity for the first quar- first private cargo airline, Trai Tien the Vietnamese capital, Hanoi has ter of 2010 from northern Asia Air Cargo. Having obtained an operat- emerged as an international gateway to Europe. Lift out of southeast ing license from the Vietnamese au- besides Ho Chi Minh City. The airport AsiaI has also been tight, but the for- thorities last fall, the new kid on the has seen some improvements over the warder has seen no need to supple- block is scheduled to take off in March past couple of years, which have been ment its existing block space arrange- with a converted B737-300 freighter. adequate to sustain growth so far, but ments with additional capacity deals. After the initial phase, which will con- it now needs an upgrade – not only in “The north Asian market terms of runways and taxi- is different from southeast ways but also warehouses, Asia. It’s larger, more prone said Thapar. to peaks and lows. South- Vietnam’s appetite for east Asia is slower, steadi- air cargo was dented by er,” said Madhav Thapar, the downturn, but it re- senior vice president, air- bounded sharply in the freight for the South Asia second half of last year. Pacific region. Indonesia, on the other “The backlogs on the out- hand, was less impacted bound sectors were more by the slump, partly be- pronounced in north Asia. cause its economy is In southeast Asia capac- driven more by domestic ity has been tighter every- demand. One indication of where, but we have not seen the headwinds on interna- backlogs like in Hong Kong tional sectors last year was or Shanghai,” agreed Steve Dearnley, centrate on the domestic market, the Garuda’s decision to suspend its daily president of Schenker, Asia Pacific. carrier intends to expand into the in- flights from Jakarta via Singapore to He added that the only market in ternational arena as it takes on four Ho Chi Minh City. the region that saw backlogs during more 737-300Fs. Recently the airline has been more the fourth quarter was Vietnam. National flag carrier Vietnam Air- upbeat. The resumption of flights to “We see Vietnam as one of the lines signaled its growing ambitions Amsterdam is supposedly the first growth engines in the region,” said last November with a $1.8 billion or- step of an expansion towards Europe. Thapar. In recent years the country’s der for four A380 aircraft, as well as Garuda has signaled ambitions to traditional export base of garments, two A350s, reflecting bullish growth open routes to Frankfurt, Paris and textiles, furniture and seafood has ex- expectations in passenger traffic. London over the coming years as it panded to electronics and hi-tech pro- Shippers and freight forwarders takes delivery of ten B777 aircraft on duction. Companies like Samsung and hope that the market will maintain order, which are due to enter its fleet Canon as well contract manufacturers its momentum this time. “Last year starting next year. producing electronics for private label several carriers introduced flights to Cargo flights serving Indonesia are customers overseas have established Vietnam, but they couldn’t sustain also on the rise. Last December DHL production facilities in Vietnam, fuel- them. But now we see growth both started direct flights between Hong ing demand for airfreight. in passenger and freight traffic,” re- Kong and Surabaya, which operate Arguably the most pronounced marked Thapar. four times a week. Last summer TNT regionregionffocusocus SE AAsiasia

started B737F flights between Singa- 41.6 percent drop in revenue. The fol- “In addition, we will continue to pore and Kalimantan. lowing quarter, which ended Dec. 31, monitor new markets for growth and Perishables dominate airborne ex- showed a 9.3 percent drop in revenue sales opportunities and actively pur- ports from Indonesia, but electronics and a 0.3 percent decline in volume. sue more charter opportunities, such have entered the mix. Besides tuna It marked a return to black figures as targeting more project movements and other types of fish and tropical with an operating profit of S$40 mil- for museums, engine shipments and fruit, Singapore Airlines Cargo has lion ($28 million) from a loss of S$46 motor sports,” he added. been moving cameras headed for Eu- million ($32 million) a year earlier. Freighter routes to Dhaka, Nairobi rope and the Americas and DVD play- Overall, SIA tabled a net profit of and Atlanta, which were launched last ers going to the Philippines, reported S$403.7 million ($283.8 million) in the year, have fared reasonably well and outgoing SIA Cargo president Goh third quarter, its best quarterly result will continue. An earlier foray into Choon Phong. in two years and a return to black af- Latin America proved less success- Given the paucity of direct interna- ter two straight quarters in the red. ful and was abandoned after a few tional links, a considerable portion of Despite the upturn, which was months. Indonesian exports by air continues most pronounced on the longhaul One segment that SIA Cargo intends to be routed over Singapore. Like- sectors to North America and Europe, to cultivate more in the near future is wise, SIA Cargo has maintained its Goh was only cautiously optimistic. perishables. This is linked to the in- high proportion of transit cargo to and “Although the worst seems to be tention of Singapore Airport Terminal from other countries in the region. over and there are signs of demand Services to launch Coolport@Changi Predictably the slump also took a toll strengthening in recent months, it is later this year, the airport’s first per- on transit volumes moving through as yet uncertain whether the recovery ishables handling center. Changi. As long as the recovery of air- in cargo traffic volumes will be sus- According to forwarder reports, freight demand throughout the region tained,” he commented. Singapore has recovered fairly well remains slow, the existing lift out of For the region’s pre-eminent car- from the earlier downturn, although neighboring countries can absorb a rier, this spells a continuation of its its airfreight base for O&D traffic is larger share of exports, reducing the flexible approach to capacity deploy- smaller than in the days when elec- overflow that moves over Singapore, ment. tronics manufacturing was still car- Thapar observed. “SIA Cargo continues to adopt ried out on a large scale in the city SIA Cargo showed a marked im- variable frequency implementation state. Its airfreight sector has fared provement in its fortunes as 2009 and flexible capacity management to better than Thailand’s, which had to progressed. In the second quarter match capacity to market demand. contend not only with the impact of of its fiscal 2009/10 year, the car- We will also continue to restructure the economic slump but also with the rier suffered a 15.4 percent decline routes to improve economics,” Goh fallout from the disruptions in 2008 in tonnage, which translated into a declared. which shut down Bangkok’s airports.

ACW MARCH 2010 25 regionfocus SE Asia

“It shook customers’ confidence in Thailand. A lot will depend on how stable the country is going to be in the near future,” remarked Thapar. Seemingly undaunted by this situa- tion, the national flag carrier declared its intention of entering the main deck market. Management has indi- cated that it wants to field large wide- body freighters. So far this has led to a block space deal with US-based Southern Air for two B777 freighters. Still, forwarders are not holding their breath. “You hear that periodically,” said Dearnley with regard to Thai’s from Japan have also been courted. risen to even more prominence in the freighter plans. “We’re still waiting. I “Johor will be useful as a third wake of the economic downturn and wouldn’t want to speculate.” gateway besides Penang and Kuala the prospect of diminished appetite Next door, MASkargo has been Lumpur,” commented Thapar. for imports in North America and Eu- vague about its plans future freighter Malaysia’s incumbent hubs may not rope for some time to come. operations. Management has indicat- be pleased with the upcoming com- “We do see more focus on intra- ed that it would be interested in more petitor, but they may be more con- Asia traffic,” confirmed Thapar. modern cargo planes, possibly A330s cerned about a different kind of com- Greater liberalization between or 747-400s, once its leases for the petition. The traditional gateways in ASEAN member countries has been 747-200Fs provided by Air Atlanta the region are faced increasingly with slower than widely hoped, but the Icelandic expire. efforts to shift their throughput from push has nevertheless been welcomed Given its strong base of electron- air to road. by logistics operators as a move in the ics manufacturers, Malaysia was hit Over the past two years TNT has right direction. hard by the slump, but operators are aggressively expanded its trucking By the same token, the free trade upbeat about the year ahead. Schen- network in the region, including links agreement between ASEAN and Chi- ker has an aggressive growth strategy to China. Other operators are mov- na that came into effect on Jan.1 gives for Malaysia this year, Dearnley said. ing in the same direction. DHL Global hope for increased traffic flows within TNT, which opened a new gateway Forwarding launched a cross-border the region, although nobody expects in Penang in October, declared that it trucking service between China and a sudden surge in traffic. expected its revenues in Malaysia to Vietnam last August. “The establishment of ACFTA triple within three years. Schenker has moved at a slower brings an economic zone with 1.9 Optimism is also high in Johor, pace. “We’re just now getting a ded- billion consumers, close to $6 tril- where Senai airport saw the start of icated person looking at that,” said lion GDP and $4.5 trillion in interna- weekly MASkargo flights to Tokyo Dearnley. He reckons that it will take tional trade volume. It is the largest last September. The airport operator some time yet for surface transporta- free trade zone in population and the wants to lengthen the runway to 3,800 tion to establish itself as a true con- third-largest in economic scale,” com- meters, expand taxiways and build a tender. mented Goh. cargo terminal capable of handling up “I don’t see a big need for this at “For cargo, the volume within ACF- to 80,000 tons of cargo a year. the moment. It’s more a longer-term TA will likely increase significantly. Senai Airport Terminal Services, thing. The infrastructure is still a Consequently the lanes between which operates the airport, set up a challenge. You’ve got to trans-load a China and ASEAN will have strong subsidiary last September to oversee container at the border,” he said. growth.” the development of a hi-tech park on In the long run trucking is likely to However he does not regard truck- 2,700 acres adjacent to the airport, play a much larger role, especially as ing as a particular threat for SIA which is slated to commence this the focus shifts more from the long- Cargo. “The emergence of surface spring. It aims mainly at the aeronau- haul sectors to North America and transportation is not a threat but tics industry and the information and Europe to the intra-Asian trade lanes. rather will enhance Singapore as a communications technology sector, Long projected to outpace growth regional hub, especially for trucking but investors in pharmaceuticals, the on the Asia-North America and Asia- from Thailand, Vietnam, Cambodia energy business and auto companies Europe sectors, intra-Asian traffic has and Malaysia,” he said. ACW

26 MARCH 2010 ACW publisher of Airline Ground Services, is delighted to present the 2nd Air Cargo Handling Conference 2010 Providing quality and retaining the margins

Crowne Plaza Brussels Airport Hotel June 15-16, 2010

Chairman: Chris Notter, Manager Cargo Handling, Etihad Crystal Cargo Co-chairman: P Balasubramanian, Manager Cargo Global Operations Services, Emirates SkyCargo

Event hosted by Conference supported by

Platinum sponsor Gold sponsor Silver sponsor Bronze sponsor Special sponsor

Media Partners

To view conference programme, information on sponsorship or to exhibit, www.evaint.com “The market won’t survive on current yields.”

SAs report a modest Adrien Thominet,t,, ggeneralenene managerr papacityciityy withdrawsdraws wewe willw returntuurn tot a increase in airfreight of Aero Cargogo InternationalInnter tional in FranceFr llelevelevel wwe can aallll lliveiive wiwith.”it volumes since last fall. and didirectorirector of the parentarent EECSCS ggroup,r KeKeithit Stevens,vens, MMDD of Platinum’satinum’m s GBut when it comes to believeselieves 2010 willwi bee “a bit betterbette in UK armarm, is equally cautious.ca s. “Much“Much the rate they’re get- volumeume terms” but admits: “R“Rates dependdepends on the individualindivid marketarket andand ting for the job, they will tell you only are an issue we have to work onon. We the finfinanciall stability or growthwth raterate what “cannot” or “must not” happen have recovered in volume but not yet there. Any change in the level of ca- this year. in revenue. Profitability has not yet pacity to a particular market can have Most prefer not to reveal what their come back to airlines. an effect. Niche markets like some of expectations truly are, underlining “Even if they don’t increase, rates the Amerijet Central American or Ca- the fragility of the recovery in this must at least freeze. We cannot have ribbean destinations have been less market. the price dropping further through affected by the credit crunch than Over recent years the leading cargo special promotions,” Thominet says. mass markets like London to New GSAs have re-branded themselves as Don Cochran, president of Hous- York or Europe to the Far East,” Ste- general sales and service agents or ton-based Platinum Air Cargo, agrees: vens adds. GSSAs. It is the extra “S” that holds “There has to be rate recovery. The Ian McCool, MD of International the key to their fortunes this year. market won’t survive on current Airline Marketing (IAM) in Ireland, Those companies that are willing to yields. In the middle of last year, the is optimistic the worst is over. “There go the extra mile on behalf of their market grew so soft I was in panic are indications that supply is closer principals are holding on to their con- mode. But we came out in the black. to matching demand following capac- tracts, and more positive about their We won’t quickly get back to the rates ity cutbacks on certain routes, which prospects. we have seen in the past, but as ca- has stabilized rates over the last two featurefocus GSSA

months and has even in- find them a solution if it hasn’t.” “We do a lot of truck management and creased rates in some cases,” Acting effectively as the airline in can get a cheaper cost per lane sector McCool says. “Increased de- a particular location brings extra re- than many specialists. We have to do mand for specialized express sponsibilities, he says. “We’re geared a little extra work for that – maybe go services has been an- for exports of course, because that’s to seven different vendors, take in- other positive indica- where you earn your commission. But voices from each of them and process tor and we expect this we deal with imports too, because my the paperwork.” to continue.” imports today are my exports tomor- He confirms that GSAs face more Rate pressure re- row. You don’t walk away from prob- re-tendering, but is happy to come mains intense, according lems just because you can’t see an im- under clients’ microscope. “Airlines to Ton Smulders, MD of mediate advantage.” are asking, what have you done for Active Airline Represen- Most GSAs agree the crisis has ac- me? That’s OK. Everything we mea- tatives in the Netherlands celerated the trend towards outsourc- sure for them, we should be measur- and vice president ing. Airlines have been forced to cut ing for ourselves anyway.” of the EGSAC net- costs and have not worried about los- Platinum lost AirBridge Cargo and work of indepen- ing control, Smulders says. “The num- Aer Lingus last year, but picked up dent agents. ber of requests increased heavily last Gabon Airlines, which Cochran says “The last year year. “If an airline reduces services to is “increasing nicely”, and Tripoli- has been very dif- a particular destination but still has based Afriqiyah Airways. He was also ficult. Agents are its own office, that’s a fixed cost.” pleased to renew Etihad, which as a screaming for cargo. Thominet says that with cargo typi- state-owned carrier is obliged to go The number of ship- cally accounting for 10-15 percent of out to tender every two years. Etihad ments was a bit up revenue for passenger airlines, once added Chicago, its third US destina- but they were much upon a time it may have taken a back tion, last year. smaller,” Smulders seat. But with carriers now looking at With six company-owned offices says. “The income all areas of revenue the trend towards plus sub-agents in Detroit and Atlan- per kilo on small outsourcing to GSAs, especially those ta, Platinum is strong nationally, but shipments is high, with larger geographic coverage, has has had to close its Washington DC but if it’s only one or increased. and Denver offices. two kilos, the total “Airlines that didn’t consider it “They were no longer relevant in in your hands is al- before are now looking at it. Others the grand scheme. Before, I wouldn’t most nothing. Even are auditing more carefully, to make hesitate to open a local office if that’s at a rate of two sure the setup in their GSA is opti- what an airline wanted, but now, ev- cents, 10,000 kilos mal. They used to stay in long-term erything has to pay its way - there’s is better, but the big relationships and believed what the no place for a loss-leader office,” Co- shipments are just GSA was saying. Now the cargo man- chran says. “Instead we opened in not there.” ager has to report in, and show his Chicago and Los Angeles, where we’d Smulders believes traditional con- efficiency,” he says. previously had sub-agents.” tracts, under which GSAs buy net “Even incumbents have to take part Platinum Air Cargo (UK) picked and sell gross while determining their in regular tenders. It’s not a question up Estonian Air and Viking Airways own margin, are disappearing in the of airlines losing loyalty, but they’re last year, together with Libyan start- current cut-throat market. A straight under greater obligation than before up, Madina Air. Previously a ground commission agreement is not only to monitor, evaluate, review.” handler, Madina began flying in No- more transparent, but encourages Cochran does not share the view vember and now operates two A300 the agent to seek the best rate he can that the recession has necessarily led freighters a week from Vatry, France, from the forwarder. to more outsourcing in the US mar- to Tripoli. As commissions have fallen, the ket. “But airlines are tightening their As well as the oil and gas traffic for priority has been “to do things you’re belts. They want more for less, and which Libya is best known as a freight good at and win loyalty from the air- are trying to negotiate lower commis- destination, Keith Stevens and his line”, Smulders says. “We supervise sions.” team have been responsible for ship- flights, and call the agent [forwarder] Platinum’s preference, naturally, is ments of hatching eggs and horses. when the shipment has gone — or to offer airlines more for their dollar. Platinum has European offices in

ACW MARCH 2010 29 featurefocus GSSA

the Netherlands, Belgium, Spain and same firms, suggesting that in diffi- ing increasingly to medical devices Portugal as well as the UK. “Multi- cult times some carriers simply cast and pharmaceuticals. country contracts are becoming around for something different. IAM’s Ian McCool believes stricter rarer,” Stevens says. “In some cases “It’s about more than just commis- temperature-control regulations on other offices will represent airlines sion level,” Thominet says. “Some pharmaceutical movements will open that may directly compete with the clients want a bigger representative new opportunities for carriers, but carriers we represent. In the US, Plat- with dedicated staff. They may look says technology-driven destinations inum represents Afriqiyah, which flies for an established player with regional have suffered. “We battled hard dur- daily passenger flights from Gatwick offices. Others believe they will get ing the year to gain share in a dimin- to Tripoli; we represent Madina with more efficient service from a smaller, ishing market. Some routes such as its Tripoli freighters. Having said that, hands-on GSA.” Johannesburg and Tokyo have seen we do try and market the worldwide Overall, he believes airfreight is substantial reductions. Platinum network to carriers.” now running at similar volumes to The launch from London to Kua- ECS represents some clients such the end of 2008. “Freighter operators la Lumpur by AirAsia X last March as Brussels Airlines, TUI-owned Cor- are suffering the most. They must in- brought welcome relief. The low-cost sairfly and Ukraine International Air- crease rates but can only do it gradu- carrier had built a 58 percent share lines, at a global level. Turnover is ally. In passenger services it depends of the small bellyhold market from down thanks to the disappearance of on the market. Ireland to Malaysia by November. airlines such as Cargo B. But like-for- “To Japan, for example, there is McCool says AirAsia X has quickly like traffic increased, Thominet says. now a shortage of capacity after Air established itself as a route to Perth, In the case of Brussels Airlines, where France withdrew its freighters and Melbourne and Brisbane over KL. ECS has full access to capacity, the with Japan Air Lines pulling out of a The Irish market is small but the east- group achieved a 93 percent load fac- lot of services. We have represented bound services were achieving 85 per- tor last year. All Nippon Airways ex-France since cent cargo load factor in November ECS picked up Colombian all-cargo September. It’s their first time with a and December. airline Tampa Cargo for all of Europe GSA, and suddenly they’re in a good With American Airlines’ reduction except the UK and also last year won position in the market.” of winter capacity on Dublin-Chicago the US Airways account out of the The countries hit worst by the fi- route, IAM has routed much of its US UK. “That’s our first North American nancial crisis have seen manufactur- traffic on the carrier’s widebodies out carrier and an interesting product for ing decimated. Irish airfreight exports of Heathrow. “On the B757 aircraft us,” Thominet says. were 23 percent down in the first 11 ex-Dublin, we have been focusing on The group has both won contracts months of 2009 and with the IT sector small express shipments,” McCool from rivals and lost business to the still reducing, GSAs have been look- says. “Express demand on AA has in- creased from Ireland on certain www.heavy-weight.com routes, in particular to the US west coast as there is no longer any direct For all your freight transport and logistics requirements uplift from Ireland after Aer Lingus here’s the obvious choice! stopped serving the region.” IAM should also benefit from March, when China Airlines launches the only direct Heathrow-Taipei flight three times a week in addition to its three freighters from Manchester. Whatever the economic portents, global deliveries of jet airplanes are set to equal their 2009 level this year at 1,200. Entrepreneurs continue to launch new airlines while existing From our signature GSSA programmes, airport to door ■ General Sales & Services Agent solutions and logistics innovations, Heavyweight provides ■ Airport to Airport, Airport to Door Deliveries operators are reinstating mothballed our airline and freight forwarding customers the products and ■ Wholesale Transportation Services services from the northern summer services that have become an integral part of their business. ■ Tailor Made Solutions season. For proactive GSSAs, busi-

Find out more about our offices and services throughout the U.S., ness is out there — even if margins Ireland, the United Kingdom and Middle East. will likely stay wafer-thin for some E: [email protected] www.heavy-weight.com time to come. ACW

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LOOK FOR L-3 AT: AirCargo 2010 (March 14–17), Orlando, Florida; Booth 74 & 75 featurefocus IT

SIA is the largest carrier so far to move its cargo IT platform to Java open architecture. More airlines are expected to follow suit.

Hot For SIA Cargo

ingaporepore Airlines CarCargogo executive John Johnston.J and cheaper. Separately from one is pushingshing itsits ITIT platformplatform WithWith itsits JavaJava architecture, Car- another, airlines have tweaked and into the 21st century. In gospot offers a number of advantages modified their systems over the years, Sa major step away from over the two mainframe-based sys- creating highly complex variations the legacy system it has tems that are widely in use today. that are cumbersome and costly to used for two decades, the Asian car- Lacking relational databases, those upgrade. Numerous front ends and rier has adopted several modules of legacy systems do not allow direct ac- interfaces have been created to link Cargospot, the Java-based cargo IT cess to operational and commercial the core functionalities of the main- system offered by CHAMP Cargosys- data for reporting. Data for reports frame system with other elements of tems. have to be extracted from the operat- IT infrastructure. Cargospot was initially developed ing system and shifted into auxiliary SIA Cargo has been using its exist- by Switzerland-based Softair, which data warehouses before they can be ing reservations setup for the last 20 CHAMP acquired in 2008. Having analyzed. The Cargospot system, on years. Over time it has become more identified a need for new generation the other hand, gives users direct ac- cumbersome for the carrier to im- solutions, CHAMP moved some of its cess to these data, allowing instant prove the system’s performance and applications to a Java platform before visibility of performance. functionalities to meet the changing management decided it needed a core The open architecture permits needs of its customers and stakehold- system that transcended the legacy ready connections between reserva- ers, remarked outgoing SIA Cargo architecture of the existing FAST and tion and revenue accounting, enabling president Goh Choon Phong. Unisys setups that the air cargo in- users to obtain instant price calcula- He said the airline picked Car- dustry has used for the past decades. tions, including pro-rating for a sec- gospot because its functionalities are Rather than build one from scratch, ond leg with an interline partner. able to meet SIA Cargo’s operational it opted for a friendly takeover of Sof- Besides quicker access to infor- needs with minimal changes. “In ad- tair, a step that accelerated develop- mation and related cost benefits, the dition, Cargospot is currently used by ment of its new generation solutions new technology makes updates and numerous major players in the logis- by about two years, said CHAMP chief maintenance of cargo systems easier tics industry,” he added.

32 MARCH 2010 ACW It is not only the costly and time- tomers to the next-generation sys- consuming changes that make legacy tem. Together with new clients, they cargo systems cumbersome to use. add up to almost 40 firms. Most are The number of IT staff who are famil- airlines, but their ranks also include iar with its architecture and quirks is handling agents. diminishing, so carriers have to spend “Our target for 2010 is to bring about more time and money on recruiting 20 further carriers to the Cargospot and training suitable IT staff. platform,” said Johnston. By early 2011 Speed and ease of operation are he intends to have all customers off two other relevant factors, Goh point- their FAST systems. Those who were Air Cargo Security Screening ed out. The learning curve for staff is using Unisys have already been moved that Keeps Commerce Moving shorter, and the new system enables to the next-generation camp. L-3 offers products and services that support your need to keep cargo moving. them to respond faster to customer Johnston reckoned that the down- You need reliable, high-throughput equip- enquiries. turn last year put pressure on airlines ment that is cost effective, tuned to your Out of CHAMP’s menu of offer- to move ahead with their longer-term demanding environment and backed by an ings, SIA Cargo picked the reserva- plans to upgrade their cargo IT infra- experienced team of trainers and support en- tions element as well as the handling structure. gineers. Qualified by regulators, L-3’s air cargo systems help you keep things moving. and flight planning modules. The new This is likely getting a further boost setup will give it better reporting and from the fact that some airlines that To address the regulatory requirements, tracking capabilities and move its res- have been sharing their mainframe L-3 provides a range of TSA-qualified solu- ervations to a more customer-focused architecture between passenger and tions in many sizes and capabilities. and more cost-effective platform, cargo applications are turning away Our equipment handles shipments of var- Goh predicted. from main- ied sizes and applications and is available in The airline is frames in all of the TSA-defined equipment categories. currently roll- their passen- L-3 products come in a multitude of tunnel ing out the sys- ger business, sizes (small, medium and large X-ray) and in- tem. The process which forces clude both conventional X-ray and advanced kicked off last their cargo di- technology (AT) systems that have approved September and visions to look software algorithms that automatically detect is expected to be for a new plat- explosives. completed by the form. We offer many sophisticated dual-view and third quarter of The rise in multi-view architectures along with best-value this year, accord- the number of single-view systems. Several of these systems ing to Goh. operators that are TSA-qualified, and additional products ‘Rx’, as SIA are using parts have been submitted for qualification. These calls the new system, will be integrat- of the Cargospot system has an at- include some of our low-cost systems, large ed with CCN Hub, a carrier-neutral tractive cost benefit besides reducing X-ray platforms and L-3’s OptEX explosives Internet portal. “Customers will enjoy clients’ expenditure to maintain and trace desktop system, which can detect any a seamless booking experience with upgrade their mainframes and the kind of explosive. SIA Cargo via the CCN hub in coun- lower cost for recruiting and train- L-3 has longstanding expertise as a trust- tries where they operate. They will ing IT personnel. As more players use ed supplier of air cargo solutions. also be able to make bookings and get Cargospot, the less CHAMP should For more than a decade, we have been pro- confirmations directly via the hub and charge each participant for future viding airports and shippers with a conven- partner cargo reservation systems,” upgrades. tional and high-energy X-ray line of inspec- Goh said. “Rx is a community-based program. tion systems for break-bulk, skids, pallets and SIA Cargo is the biggest airfreight This provides SIA Cargo the opportu- ULDs. Our equipment screens cargo ranging carrier to date to embrace Cargospot, nity to tap the vast knowledge avail- from containers of fruits and vegetables to but it is joining a growing community able from other stakeholders in the electronics and is currently in operation at of users of the system, said Johnston. logistics industry. This community- shipping, forwarding and independent cargo Several airlines are looking to take on based platform will help ensure that screening facilities (ICSF). the system, he claimed. Rx will be continuously upgraded, to Learn more at: www.L-3com.com/sds Back in 2008 CHAMP began mov- meet all new requirements of the lo- ing existing clients from their FAST gistics industry. platform to Cargospot. Seven carri- “These will include the delivery of ers migrated to the new platform in system solutions to meet new cus- that year and more followed during toms regulations around the world the 2009. Up to late January, CHAMP and e-air waybill requirements for had migrated 26 existing carrier cus- Cargo 2000,” Goh concluded. ACW

ACW MARCH 2010 33 Nagpur logistics: sweet or sour orange? Millions are being spent on new airfreight facilities in the very heart of India. Yet many analysts believe that despite congestion, existing hubs are a better bet.

ccording to the latest this year with a capacity to handle power plant, a 60 hectare (148 acres) Airbus forecast, a 16.5 870,000 tonnes of cargo. terminal to handle 1,000 trucks, ad- percent annual growth Recent reports have questioned ditional space for private operators Ain India’s express in- the viability of Nagpur as a single, dustry will require Memphis-like express hub, most no- an additional 164 cargo aircraft by tably a study conducted by a central 2028. Meanwhile, Air India says it will government Planning Commission launch a separate cargo business next that concluded New Delhi is far bet- month with a fleet of B737 and A310 ter suited for the purpose. freighters based at Nagpur in the In- Despite the doubts, the regional dia’s Maharashtra province. government of Maharashtra and the Situated in the absolute center of Maharashtra Airport Development the country with a population of 2.4 Company has budgeted Rs3 billion million, Nagpur is popularly known ($65.2 million) for the project. And as the “Orange City” because of its the reputed architect of India’s low- historical trade in the fruit. cost travel, Captain G R Gopinath, has Following a decision four years ago also chosen Nagpur to launch his new to develop the country’s first express logistics company, Deccan 360. delivery hub in Nagpur, the city’s When opened, the airport’s new expanded airport will be completed cargo development will have its own

A huge development of domestic airfreight in India to satisfy a growing middle-class population

to develop their own facilities, and 14 public warehouses. With its central location and con- nections to major road and rail net- works across India, Nagpur is cur- rently served by Indian Airlines, Jet Airways, Indigo and Kingfisher Air- lines. The India Post has shifted its Source: Airbus air cargo forecast to 2028 regionfocus Nagpur

hub to Nagpur, while ast month, Kingfisher some Indian freight for- Airlines launched warders have already Kingfisher Xpress, a established a presence door-to-door in the city as existing service that airports like Mumbai includes a same-day and Delhi have become increasingly congested. offering it claims But if government is India’s first such express planners still prefer product with a money-back New Delhi, will Nag- guarantee. pur’s colorful ambitions The airline said it will turn a sour orange? collect shipments up A recent survey by the New Delhi-based to 175 kilos (386 lbs) in Indian Council for Research on In- or actual volume of traffic is always Mumbai, New Delhi, ternational Economic Relations and the deciding factor. Bangalore, Hyderabad, the Indian Institute of Management When asked what determines hub Chennai and Kolkata choice, respondents added that land with guaranteed same- availability and other infrastructure day delivery to Bagdogra, facilities were important — together with service quality and airport costs. Bangalore, Chennai, Significantly, even though the Ex- Coimbatore, Delhi, Kochi, press Delivery Council of India has a Goa, Guwahati, Hyderabad, common-user terminal in Delhi and Indore, Kolkata, Mumbai, Mumbai, it has not taken up space in Raipur, Ranchi, Lucknow, Nagpur. Nagpur, Pune and Srinagar. In fact, some companies surveyed suggest Bangalore could be a better Prakash Mirpuri, Kingfisher option than Nagpur because of its in- vice president for corporate creasing trade with the ASEAN eco- communications said, nomic community. “Kingfisher Xpress has been So in order to establish Nagpur as conceived with a view to a viable logistics hub, India’s regional serving the unmet needs of and national government will have to offer some significant incentives to users who are looking for attract business. a solution which ensures So far the country’s Ministry of Civ- that their shipment reaches il Aviation has proposed a five-year the recipient’s doorstep exemption of all airport and naviga- on the very same day. Our tion charges for both domestic and confidence in this service international airlines. This may increase the attractive- reflects in our money back ness of Nagpur. Hopefully, it will guarantee. Kingfisher achieve the desired results. Xpress will also offer a next- in Kolkata, suggests most logistics day delivery service across companies are not so interested in a Authors Dr Partha Pratim Pal 20 cities in India”. Nagpur hub. and Dr Subrata Mitra are Profes- The airline also announced The nationwide questionnaire of sors at the Indian Institute of Man- 133 express companies, 90 shippers agement. Dr Arpita Mukherjee is door-to-airport, airport- and 25 freight forwarders found that a Professor at the Indian Council to-door and counter-to- while the industry prefers operating for Research on International Eco- counter express services. a hub-and-spoke model, the potential nomic Relations. ACW

ACW MARCH 2010 35

opinion

Dr. Gabriel Weisskopf is the CEO of Switzerland-based Softair AG. He is an expert on cargo industry requirements for IT and software solutions. Transparency — but only when it suits me

henever we talk of tracking, tracing, cargo ment arcane enough for savvy pricing experts to ignore in 2000, RFID or any related topic, we can computing a deal, irrespective of the cost of administering safely predict that terms such as “visibili- it afterwards. ty”, “transparency” and “real-time clarity” All attempts to create a more transparent marketplace will pop up sooner rather than later. that would allow anyone to “see” what the financially and WOf course we agree that these are most laudable objec- operationally best alternative is for any particular ship- tives in the air cargo process. The obvious analogy that ment, much along the lines of the passenger business, comes to mind is glass. have failed. Whether as fibre optic cable allowing the transmission of Admittedly, putting backsides (whatever the size) on information to any point on the globe at the speed of light; two or three different seat-types is far easier than booking as a lens or magnifying glass sharpening our eyesight; or air cargo, but failure in the latter is often due to the fact as a window enabling us to see clearly what is occurring that market transparency will work against the economic outside our four walls — no other material would seem to interests of the principals and their distribution partners. so aptly symbolize our praiseworthy quest for transparency After all, the only provider truly interested in market trans- and visibility. parency is the one offering the most attractive transaction But glass has another quality that we tend to overlook in at that particular point in time. our well-meant enthusiasm. Apply just the thinnest layer of The operational aspects of the business often mirror silver to it and it will morph dramatically. Instead of allow- an asymmetry of interests. Consider the transparency ing us to see the world outside and vice versa, it is trans- provided through real-time track and trace data — a most formed into a mirror in which we only see ourselves. praiseworthy goal whose achievement has been backed Equate the silver layer with money and you have a won- by copious amounts of money and touted with endless derful metaphor for the change in our behavior and inter- advertising dollars. ests with regards to transparency and visibility whenever But show me the air cargo professional who is hon- money comes into play. estly keen on getting a phone call from an irate client, Two aspects of the air cargo business can serve to il- while trying to solve the problem of a 500 lb shipment of lustrate the disparity between praiseworthy intention and tropical fish that has missed its connection in Anchorage reality. and is in the process of becoming frozen seafood on the The air cargo industry in general, and airlines in partic- tarmac. ular, have expended endless efforts to maximize revenues We are all happy to demonstrate our operational prow- by constructing tariff systems which seek to capitalize on ess when matters work smoothly, but far more reticent the different product-specific demand curves irrespective when matters get derailed. It is often in these situations of the actual cost of transportation. We invent commodity where the various business partners’ interests in transpar- rates that astutely distinguish Emmental cheese with 20 ency will be diametrically opposed. millimetre holes and Gruyère with none or between surgi- We may admire Mother Teresa, but let us accept the cal knives made of steel rather than titanium. effect of the layer of silver behind our windows and own We then superimpose the endless permutations of pric- up to the fact that enlightened self-interest, not trans- ing arrangements that are struck between all participants parency, continues to be the most potent driver for our in the air cargo process. There is practically no measure- actions. ACW

ACW MARCH 2010 37 peopleevents

AIRLINES development strategy and rectors have been appointed: Juan Tan Kai Ping has taken over as presi- operational management, Carlos Serna for the Americas, dent of Singapore Airlines’ SIA Car- focusing on improving qual- Jindrich Hudecek for Eastern go subsidiary. He held various senior ity of the organization and Europe and Turkey, and Henrik positions in the division before being personnel development. She Spove for Scandinavia and Finland. seconded in 2005 to be will also retain responsibility Further key regional appointments president of Shanghai- for overall group strategy BROOKS will follow in Asia and mainland Eu- based associate Great and for the implementation rope. Transportation and logistics Wall Airlines. Tan of marketing in key aspects of route provider Aramex has promoted Nabil returned to SIA Cargo network development, sales infrastruc- Zaghloul to station man- in October 2008 as se- ture and developing strategic alliances. ager, Heathrow. He was nior VP-operations. Southwest Airlines has appointed the former finance man- Goh Choon Phong, Doug Brooks, chairman, president, ager of the station and is and CEO of Brinker International, now responsible for all TAN president of SIA Cargo since 2006, returns to to its board. Gary Kelly, chairman of of the company’s multi- the parent company as executive VP the board, president, and CEO at South- modal operations there, (designate) for marketing and the sales west, said: “His business knowledge and including six departmen- regions. He will take over from Huang hands-on experience will complement tal managers and a staff ZAGHLOUL Cheng Eng, who will retire in June. the existing talent and serve as a tre- of 85. Swissport In- Tatyana Arslanova mendous benefit for our team.” ternational, the aviation ground has been promoted to services provider, has announced two executive president of AIRPORTS personnel changes in its cargo organisa- AirBridgeCargo Christa Soltau is the new VP of cargo tion. Wouter Brand assumes overall Airlines (ABC), the and logistics at Budapest Airport. responsibility for Dutch airfreight han- operator of scheduled She has previously held senior man- dling. He previously served in global B747 services within the agement posts in airport and cargo de- key account management at Swissport’s Volga-Dnepr Group. velopment with Munich Airport, head office. A local management change ARSLANOVA She was previously VP, Düsseldorf Cargo Logistics, prompted his short-notice transfer to marketing and strategic and Dubai World Central, and Swissport Amsterdam, where he has re- business development for the group in project management at Hochtief. structured and turned around the local after an earlier role heading up the “Budapest has huge potential for be- organisation over the past few months. Management Technology Department. ing the cargo hub for Eastern Europe,” In view of this, Brand — a Dutch na- Arslanova will be responsible for ABC’s Soltau said. “We will develop the cargo tional — now takes overall responsi- division and logistics infrastructure with bility for the Netherlands. Structural ADVERTISER INDEX a view to handling flights especially changes have also been made at Swis- from Asia and the Americas. Distribu- sport Brazil, where the head of ground Amsterdam Airport, Schiphol ...... 9 tion facilities throughout the region will handling, Francisco Gonçalves, has also play an important role.” Stéphane assumed control of the local cargo or- Cargoitalia ...... 17 Geffroy is the new sales and marketing ganisation. Wagner Xavier, who has director of Lyon-Saint-Exupéry been in charge of Swissport Brazil’s Continental Cargo ...... CV4 Airport. His brief is to develop freight operations and training for the last five and passenger traffic to achieve Lyon’s years, takes charge of day-to-day cargo Coyne Aviation ...... 10 goal of becoming the second biggest in- business. Swissport thanked Reinal- EVA International Conference ...... 27 ternational gateway in France. do Góes, former head of cargo Brazil, for his contribution over many years. Foreign Affairs & Int. Trade ...... 15 THIRD PARTIES Tony Ivey, an industry of almost Air Logistics Group, 30 years who spent his last 10 years Global Aviation Holdings ...... CV2 the global air cargo sales as commercial senior VP at Swiss- and service provider, has port in the US, retired at the end of Jones Lang LaSalle ...... 13 restructured its senior man- January. Alan G Votaw has been L-3 Communications...... 31 agement team. Stephen appointed as the head of the com- Dawkins becomes the petence centre for the automotive Macau Int. Airport ...... 7 group’s first chief operating industry vertical by the Panalpi- officer. Three regional di- DAWKINS na Group. Automotive is one of Messe Munchen GMBH ...... 23

Munich Airport ...... 11

Thai International ...... CV3

TIACA ...... 19,36

38 MARCH 2010 ACW Panalpina’s core industry groups along- events mit 2010 will focus on key develop- side oil and gas, telecommunications, MARCH 8-11 ments in air cargo during the past year hi-tech, retail and fashion, and health- in a bid to contribute to the recovery of care (pharmaceuticals and chemicals). Vancouver, BC: The 2010 IATA World Cargo Symposium “Bounce Back: Re- the industry. This event is also an im- Votaw, a US citizen who joined Panal- build The Future” will focus on what it portant platform to explore the devel- pina in 2002, has held several manag- will take for the air cargo supply chain opment of China’s air cargo industry the ing positions within the group, among to bounce back from the current global air transport business is getting back them key account manager for one of recession and what steps it can take to on its growth track. In particular, the the biggest global customers. Famous build its future. The event will take place Chinese air cargo industry is taking on a Pacific Shipping (NZ) Ltd in at the Westin Bayshore. For more infor- quicker recovery momentum compared with that of Europe and America. For Auckland has appointed George Dobo- mation, visit www.iata.org/events. more information, visit http://www.air- vanszky as business development man- MARCH 9 cargosummit.org/ or email: market- ager with a focus on the development Vancouver, BC: The Air Cargo Excel- [email protected]. of the freight forwarder’s cargo volumes lence Awards evening is a celebration JUNE 15-16 in the US-New Zealand trade. At the to recognize excellence in the air cargo same time, the company has formed a industry. Held in conjunction with the Brussels: The Air Cargo Handling Con- joint venture with Royale Interna- IATA World Cargo Symposium, the re- ference “Providing Quality & Retaining tional Couriers, one of the largest sults of Air Cargo World’s annual ACE The Margin” will address the thorny is- independent express companies in Asia, Survey will be announced and awards sues of succeeding in building both volumes and relationships in challeng- enabling Royale to estab- presented. Registration via the IATA ing market conditions. The forum will lish a presence in New World Cargo Symposium registration site at http://www.iata.org/events/wcs10/ include airline and handler speakers and Zealand at a new office in seek to address airline needs, practical Auckland. Marcus Gold- index.htm. For more information or to inquire about sponsorship opportunities solutions and the future for air cargo sworthy, MD of FPS NZ, contact Steve Prince, Air Cargo World, handling. This event will be held at the will oversee the operation at [email protected]. Crown Plaza Brussels Airport. For more of the Auckland office. information, visit www.evaint.com or The GAC Group has MARCH 14-17 e-mail [email protected]. DELANEY named industry veterans Orlando, FL. AirCargo2010 is the pre- NOVEMBER 2-4 Mark Delaney and Ron- mier annual trade show and conference Amsterdam: The International Air nie Knowles as MDs for the Air and Expedited Motor Carriers Cargo Association’s Air Cargo Forum respectively of its opera- Association (AEMCA), the Airforward- and Exposition will bring together all tions in Thailand and Abu ers Association (AfA), and the Express Delivery & Logistics Association (XLA), segments of the industry in one place Dhabi. Delaney brings which co-host AirCargo as a service to at one time. This biennial event, which to his new role a strong the industry. The conference includes a attracts thousands of senior executives background and broad diverse educational program for attend- and hundreds of exhibitors from across expertise in sales, marine ees, outstanding business opportunities the globe, will be hosted by Amsterdam operations and customer Airport Schiphol. For more information, KNOWLES for exhibitors and excellent corporate service. With more than exposure for sponsors. For more infor- visit www.tiaca.org. two decades of experience in the inter- mation, visit: http://www.aemca.org/ MAY 2-4 AC_conference/Welcome.html national shipping and logistics industry, Miami, FL: The 2010 Cargo Network he spent almost 17 years in the Middle MARCH 23-25 Services Partnership Conference, un- East, holding various posts within the Kuala Lumpur: The International Car- der the theme “Making Visions a Real- GAC Group. He hands over the man- go & Logistics Conference 2010 at the ity”, will offer informative sessions, in- agement of GAC Abu Dhabi to Ronnie Prince Hotel will provide participants spirational presentations and speakers, Knowles, a veteran with more than 30 with valuable insights from experts and collaboration with industry leaders. years of operational and management across various logistic industries. Topics The conference will be held at the Doral experience in the supply chain, who for to be covered include the potential of Golf Resort & Spa, where the CNS Golf Tournament will take place before the the past three years has spearheaded international logistic hubs; overcoming main event. More information at www. the development of GAC Pakistan’s busi- the issue of cargo capacity and market demand; analyzing the prospect of do- cnsc.net/events/pages/2010-partner- ness and operational activities. UBM ship-conference.aspx Aviation, publisher of Air Cargo mestic markets; grasping the strategies of effective crisis management; ways of World, has appointed Donna Gagli- MAY 3-4 reducing cost and sustaining competi- ardo to the role of legal counsel. She Abu Dhabi: The first Postal Innovation tive pricing; methods to enhance con- Conference, organized by Wise Media, has global responsibility for protecting tainer and intermodal facilities, and un- focuses on high-end technology for the the company’s legal interest and main- derstanding the key factors of success- postal and express shipping industry and taining its commercial operations by ful supply chain management. For more takes place at the Rotana Beach Hotel. A providing hands-on legal counsel to ex- information, visit, www.evolution-asia. partner event with an accompanying ex- com. ecutive staff. Gagliardo brings over 15 hibition, will take place in Milan on No- years of aviation and travel experience APRIL 20-21 vember 16-18. For more information, visit: with Galileo and Travelport. ACW Bejing: The 7th China Air Cargo Sum- www.postalinnovation.com.

ACW MARCH 2010 39 bottomline

CARRYING EUROPE U.S. AIRLINES Monthly year-over-year percent change in overall Monthly year-over-year percent change in domestic freight traffic and Asia-Pacific freight traffic for and international cargo traffic for U.S. airlines. European airlines. 5 25 20 0 15 Domestic -5 10 International 5 -10 Overall Asia-Pacific 0 -15 -5 -20 -10 -15 -25 -20 -30 -25 12/0911/0910/099/098/097/096/095/094/093/092/09 12/0911/0910/099/098/097/096/095/094/093/092/09

Source: Association of European Airlines Source: Air Transport Association of America

CARRYING ASIA SHARING MARKETS Monthly year-over-year percent change in capacity, in International air cargo year-to-date change for available tonne kilometers, and traffic, in freight tonne DecemberMonth 20092008 vs. MonthDecember 2010 2009 kilometers, of Asia-Pacific airlines. -10 Middle East

North America -15 Europe Capacity -20 Asia/Pacific Traffic Latin America -25 Africa

-30 Total 12/0911/0910/099/098/097/096/095/094/093/092/09 -20 -15 -10 -5 05 Source: Association of Asia Pacific Airlines Source: IATA

CARRYING INTERNATIONAL SEMI CONDUCTORS Monthly year-over-year percent change in total scheduled Worldwide monthly year-over-year percent change international freight traffic and capacity worldwide in sales of semiconductors and month-to-month in freight tonne-kilometers and available tonne-kilometers. percent change. 25 30 20 25 20 M-O-M 15 Capacity 15 10 Traffic 10 Y-O-Y 5 5 0 0 -5 -5 -10 -10 -15 -15 -20 -25 -20 -30 -25 -35 12/0911/0910/099/098/097/096/095/094/093/092/09 12/0911/0910/099/098/097/096/095/094/093/092/09

Source: IATA Source: Semiconductor Industry Association

40 MARCH 2010 ACW More capacity to move your cargo around the globe.

Now we have room for every size, shape and quantity to connect Asia, Europe and USA. For more information, please access www.thaicargo.com/what’s new.

T H A I C a r g o , ALWAYS DELIVERS THE BEST. www.thaicargo.com © 2010 Continental Airlines, Inc.

GERMANY. NO SPEED LIMIT. NO STOPS.

JUST THINK OF OUR NEW ROUTE AS THE AUTOBAHN OF THE AIR.

New nonstop 767 service between Newark and Munich begins March 27.

Continental Airlines recently launched its Houston-to-Frankfurt 767 service, officially opening its “autobahn of the air.” Now Continental is adding another fast lane with daily nonstop flights from Newark to Munich, Bavaria’s pharmaceutical, electronic and automotive center. For more information or to book a shipment, contact your Continental Airlines Cargo sales manager, or go to cocargo.com.

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