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WWW.AIRCARGOWORLD.COM

NOVEMBER 2005 INTERNATIONAL EDITION

HungryAircraft Report for Freighters

Europe Airports • Dubai’s Ambitions • Fuel Drag C2ACWI1105 10/19/05 4:20 AM Page 1

Finding the finest

“ingredients from all over

the globe isn’t enough. They also have to “ be the freshest.

MARCUS SAMUELSSON EXECUTIVE CHEF / OWNER AQUAVIT

From Arctic char to Asian choy, The Port Authority of New York and New Jersey’s air cargo network helps Marcus Samuelsson bring in the best fare from all over the world. Every day, thousands of metric tons of fresh produce, fish, nuts and dairy products come and go through New York and New Jersey’s air cargo network — including the Arctic char Marcus selects from the seas of Iceland, Canada and Japan. Our airports offer refrigerated cargo facilities and expert, efficient handling to get even the most delicate and time-sensitive cargo to more than 100 million consumers within one day of arrival. To Marcus, our facilities mean being able to plan a menu with the freshest, most high-quality ingredients, without being limited by seasonality. To your business, it means finding new routes to success, no matter your specialty. If you want customers to rave about your business, contact air cargo manager Michael Bednarz toll free in the US at 866.353.1031, at 212.435.3772 or email [email protected].

Kennedy · Newark Liberty · LaGuardia 01TOCINT 10/21/05 1:14 PM Page 1

INTERNATIONAL EDITION

November 2005 CONTENTS Volume 8, Number 9 REGIONS Cargo 10 North America Aircraft U.S. airports are feeling the 20 Air Cargo Management pain of major American airlines’ Group’s annual analysis deepening financial troubles projects a strong demand for freighters. 12 Europe Deutsche Post’s international expansion rises to another level with the acquisition of Exel 16 Pacific Hong Kong’s famously prof- itable airlines are not immune to high fuel costs • Converting EVA Euro 28 Airports Airports throughout Eu- rope are trying to become the continent’s alternate car- go hubs, but airlines aren’t quite buying their pitch.

DEPARTMENTS 2 Edit Note Bigger 4 News Updates Dubai 41 Events 36 With a new airport and lo- 42 BACK Aviation gistics center on the way, Aircraft Report Dubai’s cargo ambitions are spreading well beyond the 44 People Middle East. 46 Bottom Line 48 Forwarder’s Forum Cover photo courtesy Boeing WWW.aircargoworld.com

Air Cargo World (ISSN 0745-5100) is published monthly by Commonwealth Business Media. Editorial and production offices are at 1270 National Press Building, Washington, DC, 20045. Telephone: (202) 355-1172. Air Cargo World is a registered trademark of Commonwealth Business Media. ©2005. Periodicals postage paid at Newark, NJ 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 Directory 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 Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC 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 the magazine directly. POSTMASTER and subscriber services: Call or write to Air Cargo World, Customer Care Department, 400 Windsor Corporate Park, 50 Millstone Rd., Suite 200, East Windsor, NJ 08520-1415; telephone (888) 215-6084

November 2005 AirCargoWorld 1 02EditorialINT 10/21/05 1:22 PM Page 2

Editor’s Note International Edition

Editor Paul Page • [email protected]

Managing Editor Aaron Karp • [email protected]

Contributing Editors Roger Turney, Ian Putzger Mike Seemuth

Art & Production Director Uncontrollable Jay Sevidal • [email protected] s 2005 draws closer to an end, it is apparent that air cargo Editorial Offices operators won’t have nearly as much to celebrate this New 1270 National Press Bldg., Washington, DC 20045, U.S. AYear’s Eve as they did last year. There was almost giddiness +01 (202) 355-1170 • Fax: (202) 355-1171 among air freight players last November and December as the in- PUBLISHER dustry completed its best year of traffic growth since 1997. Some Steve Prince • +01 (770) 642-9170 • [email protected]

believed the hard times of the early part of the decade were past U.S. Business and Advertising and that 2004’s heady growth was a harbinger of things to come. 1080 Holcomb Bridge Rd. • Roswell Summit Building 200, Suite 255 • Roswell, GA 30076 In this space last November we noted Korean Air Cargo President Ken Choi’s +01 (770) 642-9170 • Fax: +01 (770) 642-9982

warning that 2004 was “too good” and that expectations for 2005 should be Assistant to Publisher more realistic. Choi understood the nature of air cargo and the global economy Susan Addy • [email protected] to which it is so closely tied: change is frequent and unpredictable. International Advertising Offices Oil prices skyrocketed this year and what was once a nightmare scenario — Europe, United Kingdom, Middle East crude oil prices at $50 per barrel — is now something airline operators yearn David Collison • +44 192-381-7731 [email protected] for. The price of oil, which hovered around $60 per barrel Hong Kong, Malaysia, Singapore throughout October, isn’t likely to go down. The real hope Joseph Yap • +65-6-337-6996 now is that it will not make another giant leap upwards. [email protected] In fact, many shippers and forwarders have decided to Japan Masami Shimazaki • +81-3-6418-0580 move some international air freight business to less expensive [email protected] ocean liners, one sign of how soaring fuel costs have shifted Thailand expedited shipping patterns. Chower Narula • +66-2-641-2695 [email protected] Airlines throughout the world have been stymied by high Taiwan fuel costs and forwarders have been made dizzy by carriers’ Ye Chang • +886 2-2378-2471 frequently ascending fuel surcharges. Airlines are expected to [email protected] lose a collective $7.4 billion in 2005, losses that come on top of more than Korea Mr. Jung-won Suh • +82-2-3275-5969 $30 billion in losses from 2001 to 2004. United and Northwest airlines, Delta [email protected]

Air Lines and Varig Brazilian Airways — all signature, global brands — are Classified Advertising and Reprints among the carriers currently operating under bankruptcy protection. Tamara Rodrigues • [email protected] +01 (770) 642-8036 The good news for those in the cargo sector is that freight is a bright spot for most major airlines. But air cargo traffic growth has been sagging, and the CUSTOMER SERVICE OR TO SUBSCRIBE: 888-215-6084 freight divisions at combination carriers are in many ways a hostage of air- lines’ overall profitability — or lack thereof. American Airlines, which has so far avoided bankruptcy, posted a slim profit 400 Windsor Corporate Center, in the second quarter, its first net positive quarter since 2000. But the world’s 50 Millstone Rd., #200, East Windsor, NJ 08520-1415, U.S. largest airline came back to earth in the third quarter, losing $214 million. +01 609-371-7700 “It’s certainly disappointing to have swung (back) to a loss,” lamented Chairman, President and CEO Alan Glass American CEO Gerard Arpey. “The fact that we were unable to sustain prof- Senior Vice President, CFO Dana Price itability … says a lot about our inability to pass on fuel-price increases.” Director of Circulation John Wengler Although long-term air cargo traffic growth of more than 6 percent is still Senior Marketing Manager Laura Kaiser widely expected, and lucrative opportunities in Asia provide reason for excite- Director of Manufacturing ment, air cargo players may take this year as a lesson. Nothing is assured, and & Production Meg Palladino prospects can change dramatically when costs largely out of operators’ control

— such as fuel — surge to unprecedented heights. POSTMASTER: Send address change to: Air Cargo World, 400 Windsor Corporate Park, 50 Millstone Road, Suite 200, East Windsor, NJ 08520-1415. © 2005 Commonwealth Business Media Inc. — All Rights Reserved For more information visit our website at www.aircargoworld.com

2 AirCargoWorld November 2005 03ACWI1105 10/19/05 4:27 AM Page 1

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UpdatesNews

IATA cites high fuel costs as the main culprit leading to a forecasted $7.4 billion loss for the world’s air- lines this year. The Air Transport Association of America says the jet fuel bill for its carriers will be $30.6 billion this year, double what it was in 2003. And the oil pinch is leading to fears of a slowing global economy. Speaking to Japanese investors, U.S. Federal Reserve Chairman Alan Greenspan warned that the “recent surge in energy prices will undoubt- edly be a drag from now on.” Slipping Peak hether it was because of fuel Wsurcharges or economic con- Fuel Proves Flight Drag ditions, airlines across the world were reporting sagging cargo num- oaring oil prices are likely to make 2005 bers just as the peak shipping sea- a disappointing year for air cargo. Air son was supposed to be starting. freight traffic has generally grown slow- Cargo traffic for the U.S. carriers Sly this year as airlines bleed red ink and grew just 1.6 percent in August, a rapidly tack on fuel surcharge increases for car- meager figure that nevertheless was go shipments. The ramifications are widespread better than the reports from Asia across the cargo spectrum — carriers from China and Europe. to the United States are having difficulty coping Asian airlines’ traffic was up only with unprecedented fuel costs. 1.3 percent in August, half the rate A host of major airlines upped fuel surcharges twice last month, bring- of growth in capacity. And business ing the standard surcharge rate to 60 cents per kilogram. Air France, for European airlines was up just Lufthansa, American Airlines, Northwest Airlines, Cargolux and British 1.1 percent. Airways all raised surcharges twice in October. “The decision reflects the For some, it looked to be getting rising (fuel) costs that Cargolux is exposed to and that affect the entire in- worse in September. dustry,” said Cargolux. Lufthansa Cargo’s traffic, mea- But the surcharges weren’t the only noticeable impact of crude oil prices sured in revenue tonne-kilometers, that hovered around $60 per barrel. China Aviation Oil Holding, the main jet fell 4.7 percent in September and fuel supplier for Chinese airlines, last month raised the price of jet fuel by 9.4 was off 6.4 percent in the usually percent. That was the fourth time this year jet fuel prices have risen in China, strong Asia-Pacific lanes. Cargolux where airlines now are paying $89 per barrel of jet fuel. reported a 6.3 percent increase in In the U.S., American Airlines extended a previously announced reduction its traffic over September 2004, but in flights for at least the rest of the year, citing high fuel prices. The carrier also that was a retreat from its usual axed 15 daily flights between Dallas and Chicago. AA says fuel costs now ex- double-digit growth and the Sep- ceed salaries as the airline’s greatest expense. tember figure was actually below The International Air Transport Association estimates airlines will pay a what Cargolux had handled in usu- collective $97 billion for fuel costs for 2005, 30 percent above last year. ally slow July.

4 AirCargoWorld November 2005 04NewsUpdateINT 10/21/05 1:24 PM Page 5

News Updates

Cathay Pacific defied the trend, tract paves the way for AAWH to management at Exel and chairman with cargo growing 19.8 percent in merge the pilot workforces of Polar of Cargo 2000, is “a significant step September, but the carrier was and Atlas Air, AAWH’s 747 contract towards our goal of eliminating frag- hardly boasting since that was be- cargo subsidiary. mentation in the worldwide air car- hind the growth in capacity. “We’re disappointed that it re- go industry and delivering a com- Helped by transshipments, the quired withholding our services to mon platform that brings together tonnage “masks the softening in get” an agreement, said Bobb Hen- reliability, predictability and proac- demand for exports from China, in- derson, chairman of the Polar Air tive shipment management with re- cluding a slowdown in garment crewmember unit of the Air Line Pi- duced costs and improved customer shipments,” said Cathay Cargo Di- lots Association. “We know that a satisfaction.” rector Ron Mathison. “We have strike means that there was a failure There was slightly less satisfac- seen a significant increase in cargo of the labor relations process. … tion in August, as the “flown as capacity in the market in the last However, it is now time for Polar booked” measure slipped to 92 few months and remain highly con- Air Cargo and its crewmembers to percent from 93 percent in July. cerned about the pressure on yields move forward.” But that was still sharply better and loads, particularly in the con- than the 82 percent performance in text of high jet fuel prices.” Metric System October 2004 and it came with some four times more shipments Polar Thaws ervice performance for partici- measured and 1,356 lanes tabulat- Spants in Cargo 2000 grew 10 ed in August 2005 against 244 the olar Air Cargo is back in the air percentage points over the past year before. Pafter its pilots agreed to a new la- year as airlines and forwarders Communication also appears to bor contract, averting a protracted ramped up the routes and ship- be improving, with the percentage strike that threatened to permanent- ments they are measuring in the of forwarder freight waybills “cor- ly ground the 747 scheduled all-car- quality initiative. rect received by the airline” almost go airline. The growth came in some of the doubling over the past year. Polar pilots went on strike in first performance reports that Cargo The top performing carrier in the mid-September after negotiations 2000, the International Air Trans- measures was Cathay Pacific, which with parent Atlas Air Worldwide port Association interest group, handled all its Cargo 2000 ship- Holdings ended without resolution. started putting out to show ments flown as planned. The 92 But talks called by the National Me- progress in meeting its goals — and percent average did not include sev- diation Board brought the two sides to bolster support for the effort eral Cargo 2000 members, including together last month, and an accord across the industry. Lufthansa, Cargolux and Singapore was reached. Polar’s international Public release of the figures, said Airlines, which were not ready to network had been grounded for Mick Fountain, CEO of global freight have their shipments measured un- two weeks. der the group system. The contract provides a Air-Cargo 2000 10.5 percent pay increase ef- Percentage of shipments flown as NWA Booked fective June 1, 2005, and an planned on participating airlines. increase in the company’s 100% n a new bid to push more contribution to pilots’ retire- Iover-the-counter customers 95% ment plan, according to to the Web, Northwest Air- AAWH. Jeffrey Erickson, 90% lines Cargo is adding a $5 AAWH president and CEO, 85% charge for customers booking said the company is moving same-day expedited service 80% its attention to the “upcom- by phone or in person rather 75% ing peak shipping season.” 10/04 11/04 12/04 1/05 2/05 3/05 4/05 5/05 6/05 7/05 8/05 than online. He added that the new con- Source: Cargo 2000 The charge for the “VIP”

November 2005 AirCargoWorld 5 04NewsUpdateINT 10/21/05 1:24 PM Page 6

News Updates

service is aimed at boosting booking repay hundreds of millions of dollars sell shares in the new company as a through the Cargo Portal System, the in state aid the EU ruled illegal. Al- way to raise money. online system managed by Unisys though the decision initially ap- that Northwest helped launch with peared to be a death knell for Handling Virgin several other carriers. Olympic, the Greek government was “The majority of our customers scrambling for ways to keep irgin Atlantic Cargo says worldwide have embraced the advan- Olympic in the air. Vchanges in the ground services tages of technology, with over 70 per- A Greek-American consortium business are pushing the airline out cent of our bookings now coming that had expressed interest in the of its niche third-party ground han- through CPS,” said Jim Friedel, Presi- airline said it has not backed away. dling operations in the United dent of NWA Cargo. But the EU order could scuttle a States. “Yet, we recognize that some VIP buyout if the buyer is saddled with Virgin last month sold its North customers need the expertise of our the costs. American cargo handling business to customer service agents. We will con- Greece’s finance minister, Worldwide Flight Services, ending tinue to offer them the service they George Alogoskoufis, told re- the airline’s attempt to build its self- require for a nominal fee and speed porters that a sale is still possible, handling operations into a larger the airport experience for our cus- but conceded the EU order compli- business serving other airlines. tomers who help us minimize our cates previous efforts to sell the Under the sale agreement, WFS distribution costs.” carrier to private investors. The will take over Virgin’s handling as- The fee does not apply to North- outcome could be similar to what sets and staff at five U.S. cities — west’s general international and do- transpired in Switzerland, where Newark, Los Angeles, Miami, Wash- mestic cargo service. Swiss International Airlines was ington and Orlando — and serve created out of leftover assets from Virgin and its customers for at least Carrying Debt bankrupt Swissair. five years. Meanwhile, Varig Brazilian Air- Virgin started selling handling ser- he flag carriers of Greece and ways planned to cut its workforce by vice in the 1990s, but since then TBrazil struggled for survival as 13 percent and attempt to renegoti- companies such as WFS and Menzies the international airline landscape is ate debt agreements to emerge from have expanded into global businesses redrawn in the face of mounting bankruptcy protection. The airline, by buying up national operators and losses. which includes South America’s sec- selling broader ramp services in addi- Greece’s Olympic Airlines was ond-largest cargo business, will also tion to cargo handling. rocked by an order from the Euro- spin off a new company to control “The airline handling business has pean Union calling for the carrier to some of its smaller assets and will changed dramatically over the last Iraq Neutral air cargo services 4xweekly2Iraq coyne Airways Limited Gateways worldwide x Coyne Airways Limited Full details: Dubai Tel: +97 1508 482362 www.coyneair.com Email: [email protected] London Tel: +44 (0) 207 605 6884 4 Email: [email protected]

6 AirCargoWorld November 2005 07ACWI1105 10/19/05 4:28 AM Page 1 04NewsUpdateINT 10/21/05 1:24 PM Page 8

News Updates

ADVERTISEMENT Amsterdam Airport Schiphol: couple of years and to remain com- Europe’s favourite petitive you have to be able to offer a freighter hub broad range of services,” said Jack Over the last century, Amsterdam Fiol, Virgin Cargo’s vice president in Airport Schiphol has evolved into a the United States. main gateway for Europe. The ex- “We reached a point where we had tensive trucking network and excel- lent links to the European motorway to branch out, possibly into ramp or infrastructure make Amsterdam Air- passenger handling, or outsource the port Schiphol an ideal base from operation to a company who can re- which to serve all of North-West Eu- alize the value when aligned to rope. Amsterdam Airport Schiphol theirs.” ranks fourth among European air- ports in terms of passenger volume, and even higher – third – in terms of Flowering ABCs cargo volume. Amsterdam Airport Schiphol is more usiness is blooming at AirBridge than just an airport for passengers BCargo. The 747 scheduled against any competition and contin- and cargo. It’s a place where supply freighter subsidiary of Volga-Dnepr ue to be the largest scheduled air and demand meet. It’s an AirportCity. launched three-times-weekly service carrier in Russia.” In addition to being a homebase for from Amsterdam to Moscow aimed airlines, ICT companies establish of- fices at Schiphol and global corpora- at the strong flower trade. IJS Builds tions set up their headquarters here. ABC estimates Russia’s fresh Compared to other European air cargo flower import business to be worth JS Global, the small New York for- hubs, Amsterdam Airport Schiphol ac- some $1 billion and that the flights Iwarder being piloted by former commodates most full freighter flights on a lane not regularly served by leaders of Air Express International, (excluding integrator flights). At the widebody freighters will provide “a made its first move outside the Unit- moment, 26 airlines operate sched- fast and reliable supply line” for the ed States as part of a larger expan- uled full freighter services to and from the Amsterdam hub. In winter 05/06 business. The flower market out of sion plan. this number is expected to further in- Amsterdam is a foundation for air The company bought ESI Group, crease with new full freighter airlines cargo and of the world’s flower which includes air and ocean freight starting flight services to and from the market. forwarding operations in Hong Kong Amsterdam hub. The Russian consumer market for and Shanghai, and suggested more We kindly invite you to challenge us flowers is one of largest in Europe, acquisitions are in the pipeline. to share with you our knowledge, ex- and ABC estimates that 60 to 80 per- “As we expand our presence be- pertise and understanding of market cent of flowers imported into Russia yond the U.S., we will first pursue trends. come from the Netherlands. opportunities in Asia because of its Please contact our marketing ABC service from Amsterdam spectacular growth prospects,” said managers at the following address: Schiphol Airport to Moscow’s John Gallahan, a former AEI execu- Amsterdam Airport Schiphol Sheremetyevo Airport will offer a tive who is president and CEO of Cargo Department distribution channel for Dutch flower IJS Global. P.O. Box 7501 1118 ZG Schiphol exporters throughout Russia. Gallahan says the purchase The Netherlands “Amsterdam is very important for launches “the next phase of our glob- Tel: +31 (0)20 601 4530 us,” says Stan Wraight, head of al growth strategy,” a plan he expects Fax: +31 (0)20 601 2936 ABC. “We are building up our hubs to “dramatically increase its market e-mail: [email protected] in Europe and expanding our flight share in trans-Pacific and intra-Asian website: www.schiphol.com network to meet the demands of lane segments.” Russia’s growing economy. We IJS is backed by an investment want to build AirBridge Cargo as an group headed by Hendrik Hartong, airline that can stand on its own who was chairman of AEI. ■

8 AirCargoWorld November 2005 09ACWI1105 10/19/05 4:32 AM Page 1

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At THAI Cargo we believe every item we transport should finish it's voyage in exactly the same condition it started in. Regardless of whether your precious shipment is massive, microscopic or somewhere in the middle, we'll make absolutely sure that it receives the very highest levels of meticulous care and attention during every stage of its transportation. For every kind of cargo, put your trust in THAI Cargo. For more information, please visit www.thaicargo.com or a THAI cargo branch office worldwide. 10RegionalsINT 10/21/05 1:25 PM Page 10

ReportsRegional

NORTH AMERICA Airport Pain U.S. airlines’ financial difficulties are echoing across hubs that rely on carriers’ flight schedules and money

And airport officials can’t ignore the potential consequences if the airline, which operates more than 60 percent of Miami’s flights, reduces service.

Miami Slice Standard & Poor’s Ratings Services recently lowered its outlook on Mia- mi-Dade County’s outstanding avia- tion revenue bonds from stable to “negative” because of the impact the upheaval in the skies may have on the ground. A massive new terminal for Ameri- can flights was supposed to be finished this year. Instead, the project’s costs have swelled more than $1 billion over original estimates and it sits half fin- he financial woes of United States airlines are reverberat- ished. American has given up jurisdic- ing across the aviation world, leaving businesses tied to tion over the project, which was slated the carriers struggling in the wake of the airlines’ rough to cost $900 million but is now near- Tride. The problem is growing more acute at several air- ing a $2 billion price tag. American is ports, which are contending with reduced flight schedules and paying $105 million over 10 years to pullouts by struggling and restructuring airlines. cover some of the cost overruns, but Major U.S. hubs are left to figure out what happens if primary airlines make airport operator Miami-Dade County severe cost cuts that include reducing their presence at and investment in air- is stuck with the rest of the bill. port facilities. “The airport’s financial condition In Pittsburgh, officials are trying to recast the airport after US Airways with- could weaken as it undertakes the drew its international hub operations. Cincinnati/Northern Ken- most complex portions tucky Airport is searching for new options and dealing with polit- By Aaron Karp of … its capital improve- ical fallout after DHL moved its air express hub to Wilmington, Ohio, and ment program at a time when its traf- bankrupt Delta Air Lines scaled back its flight schedule. fic levels are relatively flat, the oper- Miami International Airport, the main gateway between the United States ating environment has become in- and Latin America for cargo and passengers, is being buffeted by the financial creasingly competitive, and high fuel difficulties of its top carrier, American Airlines. The airport and American have prices and intense price competition argued over who should pay for cost overruns on a major terminal project. could lead to material service disrup-

10 AirCargoWorld November 2005 10RegionalsINT 10/21/05 1:25 PM Page 11

ReportsRegional

tions or service changes by American For DHL, consolidating its air hub in by 30 planes, moves that will likely Airlines,” warned S&P. Wilmington was a necessary move further damage Cincinnati/Northern American reported a small profit in given financial and logistical realities. Kentucky. the second quarter of 2005, but has But it left CVG with a recently re- lost hundreds of millions of dollars built air express hub only lightly … Briefly over the past four years and has nar- used. Airport officials say DHL is still rowly avoided bankruptcy by cutting paying rent on its facilities at CVG Nippon Cargo Airlines named costs and winning labor givebacks. even though flights by DHL subser- ASIG to manage its warehouse at The airline says it is now “in the vice fliers have already moved to San Francisco International Air- clear” in terms of a Chapter 11 filing, Wilmington. But DHL is expected to port, a site shared with All Nippon but warns that high fuel costs are tak- keep only a small presence at the air- Airways and Cathay Pacific. ... ing a toll. port, and its former facilities will soon Emirates planned to launch its sec- The potential toll on airports is al- be mostly empty. ond weekly passenger service between ready evident at Pittsburgh Interna- DHL’s move has cost the city jobs Dubai and New York this month us- tional Airport. and tax revenue but it’s actually be- ing an A340-500. ... AMB Property, The airport was a big hub for US Air- ing celebrated by some in the com- which specializes in air cargo facili- ways, which operated trans-Atlantic munity who are happy to lose night- ties, took a 5 percent stake in Cana- flights through the site. But US Air- ly freighter flights. That may cost da’s IAT Air Cargo Facilities Fund, ways has struggled through two bank- CVG in the long run. owner of International Aviation ruptcy filings and now is merging with “We’ve got people in the commu- Terminals, which owns and man- Phoenix-based America West. nity saying we shouldn’t do anything ages 1.25 million square feet of cargo In its restructuring efforts, the air- about DHL leaving,” says airport space at five Canadian airports. ... line ended hub activities at the air- spokesman Ted Bushelman. Canada’s Purolator opened an of- port and withdrew all international Community activists have written fice in Irving, Texas, the company service. That left Pittsburgh without newspaper editorials saying the airport says will focus on handling NAFTA international flights and some once should avoid trying to attract new all- traffic. ... Forwarder Target Logistic busy facilities sitting empty. cargo flights, allowing the night skies Services moved into new corporate Airport officials have tried to rein- to remain noise free. “We don’t want headquarters in the Los Angeles area vent the airport as a domestic, low- to aggravate the issue,” says Bushel- that includes 100,000 square feet of cost passenger facility, and Southwest man, noting any efforts to attract warehouse space and fully automated Airlines now operates an increasing new freight service will be decidedly warehouse management and ship- number of Pittsburgh’s flights. But in- on the quiet side. “We’re keeping a ping systems. … DSC Logistics says ternational service remains elusive. low profile on this.” its Chicagoland Logistics Center was Cincinnati still has its Delta hub certified as a Foreign Trade Zone … Harsh Reality operations, primarily flights by Delta After a stagnant year in 2004, cargo subsidiary Comair, but the airline has traffic at San Francisco Interna- Cincinnati/Northern Kentucky already cut 26 percent of its flights at tional Airport was up 8.7 percent Airport, recently a thriving cargo hub the airport and eliminated some in the first seven months of this year. for DHL and a busy passenger hub 1,000 workers. … Continental Airlines said it will for Delta, has already suffered the The airport estimates it will lose $8 start flights next year between loss of DHL and is now dealing with million in revenue from passenger fa- Newark Liberty International fallout from Delta’s move into bank- cility charges on flight tickets. And as Airport and Canada’s Greater ruptcy protection. Delta restructures through bankrupt- Moncton International Airport, DHL decided it could not afford to cy, the airport could lose its hub sta- the first non-stop service between the keep its hub at CVG, and moved op- tus altogether. United States and Moncton. … erations to Wilmington, Ohio, where Delta said last month it plans TransMeridian Airlines, a passen- it owns an airport purchased through 650 more job cuts at Comair and ger charter carrier with some sched- the acquisition of Airborne Express. will reduce the regional airline’s fleet uled service, ceased operations. ■

November 2005 AirCargoWorld 11 10RegionalsINT 10/21/05 1:25 PM Page 12

ReportsRegional

EUROPE Taking Over Deutsche Post’s planned acquisition of Exel will create a logistics giant with worldwide reach

Now, while everyone has been watching Europe’s national airlines move through their slow consolida- tion dance either through mergers or through grand alliances, the logistics sector is preparing to witness the two largest buyers of freight transport ser- vices in Europe combine into one. Other combinations are all but cer- tain to follow.

Merging Exel Exel itself was a creation of the merger of two British companies, Ocean Group and Exel, just five years ago, and its very identity is a testament to the consolidation wave that has washed over the forwarding eutsche Post’s collection of designer label logistics ser- industry. vice providers is set to be crowned with the acquisition Exel essentially combined the of United Kingdom rival Exel. By paying $6.7 billion in freight forwarding operations of Dcash (about 72 percent of the acquisition price) and the Ocean, known more familiarly per- balance in new shares, the German mail group will truly be creat- haps through the name MSAS Global ing a global logistics giant. Logistics, with Exel’s predominantly It is a collection that already features such well-known main- domestic contract logis- By Roger Turney street brands as Danzas, DHL, AEI and ASG. How will Exel fit into tics activities. The com- this portfolio? bined operation was acknowledged One clear sign is in the announcement by Deutsche Post that the new outfit as the world’s largest contract logis- will be headquartered, not in Germany, but in the United Kingdom, at Exel’s tics company. current headquarters in Bracknell. The operation is to be headed by Exel’s MSAS Global Logistics had only a chief executive, John Allan, who will also be charged with overseeing the inte- year earlier re-branded from its for- gration process. mer moniker of MSAS Cargo Interna- Deutsche Post, it would seem, wants to model its new lines very much in tional, at the same time announcing the image and style of Exel, although it is believed “DHL” will be the predomi- the continuation of a fairly aggressive nant brand label. More importantly, though, the new logistics venture will be strategy of growth by acquisition top dog in Europe, the Americas and Asia. across all markets.

12 AirCargoWorld November 2005 10RegionalsINT 10/21/05 1:26 PM Page 13

ReportsRegional

It had already scooped up such rose 25 percent to $325 million to with its U.S. domestic freight manage- names as Intexo in Holland, the Mer- provide an operating margin of 2.9 ment business that caused Exel to un- cury Group in the U.K. and Dutch Air percent. Air freight forwarding rev- dertake a restructuring program last Plus in the Netherlands. enue topped $3 billion. year. This resulted in combining a It was also on the move in the No wonder executives at Deutsche previous six operating units into just North American market through Post were training their binoculars two divisions: Global Freight Manage- what it charmingly termed “organic across the English Channel. Exel’s ment (air and sea) and Domestic acquisition,” namely the purchase of split between contract logistics and Freight Management (road and rail). its long-term partners. Folded in were freight management operations now Among the questions now being companies such as domestic for- lies roughly 60:40 in favor of the con- asked of the bean counters in Bonn warder Skyking Freight Systems, fash- tract logistics business, with the ac- and in Bracknell will be which of the ion mover Airlink and customs bro- quisition of Tibbett & Britten tipping two companies are the stronger in ker A.W. Fenton. the scales. the various global markets, particular- This so-called “eat lunch or be Contract logistics has enjoyed ly in the keenly fought air freight sec- lunch” strategy enabled MSAS to higher profits and profit margins for tor. It is also not only about sheer boost operating profits in the U.S. by the company compared with freight weight of business, but also about the 30 percent in a single year. North management, but that gap has closed individual market perception of these America, however, has proved more over the last year. two substantial players. difficult in recent times for Exel. Freight management margins have In a recent shipper survey carried Even back then, MSAS was the sub- improved on increased air volume, out by U.K.-based Transport Intelli- ject of takeover rumors, with FedEx up by 18 percent. Europe was particu- gence, U.S. shippers put Exel way once seen as the likely predator. larly strong, with signs also that the ahead of the field with 20 percent of More recently, Exel’s acquisitions company was coming to grips with respondents giving it a strong ap- have continued in Europe, Asia and its problematic U.S. operations. Asia- proval rating, while DHL/Danzas South Africa, but have been aimed Pacific revenue climbed 26 percent. lagged behind at around 12 percent- more at strengthening the company’s In fact, for Exel’s freight manage- age points. position in ocean forwarding. It has ment operations, the U.K. only repre- But it is on the global catwalk where acquired Eagle Freight in South sents 10 percent of its business, with size and perception matter most. Africa, All Cargo Logistics in Austria continental Europe and Africa repre- Deutsche Post’s frontline operation and United States Consolidations in senting 26 percent of revenue, and of DHL Danzas Air & Ocean, as the North America. the Americas and Asia Pacific each ac- market leader in air freight forward- Most notably, in contract logistics, counting for about 30 percent. ing, already accounts for a 6.4 per- Exel last year made the breathtaking Freight management operations cent market share, with fourth place buy-out of U.K. domestic rival Tibbett now account for more than four mil- Exel (after UPS and Panalpina) claim- & Brittten for nearly $600 million. It lion air freight shipments a year for ing a 4.7 percent market share. Domi- was a move that certainly caused a Exel, adding up to over 600,000 nant though the new duo might be, sharp intake of breath among in- tonnes. It has seen particularly strong they will still only account for just vestors, as Exel’s stock price fell over growth in the last year, with the over 10 percent of the business. worries that the firm had overpaid on Americas proving to be its ace in the the deal. hole, with growth rates in excess of … Briefly 23 percent. The European air freight Expanding Giant market grew 16 percent for the com- Cargo traffic for European carriers pany with Asia Pacific up 18 percent. edged up 1.1 percent in August, ac- But Exel appears only to have gone That provided an average global cording to the Association of Eu- from strength to strength. Last year, growth by air weight of 18 percent. ropean Airlines, as a 1.5 percent overall revenue for the company In North America, Exel’s air cargo decline on the North Atlantic offset grew 25 percent to $11.5 billion. business accounts for around $540 6.2 percent growth on Asia routes. More significantly, operating profit million in revenues. It was problems The overall business for the sched-

November 2005 AirCargoWorld 13 10RegionalsINT 10/21/05 1:26 PM Page 14

ReportsRegional

uled airlines was up 2.1 percent in gust, less than half the capacity tional Airport says it handled the first eight months of the year. ... growth of 7 percent during what the more than 24,000 tonnes of cargo in SAS Cargo, opening a new business company called “a persistently chal- the first eight months of 2005, about line in cargo general sales agency lenging environment.” … Kuehne + 5,000 tonnes more than it saw in all work, took over the freight activities Nagel opened a 72,000-square-foot of 2004. Vatry started work on a of Sterling, formerly Maersk Air logistics and handling facility in Nor- 29,000-square-foot building almost Cargo, including the GSA business rkoping, Sweden. … British home im- double the size of the industrial air- representing eight airlines in the provement goods wholesaler PJH port’s existing cargo facility. … Nordic and Baltic countries. … TNT Group named APL Logistics to British Airways World Cargo Express will take on two 737-300 manage its international supply appointed Airline Services GSA freighters from GE Capital Aviation chain. … Cargolux opened a com- its cargo general sales agent for Fin- Services to replace two sub-contract- pany office at the Zurich Airport, land. … Martinair Cargo started ed aircraft in its European network. ... where the airline operates truck con- weekly MD-11 freighter service be- Finnair will add two MD-11 passen- nections to its hub in Luxembourg, tween Amsterdam and Khartoum, ger aircraft in coming months and and named Gestao de Servicos the capital of Sudan. ... Britain’s In- will add them to its growing service Aereos as its general sales agent in stitute of Exports named Select Air- to Asia. … Cargo traffic at Air Portugal at the Lisbon and Porto air- line Management its ‘New Ex- France-KLM grew 3.2 percent in Au- ports. … France’s Vatry Interna- porter of the Year.” ■

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ReportsRegional

PACIFIC Fuel Imbalance Hong Kong’s airlines contend with high fuel costs and imbalanced trans-Pacific loads

But Mathison is not enamored with suggestions that the fuel sur- charge mechanism should be modi- fied to incorporate distance. Al- though this would help on the longer routes, which are currently at a disadvantage from a carrier per- spective, it might affect the intended transparency and simplicity of the surcharge, he said.

Longer Concern Cathay is adding another long haul sector to its cargo network, al- beit later than originally intended. Its new 747-400 freighter trans-Pa- cific service to Dallas/Fort Worth and Atlanta, which had been scheduled ven famously profitable airlines like Cathay Pacific are not to start in August, was postponed to impervious to the price of oil’s dizzying ascent. In the first November because of aircraft and six months of this year, Cathay’s earnings fell 5.7 percent crew shortage. Mathison hopes the Eto $215 million even though revenue was up 21.5 percent long-awaited peak season will finally to $3.1 billion. All that growth on the top line was eclipsed by be in full swing by then. Cathay’s fuel bill, which skyrocketed 53 percent from last year. “There are signs of a slowdown in The airline’s cargo traffic rose 8.6 percent for the period, By Ian Putzger demand from August partly due to the addition of a new 747-400 freighter to its fleet and market sentiment in January, but its load factor slipped 2.8 percentage points to 65.9 percent. seems to have deteriorated in the last As on the passenger side, the rise in fuel costs is hurting Cathay’s cargo month,” he said. “Most pundits are business. Fuel costs and softer demand combined to cancel previously planned now forecasting a shorter and less extra flights on the airline’s routes to Brussels and Los Angeles. pronounced peak than last year. We “The high price of jet fuel is having a serious impact on our longer haul are increasingly concerned about the freighter route profitability, particularly those routes operated by our 747-200 impact of continued high fuel prices freighter, which are older and less fuel efficient aircraft,” said Ron Mathison, and the ever increasing amount of ca- Cathay’s director and general manager of cargo. “As a result we are not operat- pacity being deployed in the market.” ing as many flights as we had originally planned this year.” He added that the downward pres-

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ReportsRegional

Cathay Capacity Monthly year-over-year change in cargo sure on westbound yields is traffic and capacity at Cathay this year. open its first conversion a worry too. Flying three 25% site in Asia and is produc- times a week to two new 20% ing kits to convert 767s U.S. destinations is part of 15% as well. Mathison’s strategy to cope 10% with directional imbal- Capacity 5% … Briefly ances and yield pressure, as Traffic 0% this positions the airline Forwarder U-Freight –5% closer to more origin 1/05 2/05 3/05 4/05 5/05 6/05 7/05 8/05 says its warehouse in points for cargo rather Source: Company reports Hong Kong and two sites than funneling everything in Singapore were certi- into its existing U.S. gateways. In ad- on the market and the strategies of fied under TAPA security guidelines. dition, Mathison hopes to develop both carriers. “We see no reason why … Qantas freight revenue soared 46 some Latin American traffic through we need to pull out the existing ser- percent in the year ending June 30, Atlanta, glimpsing promise in the vices if the market can sustain the to US$571.2 on the addition of Asia-Latin America sector. added capacity,” Yau said. freighter capacity and rising fuel sur- Meanwhile, Cathay is moving charges. ... Schenker Logistics was Plane Growth ahead with its alignment with Air named the freight forwarder and cus- China, in which the Hong Kong car- toms clearance provider for the 2006 Cathay rival Dragonair, which en- rier took an equity position a year Melbourne Commonwealth Games, tered the U.S. market in the spring ago. “We recently signed a special the latest endorsement for the Ger- with a 747 freighter to New York, also prorate agreement with them, and man forwarder’s division focused on finds westbound loads weak. “We talks around further opportunities for global sports events. … Macau In- deal with the problem by increasing cooperation are progressing well,” ternational Airport and Ger- the revenue from the eastbound traf- said Mathison. many’s Frankfurt-Hahn Airport fic (two rounds of rate increase during signed a letter of intent to become the peak seasons) and reducing the EVA Converting “sister airports.” … Mondiale cost of operation,” said Albert Yau, Freight Systems, the largest for- Dragonair’s head of cargo. “One way aiwan’s EVA Airways signed a warder in New Zealand, signed a reci- to achieve this is to fly direct from the deal with Israel Aircraft Indus- procal representation agreement with U.S. back to HKG if the westbound Ttries to convert up to six 747- Los Angeles-based Corrigan’s Ex- load of the flight is within the pay- 400 combi aircraft into freighters. press. … BDP International load limit of the aircraft.” The conversion work is slated to be- opened an office in the coastal city of It helps that China Airlines is tak- gin in the second half of 2007. Ningbo, its seventh BDP office in ing some space on the aircraft. The contract calls for four conver- China. … French forwarder Geodis Both Hong Kong-based carriers sions, with options for two more. If launched a special Web site aimed at have more freighters coming. Cathay, six conversions are done, the value of Asia business, www.asia.geodis.com. … with 14 747 freighters, is due to take the deal could reach $100 million, ac- The Federation of Asia-Pacific delivery of the first of six converted cording to IAI. Air Cargo Associations named 747-400s in December. Dragonair will IAI’s Bedek Aviation Group previ- Hong Kong International Air- get the first two out of five 747-400SFs ously signed deals to convert 747- port the “Most Friendly Airport for in the second half of next year. 400s for Air China Cargo and Asiana Cargo” in the region. … Emirates Yau has his eyes on Los Angeles, Airlines. “Asia’s rapid economic SkyCargo and Korean Air Cargo Chicago and Dallas/Fort Worth for growth is resulting in an increased will codeshare cargo capacity on expansion of trans-Pacific activities. demand for cargo aircraft,” says Be- routes from India and Mumbai in In- Whether or not the deal with China dek Aviation General Manager dia. … Thai Airways started three- Airlines will continue once Dragonair David Arzi. times-weekly MD-11 passenger flights fields its own freighters will depend He adds that IAI’s Bedek will soon between Bangkok and Moscow. ■

November 2005 AirCargoWorld 17 18-19ACWI1105 10/19/05 4:43 AM Page 1

www.boeing.com 18-19ACWI1105 10/19/05 4:43 AM Page 2

The new 777 Freighter is a powerful extension of Boeing’s leadership in providing over 90% of the world’s freighter capacity. In addition to more than 100 tons of payload, the 777 offers operators unmatched freighter efficiency and range. Enabling customers to fly more cargo to more places, more profitably. To take their freight business further every day. 20F1-CargoINT 10/21/05 1:27 PM Page 20

Feature Focus: Cargo Aircraft

Freighter

by Robert V. Dahl Project Director Air Cargo Management Group Photo courtesy Boeing 20F1-CargoINT 10/21/05 1:28 PM Page 21

Freight traffic grew 12 percent in Robust air cargo 2004, although part-year results for 2005 indicate that total air freight traffic this year will be up less than 5 growth is percent, on a year-over-year basis. Air- line trade groups in Europe and Asia both reported low single-digit growth producing big in air freight traffic through August, and U.S. carriers as a group reported orders for flat cargo traffic for the first eight months of the year. Given that air freight traffic has av- freighters, eraged 7 percent annual growth over the past 30 years, 2004 was an excep- including many tionally good year, and despite less impressive results this year, the 2004- 2005 period will reflect above-average straight from the traffic growth. This situation is clearly a welcome relief from 2001-2003, a period in which the air freight indus- assembly line try lost three years of growth based on an unprecedented decline in 2001 followed by only modest recovery in the following two years. Air Cargo Management Group pre- dicts that over the next 10 years, 650 more widebody freighters will join the global fleet, and the widebody share of all jet freighters will increase rFever to 58 percent. hese are truly exciting times in the freighter aircraft ACMG’s longer 20-year forecast for market and for those whose supply chains depend on freighters of all sizes indicates the fleet all-cargo services. Never before has there been so will grow in size to more than 3,750 much interest in freighters, and never before have units, up from roughly 1,700 aircraft prospective freighter operators had so many aircraft today. The greatest growth will take types from which to choose. place in the large-capacity segment. Until recently, the typical freighter was an aging, older In excess of 2,000 freighters will be technology aircraft, often selected more for its low acquisition needed to meet the growing demand price than for its performance capability. Now, however, the for air freight services over the next freighter fleet is undergoing a remarkable transformation as 20 years. In addition, 1,100 existing more modern aircraft types become available. freighters will be retired, including TMoves by the world’s airlines to expand their freighter fleets are being dri- more than 500 narrowbody freighter ven by expectations of future economic growth and the inexorable expansion retirements in the next 10 years. As a of global trade. Globalization, and the resulting increase in demand for the result, ACMG foresees an active mar- movement of high-value goods, will stimulate the expansion of the global ket for freighters in the future, with freighter fleet. the need for 3,170 freighters to be

Photo courtesy Boeing

November 2005 AirCargoWorld 21 20F1-CargoINT 10/21/05 1:28 PM Page 22

Feature Focus: Cargo Aircraft

ACMG’s Freighter Fleet Forecast 3,170 freighters needed for growth and replacement trough 2024. added through 2024 to meet both 4,000 growth and replacement needs. 3,758 3,500 Large Medium wide 3,146 he trend toward newer freighters 3,000 Medium narrow is apparent across the full spec- Small T 2,507 trum of aircraft sizes, from the 737- 2,500 300 to the A380. And there is a lot 2,000 1,927 1,707 of competition: Boeing versus Air- 1,500

bus; new freighters versus conver- Fleet Global Freighter sions; and original equipment man- 1,000 ufacturers versus independent con- 500 version companies. 0 The competition will get even 2004 2009 2014 2019 2024 more intense in the coming months Source: Air Cargo Management Group as additional conversion programs under development gain certification. vanced program would ever amount freighter model. Boeing logged 28 The newer freighter trend is most to anything more than talk. Now, al- orders for 747-400s in the first nine obvious in the large-capacity though the 747 Advanced has not months of 2005, and all of these or- freighter segment, where the 747-400 been formally launched, its eventual ders were for the -400 freighter or has become the standard bearer, and arrival is generally taken for granted 400ER freighter models. By contrast, where the A380 and 777 models will — and sooner rather than later. Boeing recorded only 31 orders for soon join the fray. As recently as a The resurgence of interest in pro- 747-400s in the full three year peri- year ago, the question for many ob- duction 747-400s has been driven od from 2002 through 2004. servers was, “When will Boeing close entirely by orders for the freighter The outstanding firm orders for the 747 line?” Now the big question variants; Boeing’s last order for a 747-400s – as reported by Boeing and is, “Can Boeing ramp-up 747 produc- passenger-configured 747-400 came the airlines involved – consists of a tion fast enough to keep pace with almost three years ago. In the mean- backlog of 25 basic 400 freighters, 17 the orders that are pouring in?” time, the company has recorded 48 ER freighters and six passenger units. In a similar vein, many doubted orders for the 747-400 freighter or Recent major orders for 747-400 that the long-talked-about 747 Ad- the extended-range 747-400 freighters include orders for eight 747-400 freighters by UPS and orders Expanding Freighter Options for six 747-400ER freighters by both FREIGHTER TYPE SIZE CATEGORY AVAILABLE NOW (CERTIFIED)UNDER DEVELOPMENT Guggenheim Aviation Partners and Conversions: Chinese start-up Jade Cargo. 737-300 Narrowbody Pemco, IAI, AEI — Add in five to 10 unconfirmed, but 737-400 Narrowbody — Pemco, IAI, AEI 757-200 Narrowbody Boeing (DHL), IAI & Mobile Aero (Boeing) likely, additional orders and the man- Precision Conversions Alcoa-SIE ufacturer not only has enough orders 767-200 Medium Wideboby IAI Boeing/Aeronavali to bridge the gap until the start of A310-300 Medium Widebody EADS-EFW — A300-600 Medium Widebody EADS-EFW — production on the 747 Advanced, but MD-11 Large Boeing — in fact will likely have to increase its 747-400 Large — Boeing, IAI 747-400 production rate, which has Production Freighters: remained at about 1.25 units per 767-300F Medium widebody Boeing — A300-600F Medium widebody Airbus — month for the past two years. 747-400F Large Boeing — It is well known that converted 747-400ERF Large Boeing — aircraft outnumber production 747 Advanced F Large — Boeing (proposed) 777F Large — Boeing (from 2008) freighters in the global fleet by a A30-800F Large — Airbus (from 2008) three-to-one margin. So it is some- Source: Air Cargo Management Group what surprising that Boeing and Air-

22 AirCargoWorld November 2005 23ACWI1105 10/21/05 9:01 AM Page 1

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Russia: +7 8422 590059 USA: +1 832 585 8611 the heavyweight in airfreight UK: +44 1279 661166 China: +8610 650 58288 www.vda.ru 20F1-CargoINT 10/21/05 1:29 PM Page 24

Feature Focus: Cargo Aircraft

bus together have firm orders for a firm order for four of the aircraft to significant is that together the two more than 100 new freighter air- be operated by Air Atlanta Icelandic. companies have received 51 firm or- craft. The total includes the 42 747- ders for 747-400 Special Freighter 400/747-400ERs, plus 27 A380 he increased interest in produc- conversions. freighters, 15 A300-600s, 10 767- Ttion 747-400 freighters comes as Airline customers for Boeing’s 300s and nine 777s. These orders deliveries of the 747-400 Special program include Air France, Cathay represent nearly $20 billion in value Freighter conversions are about to Pacific, Dragonair, Japan Airlines, at list prices, or in excess of $13 bil- begin. Some observers thought the Korean Air and Singapore Airlines. lion even with typical discounting. availability of converted 747-400s at IAI’s announced customer base in- The 777 freighter, launched earlier substantially lower prices would un- cludes Asiana, Atlas Air, EVA Air and this year based on an order from Air dermine the sale of production 747- GECAS. Combined with the firm or- France, has yet to attract significant 400 freighters, but that clearly has ders for 747-400 freighters and ER follow-on orders. However, its supe- not been the case. freighters discussed previously, these rior twin-engine operating econom- Such conversion programs, conversion orders mean we are ap- ics and its ability to carry 10-foot launched by Israel Aircraft Industries proaching 100 outstanding firm or- high loads will add to its long-term and Boeing late in 2003, have en- ders for 747-400 freighters of all popularity. The 777 freighter pro- joyed significant sales success. Boe- types. These aircraft will be in opera- gram was given a boost in September ing enjoys a two-to-one advantage tion by the end of 2008 when the when Iceland’s Avion Group placed in terms of orders, but what is most first A380 freighters and 777

24 AirCargoWorld November 2005 20F1-CargoINT 10/21/05 1:29 PM Page 25

Feature Focus: Cargo Aircraft

Large Widebody Freighter Characteristics

A380-800ZF 777F 747-400F 747-400BCF 747-400ERF 747 ADVFPRODUCTION PRODUCTION PRODUCTION COVERSION PRODUCTION PROPOSED (GENERAL FREIGHT) Max takeoff freighters go into service. weight (lbs) 766,000 875,000 870,000 910,000 960,000 1,300,000 It now seems almost certain there Main deck pallets 27 30 30 30 34 46 (17+29) will be sufficient demand to support Lower deck pallets 10 9+2LD-1 9 9+2LD-1 12+2LD-1 13 Boeing’s development of the 747 Total cargo volume (cu ft) 22,535 25,547 24,409 25,547 29,792 32,760 Advanced. Max. revenue load Luxembourg-based all-cargo carri- excluding pallet tare (lbs.) 229,000 248,300 238,900 248,600 294,100 313,000 er Cargolux has committed to take Range with max. load (nmi) 4,965 4,445 4,100 4,970 4,475 5,600 Note: 1) Data taken from manufacturers’ brochures, as interpretted by ACMG.; 2) Cargo volume excludes lower-deck 10 units of the freighter variant as- bulk space.; 3) 747 Advanced Freighter reflects ACMG estimates.; 4) A380F carries 17 upper deck pallets and 29 main suming it is launched. Although no deck pallets.; 5) Alternate A380F loading for maximum volume carries 25 upper deck, and 33 main deck pallets. other deals have been publicly an- All of the models shown are production freighters with the exception of the 747- nounced, Boeing executives have re- 400BCF (Boeing Converted Freighter). The standard bearer in this market segment today is the production 747-400 freighter, of which Boeing has delivered 97 units (plus 13 of the cently expressed optimism that suffi- ERFs). The -400F can carry 30 main deck pallets, and it provides a total cargo volume of cient orders will be received for the about 25,000 cubic feet and a maximum revenue load approaching 250,000 pounds. The range for this model carrying a full load is just under 4,500 nautical miles. passenger and freighter versions to In comparison to the 747-400F, other freighter types feature the following capabilities: support an official launch of this ■ The 777F has about 10 percent less payload weight and volume capability, but with growth model by the end of 2005. 500 miles greater range. The freighter version of the 747 Ad- ■ The 747-400BCF has about 5 percent less payload weight and volume capability, and vanced would feature a stretched about a 350-mile range penalty. ■ The 747-400ERF offers the same payload weight and volume as the standard 747- fuselage, allowing it to carry 34 400F, but with a 500 mile range advantage. main-deck pallets, four more than ■ The 747 Advanced Freighter has 15 percent to 18 percent more payload weight and current models. volume capability than the -400F, with the same fully-loaded range. Moving down in size a notch, the ■ The A380F offers 26 percent to 29 percent more capability than the 747-400F in terms of payload weight, payload volume and fully-loaded range. Airbus also shows an op- Airbus models continue to dominate tional loading scheme for the A380F for low density freight with a total of 71 main, upper the medium-widebody freighter and lower deck pallets that provides nearly 40,000 cubic feet of space (55 percent more market segment, but the Boeing 767 than the 747-400F). is making up some ground. Over the Source: Air Cargo Management Group past decade, this medium-widebody segment has been the fastest grow- freighters from FedEx and a single three certified programs for the con- ing portion of the freighter market, order from Japan-based start-up version of 737-300s at Pemco, IAI increasing from just 25 units in 1995 Galaxy. EADS-EFW is also set to ex- and Aeronautical Engineers. Pemco, to more than 350 units today. pand its capacity based on increasing for one, is also moving ahead on Boeing has recorded recent orders demand for freighter conversions of freighter and combi conversions of for factory-built 767-300ER A300-600 and A310-300 models. The the stretched 737-400 model, based freighters from All Nippon Airways, current capacity for 14 conversions on a firm order from Alaska Airlines. LAN Airlines and Japan Airlines; per year will be increased 50 percent The Aeronautical Engineers meanwhile IAI has delivered about a by the end of next year through a 737-300 conversion program re- dozen converted 767-200 freighters hangar extension. Elsewhere, Airbus ceived certification this fall. It is to Tampa Cargo of Colombia, ABX is expected to launch a freighter de- unique in having the capacity for Air and Europe’s Star Air. rivative of the A330-200 model, nine full-size pallets, versus eight Development of the which will be used as the basis for for competing 737-300 conversions. Boeing/Aeronavali special freighter the EADS entry in the upcoming U.S. The 757-200 conversion market is conversion program for 767-200s is Air Force air refueling tanker compe- also expected to get more intense. moving ahead, with first delivery to tition versus the 767-200ER. The only game in town at the mo- launch customer Cargo Aircraft ment is the 15-pallet Precision Con- Management scheduled for the third here also is significant change versions program that was certified quarter of 2006. Ttaking place in the narrowbody in June 2005. However, Alcoa-SIE Meanwhile, Airbus recently got an freighter market. has begun flight testing for its 14- order for six more A300-600 Competition is heating up with plus pallet conversion, with certifica-

November 2005 AirCargoWorld 25 20F1-CargoINT 10/21/05 1:29 PM Page 26

Feature Focus: Cargo Aircraft

ften it’s the little things, even with large freighters. That’s the case for suppliers providing original equipment, such as upper deck freight loading systems, for newly built or recently con- tion expected in the coming weeks. verted freighter aircraft. Also on the horizon is an update Typically, integrators such as FedEx and UPS and airlines by IAI and ST Mobile Aerospace of with freighter fleets ask original equipment manufacturer sup- the earlier 757-200 Special Freighter pliers to modify or customize equipment in order to make more program developed by Boeing for efficient use of cargo aircraft. DHL. The joint IAI/Mobile Aero- Even modest customizations mean OEM suppliers must tweak the space program, which uses data li- O configuration hardware to better accommodate the various sized pal- censed from Boeing, will be more lets and containers being stowed on board, says Tim Dumbauld, vice cost competitive than the earlier 14- president and general manager of Goodrich Aerospace and Defense’s pallet Boeing/DHL conversion, and cargo handling system operation in Jamestown, N.D.. Goodrich sup- will provide full 15-pallet capability. plies loading systems for the full range of Boeing and Airbus freighters Assuming things go as planned, this including 777s and A380s. model will enter service in 2007. The orders and deliveries of con- verted 737-300s and 757-200s have not developed as quickly as some Even Freighters observers anticipated. But most of the freighters in this size category Get Detailing are used by the integrated express by Ira Breskin operators. Lack of growth in the U.S. “There’s never been an aircraft we’ve purchased that we haven’t had domestic express market has caused to modify in one way or another,” says Jay Burkett, UPS’s liaison with these companies to delay any deci- freighter manufacturers. sion regarding upgrade or replace- FedEx, for example, requires that override latches and locks on the ment of their narrowbody 727 and floors of aircraft loading systems be configured so that it can quickly DC-9 freighter fleets. and easily secure several different size containers on the main deck. Elsewhere, a growing market for regional, narrowbody freighters is de- “It’s all about speed,” says Marco Sterk, FedEx’s manager of aircraft de- veloping in China. In addition to the velopment and acquisitions and A380 program. 737-300/400 and 757-200 discussed More specifically, FedEx seeks the flexibility to accommodate two above, converted A320s are expected sizes of containers or pallets on the upper decks of its widebody air- to see considerable use in this market craft: the AMJ, which is 96 inches high by 125 inches at its base and the segment over the long term. AYY, which is half as long. In addition, FedEx carries a third, smaller The recent emphasis on widebody standard-size container/pallet on its narrowbody aircraft. freighters by the world’s airlines has With the ability to quickly load and secure both larger containers, resulted in a decided increase in the FedEx is better able to match container use to short-term demand from size of the average freighter. As re- a specific market, improving operating efficiency and aircraft utilization. cently as 1995 widebody models Moreover, FedEx wants the cargo loading system in its A380 held just a 24 percent share of the freighters to have attenuated bumpers, or spring-loaded guide rails, as global freighter fleet. The widebody well as the floor-based override latch and locks. FedEx ordered the share now stands at 48 percent and bumpers to protect the aircraft superstructure from damage caused by is growing. containers being loaded aboard the A380’s two main cargo decks. FedEx, which expects to introduce the A380 into service by late 2008, Robert V. Dahl is project director of has two main decks for cargo. The company has ordered 10 of the air- Air Cargo Management Group, a Seat- craft, and has options for 10 more. tle-based aviation consulting firm, Goodrich is supplying A380 cargo loading systems to FedEx as buyer and associate editor of the CARGO furnished equipment. The other option is to sell such systems directly FACTS Newsletter, an ACMG-affiliat- to the aircraft manufacturer. ■ ed publication.

26 AirCargoWorld November 2005 27ACWI1105 10/19/05 4:37 AM Page 1

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Mercator, Al Fattan Plaza, PO Box 686, Dubai, UAE. Tel: +971 4 213 3133. Fax: +971 4 213 3170. E-mail: [email protected] Web: www.mercator.aero 28F2-EuropeanINT 10/21/05 1:37 PM Page 28

Feature Focus: WesternEuropean Airports Airports

Amsterdam Schiphol Ostend-Bruges International Vatry International Alternative European airports hope to become freight gateways, but so far the results are mixed Beyond 28 AirCargoWorld November 2005 28F2-EuropeanINT 10/21/05 1:38 PM Page 29

o some extent, the story of Europe’s air cargo hubs seems to be that the big are getting big- ger. The big four — Frankfurt, Paris, Ams- terdam and London Heathrow — all saw healthy cargo growth of between 8.4 and 11.4 percent in 2004, and fourth- placedT Heathrow had twice the tonnage of No. 5 Luxembourg. Yet talk in Europe about alternative Vitoria International Vitoria International gateways is hardly diminishing. Air cargo exhibitions are filled with the stands of hopeful alternative cargo hubs — Vatry, Vitoria, Hahn and Os- tend, to name but a few. These air- ports tout a new service from some African or Middle Eastern cargo air- line, or say they are in “advanced dis- cussions” with a major Asian carrier. the Big Four by Peter Conway November 2005 AirCargoWorld 29 28F2-EuropeanINT 10/21/05 1:38 PM Page 30

Feature Focus: European Airports

Europe’s top 15 cargo airports in 2005, went back to a few weekly flights by the likes of Egyptair, Iran Air and through April Turkey’s MNG Airlines. RANK AIRPORT TRAFFIC % CHANGE Two carriers that like Hahn, how- 7. Frankfurt, Germany (FRA) 616,894 7.4 ever, are Aeroflot and Air France. The 10. Paris (CDG) 564,910 7.5 Russian carrier shifted its freighter 16. Amsterdam (AMS) 489,070 3.8 hub there from Luxembourg in 17. London Heathrow (LHR) 444,040 0.8 2000, and now has 13 flights, operat- 26. Luxembourg (LUX) 238,306 9.1 ed with four DC-10s, out of the air- 28. Brussels (BRU) 234,255 7.9 port to Moscow and China. 32. Cologne (CGN) 202,491 4.4 “It is not so close to any town, but between all the major European cargo 41. Milan Malpensa (MXP) 127,224 13.2 hubs, and it has 24-hour operations 42. Madrid (MAD) 122,391 0.4 and flexible slots,” says Oleg Korolev, 55. Zurich (ZRH) 103,320 4.9 Aeroflot’s regional cargo manager Eu- 56. Liege (LGG) 102,362 -28.4 rope. “All the other airports we oper- 58. Nottingham (EMA) 97,646 14.1 ate to apart from Moscow have strict 64. London Stansted 85,738 12.7 slot regimes. In the old days, we often 67. Istanbul (IST) 83,126 3.9 had to sit in Moscow waiting for Lux- 73. London Gatwick (LGW) 75,152 -2.5 embourg to open.” Source: Airports Council International Korolev insists the lack of major forwarders at Hahn is not a prob- lem. “Big forwarders have huge vol- But, in reality, their progress often first freighter to Hahn because of umes and can deliver them in their is one step forward, two steps back. noise restrictions at Cologne for one own trucks,” he says. For smaller The idea is there, but the cargo does- weekly freighter flight en route to forwarders, Aeroflot has recently n’t look quite set to follow. Johannesburg; the second freighter, started a trucking service to other Part of the problem is that al- a Hong Kong service, was added for Europe hubs. though the airports see themselves crewing reasons. The other fan of Hahn is Air as a viable alternative, cargo carriers Gareth Kirkwood, British Airways France, which has a trucking hub usually see them only as a stopgap. World Cargo managing director, ad- there, adding some 125,000 tonnes Frankfurt Hahn, a former U.S. air- mits he would like to fly all 10 of cargo a year to Hahn’s volume — base 60 miles from the main Frank- freighters out of one airport, but it is extra tonnage that often creeps into furt airport, arguably fell into this a fair bet that the main Frankfurt air- the airport’s figures in airport trap in September last year when port is the one he has in mind. “We league tables. British Airways World Cargo started have only just started to operate out But while Vatry in France has a routing two of its freighters through of Hahn, so I can’t say if we would large TNT logistics operation next the airport, adding two more in No- commit to it in the longer term,” he door, there is not yet an example of vember. said in August. a trucking hub turning into a flight That was a key factor in boosting By September, the Hahn flights hub. Hahn still awaits flight opera- Hahn’s flown tonnage 80 percent to were back down to two a week. tions from Air France. 66,145 tonnes in 2004, and led the Perhaps Hahn’s biggest lack — airport to hope it might become the ahn has been here before. In apart from a runway too short for ful- hub for all 10 of the 747 freighters Hthe late 1990s, Malaysian Air- ly loaded and fuelled 747 freighters, a British Airways routes via Germany lines had an ambitious plan to make problem that is being rectified — is each week. the airport its cargo hub, but in an integrator presence. This is un- But the fine detail might have giv- 2001 new management scrapped doubtedly the royal road to success en the airport pause. BA moved its the plan. Hahn’s cargo operations for any alternative cargo airport.

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Feature Focus: European Airports

unich Airport isn’t slowing down in its eight months of this year. That was almost largely push to make itself a major hub for the in- because of the integrators as freight tonnage from tegrated air carriers. freighters jumped 111 percent and made up about a The German airport in September quarter of the airport’s freight traffic in August. opened a 15,800-square-foot Express Ser- “Thanks to Southern Germany’s strong exports vices Center that will be used exclusively by and our airport’s location at the heart of an ex- MFedEx, DHL and UPS. panded Europe, we have the opportunity to sustain For Munich, the expansion in express business is our above average growth in the freight sector,” Pe- part of a larger effort to raise its profile in the air- ter Trautmann, the airport’s managing director for line business both within Europe and in longer- traffic operations and engineering said in opening haul international transport. The airport has be- the new express center. come a large secondary passenger hub for The construction is part of a larger expansion ef- Lufthansa and has gained new connections in re- fort aimed at ramping Munich up to compete with cent years to North America and Asia. Europe’s leading gateways. The airport manage- Munich’s 18.2 percent cargo growth in 2004 ment company, FMG, this year started planning a placed it 84th in the world, just ahead of Hahn, and third runway, saying it would reach capacity for its air freight tonnage was up 26.4 percent in the first two parallel runways as early as 2008. ■ Munich Expresses Growth

Look at Liege in Belgium, which now Kalitta Air flies weekly en route be- there impossible, carriers will turn to ranks a mighty eighth among Euro- tween Chicago, New York and the next airport with a long runway pean airports, with 382,325 tonnes of Kuwait, while Icelandair operates and strong cargo infrastructure, and cargo in 2004, on the strength of be- weekly and Bluebird Cargo of Ice- that is NEMA,” he says. “So it is not ing TNT’s European air hub. land four times a week. The coopera- a matter of if, but when.” Or Nottingham East Midlands tion between Lufthansa and DHL Airport, which has overtaken Lon- also means it has 15 flights a week EMA is not the only airport don Gatwick to become the United via NEMA. Nhoping to pull off the trick of Kingdom’s second largest cargo air- But despite intense overcrowding adding conventional air cargo to in- port, with tonnage of 254,029 and a complete lack of new tegrator operations. tonnes, a figure includes “transit” freighter slots at Heathrow, NEMA Liège for a time played host to At- cargo that never leaves aircraft. It has failed to win any big Asian car- las Air’s ultimately doomed attempt nightly hosts 20 DHL flights, six riers. For a few years Cathay Pacific to set up freighter “fractional leas- UPS flights, and two TNT flights. It used NEMA for one freighter a week ing” operations, but since the pro- is also a stop on the trans-Atlantic during the winter, but it has consol- ject’s demise Liège has lost carriers freighter flights of DHL and UPS. idated operations at Manchester, such as Polar Air Cargo to Amster- Although this boosts total volume which also hosts freighter operators dam. And Leipzig-Halle in Germany, (NEMA has more tonnage than Istan- such as Dragonair and China Air- which last year beat out Vatry to re- bul, Munich, Moscow or Rome), the lines. Since Manchester owns place Brussels as DHL’s main Euro- impact on regular cargo operations is NEMA, Blanchard can’t complain. pean hub, also hopes the win will debatable: NEMA has had mixed suc- “At least it keeps these operations stimulate more mainstream traffic. cess attracting more traditional in the family,” he says. Eric Malitzke, Leipzig’s managing freighter operators for years. He remains hopeful NEMA will director, is fond of saying that the Bill Blanchard, its cargo develop- get its own Asian freighters in time. DHL decision “put Leipzig on the ment manager, says just 29 percent “As congestion in the southeast of map” and he has been travelling to of tonnage is non-integrator traffic. England makes freighter operations Asia and the Middle East making the

32 AirCargoWorld November 2005 28F2-EuropeanINT 10/21/05 1:38 PM Page 33

Feature Focus: European Airports

most of the airport’s newfound to Munich or Northern Italy from too much. With DHL’s operations prominence. The results so far are a here as from Frankfurt, and faster to alone, its traffic is likely to soar to weekly DC-10 charter to Africa oper- Hamburg and Scandinavia,” he says. 600,000 tonnes in 2008, making it ated by Ugandan carrier DAS Air and Although Leipzig has with Siemens, Europe’s sixth or seventh largest car- three AN-12 flights a week to BMW, Infineon and Dow Chemicals go airport. In 2004, its throughput Moscow by Atran. all within the vicinity, Malitzke says was just 15,000 tonnes. Malitzke says he is in discussions its location at the heart of Europe is with an unnamed carrier about 747 what matters. “Air freight is deliv- nother strategy some would-be freighter operations to Asia, and he ered all over Europe anyway,” he Acargo airports are using is going can also expect that Lufthansa Car- says. “You might as well land it here, for niche cargo. go will move the five intercontinen- which is much cheaper than Frank- Perishables is usually the one cho- tal routes it operates as a joint ven- furt or Amsterdam.” sen, and France’s Vatry International ture with the DHL to Leipzig when Leipzig knows the importance of has had modest success with it. Even hub operations start in 2008, adding attracting freight forwarders to gener- more successful has been Vitoria in more general cargo capacity. ate air freight traffic. Malitzke admits Northern Spain. But he insists Leipzig is different this is one of his major priorities for That is in part due to the strange from other alternative cargo airports. the next few years, and he is dangling management set-up at the airport, “We have excellent road infrastruc- such carrots as access to the ramp. which was designed in the 1970s as ture, and it is just as quick to truck But the airport need not worry a new airport for Bilbao. That city’s

November 2005 AirCargoWorld 33 28F2-EuropeanINT 10/21/05 1:39 PM Page 34

Feature Focus: European Airports

inhabitants preferred their existing airport, however, and Vitoria was “As congestion in the Southeast of largely mothballed until the early England makes freighter operations 1990s, when the Vitoria city govern- ment and its chamber of commerce there impossible, carriers will turn to set up a non-profit venture, VIA, to the next airport with a long runway promote the airport as a cargo hub. The airport has attracted carriers and strong cargo infrastructure, such as Cargolux, Cielos de Peru and that is NEMA.” and British Airways to make stops on the way back from Africa or ing Spanish vegetable and salad of that – 26,000 tonnes in 2004 – is South America. With a 34,200- items back in the opposite direction, due to DHL, which uses Vitoria as an square-foot perishables facility, it and in 2004 he persuaded Air Cana- Iberian and Moroccan sub-hub. boasts quick transfers to trucks and da to include a stop in Vitoria on And growth has been fitful. The good road links not just with Spain one of its scheduled MD-11 2004 total was 8.7 percent up on but to the rest of Europe. freighters to Frankfurt. 2003, but only 2.8 percent higher Ricardo Gonzalez, the director of In February 2006, he is also hop- than 2002, and less than 2001, VIA, has gone further, however, and ing to start a 737 service between when the airport reported 45,000 taken the step of actually organizing Reykjavik and Vitoria, carrying fish tonnes. DHL as much as fish is re- flights on behalf of forwarders and southbound and Spanish fruit and sponsible for Vitoria’s scale: in the shippers. His vehicle for this is VIAS, vegetables northbound. And he al- first half of 2005, the integrator put Vitoria Integrated Air Services, a ways has a clutch of other ideas. Nile smaller aircraft on some of its routes combination handler and charter Perch from East Africa? Fish from into Vitoria, and total volumes at broker created in 2001. Mexico? One long standing dream is the airport fell 7 to 8 percent. “If VIA sees an opportunity, they to start a route to the Canaries and So no alternative airport in Eu- ask VIAS to exploit it,” says Gonzalez. Mauritania or Senegal in West rope has yet found a successful strat- Since he is head of both entities, he is Africa, aimed at carrying mining egy for attracting general cargo, un- presumably often asking himself. equipment and other capital goods less one counts Luxembourg, which Perishables — mainly fish, for southbound and fish and other per- despite passenger traffic ranks fifth which the Spanish have a voracious ishables northbound. on the continent with 712,954 appetite — are the main target. Gon- This is helped Vitoria to clock up tonnes of cargo in 2004. zalez’s looks at fish-producing parts 43,683 tonnes of flown cargo in But alternative cargo airports still of the world and then try and find 2004. But this is a fishy story with a have reason for hope. In September, the lift to satisfy the market. In sting in its tail: some 65 percent of the European Commission published 2002, VIAS chartered a Gemini DC- this traffic is accounted for by good a paper on airport capacity which 10 to fly fish from Montreal, send- old-fashioned integrator traffic. Most warned that by 2025 Europe’s top 20 passenger airports would be saturat- Munich International ed for most of the day, while a fur- ther 40 airports would be congested. That suggests that cargo airports may yet have their day — if they are still cargo airports by then. Both NEMA and Hahn have a new growth business — as hubs for low-cost pas- senger flights. For now, at least, Ryanair and EasyJet, are more attrac- tive customers in Europe than Africa-bound freighters. ■

34 AirCargoWorld November 2005 35ACWI1105 10/19/05 4:39 AM Page 1

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Region Focus: Middle East Dubai’s Global Ambitionsby Roger Turney nough is never enough for Dubai. Already a world-class A310-330 converted freighter. With gateway, Dubai International Airport is to be supplemented three aircraft set to be in operation with the construction of an entirely new airport to the by year’s end, the carrier says it will north of Dubai City. A primary focus of the project will be be able to offer a more comprehen- the creation of Dubai Logistics City, a massive one-stop sive transhipment product over multi-modal logistics interchange that designers hope will Dubai to points in the Arabian Gulf be serve as the central cargo hub for the Middle East and a and other regional markets in Africa major gateway for international trade. and India. When completed in 2015, the $10 billion Jebel Ali Airport will feature six runways and a myriad of terminals capable of handling he Dubai Logistics City aims to 120 million passengers and 12 million tonnes of cargo annually. And, in Tmake such long-haul transship- Ekeeping with the Dubai ethos of always being the biggest and the best, its ment quite common. And in one sense, the logistics project is already aim is to be the largest airport in its own right and destined to cover halfway completed. It will effectively the world. some 18 square miles, the Dubai Lo- be bolted onto the existing ocean This would hardly be Dubai if gistics City will be built alongside port at Jebel Ali, currently responsi- there were not a heavy emphasis on the new airport and have direct ble for handling 60 percent of all moving goods, and that is an impor- apron and runway access, within a Middle East imports, thus creating tant part of the plan. huge free trade zone. the other half of the DLC multi- The first phase is set to become Although there is plenty of modal platform. operational in 2007 and the priority freighter lift transiting Dubai, serv- The man charged with realizing in the first stage of construction is to ing beyond regional markets with this huge enterprise is David Proffitt, develop the airport as a major cargo local freighter capacity has not al- who took on the job of as the DLC gateway through the creation of ways been so easy. That situation chief executive this year. Proffitt, a Dubai Logistics City. has been remedied of late with Emi- 28-year industry veteran, was most Although a stand-alone project in rates SkyCargo’s introduction of an recently with DHL Danzas Air &

36 AirCargoWorld November 2005 36F3-MiddleEastINT 10/21/05 1:40 PM Page 37

With a new airport and massive logistics facility under construction, Dubai seeks to be far more than a regional hub 36F3-MiddleEastINT 10/21/05 1:40 PM Page 38

Region Focus: Middle East

DUBAI GROWING Ocean as executive director for Eu- zone which will Dubai International Airport’s cargo rope and was a board member of make up Dubai traffic, 1999-2004 (in 000s of tonnes) Deutsche Post’s Mail International. Logistics City.” 1,200 The British national speaks excit- Dubai’s own lo- edly about the logistics hub’s poten- gistics catchment 1000 tial. “The strategic combination of area now stretch- DLC, Jebel Ali sea port and the new es well beyond 800 Jebel Ali airport will enable us to cre- the Arabian Gulf ate the world’s first truly integrated and other Middle 600 logistics multimodal transport plat- East markets. Its 400 form,” he says. “It will make this a distribution reach ’99 ’00 ’01 ’02 ’03 ’04 prime location for airlines and logis- stretches into In- Source: Dubai International Airport tic providers to serve the region. It dia, Africa and will also have the effect of attracting the southern states of the former larly for land-locked countries on more companies to Dubai to set up Soviet Union, helping to position the continent. regional distribution hubs.” Dubai as the world’s third largest Swift Freight shares the view that Proffitt has spearheaded a trade port for re-exports after Hong Kong Africa may offer the greatest poten- mission to the Far East to encour- and Singapore. tial for the growth of transfer age investment in the DLC project through Dubai, but it is also the from manufacturers and logistics ne man who has witnessed market with the biggest challenges. service providers. The DLC is in dis- Omost of that remarkable “The continent of Africa offers cussions with over 150 companies growth is Issa Baluch, chairman and the potential of multiple new mar- that have expressed an interest in CEO of forwarder Swift Freight In- kets which can be served from the project. ternational. Baluch, who recently Dubai,” says Baluch. “But access to Proffitt says the early planning for completed a two-year tenure as pres- these markets is not always easy the new airport has made careful ident of FIATA, is credited with in- because some of these countries provision for the needs of different spiring and developing the sea-air have not yet opened their doors to users, including the integrators that concept through Dubai. foreign business and remain highly will be able to develop their own fa- “Sea-air has grown far beyond restricted.” cilities. Space has been provided for even my own expectations,” he says. Competition in the Dubai logis- up to 16 separate cargo terminals, “When I hear the current ton- tics market is becoming tougher, ac- each nearly 130,000 square feet, nages, the numbers are staggering. It cording to Baluch, with more of the which will be designed to handle is a business that continues to be global players seeking to establish a different types of freight, such as further bolstered by Dubai’s open greater presence. But he insists there perishables and sea-air traffic. sky policy, as well as efficient cus- remains a distinct difference be- “The emphasis will be on freedom toms facilitation and speedy han- tween them and the vibrant Dubai of operation, the reduction of dou- dling between modes.” forwarding community. ble handling and speedier transit He says that Far East-to-Europe “The major players that are now times for sea-air business,” says Prof- shipping remains the main traffic involved are using Dubai as a staging fitt. “There will also be a huge catch- lane for sea-air traffic moving point to serve their networks,” he ment of companies operating within through Dubai, but Africa is be- says. “Local companies, on the other the single customs bonded free coming a growth market, particu- hand have grown out of their tradi- tional Dubai-generated business. These local companies may appear to Competition in the Dubai logistics market is be serving the same markets as the major players, but in reality, they do becoming tougher … with more of the global not. The local companies tend to spe- players seeking to establish a greater presence. cialize in their own niche markets.”

38 AirCargoWorld November 2005 36F3-MiddleEastINT 10/21/05 1:40 PM Page 39

Region Focus: Middle East

As for Swift, “We plan to focus on erating its second 727 freighter out of ing manager for Al Rais Logistics, emerging markets that are foreign Dubai, following the introduction of both aircraft have been made avail- investment-friendly, capitalize on its first aircraft at the start of the year. able for local charter operations. growing exports out of China, and According to Anis Nazir, market- “We were operating flights to focus on Asia-Africa trade lanes,” said Baruch. “China’s position as a center of global manufacturing will further strengthen Swift’s multi- modal product, as our offices in Hong Kong and China link this booming economy to consumer markets via Dubai.”

PS can count itself as one of UDubai’s longer-term mainstream global operators in a market that country manager John Tansey says is becoming increasingly sophisticated. “The distinction between local and global players is becoming more blurred as the Dubai market ma- tures,” he says. “That is not only dri- ven by global dynamics, but by the fact that the populations of these Ara- bian Gulf countries are very young and they have a very consumer mind- ed, next-day delivery attitude.” Tansey insists it is important to be able to provide a global perspective at local level. “UPS is involved in serving the re- gional markets out of Dubai, but what should not be forgotten is that as a fast-growing global interchange we can reach Europe or Asia out of here with next-day delivery,” he says. “That is beginning to prove very attractive to some major com- panies who want to position their inventory control in Dubai to serve both these markets.” What makes that possible is the longhaul freighter lift, of course, and local service providers such as Al Rais Logistics are working to alleviate the shortage of domestically generated freighter lift. It has recently started op-

November 2005 AirCargoWorld 39 36F3-MiddleEastINT 10/21/05 1:41 PM Page 40

Region Focus: Middle East

Says Gary Chapman, president of gistics, in a deal valued at $454 mil- Dnata, “This joint venture is a strate- lion. Earlier this summer PWC Lo- gic move to establish an airport-to- gistics sealed a five-year rolling U.S. airport logistics network within the military contract worth $1.5 billion region. The service is designed to to provide logistics services in provide airlines with a wider-choice Kuwait and Iraq. of off-line routings, with quality ser- The extent of Dubai’s logistics am- vices at competitive prices.” bitions can be judged by the fact that Dnata-PWC Airport Logistics will even in the searing heat of Arabia, it be managed by PWC and chaired by has risen to the challenge of opening Dnata. a new state-of-the art transhipment Baghdad on behalf of DHL, with the “The company will initially focus facility for handling flowers. The first aircraft and also regular charters its operations on the Arabian Gulf Dubai Flower Center, which is short- to Afghanistan, but both of these states, Lebanon and Jordan,” says ly to open its doors for business, is operations have stopped for the time Chapman. “But, we are really bullish designed to speed the flow and trans- being,” he says. for the expanded long term fer of cut-flower traffic through The aircraft are currently being prospects for this business through- Dubai’s international airport. used to operate charters around the out the region.” When it comes to the logistics region and for regular freighter ser- PWC recently completed its ac- business, it seems Dubai really can vices to Iran. quisition of California-based GeoLo- make the desert bloom. ■ “We see a big potential for regular freighter services between Dubai and Tehran,” says Nazir. “It is market in which we have extensive experience.” Al Rais Logistics is obviously con- fident about injecting more narrow- body freighter capacity into the Dubai market, with plans to have at least five 727 freighters in service by the end of next year. The fledgling carrier, however, appears to have reined in more ambitious plans to Log on to start operating 747 freighters on key Top News, Features, longhaul routes. the Bottom Line... “We have looked at scaling up to 747s,” says Nazir. “But we have now put those plans on hold for the time being.”

ir cargo road feeder services out Aof Dubai to neighboring Gulf states and other Middle East points are also being strengthened. A new deal recently signed between local air cargo handler Dnata and Kuwait- based PWC Logistics will provide what are described as inter-airport lo- WWW.AIRCARGOWORLD.COM gistics solutions in the region.

40 AirCargoWorld November 2005 41EventsINT 10/21/05 1:42 PM Page 41

Events

Nov. 12-16 ment event looks at how private March 26-28 meets postal in Latin America. For Anaheim, Calif.: Transcomp information, call +44 870 950 7900 Orlando, Fla.: ISTAT 23rd An- 2005, joint annual meeting of or visit www.triangle.eu.com. nual Conference, the annual meet- National Industrial Transporta- ing of the International Society of tion League, Intermodal Associ- Dec. 5-6 Transport Aircraft Trading. For infor- ation of North America and mation, call (703) 978-8156 or visit: Transportation Intermediaries Kuala Lumpur: Asia Pacific www.istate.org/conferences. Association, at the convention Aviation Outlook Summit, the center. For information, call (703) forward-looking annual gathering March 27-30 524-5011 (866) 438-EXPO or visit: hosted by the Centre for Asia Pacific www.intermodal.org. Aviation. For information, call +61 Cleveland: 2006 Material Han- 9241 3200 or 870 950 7900 or e-mail: dling and Logistics Show & Con- Nov. 28-Dec. 1 [email protected]. ference, at the I-X Center, the annual event includes keynote speakers from Washington: Defense Logis- Dec. 8-9 supply chain chiefs at Lucent and The tics 2005, at the Renaissance Hotel, Limited. For information, call (704) where private logistics providers get Tallin, Estonia: Transport & 345-1190 or visit: www.NA2006.org. their marching orders. For informa- Logistics, Western operators meet tion, call (888) 482-6012 or visit: Central European partners. For infor- April 9-11 www.defenselog.com. mation, call +372 627 2755 or visit, www.bi-info.ee. Beijing: International Air Car- Nov. 29-30 go Association Annual General Meeting, TIACA’s high-level yearly London: The Future of Air 2006 gathering looks at air freight direc- Transport, at the Waldorf, from Feb. 14-17 tions in aircraft, Asia and fuel. For in- economic to environmental issues, formation, call (786) 265 7011 or including the CEOs of Atlas Air and Shanghai: Air Freight Asia visit: www.tiaca.org. Ocean Airlines. For information, call 2006, at the Shanghai-Pudong Inter- +44 207 608 0541 or visit, www.mar- national Conference and Exhibition April 30-May 2 ketforce.eu.com/airtransport. Center, the Payload Asia event moves to China. For information, e-mail: Las Vegas, Nev.: Cargo Net- Dec. 5-6 [email protected]. work Services 2006 Partnership Conference, At the Hyatt Lake Las Washington: Fourth Cargo Se- March 12-14 Vegas, the largest yearly gathering of curity Forum, at the Willard Inter- the international air freight business in continental, the eyefortransport Bal Harbour, Fla.: Air Cargo North America. For information, call event has government officials, ship- 2006, at the Sheraton, the three- (516) 747-3312 or visit: www.cnsc.net. pers and carriers looking at issus such sided annual meeting of the Airfor- as screening and C-TPAT. For infor- warders Association, Air & Expedited May 11-12 mation, call +44 207 375 7231. or vis- Motor Carriers and the Air Courier it: www.eyefortransport.com. Conference of America. For informa- Paris: World Express and Mail tion, call (703) 519-0335 or visit: European Conference, at the Sofi- Dec. 5-6 www.airforwarders.org. tel Forum Hotel, hosted by La Poste, uniting the private and postal Miami: World Mail & Ex- For more events, visit: worlds. For information, call +44 press Americas, at the Sheraton www.aircargoworld. 870 950 7900 or visit Bal Harbour, the Triangle Manage- www.triangle.eu.com. ■ com/dept/events.htm

November 2005 AirCargoWorld 41 42BackAviationINT 10/21/05 1:46 PM Page 42

BACK Aviation Aircraft Report

he twin-engine short-to-medium-range 757- 200 is touted for its fuel efficiency, low noise levels and efficient operating performance. TBoeing launched the freighter derivative of the 757 in 1985 with an order for 20 from UPS, which now operates 75 of the aircraft. The basic maximum takeoff weight of the 757 freighter is 250,000 pounds (113,400 kilograms), with an option for 255,000 pounds (115,600 kilograms). The 757 freighter has no passenger windows or doors and no interior amenities. A large main-deck cargo door is installed in the forward area of the fuselage on the left- hand side. The flight crew boards the aircraft through a single entry door installed immediately aft of the flight deck on the left side of the aircraft. Up to 15 containers or pallets, each measuring 88 by 125 inches (223 by 317 centimeters) at the base, can be accommodated on the main deck of the 757 freighter. Total main-deck container volume is 6,600 cubic feet (187 cubic meters) and the two lower holds of the air- capability of 87,700 pounds (39,780 kilograms), includ- craft provide 1,830 cubic feet (51.8 cubic meters) for ing container weight. When carrying the maximum load, bulk loading. the 757 freighter has a range of about 2,900 nautical These provide a combined maximum revenue payload miles (5,371 kilometers). ■

Freighter Values $60.00

$50.00

$40.00

$30.00

$20.00 2004

Current Book Values (millions) Current Book Values $10.00 1995 $0.00 CBV2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Passenger Values $60.00

$50.00

$40.00

$30.00 2004 $20.00 1995 Current Book Values (millions) Current Book Values $10.00

$0.00 CBV2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: BACK Aviation Solutions

42 AirCargoWorld November 2005 42BackAviationINT 10/21/05 1:47 PM Page 43

BOEING 757-200

Fleet by Configuration Average Direct Operating Costs Active Fleet by (Active / On order) Q1 2005 World Region

Engine Maintenance Expense All-cargo 11% 12% Europe 20% Aircraft Maintenance Fuel Cost 9% Far East 47% Middle East 10% 2% U.S.A 64% South America Passenger Depreciation/ 1% 88% Capital Leases Central 9% All Other America Crew Cost 2% 1% 24%

OPERATOR EQUIPMENT TYPE ACTIVE IN SERVICE American Airlines Passenger configuration 143 Delta Air Lines Passenger configuration 121 United Airlines Passenger configuration 97 UPS Cargo 75 Northwest Airlines Passenger configuration 51 Continental Airlines Passenger configuration 41 US Airways Passenger configuration 31 DHL EUROPE Cargo 22 China Southern Airlines Passenger configuration 20 Britannia Airways Passenger configuration 19 First Choice Airways Passenger configuration 18 Thomas Cook Airlines Passenger configuration 15 Europen Air Transport Cargo 13 Britsh Airways Passenger configuration 13 America West Airlines Passenger configuration 13 Air China Passenger configuration 13 Shanghai Airlines Passenger configuration 13 VIM Airlines Passenger configuration 13 Iberia Passenger configuration 10 Icelandair Passenger configuration 10

AVIATION DATA / ANLYSIS / CONSULTING / ASSET MANAGEMENT A division of Commonwealth Business Media, Inc. Specialists in Regional Airline, Airports, Aircraft 1-203-752-2000 [email protected] www.BACKaviation.com

November 2005 AirCargoWorld 43 44PeopleINT 10/21/05 1:48 PM Page 44

People

Airlines veteran had been with BAX Global. ed William Sheeran a United DHL Malaysia also named Tay Lee States-based key account director for Etihad Crystal Cargo: The Abu Shee manager of research and plan- global automotive clients. Sheeran Dhabi-based carrier appointed Barry ning. She had worked for DHL as a has more than 20 years of transporta- Haslett cargo handling operations special project consultant. tion and logistics experience in the manager and its main hub. Haslett automotive field and started with had been at FedEx Express for 17 years Third-Parties TNT in 1995 in Brentwood, England. in the United Kingdom and Dubai. Before that, he was with AutoAlliance Volga-Dnepr Kuehne+Nagel: The forwarder International and earlier was with the Airlines: The project named Ewald Kaiser to its manage- automotive division of Johnson Con- cargo specialist ment board in a position running the trols and Central Transport. named Matthew business unit in charge of road and Transgroup Worldwide Logis- Thear customer ser- rail logistics. The company said the tics: The Seattle-based forwarder vice manager, a new appointment “underlines the strategic named Jacob Bech Hansen director position based at importance of these activities for the of Asia development. A 10-year indus- London Stansted Air- globally operating logistics company.” try veteran, he worked at Rohde & Thear port. Thear started at Kaiser has been managing director of Liesenfeld and Formosa Container Volga-Dnepr’s original British joint KN’s Germany business since 2001. Line before becoming managing direc- venture company in 1991 and has TransGlobal Logistics: The tor of logistics company China LinQ. been planning manager for the air- Naples, Fla.-based company named Ozburn-Hessey Logistics: The line since last year. Florida Foreign Trade Association Tennessee-based logistics company KLM Royal Dutch Airlines: The Vice President Joseph R. Smith to named Dave Hanley director of its carrier named Ben J. Swagerman its board of directors. A former cargo integrated solutions group and deputy chief of KLM Security Services manager for COPA Airlines, he has Nathan Sanders director of opera- and said he will replace division chief been U.S. delegate of ALACAT. tions at its Indianapolis site. Hanley Teun J. Platenkamp when WCA: The World had been with Triangle Services, Ry- Platenkamp retires next fall. Swager- Cargo Alliance group der Integrated Logistics and Perfor- man, 46, was most recently chief pros- of international for- mance Logistics Group before joining ecutor in the Dutch city of Roermond. warders named Ozburn-Hessey last February. Sanders He was a prosecutor in The Hague, Andy Robins vice most recently was operations director Curaçao and Amsterdam and also president with re- at Brightpoint. served in the Dutch judiciary. sponsibility for Samuel Shapiro & Co.: The Bal- strengthening ties timore-based forwarder and customs Integrators with members Robins broker named Sandy Peterson chief throughout Europe, financial office. Peterson has 15 DHL: DHL Express named John the Middle East and years’ experience with non-profit or- Cameron, who had been with FedEx Africa. Robins, 45, ganizations, including MedStar and Ground, executive vice president of has been in Thailand Associated Catholic Charities, and ground in the United States. Cam- for 10 years as mar- has also worked as a contractor for eron was division vice president in keting director of a the U.S. State Department. the Eastern division for the FedEx freight forwarder. Crown Relocations: The corpo- parcel division. He started his career Also, Monica Tappi rate relocation and forwarding com- with FedEx Ground predecessor RPS joined as director of Tappi pany named Swati Pathak Seattle- in 1985. Meanwhile, DHL Malaysia membership development for Eu- based business development manager named named Lim Wooi Hooi se- rope. A native Italian, she worked at a for the Pacific Northwest. A seven- curity manager, overseeing security forwarder in Ancona, Italy, and will year veteran of the industry, she re- for DHL Express, DHL Danzas and be based in Amsterdam. cently managed the operations for DHL Solutions. The 16-year industry TNT Logistics: The 3PL appoint- the Bangalore branch of Crown India.

44 AirCargoWorld November 2005 44PeopleINT 10/21/05 1:48 PM Page 45

People

U-Freight: The Hong Kong-based Menzies Aviation: The United manager at the Civil Aviation Au- forwarder named I. J. Sahulata Kingdom-based worldwide ground thority of Singapore. branch manager for its new office on handler named Clive Macmillan Indonesia’s Batam Island. He had been director for the Americas. A onetime Airports at Garuda Indonesia Airways for more managing director of handler Servi- than 30 years, most recently as general sair in the United Kingdom, Macmil- Brussels International manager of the airline’s Batam office. lan joined Menzies and developed Airport: The Belgian airport’s man- ACLS: Don Palmer, onetime head handling operations for easyJet, agement company named Arnaud of the Intermodal Center at Alabama’s bmibaby and Jet2. Feist chief finance officer. Feist, 38, Huntsville International Airport, start- AMB Property: The developer fo- had been vice president of finance ed a consulting firm, Air Cargo Logis- cused on air freight distribution sites and information technology at SCA tics Services. Palmer had most recently named Afsaneh M. Beschloss to Packaging Europe, a unit of Sweden’s been a business development director the board of directors. She is president SCA, Europe’s largest corrugated board at forwarder Panalpina. and CEO of The Rock Creek Group, a packaging company. He also worked Washington-based investment com- at Coopers & Lybrand and at Swift. Manufacturers pany, she formerly Carlyle Asset Man- agement Group. She earlier was trea- Government DVB Bank: The Frankfurt-based surer and chief investment officer of bank, which specializes in transport the World Bank and held positions at TSA: The U.S. Transportation Secu- finance, placed Peter Kappel in J.P. Morgan in London and Shell In- rity Administration named Donald charge of its new Securitization Unit. ternational Group Planning. L. Barker federal security director at Kappel started his career at KPMG in Memphis International Airport. Bark- Canada and Germany and later Associations er had been federal security director at worked at JP Morgan and Nomura Se- Eugene, Ore., Mahlon Sweet Field curities. He more recently worked in Air Transport Association: The since 2002. A 21-year veteran office European securitization at Dresdner association representing United of the U.S. Marine Corps, he holds Kleinwort Benson and at Calyon. States air carriers named David degrees and has completed advanced Castelveter vice president, commu- studies in transportation manage- Ground Handling nications. Castelveter, 52, had been ment and logistics at Northwestern with US Airways and its predecessor and Penn State universities. ■ SAS Ground Services: The han- Allegheny Airlines for 28 years in var- dling division of SAS named Bo Ek- ious sales, marketing and operations Advertiser Index lund president. Eklund, 42, had been posts, most recently as managing di- Air France Cargo ...... CV4 with SAS until 10 years ago in posi- rector of corporate communications. Alcoa SIE Cargo...... 24 tions including economy and admin- He also completed 26 years in the Amsterdam Airport Schiphol...... 8 istration manager at SAS Cargo. More U.S. Armed Forces. Boeing...... 18-19 recently, he was managing director of Airforwarders Association: Cargolux Airlines ...... 15 Daimler Chrysler Rail Systems in Den- The U.S. association of air forwarders Coyne Aviation...... 6 mark and earlier was group logistics named Ross Bacarella, president of Dubai Cargo Village...... 39 and IT director at ECCO Denmark. the Connecticut-based BTX Air Ex- Lufthansa Cargo...... 14 ASIG: The Florida-based airline press, to the board of directors. Mercator...... 27 services firm named David L. As- Bacarella has more than 30 years of Polet Cargo Airlines ...... 33 chenbach vice president of sales experience in the industry. Port Authority of NY/NJ ...... CV2 and customer service, replacing Leif AAPA: The Association of Asia Skyteam Cargo...... 3 Andersson, who is retiring. A 35- Pacific Airlines named aviation in- Swiss World Cargo...... 7 year aviation industry veteran, As- dustry veteran Beatrice Lim as its Thai Airways ...... 9 chenbach had been vice president of commercial director. Lim had most Volga-Dnepr Airlines...... 23 airport services at ATA Airlines. recently been senior air transport Winnipeg Airports Authority ...... 31

November 2005 AirCargoWorld 45 46BottomLineINT 10/21/05 1:49 PM Page 46

AirCargo theBottom Line

Selling Semis Carrying Korea Year-over-year percent change in Year-over-year percent change in semiconductor sales by market, July freight tonne kilometers carried by 2005 compared to July 2004. Korean Air to/from key markets for the 10% first eight months of 2005. 8% 50% 6% 40% 4% 30% 2% 20% 0% 10% –2% 0% –4% –6% –10% –8% –20% –10% –30% Americas Europe Japan Asia Pacific Domestic Japan China Southeast Americas Europe Asia Source: Semiconductor Industry Association Source: Korean Air Brisbane Bulk Lufthansa Capacity Cargo traffic at Australia’s Brisbane Lufthansa Cargo monthly year-over- Airport for the past three fiscal years. year percent change in cargo capacity (in tonnes) and traffic. 15% 100,000 International Exports International Imports 12% 80,000 Domestic 9% 60,000 6% Capacity 3% 40,000 0% 20,000 –3% Traffic 0 –6% ’01/’02 ’02/’03 ’03/’04 Jan. Feb. March April May June July Aug. Source: Brisbane Airport Source: Company reports

Euro Cargo Year-over-year percent growth/decline in cargo carried by European airlines, for the first 8 months of 2005, in key markets.

Domestic

Within Europe

Europe-North Africa

Europe-Middle East

North Atlantic

South Atlantic

Europe-Far East –10% –5% 0% 5% 10% 15% 20% Source: Association of European Airlines

46 AirCargoWorld November 2005 46BottomLineINT 10/21/05 1:49 PM Page 47

World Cargo Exporting America Year-over-year percent change in air Year-over-year percent change in U.S. freight tonne kilometers, by region, for air export tonnes to Europe and Asia, the first eight months of 2005. July 2004 through March 2005. 35% 15%

30% 12% 25% 9% 20% 6% 15% 3% 10% Asia 0% Europe 5% –3% Middle Africa Asia/ Europe North Latin Overall 0% East Pacific America America 7/04 8/04 9/04 10/04 11/04 12/04 1/05 2/05 3/05

Source: International Air Transport Association Source: Cargo Network Services CASS-USA

Dividing Exel Exel Earning Percent of Exel’s total revenue by Exel’s first half of year revenue by geographic region for six months business segment, 2003-2005. ending June 30, 2005. (in millions of Euros) $2.5 Europe, Middle East and Africa 55.2% Contract logistics $2.0 Freight management

Americas $1.5 30.9%

$1.0 Asia Pacific 13.9% $0.5 First half ’03 First half ’04 First half ’05 Source: Company reports Source: U.S. Federal Aviation Administration

Air-Ocean EGL’s quarterly net revenue growth for air and ocean freight, 2003-2005.

35%

30% Ocean 25%

20%

15% Air 10%

5%

0% ’03Q1 Q2 Q3 Q4 ’04Q1 Q2 Q3 Q4 ’05Q1 Q2 Source: Company reports

November 2005 AirCargoWorld 47 48ForwardersINT 10/21/05 1:50 PM Page 48

ForwardersForum

Paperless David E. Wirsing • Executive Director • U.S. Airforwarders Association IATA’s e-freight paperless initiative offers a challenge the air cargo industry must take on t a recent International Air Transport Asso- out of the loop. As for the forwarding side of the equa- ciation in Singapore, IATA Director Gener- tion, he has indicated that he will involve Cargo 2000 in Aal Giovanni Bisignani stressed the need for the process as soon as possible. airlines to look into the future to define the initia- This is his second challenge. The multinational for- tives that will return the carriers and the industry warders who have assisted in the electronic mapping to sound financial footing. He also suggested that process will be of great value to the development process, automating and simplifying business processes but are not representative of the small and medium-size was the only way to accomplish this goal. forwarders who make up the majority of the day-to-day That was a strong statement coming from the chief ex- transactions in the air freight world. ecutive of the world’s airlines, although this is not the first time this has been broached by the industry and cer- Legacy Users tainly not the first by IATA. Some believe that much of the system development However, there may be reason this time around to that a paperless environment requires is currently in place believe. and it is not necessary to reinvent the wheel. Even the most casual industry Can we use the models that Glob- observer will note that Bisignani al Freight Exchange, Cargo Portal has made a number of sweeping The profile of cargo at Services, Ezycargo, Traxon and oth- changes at IATA since he assumed IATA has taken on a ers have developed and refined? the leadership role. As a result, the much higher importance. Should representatives from these profile of cargo at IATA has taken service providers be included in the on a much higher importance. discussions and mapping process? Aleks has indicated that the e-freight project team is Focus Group tasked with the challenge to make existing carrier systems This past April, Aleks Popovich was appointed the asso- and service providers systems work together most effec- ciation’s global head of cargo, and thus far the result has tively. That is a strong sign that IATA will and indeed been impressive. must work within the existing infrastructure if they are to He has taken the director general’s words literally and has be successful. renewed the push for paperless cargo. Specifically, Aleks has In other words, carriers will not dispose of their exist- a stated goal to eliminate paper documents from cargo ing IT systems nor will they accept the financial burden processes by 2010. This program, referred to as “IATA e- of duplicative systems to achieve a paperless environment freight,” has been endorsed by the IATA board of governors, if they believe the capability currently exists. which is composed of the airline’s chief executive officers. But IATA and Aleks Popovich deserve the recognition As for strategy, Aleks has chosen a small, focused group and participation of the cargo industry for taking on a of carriers — British Airways, Cargolux, Emirates, FedEx, challenge that, in the end, will serve to strengthen the car- Lufthansa Cargo and Singapore Airlines Cargo — to lead riers and forwarders through the simplification of business the way by implementing paperless cargo processes on practices. However, if all parties are not willing to become their core routes by the end of 2007. Therein lies involved in this sea change, e-freight will be destined to Popovich’s first challenge. the file cabinets alongside previous paperless initiatives. At this initial point, he has not included many major Let’s get behind this initiative and work together to carriers and will be pressed to explain why they were left make it happen this time. ■

48 AirCargoWorld November 2005 C3BackAviationDOM 10/21/05 11:53 AM Page 1 C4ACWI1105 10/19/05 4:23 AM Page 1

YOU HAVE A UNIQUE NEED, WE HAVE TWICE AS MANY CHANCES TO ANSWER IT. Air France Cargo and KLM Cargo have joined forces. We integrate our commercial activities and co-ordinate our operational systems. Whatever solution suits you best, you can choose between our services and networks. Gradually, we will offer you more and more alternatives and answers to your questions. Inspired by the challenge, our unified sales and services team is close to you and ready to deliver as promised. One team, one face to the market. We are ready; our ears wide open, waiting to hear that unique voice. Yours!