international edition

october 2012

Boeing predicts wide-body surge

SPECIAL SECTION:

TIACA Air Cargo Forum © 2012 United Air Lines, Inc. All rights reserved.

Wherever you’re going... we’re there. Over 370 destinations throughout the world.

And there. And there. And there. The truth is, with more than 150 wide body aircraft, linking 10 hubs and over 370 destinations throughout the world, chances are good that no matter where you’re headed, United Cargo has you covered. For more information, contact your local United Cargo Sales Representative or visit us at unitedcargo.com.

Includes destinations served by United Air Lines, Inc. and United Express.

JOB#: 12UA018 AD: DC PROOF#: BLUE CLIENT: United Cargo CW: KTG/UC Color Format 4/C process STUDIO#: Vantage TRAFFIC: JW FILE NAME: 12UA018 Air Cargo World MAR12.indd HEADLINE: Wherever you’re going... BLEED: .125 PUBLICATION: Air Cargo World TRIM: 8 x 10.875 PUBDATE: APRIL 2012 SAFETY: 7 x 10 October 2012 Volume 15, Number 9

Editor Jon Ross contents [email protected] • (770) 642-8036

Associate Editor Keri Forsythe [email protected] • (770) 642-8036 Back Pages special correspondent October 1958: “Getting ready for the jet age” Martin Roebuck 24 cOntributing Editors Roger Turney, Ian Putzger Region Focus cOntributing Photographer Geography, infrastructure propel Atlanta cargo Rob Finlayson 28 columnist Brandon Fried production Director Airports Ed Calahan 32 Fueled by cargo circulation Manager Nicola Mitcham [email protected] Special Section Art Director Central Communications Group TIACA Air Cargo Forum [email protected] 39 publisher Steve Prince Forecast [email protected] Boeing predicts coming wide-body surge Assistant to Publisher Susan Addy 51 [email protected] • (770) 642-9170

display Advertising Traffic Coordinator Cindy Fehland [email protected] world news Air Cargo World Headquarters 1080 Holcomb Bridge Rd., Roswell Summit Building 200, Suite 255, Roswell, GA 30076 6 Europe (770) 642-9170 • Fax: (770) 642-9982 Correction: In the September issue, 12 Middle East the forwarders rankings (p. 29) did not WOrldwide Sales accurately portray the companies’ 2011 gross U.S. Sales Japan revenues, due to an editing error. Kintetsu Associate Publisher Masami Shimazaki 16 Asia Pam Latty [email protected] World Express also contacted ACW, saying (678) 775-3565 lobe.ne.jp their tonnage result was misrepresented by [email protected] +81-42-372-2769 21 Americas Armstrong & Associates. Europe, Thailand United Kingdom, Chower Narula Middle East [email protected] David Collison +66-2-641-26938 +44 192-381-7731 Taiwan [email protected] Ye Chang Hong Kong, [email protected] Malaysia, +886 2-2378-2471 DEPARTMENTS Singapore Australia, Joseph Yap New Zealand +65-6-337-6996 Fergus Maclagan 4 Editorial 63 People/ Events 69 Bottom Line [email protected] [email protected] India +61-2-9460-4560 62 Five Questions 66 Classifieds 70 Forwarders’ Forum Faredoon Kuka Korea RMA Media Mr. Jung-Won Suh +91 22 6570 3081 ??+82-2785-8222 [email protected] [email protected] Air Cargo World (ISSN 1933-1614) is published monthly by UBM Aviation. Editorial and production offices are at 3025 Highland Parkway Customer Service or To Subscribe: (866) 624-4457 Suite 200, Downers Grove, IL 60515; telephone 866-624-4457. Air Cargo World is a registered trademark of UBM Aviation©2012. Peri- odicals postage paid at Downers Grove, IL and at additional mailing offices. Subscription rates: 1 year, $80; 2 year $128; outside USA surface mail/1 year $120; 2 year $216. Single copies $20. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Direc tory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. Air Cargo World is not responsible for unsolicited manuscripts, photographs or artwork. Please enclose a self-addressed envelope to guarantee that materials will be returned. POSTMASTER: Send address change to: 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 Air Cargo World directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For 3025 Highland Pky Ste 200 authorization, contact CCC at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking Downers Grove, IL 60515 100 or more copies, please contact the magazine directly. Member of Audit Bureau of Circulations Ltd. For more information visit our website at POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; www.aircargoworld.com telephone 866-624-4457. ACW october 2012 3 editorial

Transition, adaptation and staying ahead of the game

e’re now, officially, entering the home stretch toward the end of the year. What better way to celebrate than a ranking of the top airports in the world? Yes, when you look at the list compiled by Airports Council International (p. 32), you’d likely first see some depressing figures. In the year-over-year column, there Jon Ross areW a lot of negative numbers. Don’t be depressed! Editor Despite the sluggish year-over-year results and the slow first half of 2012, airport operators have said that, on the whole, cargo operations are becom- ing busier. That’s good news for officials at Hong Kong International Airport, Incheon International Airport and Memphis International Airport, all of whom contributed to the article this month, and all of whom saw either flat growth or declines in their tonnage numbers between 2010 and 2011. The airports that did see boosts were the smaller players in emerging markets. These airports in Af- rica and Latin America will be even more important in the coming months. We should all watch to see how quickly they keep growing. In addition to airports, carriers are also on my mind, as we wait for the ap- proval of UPS and TNT Express’ merger, and watch, from a distance, the results from the EU’s inquiry into a proposed Ryanair-Aer Lingus deal. Closer to home, rumors are swirling about US Airways’ pursuit of American Airlines, a carrier that just welcomed a new cargo head a few short months ago. Another new of- ficial tasked with boosting up a sometimes troubled airline is Richard Forson, who recently became interim CEO of Cargolux. He provides some interesting comments about transition and strengthening business processes on page 62. Yes, transition is in the air, as it turns colder here in the Southern U.S. Merg- ers, while diminishing the number of carriers in the market, are not a bad thing. New vitality can be derived from joining forces, just as better direction can be given to an adrift company when a new perspective takes over. Hopefully, these developments will help exhilarate the industry, turning what has been a so-so 2012 into a booming 2013.

4 october 2012 ACW MIA Air Cargo world Jan16.pdf 2012/2/3 5:59:44 PM

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K Europwoe r ld Asian e w middlse east africa americas americas africa middle east Asia Europe Air Cargo Germany to acquire two 747-400ERs

irBridgeCargo Airlines will hand over two Boeing 747-400 Aextended-range freighters to Air Cargo Germany, of which ABC holds a 49-percent stake. ACG is slated to acquire the jumbo freighters once certification from the German Aviation Authority Luftfahrt-Bundesamt is granted. The 747- 400ERFs will complement the four 747- 400SFs currently in the German cargo carrier’s fleet. The 747-400ERFs, which can transport a maximum payload of 120 tonnes and fly 9,120 kilometers nonstop, will be a game- Vienna now Lufthansa changer for ACG, company CEO Michael Bock said. “The aircraft enhance our reach and market options substantially, Cargo’s ‘third’ hub due to their improved range capabilities, compared to the B-400SFs, and their nose- loading door,” he said in a statement. opes of Austrian Airlines re- “Vienna will become a central Euro- ACG will return two of its 747-400SFs taining any semblance of an pean hub for Lufthansa Cargo, compa- to lessor Martinair next year, but will independent cargo product rable to our German hubs at Frankfurt replace the aircraft with newer-model have finally been dissipated. and Munich,” Carsten Spohr, CEO and 747-400Fs or 747-400ERFs, Bock said. HThe quick-fix solution of Austrian chairman of Lufthansa Cargo, said at Now that ACG has adequate Lufthansa Cargo, following the acqui- the time of the announcement. capacity, the carrier is launching new sition of the ailing Austrian carrier by It quickly became apparent that routes. Next month, ACG will commence neighboring Lufthansa, has been con- Austrian Lufthansa Cargo was a very three-times-weekly service to Beijing signed to the trash can, a little more Vienna-centric setup, with Lufthansa Capital International Airport, a route than a year after its creation. Cargo retaining its own sales organi- complementing the carrier’s current Under that scenario, it was dictated zation throughout the rest of Austria. service to Shanghai. ACG also has plans that Lufthansa Cargo would hold a Now, it would appear, Austrian Cargo to up frequencies to Mexico City and 74-percent stake (Austrian Airlines is set to be airbrushed out of existence. Chicago, with services growing from one got the remaining 26 percent) in the A new Lufthansa Cargo subsid- to two weekly flights and two to three newly created Austrian/Lufthansa iary will assume responsibility for all weekly flights, respectively. Cargo joint venture, as the chosen ve- sales and marketing for the airline in “South America is standing on our hicle to market the freight capacity of the Austrian market. Hasso Schmidt, agenda, too, but will be materialized only the two carriers in the Austrian mar- Lufthansa Cargo’s head of regional in the near future,” Bock added. ket. In all other markets outside of management for Central and East- ACG is also completely taking over Austria, cargo would be amalgamated ern Europe, will head it. Schmidt was AirBridgeCargo’s traffic between Europe under the Lufthansa Cargo brand. previously joint managing director of and North America. “We’ve signed Notably, Lufthansa Cargo also the now-defunct joint venture, along- an interline agreement with ABC for made significant play of that fact Aus- side Franz Zochbauer, former head of enabling easy transfers of shipments in trian’s home base of Vienna would Austrian Cargo, whom, it would now Moscow and Frankfurt,” Bock said in a be accorded “hub” status, within its seem, is headed for retirement. statement. ACW greater European firmament. In other management changes,

6 october 2012 ACW More capacity to move your cargo around the globe.

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Arnulf Schoeberl, former hub man- Schmidt said. “That is why we feel we ager for Vienna, is to take charge of can best develop that concept by be- marketing and sales in the Austrian ing an integral part of the Lufthansa “Vienna will market. His predecessor, Eckhardt Cargo network.” become a central Balzer, has been transferred to a Within that context, Schmidt is still management function in the regional happy to refer to Vienna as the carri- European hub for German market. The new manager of er’s third European hub, after Frank- operations and handling in Vienna is furt and Munich. “We may never see Lufthansa Cargo, Matthias Schulz, former head of han- our freighters operating through Vi- dling in Munich. He replaces ex-Aus- enna, but it will play an increasingly comparable to trian Airlines staffer, Klaus Herring. important role for us in developing our German hubs “There is very little real change in the Eastern European market,” he the face of our sales organization in said. He is dismissive of some of the at Frankfurt and Austria,” Schmidt said. “All that has current freighter operators touching happened is that most of the senior down in Vienna, which he refers to as Munich.” managers from Austrian have now re- ‘carpetbagger capacity.’ turned to that airline.” “Some of these carriers are re- — Carsten Spohr, Lufthansa Cargo has concluded, turning to Asia from Europe and are it would appear, that the Austrian looking to uplift cargo wherever they CEO and chairman, market would fare better under the can.” He is also aware that other East- Lufthansa Cargo greater Lufthansa Cargo mass than ern European gateways are making with any allusion to independence. headway in attracting direct freighter There might also be an element of capacity, which could dent Vienna’s asset-stripping by the German car- Eastern European gateway crown. Lufthansa Cargo enjoys a 30-per- rier. Austrian Airlines is still a heavily Indeed, Vienna airport recorded an cent industry stake. loss-making operation and is proving 8-percent, year-over-year, drop in “There is a very strong focus on difficult to absorb into the German freight volumes in the first six months the aerospace sector around the fold, much to the growing frustration of the year, down to 131,000 tonnes. Polish city of Rzeszow, in what is of the head office in Frankfurt. But Schmidt is content with the known as ‘Aviation Valley,’ where Besides, the Austrian Airlines’ extent and reach of the Lufthan- around 70 companies are located,” Schmidt said. “Here, you have such names as Pratt and Whitney, Sikorsky, Go- odrich and Siemens engaged in pro- duction, not only of aerospace com- ponents, but also complete units, such as passenger doors for Boe- ing and landing gear for the Airbus A380.” A further aerospace cluster is lo- cated around Warsaw, with a strong presence of the European aviation consortium EADS and its Airbus Mil- itary subsidiary. As well as taking on responsibil- ity for Austria, Schmidt’s empire now Vienna International Airport stretches far beyond the confines of Eastern Europe; he currently over- cargo business was, it seems, never sa Cargo product offering in the sees cargo projects in Greece, Turkey about Austria, but more about its Vi- Eastern European market and the and Israel. “We are going to be add- enna hub operation. Schmidt readily strength of some of the niche sec- ing our first freighter service to Tel conceded this point. tors within it. Aviv this winter,” Schmidt said. “We “Vienna for us is about being an In particular, he refers to the are also surprised at how strongly Eastern European gateway, rather current strength of the Polish air- Greece is performing, despite its fi- than just an Austrian entry point,” freight market, in which, he said, nancial troubles.” ACW

ACW october 2012 9 Europamerice a s Asi aa fric a middl middle easte ea st a fric Asia a a m eEuropricase

Air France-KLM reports August cargo drop

ir France-KLM recorded a plunged 11.9 percent, year-over-year, The carrier’s cargo volumes to 7.8-percent, year-over-year, in August, on a 16.4 percent, year- Africa/the Middle East and the Adecrease in freight traffic in over-year, capacity reduction. These Caribbean/Indian Ocean regions August, a decline that was propelled declines are even more dramatic also lagged in August, sliding 7.4 by sluggish demand in the Asia-Pa- than the losses the carrier recorded percent and 5.2 percent, year-over- cific region and the Americas — AF- in the first eight months of the year; year, respectively. AF-KLM actually KLM’s top areas for cargo. The com- AF-KLM’s traffic to the Asia-Pacific increased capacity to the Caribbean/ bined carrier also offered 5.2-percent stalled 6.4 percent from January-to- Indian Ocean region in August, less cargo capacity than in August August 2011, while capacity dropped however, offering 12.1-percent more 2011, according to a press release. 8.1 percent, year-over-year. freight space than in August 2011. In Despite curbing capacity in August, AF-KLM’s cargo volumes to the contrast, the carrier slashed freight Air France-KLM saw freight load fac- Americas also fell from an eight- capacity to Africa/the Middle East tor fall 1.7 percent, year-over-year, to month perspective, slowing 7.1 per- by 1.6 percent, year-over-year, in 60.6 percent. The carrier’s cargo load cent, year-over-year. August, how- August. factor also contracted from an eight- ever, only saw a 3.6-percent, year- Sluggish cargo volumes or not, AF- month perspective, dropping 2.6 per- over-year, decline in cargo demand, KLM has seen a hike in passenger cent from January-to-August 2011 to according to the carrier’s statistics for volumes lately. The combined carrier 63.6 percent. the Americas. AF-KLM cut freight ca- recorded a 2.7-percent, year-over- Declines in the Asia-Pacific region pacity to the Americas by 0.7 percent, year, surge in passenger traffic from contributed greatly to these figures, year-over-year, in August, leading to January to August, with load factor according to the press release. AF- an overall freight load factor of 59.8 increasing 1.7 percent, year-over- KLM’s cargo traffic to the Asia-Pacific percent. year, to 83.3 percent. ACW

EU looking into Ryanair-Aer Lingus deal

he EU Commission has begun an in-depth investigation — known as a Phase II review — of the proposed merger between Ryanair and Aer Lingus, a development that brought up competition concerns when the commission originally looked into the deal. The issue, according to a European Union press release, stems from the fact that “on a large number of European routes … the two airlines are each other’s closest competitors.” A final decision on the potential acquisition is expected by January 16. Ryanair recently appealed the EU’s decision to launch a deeper investi- 2010, the General Court of the Eu- services on which they operate the gation. The appeal was subsequently ropean Union prevented the merger same routes. denied. Ryanair currently owns 29.82 due to competition concerns. Ry- According to HI 2012 numbers re- percent of Aer Lingus, a fact that is anair officials also notified the EU leased in July by Aer Lingus, cargo currently being examined by the UK two years later of another impending revenue finished at €23.3 million, a Competition Commission. deal, but soon withdrew their plans. 5.9-percent, year-over-year, increase. This is the second time Ryanair has What might be different this time Total revenue stood at €626.3 mil- attempted to acquire Aer Lingus. In around, according to a press release, lion, a 10.1-percent, year-over-year, a previous ruling, released on July 6, is that both airlines have increased increase. ACW

10 october 2012 ACW “For our 30+ flights a week between Hong Kong and North America, there’s no better aircraft. The economics speak for themselves.” — Nick Rhodes, Director Cargo, Cathay Pacific

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his month, flydubai Cargo will be- gin direct flights from Dubai to Bu- charest, Romania, and Skopje, Macedonia. According to a press release, these flights — which will commence on October 1 and October 18, respectively — are the first direct links by a cargo operator between Dubai and each destination. In addition to expanding its direct flights, the carrier has been busy forming interline agreements during its first year of existence. In the past 10 months, flydubai Cargo has entered into partnerships with Emirates, British Airways, Estonia Air, Coyne Airways and Jet Airways. The carrier has been focusing on spread- Middle Eastern carriers ing its network beyond the Middle East. “Through these interline agreements we expand in the Americas have opened new routes and thus new av- enues for trade,” Ghaith Al Ghaith, CEO of flydubai, said in a statement. “We are now tihad Airways CEO James Ho- Hogan also cited Arab-Brazilian able to deliver goods from Sudan to Sydney gan revealed that the United Chamber of Commerce statistics, and also provide Nepal’s handicraft industry Arab Emirates-based carrier is which showed trade volumes between with access to consumers in the U.S., Eu- eying South America for growth Brazil and the Arab world reaching rope and Australia.” Eand will launch its first route to the re- $25 billion in 2011. Experts project Flydubai Cargo has mostly been trans- gion — to Brazil — on June 1, 2013. this figure to increase by between 10 porting meat, fruits and vegetables to the This announcement comes on the heels percent and 15 percent this year, Ho- Indian subcontinent and the CIS. The carrier of rival carrier Emirates SkyCargo’s gan added. To address this growth, also flies a lot of live fish to Sudan. September 12 commencement of Boe- as well as passenger demand, Hogan ing 777-300 ER service to Washington disclosed that he’s in talks with un- Dulles International Airport. named South American carriers about Hogan said strong trade volumes potential partnerships. between Brazil and the UAE will pro- Surging trade volumes between pel Etihad’s upcoming route to Sao the UAE and the Americas also drove Paulo-Guarulhos International Airport Emirates’ decision to launch service to from its Abu Dhabi hub. The daily Washington, D.C. In a press release, route will also provide Brazil will con- the carrier said that the new route will nectivity to the GCC states, the Indian address the 113 percent, year-over- subcontinent and key Asian markets, year, increase in UAE exports to the “The wide range of products being he explained. U.S. witnessed in 2011. transported by flydubai Cargo shows the “Brazil is one of the fastest-growing Transport equipment and machin- demand for a timely, affordable and reliable economies in the world, now ranking ery parts are projected to be the key service,” he said. as the sixth largest since overtaking commodities exported from Emirates’ “Less than a year into operations,” he the UK in 2011,” Hogan said. He re- Dubai International Airport hub, while continued, “we have grown our network as vealed that bilateral trade between household goods and garments are well as our customer base and aim to con- Brazil and the UAE is valued at ap- expected to top the list of imports to tinue serving a global audience as our range proximately $3 billion annually, “with Washington, D.C.; pharmaceuticals and operations expand.” ACW authorities aiming to lift this to $10 and electronics are likely to be seen billion within five years.” on both trade lanes, officials for the

12 october 2012 ACW ASIA EUROPE AMERICAS AFRICA MIDDLE EAST

carriers revealed. ma International Airport, respectively. and promote tourism to the capital re- Orhan Abbas, Emirates Airline’s se- Emirates Airline President Tim gion from around the world, including nior vice president of commercial op- Clark said that the carrier’s push into the Middle East, which generated over erations for the Americas, called the the U.S. has economic implications 100,000 visitors last year alone.” U.S. a “strategically important mar- far outside of the Americas. “Our U.S. Like Etihad, South America is also ket” for the carrier — “a fact under- flights help to open new markets that on the carrier’s radar. Emirates Sky- pinned by our recent period of signifi- the business community is reliant Cargo launched daily, linked service cant growth,” he added. February and upon, as the globalization of commerce to Buenos Aires and Rio de Janeiro March saw the launch of daily Emir- is dependent upon transportation for in January, a route that complements ates service to Dallas/Fort Worth In- passengers and cargo,” he said. “This the carrier’s thrice-weekly freight ser- ternational Airport and Seattle-Taco- Emirates service will facilitate trade vice to Sao Paulo. ACW

Dubai Airport’s freight facilities expand s part of Dubai Airports’ $7.8 go full reconstruction, according to a also spoke out about the renovations, billion Strategic Plan 2020, press release. Once complete, Emir- explaining that they will help Dubai ADubai International Airport’s ates Airline will occupy both facilities. World Central and Dubai Internation- cargo facilities are undergoing a face- Also under construction is a new al meet heightened freight demand. lift. Renovations are slated to begin in transshipment facility that will handle In fact, total cargo traffic across both the next few months and will increase freight transferred between Dubai In- airports is projected to increase from the airport’s annual freight capacity to ternational and Dubai World Central. the 2.19 million tonnes reported in more than 3.1 million tonnes by 2018. Jeff Gould, vice president of develop- 2011 to 4.1 million tonnes by 2020. The first stage of construction will ment at Dubai Airports, said Dubai “The new infrastructure will not involve a 30,000-square-meter addi- International’s operations won’t be only increase our capacity, but go a tion to Dubai International’s 1.2-mil- disrupted during the construction long way to simplifying what has be- lion-tonne Cargo Mega Terminal. The process, however. come an increasingly complex cargo airport’s original freight facilities, Hall Chris Garton, senior vice presi- operation as the airport has grown,” A and Freight Gate 1, will also under- dent of operations at Dubai Airports, Garton said in a statement. ACW Middle East cargo soars in July, says IATA espite the fact that Middle April and June. In fact, IATA said in percent in July. Eastern carriers recorded a the press release, freight carriers in Like their North American counter- D16-percent, year-over-year, in- this region have recorded “virtually parts, Latin American carriers also re- crease in freight demand in July, glob- no growth” in cargo volumes since the ported a markedly low July cargo load al cargo markets shrunk 3.2 percent, fourth quarter of 2011. factor. Freight load factor in this re- year-over-year, according to Interna- Carriers in North America and Eu- gion dropped to 35.2 in July, despite tional Air Transport Association sta- rope have also contended with low- Latin American airlines raising capac- tistics. In a press release, IATA par- er-than-average freight volumes re- ity by 13.9 percent, year-over-year. tially attributed this decline to a com- cently. Cargo demand in both of these Cargo demand in Latin America also parison with a “relatively strong” July regions dipped 3.6 percent, year-over- slid, falling 5.6 percent, year-over- 2011, but said global trade growth is year, in July, although European car- year. still sluggish. riers reported a more marked con- The Middle East was the only re- Nowhere is this sluggishness more trast between capacity and demand. gion with any cargo gains in July, evident than in the Asia-Pacific. Airlines in Europe offered 0.9 per- according to IATA. In addition to Freight carriers in this region saw cent more capacity in July 2012 than recording a double-digit increase in volumes plunge 7.6 percent, year- in July 2011, while North American freight demand, Middle Eastern car- over-year, on a 4.3 percent, year-over- carriers perfectly matched capac- riers boosted capacity by 11 percent, year, capacity drop. These declines, ity with demand, offering 3.6 percent year-over-year. Such gains contrib- which represented the biggest year- less capacity, year-over-year. Unfor- uted to the region’s 2 percent, year- over-year losses seen in any region tunately, this decline couldn’t offset over-year, improvement in freight in July, are even more dramatic than the latter region’s staggering decline load factor, which totaled 45.3 per- those witnessed in the Asia-Pacific in in load factor, which plunged to 32.3 cent in July. ACW

ACW october 2012 13 MiddLe east africa americas europe ASIA

IATA’s Tony Tyler touts African safety improvements

ony Tyler, director general and Fostering a safe environment led Strategic Improvement Action Plan CEO of the International Air aviation authorities to devise the Af- include the establishment of indepen- Transport Association, has im- rica Strategic Improvement Action dent African civil aviation authorities plored African officials to use avia- Plan. The plan, sanctioned by IATA and the implementation of flight data tion as a driver of economic growth. and the International Civil Aviation analysis and safety management sys- Doing so, however, will require Afri- Organization, calls for all African car- tems. IATA and ICAO also encourage can governments to adopt global riers to complete IATA Operational African officials to employ “transpar- standards, improve aviation safety Safety Audit registration and contains ent” safety oversight systems and ac- and develop a supportive infrastruc- specific ways to improve aviation cident-prevention measures, with the ture, he explained. safety in Africa from now until 2015. latter focused on runway safety and “The most pressing problem for Af- Tyler said IOSA registration is in- loss of control. rican aviation today is safety,” Tyler tegral to aviation development in Af- Still, Tyler acknowledged that said in a statement. In fact, the con- rica since the accident rate of IOSA- humanitarian concerns trump tinent saw an average of one accident registered African airlines in 2011 aviation development in the minds for every 305,000 flights using West- was nearly equivalent to the global of African officials. “Eliminating ern-built jets in 2011. Although Ty- average. “That tells us that applying poverty, improving health, raising ler conceded that this was a marked global standards to African aviation living standards and generating improvement from Africa’s 2010 ac- will yield results,” Tyler stated. “And jobs rank much higher,” he said in a cident rate, he said it was still nine the most effective way to increase the statement. “My message is not to shift times higher than the global average. adoption of IOSA in Africa is for gov- priorities, but to ask governments to “It should be as safe to travel by air ernments to mandate participation see aviation as an economic driver in Africa as it is in any other part of for all airlines.” and develop policies to support that the world,” Tyler said in a statement. Other key objectives in the Africa important role.” ACW

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2012-10 AGS ad for ACW.pdf 1 8/29/2012 9:23:55 AM woAsia r ld MiddLen eeast w s africa americas europe europe americas africa middle east Asia Cathay Pacific records less dramatic August declines

athay Pacific and wholly owned subsidiary Dragonair saw freight Cvolumes plunge 6.9 percent, year- over-year, to 122,351 tonnes in August. Al- though a relatively steep decline, the drop is less dramatic than the 10.5 percent, year- over-year, cargo decline the carriers record- ed in July. Cathay Pacific’s cargo manager James Woodrow said he expected to see even more improvement in September. “We expect to see some increase in de- JAL, Nippon Cargo mand from mid-September onwards, driven by the shipment of high-tech products from the key manufacturing centers in Mainland eye partnerships China,” Woodrow said in a statement. August, however, is a traditionally weak month for cargo — “and this year was no exception,” Woodrow said. In addition to wo of the three big Japa- net profit soaring 111.2 percent, year- reporting sluggish freight volumes, Cathay nese carriers are adding over-year, to $340.5 million. Pacific and Dragonair saw cargo and mail capacity after painful cut- Having turned around its cost load factor slide 3 percent, year-over-year, backs — and both are structure, JAL is back in expansion to 61.9 percent, in August. To compensate looking to boost growth mode, which was underscored by the for lagging demand, the carriers offered through international partnerships. announcement in February that man- 6.1-percent less freight capacity than in Au- In September, Japan Airlines was agement was planning to invest close gust 2011. due to relist on the Tokyo Stock Ex- to $6.5 billion in new aircraft over a Cargo problems have plagued Cathay change, after filing for bankruptcy five-year period. Pacific and Dragonair all year long. From an protection in January 2010. In one of The carrier’s network is in growth eight-month perspective, the combined car- the biggest corporate failures in Japa- mode, too, which began in the spring riers recorded a 9.6 percent, year-over-year, nese history, the carrier had buckled with the launch of flights from Japan decline in freight volumes amid a 5.5 per- under the weight of $25 billion in to Boston, using Boeing 787 aircraft. cent, year-over-year, capacity drop. Cathay debt. The IPO was expected to raise “We thought it would take some time Pacific and Dragonair’s cargo and mail load about $8.5 billion, nearly doubling the to get full loads, but we are seeing factor also took a nosedive in the first eight investment of a state-backed fund strong demand from Asia to Bos- months of 2012, falling 3.7 percent, year- that injected capital into the carrier ton. From Boston to Japan, we carry over-year, to 64 percent. following its bankruptcy filing. Ana- mostly seafood,” according to JAL’s Despite these declines, the carriers have lysts projected it to be the second- Shinja Nagayasu. seen an uptick in passenger volumes. Ca- largest opening this year, only trailing The carrier’s route expansion will thay Pacific and Dragonair transported more the $16 billion Facebook offering. continue with services to San Diego than 2.6 million passengers in August, a 4 JAL managed to fly through the and Helsinki, which are due to kick percent, year-over-year, increase. This im- turbulence of the past year in good fi- off in December and March, respec- provement is in line with the higher pas- nancial shape. Fiscal-year 2011, which tively. Again, the carrier will field senger traffic the carriers have witnessed ended on March 31, brought the Japa- 787 aircraft on the new routes. JAL’s throughout 2012; passenger volumes rose nese carrier $2.3 billion in net profit. erstwhile B747s are long gone, so the 6.7 percent, year-over-year, in the first eight This success carried over to the first 787s entering the fleet will be replac- months of the year. ACW quarter of fiscal-year 2012, with JAL’s ing 767-300s, which translates into a

16 october 2012 ACW Asia MiddLe east africa americas europe europe americas africa middle east Asia

40-percent increase in capacity, Na- tegic plan, which is about growth, gayasu said. The airline has signed up according to McWhorter. “The first for 45 787s, in total. phase is finished. That was about “We are looking Beyond its own lift, JAL is look- right-sizing the infrastructure, to expand without ing to expand its cooperation with which had been built for a 20-air- American Airlines, which has been plane fleet,” he said. touching Japan. based on interline agreements and Besides cutting back, another key some joint-handling activities. Unlike objective is achieving greater flex- There are parts of ordinary interline deals, however, ibility in order to hone NCA’s ability this one includes express traffic. “We to take on charter service around the world that have started to move traffic between Asia its scheduled operations. “We were nothing to do with and South America,” Nagayasu said. not able to respond to demand,” Mc- “We have seen a significant traffic Whorter said. The airline is in the Japan.” increase there.” process of setting up charter teams Like JAL, Japan’s Nippon Cargo Air- to develop this business and intends lines is also eying expansion. The all- to unveil a new feature on its website — Shawn McWhorter, freight carrier took delivery of its first soon that will help customers send in Boeing 747-8F this summer and has their charter requirements. NCA’s president for the deployed the aircraft on its Tokyo-Los “There is still growth, but it is un- Americas Angeles-San Francisco-Tokyo route. even,” he said. “We will be taking char- Faced with challenging market con- ters to Africa, to Brazil and to China.” ditions, NCA will not be expanding its A key plank in the push for greater costs of sidelined cargo aircraft, this fleet in the foreseeable future, so the flexibility is decentralizing the car- would enable NCA to push into new 747-8 freighters entering service will rier’s corporate structure and deci- markets, McWhorter explained. “We be replacing 747-400 aircraft. Still, sion-making. Instead, NCA has been are looking to expand without touch- this constitutes a double-digit rise investing in regional management ing Japan,” he said. “There are parts in lift, said Shawn McWhorter, NCA’s with greater powers. of the world that have nothing to do president for the Americas. “Every -8 As for the 747-400Fs that are with Japan.” [comes with] 15-percent more capac- grounded as the 747-8Fs enter ser- Even so, he ruled out a Chinese ity. By the end of 2015, we will have vice, the plan is to find regular work joint venture cargo airline along the an all-747-8 fleet,” he said. for them through leasing agreements lines of the now-defunct Jade Cargo This spring, NCA embarked on the or joint ventures. Besides avoiding International or Great Wall all-freight second stage of its long-term stra- expensive parking or mothballing carriers. ACW

Air China Cargo launches service to Amsterdam

ir China Cargo has com- attracted to Schiphol airport’s exten- dent of Schiphol Cargo, also spoke menced Boeing 747-400 sive road-feeder network, which will out about Air China Cargo’s new ser- freight service to Amster- allow Air China Cargo to expand its vice, praising it for “strengthening dam Airport Schiphol from coverage of the European sector. Schiphol’s links with China.” In fact, AShanghai Pudong International Air- And Europe, Air China Cargo’s he revealed, the airport now has six port. The service, which routes Huang Bin said, has been on the cargo carriers serving the Chinese through Chengdu or Chonqing and carrier’s radar for a while. “This market, as well as 112 weekly flights returns to Shanghai via Tianjin, is ini- is now the third Air China Cargo to and from China’s top 10 freight tially operating on a five-times-weekly freighter route serving Europe, which airports. basis, although Air China Cargo has demonstrates our pioneering spirit in “Schiphol’s strategic location, ac- the option for up to 10 weekly flights the current market recovery, and our tive encouragement of logistics ac- from Schiphol airport. great confidence in the prospects for tivity and proactive measures to fa- According to a press release, the air cargo market between China cilitate the efficient flow of cargo are some of Air China Cargo’s flights to and the Netherlands,” he said in a clearly making it the European air- Schiphol are replacing Frankfurt Air- statement. port of choice for major freight carri- port freight routes. The carrier was Enno Osinga, senior vice presi- ers,” Osinga said in a statement. ACW

ACW october 2012 17 americas europe Asia middle east africa americas europe Asia middle east africa

Airbus to research biofuels in Chinese facility

ess than two weeks after Boe- analysis is scheduled for completion “We believe that the research will ing co-launched a facility with by early 2013. have positive effects on energy con- Lthe Commercial Aircraft Corp. Once all of the preliminary work is servation, emissions reduction and of China to study alternative fuels in completed, the partners will look at climate-change in the Chinese aviation Beijing, Airbus inked a deal with the increasing the production rate of the sector,” Zhang continued. Beijing-based Tsinghua University to biofuels to develop quantities suitable As the fastest-growing aviation propel the commercialization of avi- for commercial use. market in the world, China is a ation biofuels. Phase one of Airbus’ Tsinghua University’s Zhang Xiliang strategic market for Airbus, according project, which is slated for completion said the research has the potential to to a press release. In another strategic in the second half of 2012, involves tremendously modernize the Chinese move, Airbus signed a joint MoU with the assessment of suitable feedstock aviation sector. “The project will help competitors Boeing and Embraer sources. us improve the understanding of the in March to collaborate on the Used cooking oil and algae are nature of aviation biofuels commer- development of biofuels. The aircraft two key fuel sources that Airbus and cialization in China, identify the op- manufacturers detailed their plans to its partners will look at during their portunities and challenges, and evalu- “speak in unity to government, biofuel phase-one assessment. The partners ate the possibility of social, economic, producers and other key stakeholders will then select the best possible feed- market and technology change and to support, promote and accelerate the stock sources from the mix during its cost, obstacles and challenges,” he availability of sustainable, new jet-fuel the second phase of the project; the said in a statement. sources” in joint press releases. ACW

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CF_ACW_HalPage_AD USA.indd 1 15/06/2012 14:51 18 october 2012 ACW americas europe Asia middle east africa americas europe Asia middle east africa

CDI Cargo Airlines launches cargo services despite ‘depressed’ markets ix months after the Civil Avia- fering a tough time at the moment, phase,” Zhang said. “But we will tion Administration of China based on the current weak demand keep our eyes on the development Sgave CDI Cargo Airlines the situation of international markets,” of international markets and prepare green light to launch operations, Zhang said. “But most of the domes- ourselves for international operation the carrier commenced B737-300 tic/narrow-body freighter operators when the markets are recovered.” service from its Hangzhou Xiaoshan are performing well, due to booming The road to recovery may be long, International Airport hub to Chang- domestic demand.” The Chinese ex- however. In July, the Association of chun, via Qingdao. And although press sector has been performing es- Asia Pacific Airlines revealed that Asian cargo has been rather sluggish pecially well recently, Zhang added, freight demand fell 0.8 percent, lately, CDI Cargo’s Alex Zhang said as evidenced by the sector’s nearly year-over-year, in the Asia-Pacific in that the nascent carrier is poised for 30 percent CAGR increase. June, amid a capacity decline of 1.4 success. But CDI Cargo sees potential be- percent. Cargo carriers in the region Unlike the Shenzhen-based Jade yond its domestic market. Eventually, also recorded a sluggish cargo load Cargo, which officially folded in Zhang said, the carrier is looking to factor of 67.8 percent. June, and the Tianjin-based Grand- launch international operations with From a half-year perspective, star Air Cargo, which suspended op- wide-body freighters. Now, however, Asian cargo demand looks even erations in May, CDI Cargo Airlines CDI Cargo will focus on the 737- more depressed. AAPA Director is targeting the domestic Chinese 300Fs, with two more aircraft coming General Andrew Herdman said that market for growth. Zhang believes on board in October and December. Asian airlines saw a 4.3 percent, this distinction will help the carrier “To set up the organization prop- year-over-year, drop in freight de- offset some of the declines seen in erly and [garner] a healthy financial mand in the first six months of the the Asia-Pacific lately. base, CDI will be focusing on do- year, a byproduct of “weak consum- “No doubt that all long-haul/wide- mestic routings with narrow-body er confidence in major developed body freighter operators are suf- freighters during the beginning markets.” ACW

Philippine Airlines to double cargo capacity

s part of a massive fleet over- the carrier’s operations haul plan, Philippine Airlines t r e m e n d o u s l y. “ T h e Ahas inked a $7 billion deal orders we are placing with with Airbus to acquire 34 A321ceos, Airbus will play a key role 10 A321neos and 10 A330-300s. The in revitalizing PAL and 54 aircraft, which will begin to arrive growing trade and tourism in 2013, will reportedly more than in the country,” Tan and double the Southeast Asian carrier’s Ang said. freight and passenger capacity. “With these aircraft, Philippine Airlines will operate the we will be able to offer wide-body A330s on routes to the more passengers the Middle East and Australia, as well best the industry has to as high-demand regional routes. The offer across our Asia- single-aisle A321s, however, will be Pacific network,” the PAL deployed on domestic and region- officials added. “At the same time, we to 100 aircraft. The carrier, which is al routes and fortify PAL’s alliances will benefit from the low operating awaiting delivery of three additional with other carriers, according to a costs associated with new-generation Boeing 777-300ERs to supplement its press release. aircraft and the reduced impact on fleet of three 777-300ERs, currently In a joint statement, PAL Chairman the environment.” operates five Boeing 747-400s, 15 Lucio Tan and PAL President Ramon Ang revealed in a press conference Airbus A320-200s, eight A330-300s, Ang said the aircraft will enhance that PAL is looking to purchase up four A340-300s and four A319s. ACW

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www.atlasair.com *Compared with market-leading performance of 747-400F, based on Boeing estimates. africa middle east asiawo reuropeld n e wAmericass UPS extends offer period for TNT takeover PS has extended its offer period for its €5.16 billion acquisition Uof Dutch delivery company TNT Express from August 31 until November 9. Despite this setback, the deal is still expected to close in the fourth quarter of 2012, the integrators announced in a joint press release. UPS and TNT Express explained that the European Commission is unable to meet its original December 12 deadline for the antitrust probe it launched in July, thus delaying the offer period. Separate reports indicate that the EC temporarily halted its Phase 11 review of the merger Southern Air to retire in order to obtain additional information from the companies. Either way, the merger is moving for- Classics, cut employees ward. In an official statement, the former rivals reiterated their “commitment” to working together and amalgamating their n the next few months, South- email, which is dated August 21. networks. ern Air will accelerate the retire- “As a result,” he continued, “we will “Under the terms of the [offer], UPS will ment of its 747-200s — a trans- begin reducing headcount in both line acquire TNT Express to create a service lead- formation that had been ongoing operations and headquarters staff. er in the logistics industry and an enhanced, forI about two years — and lay off an There will be direct staff reductions, integrated global network,” UPS and TNT unspecified number of employees, ac- as well as outsourcing of some activi- Express said in a joint statement. “The com- cording to an email sent to Southern ties, and we expect the majority of the plementary strengths of both organizations Air employees by CEO Dan McHugh. changes to be in place by the end of will create a customer-focused global plat- McHugh also wrote that the company the year.” form that will be a leader in transportation will focus on ways to reduce corporate Southern Air officials have also technology and customer service.” debt and improve a capital structure stopped the process of a possible relo- The integrators added that the merger Southern Air inherited from the pri- cation of the company’s headquarters will not only bolster trade links in the U.S. vate equity firm Oak Hill Capital Part- from Norwalk, Conn. According to a and Europe, but will also strengthen Asian ners when it acquired a majority share report in July, Southern Air officials and Latin American networks. Such im- in the ACMI company in 2007. Oak Hill had been working on a deal to move provements will “help to stimulate much- combined an existing air cargo holding, the firm to Cincinnati/Northern Ken- needed economic growth,” UPS and TNT Cargo 360, into the Southern Air fold. tucky International Airport, bringing Express said in a statement. “Today, a significant level of our 120 jobs to the area. After protracted public negotiations, resources and infrastructure are de- In the letter, McHugh wrote that UPS and TNT Express agreed on a $6.77 voted to running and maintaining the he had expected to keep the -200s, billion deal in March, a little more than -200s. We now must realign our or- known as Classics, in the Southern a month after TNT Express rejected UPS’ ganization to serve the new business Air fleet until April 2013. The plan original $6.4 billion acquisition offer. The model, including changes to our crew had always been to slowly retire all-cash offer comes out to a per-share planning, and we will initiate select these older aircraft and move the price of a little less than $12.50, and the outsourcing of activities to better Southern Air fleet toward more mod- transaction was originally slated to close in align our costs with the operating ern planes. Declining demand, high- the third quarter.ACW requirements,” McHugh wrote in the er operating costs and increasing

ACW october 2012 21 americasAMERICAS Eeuropeurope Asia middle east africa africa middle east asia europe Americas

regulations, he wrote, were deciding for Southern Air moving forward. The ly,” he wrote, “we need to transition factors in the accelerated timetable. firm will continue its relationship with from a high-maintenance, depreciated Southern Air has been weighing the DHL Express and other carriers, while Classic fleet, to a modern, efficient retirement for at least the past 18 searching out new partners. He wrote fleet operating in more reliable, low- months. As McHugh put it, “our tra- that the fleet retirement is “not mere- cost, low-risk environments.” ditional ACMI customer base is not ly a short-term, cost-cutting move” Southern Air added three 777 actively planning to add 747-200 or and that it instead signals the start of freighters, airplanes destined for use 747-400 capacity in the near term.” a business transformation. by DHL Express, to its fleet in April. McHugh outlined that these fleet “In order to make Southern Air According to a press release issued adjustments highlight a new strategy stronger and operate more efficient- at the time, the new planes were to be used for DHL Express’ recently launched around-the-world service. Southern Air started operating its first 777 freighter for DHL in August 2011 on a Cincinnati-Bahrain-Hong Kong route. The ACMI firm also had plans to introduce 747-400 freight- ers by the end of next year, reducing Southern Air’s fleet age as it phases out the Classics. WHEN EVERY SECOND COUNTS, When the 777 freighter deliver- COUNT ON AIRNET In the news... Cargolux has resumed flights to Latacunga, Ec- AIRNET: MORE PLANES, MORE FLIGHTS, MORE OPTIONS uador’s Cotopaxi International Airport af- ter a nearly 39-month hiatus. The twice-weekly AirNet Cargo Charter Services is one of the nation’s largest cargo airlines. flights replace Cargolux’s previous freight service With our own private air network, we can offer unmatched flexibility and to Quito’s Mariscal Sucre International Airport transportation solutions that precisely fit your needs. You’re not just a track- ing number – you’re our customer. and will be propelled by Cotopaxi’s revamped freight facilities and lack of curfew restrictions, • Hundreds of scheduled flights each night to all major U.S. markets according to a press release. Cargolux officials • The latest departures and earliest arrivals in the industry said the latter merit, in particular, provides them • Superior on time performance, averaging 99.2% with greater flexibility with their operations in • On-demand charter service with aircraft strategically positioned Ecuador — the majority of which involve flower throughout the U.S. for quick response transportation. In the press release, they also • Certified for handling and shipping dangerous goods pointed out that Cotopaxi airport’s cargo fa- • Enhanced security and persistent chain of custody cilities feature cool rooms with space for several • High touch service: positive hand off, no mechanized sorts • High declared value limits for items of extraordinary value wide-body freighters… Aerolíneas Argentin- as has joined the SkyTeam Alliance as its 18th member. The Argentinian flag carrier becomes For information on making AirNet Cargo Charter Services your partner in cus- tomized transportation, email [email protected] or call 800.999.0974. SkyTeam’s first South American member and adds 40 new destinations to the alliance’s net- work… Delta Air Lines transported 205,156 tonnes of cargo in August, a 5.7 percent, year- The leading small package express cargo airline. over-year, increase. The Atlanta-based carrier’s freight operations are also up slightly from an eight-month perspective, improving 0.8 percent from January-to-August 2011. United Air- lines transported 194,465 tonnes of cargo in August, a 2.6 percent, year-over-year, drop. The merged carrier’s freight traffic is also down from an eight-month perspective, plunging 7 percent from January-to-August 2011. ACW

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ies were announced, Stephen Fen- “Their performance reliability has second 777 round-the-world route, wick, DHL Express’ CEO, Americas, been high,” he said at the time, “and which will also take full advantage of said the integrator’s partnership with we are pleased to be expanding our the aircraft’s long-range payload ca- Southern Air is “very effective.” relationship with the start up of this pability and fuel efficiency.” ACW

FedEx downgrades profit forecast

edEx Corp. saw earnings per di- decline in operating income during the percent, year-over-year. In the press luted share slide from $1.46 to three-month period. release, FedEx credited the latter in- F$1.45, year-over-year, in the first “Earnings for the first quarter were crease with improvements in Europe quarter of fiscal-year 2013, which below our expectations, as weak global and Asia. ended August 30. In a press release, economic conditions dampened rev- CEO Frederick Smith explained FedEx attributed the decline to global enue growth, drove a shift by our cus- that FedEx Ground and FedEx economic woes and downgraded its tomers to our deferred services and Freight segments performed particu- forecast for the full financial year. outpaced our near-term ability to re- larly well during the first quarter of fis- Alan Graf, Jr., FedEx’s executive duce FedEx Express operating costs cal-year 2013. The integrator’s Ground vice president and chief financial of- to match demand levels,” he said in a segment saw revenue and operating ficer, spoke out about the troubles that statement. income rise 8 percent and 9 percent, plagued the integrator during the first Even so, FedEx Express’ revenue year-over-year, respectively, during quarter of fiscal-year 2013. One par- rose 1 percent, year-over-year, to $6.63 the first quarter, while the freight seg- ticular area of struggle, Graf explained, billion in the first quarter, while the ment netted 5 percent, year-over-year, was the FedEx Express sector, which sector’s average daily international revenue growth over the span of the recorded a 28 percent, year-over-year, export volume similarly swelled 1 three-month period. ACW

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ACW october 2012 23 This article, from our October 1958 issue, is reprinted in its original form.

24 october 2012 ACW backpages

ACW october 2012 25 26 october 2012 ACW

artsfield-Jackson Atlanta International Hartsfield-Jackson also saw the introduction of Qatar Airport has long been heralded for its pas- Airways’ freight service to Atlanta in 2011. The twice- senger operations. As the world’s busiest weekly Boeing 777F flights, which commenced in Novem- passenger airport — a title Hartsfield- ber, highlight Atlanta’s position as a key exporter to the Jackson has held for 13 consecutive years Middle East, the airport’s Louis Miller asserts. “Companies — Atlanta airport welcomes travelers from all corners of can readily connect with air, road and railway transporta- the world. And if Hartsfield-Jackson’s aviation develop- tion systems in Atlanta,” Miller said last fall. “The addition ment manager Warren Jones has it his way, this dominance of Qatar Airways further enhance[s] our airport’s reputa- will one day apply to the airport’s cargo operations, as well. tion as a leading cargo airport.” Although Hartsfield-Jackson certainly has a long way Jones says the March recommencement of Air France- to go before it achieves such accolades in the airfreight KLM Cargo and Martinair Cargo’s service to Atlanta backs arena — out of the top 50 cargo airports on the Airport up his colleague’s assessment. After a three-year flying Council International’s 2012 ranking, Atlanta finished 33rd, hiatus, customer demand drove the combined carrier to re- with 663,162 tonnes in 2011 (see page 32 for the full ACI sume flights to Hartsfield-Jackson, Air France-KLM Cargo rankings) — Jones thinks the tides are changing. “If you and Martinair Cargo’s Harm Winkeler reveals. The need for look at the past history of Hartsfield-Jackson, in 2010, we automotive parts transportation out of Atlanta topped the saw 17-percent growth; in 2011, we saw 2-percent growth,” list of most-requested services. Jones says. “But in 2011, a lot of the other major U.S. gate- Global automakers Hyundai, Volkswagen, BMW and ways had declined in cargo volumes overall.” Mercedes all fly their car parts through Hartsfield-Jackson

28 october 2012 ACW regionfocus Atlanta on a daily basis, Jones points out, and — whereas the Northeast U.S. and calating airfreight costs isn’t the only Kia recently expanded its 2,200-acre West are losing people,” he says. factor driving the latter trend, Blane manufacturing facility in nearby West Atlanta’s vast population is an ad- says. In fact, Georgia’s seafreight Point, Ga., to increase its vehicle pro- vantage that Alan Schlesinger regu- rates, such as those out of the Port duction rate. In fact, Jones says, Kia larly cites — particularly when se- of Savannah, have risen steadily since set up shop in the tiny Georgia town in lecting freight forwarders with whom 2010. 2010 to take advantage of Hartsfield- to do business. As the president and “With the exception of very time- Jackson’s cargo connectivity. CEO of Duluth, Ga.-based Airflotek — sensitive commodities, like perish- It appears that luxury brand a distributor of air filtration systems ables, seafreight has become a viable Porsche is following Kia’s lead. Indus- — Schlesinger says nearby Atlanta’s option,” Blane says. “Shippers, with try rumblings suggest that nonstop robust forwarding community helps few exceptions, are not as time-sen- flights from Hartsfield-Jackson to keep prices low. sitive, and the service-quality gap be- Porsche’s Stuttgart, Germany, head- “I have about four companies that tween seafreight and airfreight seems quarters led Porsche officials to pur- I do business with, and I will shop to have narrowed. chase 33 acres of land, with an option them continuously,” he says. “These “Whether seafreight has improved for 20 more, adjacent to the airport. forwarders already know they can’t and/or the airfreight performance has Porsche’s new facility, which is slat- be over the top on price because they ed to open in late 2013, replaces the know that everyone is shopping the automaker’s current North American competition.” “We want to make headquarters. The $100 million devel- Schlesinger says Airflotek’s prox- opment was announced in 2011 and imity to Hartsfield-Jackson airport sure we can meet will help establish the Aerotropolis affords similar advantages. Since so the demand of our mixed-use concept, which is located many carriers fly to Atlanta, competi- on a former Ford Motor Co. plant. tion always exists — which, he says, freight forwarders Bob Pertierra, vice president of sup- ensures best pricing. “And I can al- ply-chain development at Metro At- ways find room in a cargo hold, even and our shippers lanta Chamber, isn’t surprised by this if it’s at the last minute,” Schlesinger to help them move. Calling Hartsfield-Jackson the adds. Southeastern U.S.’ “largest economic Steve Blane, district manager for grow.” engine,” he says proximity to the air- Atlanta at Air-Sea Forwarders Inc., port is often a key determinant when says the influx of capacity may not — Warren Jones, companies are selecting a location. be a good thing, however. Pointing to Hartsfield-Jackson Pertierra reveals that he regularly the recent fluctuation of cargo activ- attends meetings where Hartsfield- ity out of Atlanta, Blane says traffic Atlanta International Jackson representatives tell compa- has been sluggish lately, albeit “with Airport nies eying the Atlanta market about a few positive spikes.” In June, for in- their flight schedules and frequencies. stance, Hartsfield-Jackson’s cargo vol- Officials use the airport to lure com- umes fell 3.2 percent, year-over-year, declined may just be a matter of per- panies into thinking about Atlanta. to 54,755 tonnes — a drop in line with ception and could be based on lower “So it’s very much a part of how com- the declines the airport recorded in expectations for seafreight and con- panies pick their locations,” he says. the first six months of 2012. Blane tinued higher expectations for air,” After all, Pertierra says, “The airport and other stakeholders are hopeful he continues. “That would be a great gives us access to global markets, both that traffic will turn around in the lat- question for debate.” for cargo and people — and compa- ter half of the year, but are realistic Something that isn’t up for debate, nies want to be near to that, and they about the situation. however, is the importance of a bus- often request and compare Atlanta’s “Individual air shipments seem to tling cargo market to a city’s health. airport with other cities’ airports to be getting smaller — two to three Whether freight volumes come by air see what’s best for their business.” skids or less,” Blane says, “but the or sea, Blane says cities must have The other factor that companies shippers are still looking for deep a transportation infrastructure that consider, he says, is whether a pro- discounts, like they would have re- supports the flow of goods, instead of spective market is growing. And in ceived on shipments requiring con- impedes it. He rates Atlanta’s cargo the U.S., the Atlanta market certainly tainerization/palletization. He says the infrastructure — particularly Harts- is, Pertierra asserts. “So we point out problem stems from three key issues: field-Jackson’s airfreight network and the fact [to companies] that the popu- economic uncertainty, political unrest capabilities — as adequate. But Blane lation demographic for the Southeast in certain regions and loss of volumes says it’s crucial that airport person- U.S. is growing — it’s adding people to seafreight. And, surprisingly, es- nel keep an eye out for indications of

ACW october 2012 29 regionfocus Atlanta stress to the infrastructure, whether ta Cargo — as a manifestation of this. due to increased age or demand, and Carl Unger, Lufthansa’s regional di- take corrective actions before prob- rector of sales and handling for the “The airport gives lems escalate. Southern U.S., says Atlanta compares us access to global Congestion is one possible prob- favorably to other Lufthansa Cargo lem, Vito Losurdo, vice president of stops in the country. In the South, markets, both for global airfreight services at UPS, as- carriers likely don’t have to deal with cargo and people serts. “Because Atlanta’s such a popu- weather delays common to the North- lar global and regional hub, it could, east and West, he says — though one — and companies at times, result in traffic notable exception, a winter congestion, which could be storm that affected flights want to be near to a challenge for companies for a number of days, does that.” doing business in the area,” exist in recent memory. Losurdo says. “And it could Finally, the central loca- — Bob Pertierra, potentially continue to be tion of Atlanta makes the Metro Atlanta a problem with the lack of airport a good distribution Chamber investment in our national hub for the Southeast. highway system.” “It is vitally important to Three major highways Losurdo have a presence in Atlanta, converge in Atlanta — I-20, as many major players in the more than 2.5 million pounds of car- I-75 and I-85 — and com- freight-forwarding industry go, according to Southwest’s Wally panies regularly truck freight to and have large gateways here,” Unger says. Devereaux. from Hartsfield-Jackson to nearby “These gateways consolidate cargo “We’ve been extremely pleased Florida, North and South Carolina, from all over the Southeast and tender with the support of the Atlanta ship- Tennessee and Alabama, Losurdo ex- it centrally in Atlanta.” ping community,” he says. “The At- plains. Without regular improvements Ease of accessibility tops Unger’s lanta airport has been fantastic to to these roads, there could list of benefits derived from work with. The airport aviation gener- be kinks in the supply chain. the Atlanta airport. Harts- al manager, Louis Miller, and his team Even so, he calls Atlanta’s field-Jackson, he says, is have been very supportive of our air transportation infrastruc- easy to navigate and is laid cargo business thus far.” ture “absolutely favorable” out well. The availability of A strong presence by Lufthansa, and reiterates the impor- undeveloped land near the Delta, IAG and numerous other car- tance of Atlanta to UPS’ airport — land that ship- riers is nice, but Hartsfield-Jackson’s hub-and-spoke distribution pers are starting to take Jones would still like to add some Lat- network. advantage of — is also a in American carriers to the expand- The city, which serves as Unger huge selling point for the ing list of cargo and passenger airlines UPS’ corporate headquarters, city. Put simply and literally, serving the city. Revealing that the also sees regular UPS air service out Hartsfield-Jackson brings the air- airport is looking to increase connec- of Hartsfield-Jackson. Losurdo says freight business to Atlanta. tivity to South America, Jones says he the “ease of doing business” at Harts- “Hartsfield is always cooperative envisions Hartsfield-Jackson one day field-Jackson attracted the global in- and listens to the requests of its cargo rivaling Miami International Airport tegrator. carriers, which is essential to main- as the gateway to South America. “We “With the lack of curfew restric- taining a strong relationship,” Unger feel that can offer more services to tions and relatively low landing fees, says. “Further, Atlanta’s mayor, Ka- our freight forwarders [than MIA],” he it’s an advantage for UPS — and it sim Reed, is a big advocate for inter- says, such as centrality. “So we want would seem that the carriers are at- national air cargo, and has encour- to make sure we can meet the demand tracted to Atlanta as a result of this, aged new carriers to bring freighters of our freight forwarders and our ship- too,” he says. “As a freight forwarder, to Atlanta.” pers to help them grow.” To help nur- the benefits of Hartsfield-Jackson at- Among carriers operating to At- ture this idea, Jones is busy gathering tract and enable the operations of lanta, Southwest is a newcomer, but data for an airport masterplan, which global carriers that we utilize for air- the airline has quickly established its will discuss the cargo strategy moving freight needs.” He points to the fact dedication to the city. Southwest of- forward. that Atlanta serves as the Americas ficials opened a 26,000-square-foot Blane concedes that Hartsfield- headquarters for European carriers cargo facility to much fanfare on Feb- Jackson’s infrastructure and service IAG Cargo and Lufthansa Cargo — as ruary 12. In the first six months of the options are superior to Miami Inter- well as the world headquarters for Del- new operation, the carrier handled national Airport’s, but he says the

30 october 2012 ACW airport has a long way to go before it steals business from MIA. Even if Hartsfield-Jackson’s half-year tonnage trucking cargo from Miami takes three days, Blane says many supply- • January: 44,553 tonnes chain professionals will choose this (Down 11.2 percent, year-over-year, from 50,195 tonnes.) option out of habit. After all, he says, “The air cargo business is change- • February: 50,653 tonnes averse in many ways, and that would (Down 2 percent, year-over-year, from 51,706 tonnes.) include choice of airports for export- • March: 56,718 tonnes ing and importing products. (Down 2.2 percent, year-over-year, from 58,015 tonnes.) “Shippers and importers will choose comfort over change, unless there is an • April: 52,677 tonnes option that is too attractive to ignore (Down 5.5 percent, year-over-year, from 55,769 tonnes.) — and close proximity to a majority of • May: 52,283 tonnes markets by itself is not going to drive (Down 4.6 percent, year-over-year, from 54,796 tonnes.) that change,” Blane continues. Still, he believes that most shippers consider • June: 54,755 tonnes Atlanta’s centrality an advantage and, (Down 3.2 percent, year-over-year, from 56,586 tonnes.) if all else is equal — or even close to equal — will select Hartsfield-Jackson over the competition. the market. becoming an undue burden on the In order for Atlanta to maintain “The question the logistics people and companies it is meant to its position as a cargo-friendly community needs to ask now is: benefit?’ he says. “As a member of city, however, Blane says industry ‘What will we do to sustain [Atlanta’s that community, I’m looking forward stakeholders must closely monitor industrial] growth without it to finding the solution.” ACW

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ACW october 2012 31 Fueled by Cargo

ACI ranked the busiest cargo airports in 2011. HKIA, once again, tops the list

ast year was mostly a at HKIA entered into partnerships be- ing a third runway to the airport, so down year for cargo ac- tween the carriers, the airport author- the quest for more capacity is slowly tivity at airports around ity and the government, and made moving forward. Next up, officials will the world, according to good use of HKIA’s access to multi- conduct environmental impact stud- Airports Council Inter- modal transport. ies, obtain necessary governmental Lnational. Most of the airports on its In the first half of this year, cargo approvals, and then actually build the list of the 50 busiest cargo destina- activity at the airport stayed mostly runway. The spokesman estimates tions in 2011 had experienced year- flat, which was a relatively good sign that project implementation is three over-year cargo declines ranging from in this difficult economy. Although of- years away. fractions of a percentage point (JFK, ficials saw a 1.6-percent, year-over- Tonnage should start to skyrocket New Delhi) to more than 10 percent, year, decline in July, HKIA has seen early next year, with the opening of in the case of Tokyo Narita. In the top a bit of a resurgence recently. Freight the HK$5.5 million Cathay Pacific 10, only Louisville saw year-over-year volumes rose 3 percent, year-over- Cargo Terminal. According to the tonnage growth — even that was only year, to 328,000 tonnes in August. spokesman, the terminal will increase 1 percentage point. “We’ve started to see some positive the airport’s capacity by 2.5 million With all the declines and small growth in cargo throughput recently,” tonnes. Other notable developments increases experienced by the majority the spokesman says. “Although the include Shenzen Donghai Airlines’ re- of the airports on the list, a few stood cargo performance will still be af- cent freighter service; Silk Way Air- out. Of course, officials at Hong fected by the eurozone crisis and the lines and SF Airlines will also both Kong International Airport deserve U.S. economy in the short term, we start freighter service this year. recognition for once again obtaining are confident in HKIA’s long-term air South Korea’s Incheon Airport the top spot on the list, despite a traffic demand.” ranks fifth on the list of top cargo air- 4.5-percent, year-over-year, drop in Moving forward, the spokesman ports, and its tonnage numbers were activity; HKIA overtook the perennial sees a few key challenges for HKIA. good enough for third on the list of winner, Memphis International The general sluggishness of the econ- Asian airports. But it also experi- Airport, on 2011’s list. Airports in omy and the price of fuel is a peren- enced a drop in activity, year-over- Africa, Latin America and the Middle nial concern, but one issue specific to year, in 2011. East saw the largest increases in the airport is capacity. The spokes- An airport spokesman says Incheon activity. man cited estimates that by 2030, retained its high ranking despite the HKIA squeaked by Memphis this cargo volume at HKIA will reach 8.9 decline because of strong internation- year, finishing at 3.97 million tonnes, million tonnes. Currently, there’s not al business. Incheon has remained the compared to the U.S. airport’s 3.91 enough room for that type of expan- second-busiest international cargo million tonnes. According to an air- sion, he says. destination for the past six years, the port spokesman, HKIA officials “To truly handle unconstrained spokesman says, while seeing the in- amassed this amount of cargo with demand up to 2030 and possibly be- ternational volume at competing air- the help of their three biggest cargo yond,” the spokesman says, “HKIA ports steadily decline. Transshipment markets — Europe, the U.S. and needs to build a third runway.” activity this year has helped recent Southeast Asia. To corner a large The Chinese government has giv- tonnage figures. market share on those routes, those en its in-principle approval of add- “Transshipment cargo moderated

32 october 2012 ACW featurefocus Airports

the poor showing of export and im- ceeded the airport’s average annual cently. Air Cargo Germany upped its port cargo by decreasing only 1.5 volume growth rate. He attributes charters to the city, and British Air- percent, compared to 2011,” the this increase to improved infrastruc- ways recently came back to the air- spokesman says. “Incheon Airport ture, both at the airport and in the port after a long absence. Transship- has strong points in its transshipment surrounding county; expanded cold- ment is also important at the airport. environment — such as a geographi- room facilities in new, modern sheds; “Nairobi has developed as a major cal benefit of connecting Asia and the and a larger cargo apron. Carriers in- transit hub linking most of the Afri- Americas — as well as a fast and easy cluding Turkish Airlines, Singapore can states,” he says. transshipment process.” Airlines and Air Arabia also increased This enhanced cargo importance Last year’s decline, however, was their flight schedules to Nairobi re- has been spreading throughout the due mostly to the general malaise in the global economy. That has carried over a bit to this year, with Incheon turning in a first-half decline in tonnage of 5.3 percent, year-over-year. More specifically, these numbers reflect a delay in the European and U.S. economic recoveries, the spokesman says. Carriers are still adding flights to Incheon, however. Turkish Airlines, Qatar Airways and Evergreen Inter- national Airlines all introduced new freighter services to the airport in the first half of 2012. More recently, Emirates restarted its freighter rout- ing into the airport. “This year’s decrease of cargo in Asian airports and carriers was caused by high oil prices, the high unemployment rate, and the shrink- ing of consumer confidence in the European and American market,” the spokesman says. “Those factors are not expected to be resolved within a short time period.“ While a majority of the Middle Eastern and African airports in the rankings achieved solid growth when compared to 2010’s tonnage numbers, Air Canada Cargo has Europe covered. African airports all showed impressive jumps, year-over-year. Jomo Kinyatta International Airport in Nairobi ex- BARCELONA · BRUSSELS · COPENHAGEN · DUBLIN · FRANKFURT GENEVA · LONDON · MADRID · ROME · ZURICH perienced the single biggest increase out of all the airports on ACI’s list, Air Canada Cargo offers daily direct service to 8 key destinations in with a 25.4-percent increase when Europe. With our extensive interline and road feeder network, we compared to last year. Though at 288, can ship your freight to over 50 more European destinations. Call us 291 tonnes in 2011, the airport still today for your shipping needs to Europe. process a far cry from that of the re- Find the right shipping solution, consult our interactive route map, gional leader, Dubai, which saw more book your freight and track it all on aircanadacargo.com. You can than 2.2 million tonnes pass through also sign up for regular email updates from Air Canada Cargo. last year. According to William Simbah, com- AC Expedair | AC Live | AC Secure | AC DGR | AC General Cargo | AC Compassion | AC Cool Chain | AC Post mercial manager, cargo, at the Ke- Air Canada Cargo | Going further. nya Airports Authority, last year ex- aircanadacargo.com

ACW october 2012 33

ACWorld_114x187_europe.indd 1 2012-09-17 3:35 PM featurefocus Airports

Top 50 Airports By scheduled freight-tonnes carried

ACI Cargo ACI Cargo CITY CITY Rank 2011 tonnage YOY% Rank 2011 tonnage YOY%

1 HONG KONG (HKG) 3,976,768 -4.5% 39 ISTANBUL (IST) 513,935 10.2% 2 MEMPHIS (MEM) 3,916,410 0.0% 40 SÃO PAULO (GRU) 497,087 15.4% 3 SHANGHAI (PVG) 3,085,268 -4.4% 41 TORONTO (YYZ) 492,660 2.5% 4 ANCHORAGE (ANC) 2,543,105 -3.9% 42 ABU DHABI (AUH) 487,951 10.3% 5 INCHEON (ICN) 2,539,221 -5.4% 43 OAKLAND (OAK) 483,375 -5.4% 6 PARIS (CDG) 2,300,063 -4.1% 44 CINCINNATI (CVG) 481,669 29.7% 7 DUBAI (DXB) 2,269,768 0.0% 45 CHENGDU (CTU) 477,696 10.5% 8 FRANKFURT (FRA) 2,214,939 -2.6% 46 SHANGHAI (SHA) 454,069 -5.5% 9 LOUISVILLE (SDF) 2,188,422 1.0% 47 MILAN (MXP) 450,448 4.1% 10 TOKYO (NRT) 1,945,351 -10.3% 48 HOUSTON (IAH) 446,328 5.4% 11 SINGAPORE (SIN) 1,898,850 3.1% 49 SYDNEY (SYD) 434,300 4.6% 12 MIAMI (MIA) 1,841,929 0.3% 50 BRUSSELS (BRU) 430,496 -2.4% 13 LOS ANGELES (LAX) 1,681,611 -3.8% 14 BEIJING (PEK) 1,640,247 5.7% europe 15 TAIPEI (TPE) 1,627,463 -7.9% 16 LONDON (LHR) 1,569,449 1.2% ACI CITY Cargo 17 AMSTERDAM (AMS) 1,549,686 0.8% Rank 2011 tonnage YOY% 18 NEW YORK (JFK) 1,348,992 -0.5% 6 PARIS (CDG) 2,300,063 -4.1% 19 BANGKOK (BKK) 1,321,853 0.9% 8 FRANKFURT (FRA) 2,214,939 -2.6% 20 CHICAGO (ORD) 1,311,622 -4.7% 16 LONDON (LHR) 1,569,449 1.2% 21 GUANGZHOU (CAN) 1,179,968 3.1% 17 AMSTERDAM (AMS) 1,549,686 0.8% 22 INDIANAPOLIS (IND) 971,664 -4.0% 27 LEIPZIG (LEJ) 743,983 16.5% 23 TOKYO (HND) 873,255 6.6% 29 COLOGNE (CGN) 726,257 12.8% 24 SHENZHEN (SZX) 828,375 2.4% 32 LIEGE (LGG) 674,360 5.4% 25 NEWARK (EWR) 813,209 -5.0% 34 LUXEMBOURG (LUX) 656,931 -6.9% 26 DOHA (DOH) 808,099 14.2% 39 ISTANBUL (IST) 513,935 10.2% 27 LEIPZIG (LEJ) 743,983 16.5% 47 MILAN (MXP) 450,448 4.1% 28 OSAKA (KIX) 742,977 -2.1% 50 BRUSSELS (BRU) 430,496 -2.4% 29 COLOGNE (CGN) 726,257 12.8% 51 MADRID (MAD) 422,168 5.2% 30 KUALA LUMPUR (KUL) 694,311 0.0% 62 COPENHAGEN (CPH) 322,877 4.4% 31 MUMBAI (BOM) 681,265 1.5% 63 ZURICH (ZRH) 318,878 1.5% 32 LIEGE (LGG) 674,360 5.4% 65 MOSCOW (SVO) 304,621 37.5% 33 ATLANTA (ATL) 663,162 0.6% 66 MUNICH (MUC) 303,655 5.9% 34 LUXEMBOURG (LUX) 656,931 -6.9% 68 EAST MIDLANDS (EMA) 301,229 -1.8% 35 DALLAS/FORT WORTH (DFW) 654,415 -8.0% 91 LONDON (STN) 231,638 0.4% 36 BOGOTA (BOG) 617,467 17.2% 94 HAHN (HHN) 222,836 33.3% 37 NEW DELHI (DEL) 593,483 -0.2% 95 VIENNA (VIE) 213,337 -8.0% 38 JAKARTA (CGK) 582,088 11.2%

34 october 2012 ACW region. So far this year, Simbah has and live-animal exports (the airport “Contrary to the general German also seen increased joint ventures opened its Animal Export Center and European trend, cargo volume among airports and foreign investors. in 2010). The airport’s proximity to at Leipzig/Halle is rising steadily,” he “Dar-es-Salaam is just about to Eastern European growth markets, says. “However, we do not live on a open a new cargo terminal; Addis direct access to the trans-European paradisiacal ‘logistics island,’ but are Ababa has built a new expanded motorway, and 24-7 operations have ... dependent on global economic airport, and so has Kigali. Entebbe also helped keep the airport in the forces. Unfortunately, we cannot look has improved its existing facilities running as a major cargo facility. into a crystal ball and see the future.” and is now feeding South Sudan and Due to all these factors, 2011 was Exciting developments are also the Eastern Congo,” he says. “Kenya an exceptionally good year, but Kopp coming to Leipzig/Halle. By 2014, of- is developing new cargo facilities at says that this year is shaping up nice- ficials will unveil a €40 million cargo the new Kisumu International Air- ly as well. Officials saw a 15-percent, center, complete with direct apron port to capture the cargo potential year-over-year, rise in tonnage from access. By the end of this year, Kopp in the Great Lakes Region and Cen- January to August, and he expects expects to see the finishing touches tral Africa.” to see the airport pass the 800,000 on a new apron, which can accommo- But these expansions can’t tonnes mark this year. date up to five wide-body freighters, achieve their full potential in Africa without first fixing a few challenges common to the country’s air system. Simbah points to poor infrastruc- ture as a hindrance to moving cargo inside the country. This is a barrier to trade that the government needs to address, he says. The government could also help out with the introduction of regional trade agreements; currently those in the African cargo supply chain have had to deal with “unharmonized Customs tariffs,” Simbah says. More specifically to Nairobi’s airport, an im- balance exists between imports and exports, which has muddied airfreight rates. The list of potential difficulties goes on and on, he explains. “Upcoming regional airport devel- opments and improvements in ex- isting airport facilities are likely to bring regional competition, which is healthy, but will bring new challeng- es,” Simbah says. “Risks associated with security and terrorism are a ma- jor factor impinging on cargo growth due to costs related to mitigation measures.” Leipzig/Halle Airport ranked 27th among the top 50 carriers, but saw the largest rise, year-over-year, among European airports. Accord- ing to Markus Kopp, CEO of Mittel- deutsche Airport Holding, the parent company of Leipzig/Halle Airport, this is the seventh time airport officials have seen record year-over-year rises. Leipzig/Halle achieves its success, he says, by focusing on niche mar- kets like the cargo charter business

ACW october 2012 35 10,500 ft

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Andy Lyall 902.873.6300 [email protected] FlyHalifax.com middle east/africa and a new maintenance ACI CITY Cargo activity remained flat, facility. As far as expan- Rank 2011 tonnage YOY% which is an accomplishment sions in services, Kopp 7 DUBAI (DXB) 2,269,768 0.0% in the current market, and notes that airport officials according to Larry Cox, 26 DOHA (DOH) 808,099 14.2% are currently in touch with head of the Memphis- several Chinese carriers. 42 ABU DHABI (AUH) 487,951 10.3% Shelby County Airport And these developments, 59 SHARJAH (SHJ) 342,044 -14.0% Authority, tonnage for 2012 it seems, could be just the 60 JOHANNESBURG (JNB) 335,964 17.4% is up 2.75 percent. But with beginning. this boost comes a bit of 69 TEL-AVIV (TLV) 296,700 -2.0% “Leipzig/Halle Airport is disappointing passenger a relatively young player, 70 BAHRAIN (BAH) 292,145 -11.5% news — passenger activity and it is our goal to firmly 71 NAIROBI (NBO) 288,291 25.4% is down 19 percent because position the airport in the 74 CAIRO (CAI) 280,573 -9.8% of Delta Air Lines cutbacks. international markets in These cutbacks, in addition 79 JEDDAH (JED) 265,629 15.1% the long run,” Kopp says. to the European economy, “We will keep working hard 80 RIYADH (RUH) 263,886 15.0% were the biggest impacts to to ensure further growth 99 KUWAIT (KWI) 195,820 -6.3% cargo activity. and to become ‘best in “It seems to me that car- class.’ In the past few years, we had been able to dem- go activity is reducing due to global economic conditions for onstrate that our strategy of focusing on logistics offers most American airports, with little relief at hand,” he says. huge potential for success. This is our benchmark for the A big challenge to American cargo growth includes a future.” predilection to divert airfreight to ground transport be- Memphis International Airport isn’t used to being cause of ballooning air transport costs. This leads Cox to second on ACI’s list, but for the second year in a row, the believe that the best bet moving forward is international airport ranks just behind HKIA. Year-over-year, Memphis’ cargo business in the perishable and critical parts spheres.

ACW october 2012 37 featurefocus Airports

Of course, the slow economy can’t last forever. For those north america airport officials waiting for the global recovery, Cox has some advice: Be ready. At Memphis, he says, infrastructure ACI CITY Cargo improvements and the expansions are always ongoing. Fe- Rank 2011 tonnage YOY% dEx, one of the airport’s major drivers of activity, is work- 2 MEMPHIS (MEM) 3,916,410 0.0% ing on new facilities as well. “Airport operators need to continue to plan for airport 4 ANCHORAGE (ANC) 2,543,105 -3.9% facility improvements to be ready for the inevitable turn- 9 LOUISVILLE (SDF) 2,188,422 1.0% around in the global economy,” he says, “and operate their 12 MIAMI (MIA) 1,841,929 0.3% airports in a cost-effective way to compete with other 13 LOS ANGELES (LAX) 1,681,611 -3.8% modes of transportation.” ACW 18 NEW YORK (JFK) 1,348,992 -0.5% 20 CHICAGO (ORD) 1,311,622 -4.7% asia 22 INDIANAPOLIS (IND) 971,664 -4.0% ACI CITY Cargo 25 NEWARK (EWR) 813,209 -5.0% Rank 2011 tonnage YOY% 33 ATLANTA (ATL) 663,162 0.6% 1 HONG KONG (HKG) 3,976,768 -4.5% DALLAS/FORT WORTH 3 SHANGHAI (PVG) 3,085,268 -4.4% 35 654,415 -8.0% (DFW) 5 INCHEON (ICN) 2,539,221 -5.4% 41 TORONTO (YYZ) 492,660 2.5% 10 TOKYO (NRT) 1,945,351 -10.3% 43 OAKLAND (OAK) 483,375 -5.4% 11 SINGAPORE (SIN) 1,898,850 3.1% 44 CINCINNATI (CVG) 481,669 29.7% 14 BEIJING (PEK) 1,640,247 5.7% 48 HOUSTON (IAH) 446,328 5.4% 15 TAIPEI (TPE) 1,627,463 -7.9% 52 PHILADELPHIA (PHL) 415,205 -1.1% 19 BANGKOK (BKK) 1,321,853 0.9% 55 SAN FRANCISCO (SFO) 382,019 -10.5% 21 GUANGZHOU (CAN) 1,179,968 3.1% 56 ONTARIO (ONT) 378,728 6.4% 23 TOKYO (HND) 873,255 6.6% 61 HONOLULU (HNL) 327,331 -25.7% 24 SHENZHEN (SZX) 828,375 2.4% 67 WASHINGTON, DC (IAD) 302,661 -8.9% 28 OSAKA (KIX) 742,977 -2.1% 75 SEATTLE (SEA) 279,625 -1.3% 30 KUALA LUMPUR (KUL) 694,311 0.0% 76 PHOENIX (PHX) 274,046 9.3% 31 MUMBAI (BOM) 681,265 1.5% 83 BOSTON (BOS) 251,520 -3.1% 37 NEW DELHI (DEL) 593,483 -0.2% 85 DENVER (DEN) 248,141 -1.4% 38 JAKARTA (CGK) 582,088 11.2% 90 SALT LAKE CITY (SLC) 233,143 60.3% 45 CHENGDU (CTU) 477,696 10.5% 93 VANCOUVER (YVR) 223,878 -2.0% 46 SHANGHAI (SHA) 454,069 -5.5% 96 MINNEAPOLIS (MSP) 208,636 -1.4% 49 SYDNEY (SYD) 434,300 4.6% 97 DETROIT (DTW) 206,426 6.8% 54 MANILA (MNL) 410,377 -3.2% 100 PORTLAND (PDX) 194,513 2.3% 57 MADRAS (MAA) 373,748 -2.9% 58 NAHA (OKA) 373,384 -3.9% latin america 64 HANGZHOU (HGH) 306,243 8.0% 77 KUNMING (KMG) 272,465 -0.4% ACI CITY Cargo Rank 2011 tonnage YOY% 81 XIAMEN (XMN) 260,575 6.1% 36 BOGOTA (BOG) 617,467 17.2% 82 HA NOI (HAN) 252,046 16.2% 40 SÃO PAULO (GRU) 497,087 15.4% 84 FUKUOKA (FUK) 249,596 -2.9% 53 MEXICO CITY (MEX) 415,074 4.5% 86 NANJING (NKG) 246,334 5.1% 72 SANTIAGO (SCL) 288,233 1.0% 87 MELBOURNE (MEL) 238,598 5.4% 73 LIMA (LIM) 286,641 5.5% 88 CHONGQING (CKG) 237,573 21.4% 78 CAMPINAS (VCP) 267,946 5.1% 89 SAPPORO (CTS) 233,628 2.5% 98 BUENOS AIRES (EZE) 204,828 -3.8% 92 BANGALORE (BLR) 225,988 5.4%

38 october 2012 ACW Air Cargo Forum

Air Charter Service

ir Charter Service has reported a 15-percent rise Ain the number of charters it has arranged, year-to-date, compared to TIACA Journeys 2011. Chris Leach, ACS’s chairman and founder, noted: “It is clear that the charter market as a whole has not increased by this amount — various sources indicate that the U.S. and European business to aviation markets both shrank in June and July this year, so we can conclude that our market share has increased substantially. This is something that we are very proud of, especially considering the economic Atlanta climate and the competitive nature of chartered aviation.

“We feel that we have been able to achieve this by offering our clients the best value, with both pricing and our mar- ket-leading customer service – something that is always essential, regardless of how well the industry is doing as a whole.” On top of growing market share, ACS has already opened two new offices this year and has plans for a third in the com- ing months. The company has also wel- comed aviation pioneer Erik Lindbergh on board as a brand ambassador this year. Charles, Erik’s grandfather, was the first years ago, the Society of Automotive Engineers unveiled a man to fly across the Atlantic in 1927, new5050 conference in Atlanta. Dubbed the International Air Cargo Forum, this worldwide a feat which Erik recreated for the 75- gathering of industry heavyweights focused on creating standards in the industry and year anniversary in 2002. Erik is on the board of directors of The Lindbergh Foun- presenting new ideas for the future. In the 1990s, a group that would become The In- dation and is also heavily involved in the ternational Air Cargo Association splintered off from SAE and took up the mantle of the pioneering X-Prize, which promotes space event. Since the development of TIACA, 10 chairmen have headed the board, watching travel for the public, as well as his electric flight program LEAP (Lindbergh Electric the organization slowly generate a more prominent stance in the air cargo world. Now, Aircraft Programme). Erik will be working in a triumphant return to Atlanta, TIACA officials are trumpeting increased membership, with ACS on a number of projects for both record registrations for the ACF and an ever-widening influence in the industry. their cargo and passenger divisions.

ACW october 2012 39 Air Cargo Forum Atlas Air Worldwide

tlas Air Worldwide has been transforming our Aindustry for 20 years. As the parent company of Atlas Air, Inc., This increased presence will be are excited about exhibiting at TIACA’s Polar Air Cargo Worldwide and Titan Aviation Leasing, we’re recognized apparent to attendees at the Air Cargo first show in the States in 12 years. Every as the world leader in ACMI and CMI Forum, according to Daniel Fernandez, time the show moves around the globe outsourcing solutions for global cargo TIACA’s secretary general. In an interview — this year, it’s the United States’ turn; in charter operations. Now, with both VIP a few weeks before the show, he said 2014, South Korea takes the show — it and high-density passenger services for customers around the world, Atlas con- that registrations for the event had picks up more exhibitors who see a new tinues to innovate by offering the flex- experienced a 20-percent increase over opportunity closer to home, he said. ibility and convenience our customers attendance numbers for the 2010 forum But the one factor really driving require to transport passengers safely in Amsterdam. The amount of companies registration and enthusiasm, Fernandez and comfortably, whether across the country or around the world. scheduled to exhibit on the floor has also said, is optimism. Amid a sea of air cargo increased, he said. A number of these troubles — declining tonnages, rising organizations are based in the U.S. and fuel costs and roller-coaster regulatory requirements — companies registering for

short takes infrastructure of the airport. And, when we look into introducing new aircraft — we just We’re celebrating our two decades introduced the -8, and we’ve operated into of safe, efficient and reliable operations Atlanta — they worked closely with us to with a growing fleet of highly efficient, make the airport ready for that and commu- new-generation Boeing 747-8 freight- Ian Morgan is vice president, nicated well with us. So from a standpoint ers and the addition of a Boeing 767 the Americas, for Cargolux. Based of infrastructure, it’s very solid. I would rate fleet. These solid investments in our in Atlanta, he sees a lot of cargo it highly. But also from the standpoint of future will help us to continue deliver- benefits derived from the city and the ability to communicate with the Atlanta ing value, every day of the year, to hun- its airport for the European car- airport and get responses and feedback, I dreds of destinations on six continents. rier. would rank the airport very highly, as well. Our unique combination of innovative services and solutions What are some pros and cons of flying How does Hartsfield-Jackson accom- empowers our airline, express delivery, to Atlanta? modate cargo carriers? freight forwarder, and military and commercial charter customers to It’s an easily accessible airport, geographi- If you look at the way they manage the increase fleet flexibility and network cally. And it’s been an airport that has been parking area, the airport itself manages the efficiency, drive an expanded global easy to communicate with — the infrastruc- ramp-parking area for the freighters, which I footprint, and effectively capitalize on ture there and the people at the airport are think is very positive. The fact that they are a growing market opportunities. readily accessible. From a cost standpoint, neutral entity in terms of allocating parking We may not know what the next it’s competitive as well. And the reason an spaces is positive, compared to some other 20 years will bring, but we’re look- airline flies anywhere is because there’s de- airports. ing forward to providing solutions mand from the customer base. This has defi- In some other airports, various entities to our customers that keep global nitely been the case in Atlanta. may own those parking spaces, which, when airfreight moving. you have a number of aircraft arriving at the Where would you rate Hartsfield- same time, can limit your ability to park the Jackson compared to other airports? aircraft. And that limitation can add addi- tional costs because, obviously, if you have Very highly, from the standpoint that they to wait for an aircraft to be parked and then manage to keep themselves very competi- off-loaded, it adds additional costs to the tive, cost-wise. They continue to invest in the carrier.

40 october 2012 ACW Air Cargo Forum Incheon Airport

ncheon Airport is going to partake in the TIACA ACF 2012 in Atlanta this IOctober. Incheon Airport will have a booth during the exhibition and will host the ACF see a way to get their business on for the Atlanta event. Instead of dedicating the gala dinner on October 3 as the host strong footing again. two or more days to conference panels of TIACA ACF 2014. “There’s a lot of bad news, obviously, chaired by industry experts, as TIACA out there in the economy. This is a rough has organized in the past, this year will time for the industry, but I think everyone focus on dividing the event into a short, realizes that you have to get out there and high-level conference and an expanded get some business,” he said. “This is the exhibition. By scheduling the entire biggest air cargo event in the world, and conference in one half-day, organizers During this event, Incheon Airport will what better place to put your investment were able to give attendees more time on run a 200-square-foot booth. The theme and to generate more business for your the exhibitor floor without taking away of Incheon Airport’s booth (Hall A No.505) company?” from the impact of the discussion panels. is “Creating Difference, Incheon Airport.” Along with the increased attendance, a And by ensuring that the conference can Visitors can learn how Incheon makes a difference with airlines and forwarders in few logistical items have been rethought stand on its own — the exhibit hall will the air cargo market. The booth will also include a chance for excellent network- ing, a preview of the latest cargo facilities, and information about the geographical What are some of the key imports and benefits between Asia and the Americas. exports you’re carrying on flights to and from Atlanta? Moreover, you can meet people from Korean Air, Asiana Airlines and logis- tics companies like Pantos Logistics at We’ve got the full range: a lot of automo- the Incheon Airport stand. In addition, tive, a lot of electronics, and various com- Incheon Airport will host interesting modities go in and out. The fact that Atlanta, events at the booth that will allow visi- by default, has afforded itself as a hub [pro- tors to experience Korean culture. We are vides] what we would call “consolidation going to present Korean traditional fans cargo.” But, obviously, we’ve seen the auto- with the name of visitors in the Korean motive sector increasing in that area in the alphabet. Southern states. So we’re definitely seeing an increase in automotive and cars in the Morgan market. businesses. So I think it’s very favorably posi- Is Atlanta’s transportation tioned from that position as well. infrastructure favorable to cargo carriers? Do you have any plans to increase flights to Atlanta in the near future? The density of the forwarding community — plus the lack of curfew, cost structure We’re constantly reviewing it. We’re deal- and transportation infrastructure — I think ing with our customer bases, and Atlanta it makes it very favorable. You’ve got a high is always one of the airports that we see density of freight forwarders there, and potential to increase flights. The market The gala dinner, hosted by Incheon Air- they’ve developed Atlanta as a hub, and it’s is very volatile at the moment, but it’s an port, will be filled with magnificent specta- worked very well. I think you’re seeing the airport that is definitely high on the list of cles. Incheon will promote TIACA ACF 2014 carriers being attracted today. Obviously, looking at how we can increase capacity and invite the entire worldwide air cargo you’re got one of the busiest — if not the — whether we can increase capacity on the field to Seoul. Incheon Airport will prepare busiest — passenger airports in the world, existing flights or whether we actually in- performances, so that guests will have a and that’s due to the considerable commer- crease flights into Atlanta. And both of those chance to learn about Korean culture such cial infrastructure around there as well, and are very viable options for us at the moment. as Korean fan dance and sand art.

ACW october 2012 41 Air Cargo Forum L3 Security & Detection Systems

-3’s Powerful New Dual- view Systems for Air Cargo LScreening L-3 offers three, new multi-view not be open during the panels, as systems. The compact, high-capacity it has in previous years — TIACA PX10.10-MV, with 1 M x 1 M tunnel, is ideal for inspecting break-bulk freight and can bring all the focus to the packages. The system provides superior important items being discussed. imaging performance with the optimal Fernandez said members want combination of X-ray geometry and low more time on the floor — more belt height. Its modular architecture allows the system to be installed in many time to meet with customers and areas previously only accessible to much figure out solutions to problems smaller units. that have arisen in this troubled The larger, configurable PX15.17-MV air cargo landscape. In keeping 200 and PX18.18-MV 200 systems can Fernandez screen skids, pallets and ULD containers. with this idea of increasing meeting opportunities, These high- The Air Cargo Forum also marks powered systems TIACA has also organized a service the two-year anniversary of the Global achieve best-in- where companies that don’t class penetration, Air Cargo Advisory Group, which was have exhibit booths can connect even in densely unveiled at the Amsterdam ACF. Gathering with customers ahead of time, packed goods. together the International Air Transport Each of these pre-scheduling meetings for the Association, the Global Shippers’ Forum s y s t e m s h a s exhibition room floor. been submitted for TSA qualification and and the International Federation of Freight “This opens up the networking is deployed at freight forwarders and Forwarders Associations (FIATA), GACAG possibilities even more because now shippers globally. has united the industry in a concentrated The L-3 approach: customized, scalable you can pre-schedule your meetings,” push for change. Michael Steen, TIACA’s systems Fernandez said. “We’re trying to introduce L-3 Security & Detection Systems chairman and the head of GACAG, said innovation and keep the event fresh.” designs equipment for shipments of varied he will hold a press conference during sizes and applications. With more than 30 years of experience, L-3 offers scanning inspection systems for break-bulk, skids, pallets and ULDs. Its deployment of a multi-sensor scanner to inspect customs freight at Amsterdam’s Schiphol Airport is one of the most advanced cargo system installations in the world. L-3’s equipment screens cargo ranging from containers of fruits and vegetables to electronics, and this equipment is currently in operation at shipping, forwarding and certified cargo screening facilities. L-3’s broad range of cargo screening products leverages our commitment to innovation. The company works closely with regulators and operators worldwide to develop technology with a focus on detection capability and high-throughput screening to keep commerce moving in a cost-effective manner. The new international terminal recently opened at Hartsfield-Jackson Atlanta International Airport

42 october 2012 ACW Air Cargo Forum Airborne Global Solutions

irborne Global Solutions, Inc. specializes in providing op- Aerating and leasing solutions utilizing cost-efficient medium wide-body short takes freighter aircraft. AGS, a subsidiary of Air How does Hartsfield-Jackson Transport Services Group, Inc. (ATSG), le- accommodate cargo carriers? verages the entire ATSG portfolio and oth- Hartsfield actively accommodates the cargo er solution partners to develop bundled, carriers serving a good, regional airfreight turn-key cargo airline solutions that are hub and attracting multiple, different freight flexible, customized and built on decades Vito Losurdo is the vice presi- carriers from all regions of the world. We of experience in global cargo airline op- dent of global airfreight services have flights that are somehow connected to erations. Through strategic alliances with for UPS. In anticipation of the Air Europe, Asia and, most recently, the Middle other ATSG companies — including a Cargo Forum, he talked about UPS’ East. So a couple of our key carriers, like leasing arm, three cargo airlines, an air- presence in Atlanta and where the British Airways, Air France, Cathay, Korean Air craft maintenance organization and ancil- city fits in the national cargo scene. and Qatar, are all flying 747s or 777s into lary airline service providers — we offer Hartsfield-Jackson every week. a bundled solution approach to provid- ing the right solution at the right time — What are some pros anywhere in the world. and cons of flying to

Atlanta?

Atlanta is one of the world’s largest airports. And for UPS Freight Forwarding, it gives us extensive access to the multiple, global carriers AGS builds solutions around the di- What are some of the key imports and that are flying in and out of Hartsfield- verse market needs of our customers to exports you’re carrying on flights to and Jackson. It just allows us to complement the create the right combination of assets and from Atlanta? Do you envision these amount of airfreight capacity that we have to services to meet the global needs of an volumes changing moving forward? service customer needs. increasingly connected world. The key to our value proposition is our access to un- How important is Atlanta to your flight Hartsfield-Jackson is the largest, centrally rivalled aircraft assets; our airline provid- schedule? What contributed to your located gateway to many of the major ers allow customers to add efficient cargo decision to address the Atlanta market? metropolitan areas in the Southeast. Atlanta capacity to their operation through the handles virtually all imports and exports. B757-200PCF, B767-200SF, and B767- Some of the key industries — at UPS, we’re 300ER, the most efficient aircraft for me- Well, you know, at UPS, we operate a hub- servicing the healthcare, automotive and dium range needs. and-spoke system. And we consider Atlanta high-tech sector. As far as volumes, we really Airborne Global Solutions’ bundled one of those spokes. For us, it’s a key gateway can’t speculate what it’s going to look like service solutions minimize the customer’s location for UPS, and it’s very important to going forward. But if U.S. manufacturing up-front capital investment while accom- our airfreight network. We provide air service and exports increase, especially in the plishing their strategic objectives. We work right into Atlanta with our UPS airline for our Southeast, Hartsfield-Jackson will certainly extensively with the customer scheduling small-package and cargo shipments. But we see an increase in freight volumes. That’s team to evaluate market needs and de- also utilize a significant amount of capacity also dependant on manufacturing and other velop the best solution based on service, on commercial freighters and passenger leading global economies as well. cost, and market requirements. Our combi- bellies to service our airfreight into and out of nation of global cargo airline expertise and the Southeastern U.S. strategic alliances produces leveraged cost savings, reliable service, and unmatched speed-to-market capability to enhance the competitive position of those we serve. Learn more at www.airborneglobal.com. or call us at (937) 366-2216.

ACW october 2012 43 Halifax Stanfield International Airport Air Cargo Forum

alifax Stanfield Interna- tional Airport is Atlantic HCanada’s air gateway, fa- cilitating passenger and cargo access to markets across Canada, the U.S. and Eu- the ACF to give a status update on the rope. It is Atlantic Canada’s largest air- organization. GACAG will also convene a port by passenger volume, and it is the meeting during the ACF. seventh busiest airport in Canada. HSIA This status update will concern the is the closest major continental North issues GACAG holds close to its heart American link to the European Union, — security, e-commerce, among them and it enjoys open-skies access to the United States. — but Steen warned that progress on these issues will not come quickly. While he said that industry engagement is good and that major accomplishments have Steen been achieved during the two years, these challenges won’t be met overnight. There conference next door to the ACF. This bit has been significant progress on some of scheduling has Fernandez particularly fronts, but true solutions will take time, excited. he said. “We’ve coordinated our agendas so The airport is open 24-7, including “There’s not going to be a barrage delegates from either side can participate, Canada Customs clearance. It is not of news releases coming out with final and we’ve facilitated ways for them congested and is competitively priced. solutions because this is something that to do that,” Fernandez said. “We’re A $28 million project is currently will take time,” Steen said. “Gradually, expecting quite a significant number of underway to increase the length of our main runway from 8,800 feet to 10,500 you’re going to see that we reach these their delegates to participate in our event feet. Work is expected to be completed milestones that we’re putting up.” because we have an exhibition, and they by the middle of November; when At the IATA’s World Cargo Symposium don’t.” finished, the runway will bear maximum in March, Steen said that there were Moving forward, TIACA will, of course, payloads on all freighter types. several other stakeholders currently not further the goals and ideals of GACAG, but present in GACAG’s working committees. it will also pave its own path. Fernandez The airport houses a 40,000-square- foot, multi-tenant cargo facility with Through TIACA’s expansion and Steen’s said TIACA will focus on increasing its direct airside access — the largest of ability to get more people involved with already record membership — which has its kind north of Miami. Seven thousand GACAG, the working groups now have the experienced a 15-percent growth in less square feet of this space is temperature- involvement of new players. Steen pointed than a year, he said — to even further controlled, with an additional 12,000 to DHL Global Forwarding’s Steve Smith reaches of the air cargo supply chain. The square feet of space available for use as an example; Smith now heads up the organization will also have an increasing during colder months. It is operated by e-commerce task force. role in shaping policy, lobbying for the Gateway Facilities and includes FedEx as an anchor tenant. Their services GACAG isn’t the only group holding a air cargo industry and making sure the complement those of freight forwarders, meeting during the ACF. Fernandez said industry is on the mind of lawmakers customs brokers and cargo specialists Customs and Border Protection, with the worldwide. located on site. These cargo services U.S. Transportation Security Administration, “We have the highest number of constitute an ideal “cold chain” for is gathering together to talk through members we’ve ever had now, and that’s exporters of high-value seafood. their screening pilot program. In addition because we are not just an exhibition to smaller agencies getting together, the company,” Fernandez said. “We are very Council of Supply Chain Management active in becoming more effective in the Professionals will be holding its own representational part of our agenda.”

44 october 2012 ACW

Turkish Cargo Air Cargo Forum

urkish Cargo, the cargo division of Turkey’s flag carrier, provides Ttechnology-driven logistics solu- tions to individual customers and major corporations by using Turkish Airlines’ fleet and networking capabilities. It is is one of the most rapidly growing firms in short takes the air cargo sector. Turkish Cargo oper- ates to more than 200 destinations with Atlanta has no landing or time restrictions, 179 aircraft, including a freighter fleet of so basically it’s a 24-hour operation, which four A310Fs and two new A330-200Fs. means that we have plenty of slots. There are no scheduled slots for aircraft like in Bob Pertierra is vice president European cities, for example. So we’re very of supply chain development much open and have plenty of capacity to at Metro Atlanta Chamber. In bring in new flights. his role, he uses the airport as a We’re just continuing to work to attract tool to recruit companies that new carriers to the region to fly to Atlanta Turkish Cargo operates to 35 interna- might be considering a move to and service markets. And, I think if you talk tional freighter destinations on a weekly Atlanta. to the airport, there is a pad-ready site on scheduled basis. Turkish flies to: BUDA- the airport, on the South cargo area, that, PEST, MOSCOW, PARIS, ZURICH, MILAN, How important is cargo to Atlanta’s when it’s needed, they can add another MAASTRICHT, FRANKFURT, TIRANA, economic health? cargo facility. STOCKHOLM, KIEV, MADRID, TASHKENT, ALMATY, BISHKEK, NEW DELHI, DHAKA, We’re talking about $23 billion in revenue, How is Atlanta limited by its cargo MUMBAI, BANGKOK, HONG KONG, almost 400,000 jobs, and almost $3 billion infrastructure? TBLISI, KARACHI, SEOUL, TEL AVIV, BEI- in tax impact. One air cargo flight alone RUT, AMMAN, JEDDAH, RIYADH, DUBAI, can have a big economic impact. It’s very I think the only limitations we have are CASABLANCA, ALGIERS, MITIGA, CAIRO, quantifiable and often connects our com- that when we’re talking to companies, and LAGOS, VIENNA, and MINSK. panies and our economy with other econo- we don’t fly to a particular location they mies around the world. So that access to want to fly to. The only time we’re limited is At the heart of Turkish Cargo’s growth lies the desire to meet the demands of global markets is critically important to our when we don’t have service to that market. each core air cargo sector — perishables, growth and our future growth. And part of our effort is to make sure that dangerous goods, valuables, live animals we target markets when we need service. and vulnerables — individually and in a How do you use cargo to attract new So that’s how we fill the gaps. customized manner. Turkish Cargo always businesses to Atlanta? I think we’re doing very well, and we bears in mind that the key aspects in lo- have pretty good connectivity compared to gistics are velocity and maximum reliabili- A lot of companies, when they come here, most airports in the world. So I wouldn’t ty. The main principle of the service quality they want to be close to an airport. They say we’re limited at all at this point by our lies in this philosophy, which is applied to may specify certain countries that they cargo infrastructure. every single step of the shipment process; need to fly to, or they also may say they’ll the barcode TV systems established in our compare the number of international desti- How is the Metro Atlanta Chamber hub ensures this integrity. A maximum en- deavor of improving customer value, with nations of several cities with airports. working to increase cargo volumes at a system-wide perspective of supply chain I think companies use this [metric] all Hartsfield-Jackson? logistics, makes Turkish Cargo the most the time in terms of when they pick loca- prominent cargo carrier. tions to move goods — their products — We’re part of the host committee (which to market, as well as to move their people is the airport, UPS, Delta and us) that has The company vision is to become the around the world. worked nearly five years to bring the TIACA most preferred solution for customers in conference to Atlanta. We have, obviously, the global air cargo sector. The lean and Are there any projects in the works to worked with the airport to go to recruit and dynamic structure of Turkish Cargo is the better Atlanta’s air cargo transportation speak directly to airlines and help to talk reason for its rising momentum in the last infrastructure? about the market opportunities in Atlanta. few years; this dynamic will be more re- Companies care about a number inforced by our vision to meet each cus- We continue to work with the airport to of things — real estate, the multimodal tomer’s individual needs. Turkish Cargo of- attract new carriers. And I think we have operations — and we try to show them fers complete supply-chain solutions and plenty of capacity in terms of runways and the market opportunities that exist in the translates this to the best practices in the flight hours. Atlanta is a 24-hour airport. Southeastern U.S. air cargo industry.

46 october 2012 ACW Air Cargo Forum Qatar Airways

ver the past 10 years, Qatar Airways Cargo has grown to Obecome a leading carrier in the cargo industry. Its operation continues to grow, as the airline’s freighter network short takes also develops worldwide. Attending premier events, such as this year’s Air Cargo Forum, cargo carriers. We are fortunate that cur- is an opportunity to showcase our product to fews are not very common among other the international freighter community. airports in the region. If one were intro- Qatar Airways is one of the fastest-grow- duced, it would have a significantly nega- ing carriers in the world with an unprece- Carl Unger is Lufthansa Car- tive impact on the cargo business. dented expansion rate averaging almost 40 go’s regional director of sales percent, year-over-year. Currently operating and handling for the Southern Is Atlanta’s transportation infrastruc- to 40 freighter destinations worldwide, with U.S. In advance of the Air Cargo ture favorable to cargo carriers? Why an ever-expanding fleet including four brand Forum, he answered some ques- or why not? new Boeing 777 freighters, Qatar Airways tions about the importance of At- plans to further expand its operations in the lanta and its airport to Lufthansa Yes, Atlanta’s highway system allows for coming years. Cargo. easy access to the rest of the region. Traf- fic can be a challenge during certain times of the day, but improvements are being What are some of the key imports made throughout metro Atlanta. Addition- and exports you’re carrying on flights ally, there is a vast network of railroads to and from Atlanta? Do you envi- linking Atlanta cargo to the Savannah and The company has earned the coveted ISO sion these volumes changing moving Charleston ports, as well as many other 9001:2008 for quality management systems forward? metropolitan areas in the region. in freight space. On the all-freighter front, Qatar Cargo During the past decade, many foreign au- Do you have any plans to increase has recently revamped its charter product tomakers have established manufacturing flights to Atlanta in the near future? to cater to an increasing demand for spe- plants in the Southeast U.S. BMW, Mer- cial consignments — anything from horses cedes-Benz, Volkswagon and Kia have all The current market is saturated with capac- and gas items to humanitarian cargo. One of established plants in Georgia or neighbor- ity, so there is no need for additional ca- our first clients under of the newly launched ing states over the past few years. These pacity in the short-term. However, we feel QCharter was the world-famous Cirque du manufacturers, along with their suppliers, that this will balance out in the long-term. Soleil. Qatar Airways was proud to have play a large role in the Atlanta air cargo One of Lufthansa Cargo’s strengths is its been chosen as a transport partner by the industry. network flexibility, as we are easily able to show’s team of organizers, and the partner- Additionally, we see lots of hatching add additional capacity as needed. ship is testament to the care and skill em- egg and baby chicks business ex Atlanta, ployed by the Qatar Cargo team on every due to the large poultry industry in middle consignment. and southern Georgia. Other commodities The introduction of the QCharter product shipped via Atlanta include machinery parts offers agents, brokers and forwarders the and medical equipment. ability to request special loads on any of the company’s four Boeing 777 freighters or In your opinion, has three Airbus 300-600 freighters. Atlanta’s lack of curfew Qatar Airways Cargo has expanded its restrictions and low freighter services with the introduction of landing fees attracted three new routes to Seoul, Johannesburg, carriers? Muscat and Tripoli, along with the re- introduction of freighter services to Karachi. Atlanta’s competitive land- Named the World’s Best Airline by ing fees and lack of a curfew Skytrax in 2012 for the second year certainly make it attractive for running, Qatar Airways looks forward to further developing its business and providing an unrivalled customer experience to all of its clients worldwide.

ACW october 2012 47 AirNet Air Cargo Forum

eadquartered in Columbus, OH, AirNet Cargo Charter Services is a leading small- Hpackage express cargo airline that servic- es a wide range of industries that require speed, reliability, flexibility and security short takes in the transportation of high-priority shipments. The company was founded there that they’ve had in many, many years. in 1974 and operates a fleet of more than 130 aircraft that conduct almost How does Hartsfield-Jackson’s 200 scheduled and on-demand flights Customs clearance process stack up per night throughout North America. We Harold Hagans is president against other U.S. cities? are one of the largest specialized air car- of Atlanta Customs Brokers and go airlines in the nation and the largest International Freight Forwarders Second to none, second to none. I would commercial operator of Cessna aircraft Inc. not want to be anywhere else working with in the world. Customs and all the different federal agen- Talk a little about the fluctuation cies. Now you have to understand that ... of cargo activity you’ve seen into there are 60 above-board that we work and out of Atlanta from 2010 to the with, and I couldn’t ask for a better sup- present. port or structure from U.S. Customs, or the agricultural folks, the food and drug per- I would think activity has changed from sonnel, etc. Europe to the U.S. mainly because of the eurozone itself and the economic strife that Has Atlanta lost any of its air cargo We offer a wide array of time-critical Europe is going through. When you look business to seafreight as a result of transportation services. With our sched- at Greece, Spain, Italy, Portugal and Ire- escalating prices in air transport? uled or on-demand cargo charters, we land — some of our big customers years can provide the appropriate aircraft for ago now are just sitting around. But busi- Well, sometimes that fluctuates. But the service to any location at any time. Air- ness is still good, and there’s a little bit of a big thing — the difference between the Net’s aircraft are strategically positioned growth factor out there. China is beginning air and sea — are the time elements in- throughout the U.S. to offer quick re- to hurt, too. It’s slowing down a little bit in volved. There’s just a substantial difference sponse times (within two hours). China, you might say, but that’s from China between the time elements. And even in to Europe. So we’re feeling the effects of August [when the interview was conduct- The scheduled package delivery pro- what’s going on in Europe everyday. ed], we’re bringing in Christmas trees. So gram is a regional air transportation so- I think that’s the reason for a little you couldn’t just wait on freight coming in lution utilizing our fleet of Cessna 210 fluctuation, but the airfreight business in unless you do a lot of planning. But, no, I aircraft. The Cessna 210 provides fast, Atlanta is going great. We’ve got a good don’t see a big loss to seafreight. economical transportation routes rang- program, and they have a lot to sell at ing from 200 miles to 400 miles. It is Hartsfield-Jackson. How does a robust cargo market help ideal for congested markets where traffic a city grow and thrive? Have you seen delays impede timely delivery. How do you view Atlanta’s transporta- that during your time in Atlanta? AirNet Express is an overnight, small- tion infrastructure, and what could be package shipping service utilizing our done (if anything) to enhance it? Oh my goodness, yes. I’ve been in Atlanta fleet of aircraft. AirNet’s flight schedule for about 25 years now. If you bring an allows for the latest departures and ear- Oh my goodness, we can’t do anything. airplane full of freight in from a foreign liest arrivals in the industry. We have the network here at I-285, I-85 country, you don’t realize the tradeoffs that and I-75, and we have the rail lines. And going into the freight itself. Not only are AirNet’s extensive air network pro- looking at the airport, I recently went to people employed at the airport; people are vides the most secure and persistent an event where the Porsche people are employed doing the total supply chain of chain of custody of any air cargo car- coming in. They’re actually starting to put those commodities itself. And you might rier in the business. Our on-time perfor- up their structures over the old Ford plant deliver the cargo to Tennessee, and then mance record is second to none, aver- here at the airport, which is gigantic. I think you have restaurants on the way, and you aging 99.2 percent. Our customers can initially they had purchased 33 acres; now have gas stations on the way. So there’s an depend on the on-time arrival of their they went in to purchase an additional 20 awful lot that goes into one simple airplane urgent shipments every time. acres. It’s the biggest economic shot in the coming in from a foreign land. arm to that particular geographic location

48 october 2012 ACW AIR CARGO SCREENING MADE EASIER

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outhwest Airlines Cargo provides Relentlessly SReliable® air cargo service to shippers of time-critical, perishable and high-value items. With 3,300 daily, nonstop flights throughout the short takes space at a contracted rate. I want the vol- Southwest network and service to more ume discount freight forwarders can offer than 90 destinations (including interline me. Plus, many freight forwarders have no and road feeder service), Southwest’s issue with smaller companies, who some- fleet of 550 aircraft provides shippers times want to just ship one pallet at a time. with the widest range of “next-flight- Alan Schlesinger is president The bottom line is this: Everybody would out” options for delivering time- and CEO of Duluth, Ga.-based Air- like to be able to buy direct and cut out the sensitive cargo. flotek. Though he only uses a small middleman, but that doesn’t ensure you get amount of airfreight to ship his prod- the best price. The best price comes from the ucts around the world, he still is inti- wholesaler — that’s the freight forwarder. mately acquainted with the Atlanta In my business, we deal with a lot of air cargo market. pharmaceutical companies. When they need my filters, they are often shut down until the How important is airfreight to your shipment arrives. That means next-day is a company? critical part of the equation for me. Southwest has received numerous awards in the air cargo category related This year, Airflotek will do between $5 mil- Does Atlanta have a robust forwarding to on-time performance, customer lion to $7 million in sales and 4 percent to 5 community? service and overall excellence. Southwest percent of that will require airfreight. Half of is also the first airline to provide a that is international: South Africa, Canada, Yes, it’s huge because of the traffic volume comprehensive asset-tracking service on Middle East, Mexico and South America. We in and out of Hartsfield. If you’re in a smaller a transactional basis. Southwest Airlines ship all over the U.S. via air and truck. Air- area, you have to use a small-town airport; recently announced Cargo Companion, a freight has allowed us to provide a higher this means you are restricted by space and cellular-based GPS tracking service that level of service at a greater discount for our may even have to drive to a larger airport monitors the location and environmental customers, both domestic and international. to get it to a place with more international status of cargo during transit. With Obviously, airfreight allows us to tap into connections. That also means you can be Cargo Companion, customers can markets beyond our standard truck zone. paying double freight costs because of the track by air waybill at www.swacargo. One important point to note: While the connections. com, and easily find out the location, international business is important to us, Plus, having a large community of op- shock, light, temperature, pressure and with the increasing costs of airfreight these tions is great because I shop the forwarders humidity of each shipment. Customers days, we always prefer using the customers’ to get the best price. ... And by having good also receive proactive e-mail alerts if account for airfreight. At this time, we re- relationships with multiple companies, I can issues arrive during transit and when quire cash upfront for international custom- always find space when I need it. their shipments arrive safely at their ers. We cannot be guaranteed of recouping destinations. additional freight costs if there is a snag in It’s advertised that Atlanta is only Customs or a travel delay that costs more. a day’s worth of trucking from 80 All of the device provisioning and Therefore, I always try to put the burden of percent of U.S. businesses. Is that your reverse logistics are taken care of, freight on the buyer and, as such, interna- experience? providing customers with a convenient tional airfreight cost is not the critical part of asset-tracking solution that delivers the equation for us. I don’t agree with this statement at all. Who ’round-the-clock visibility on the location says Atlanta is only a day’s worth of trucking and environmental status of their cargo. How has the use of freight forwarders away from 80 percent of U.S. businesses? To learn more about Southwest’s streamlined the logistics process? That’s plain untrue. From Atlanta, I can ship comprehensive flight schedule, our in a day to Cincinnati, North Carolina, Orlan- unyielding commitment to customer We work with medium-to-large freight for- do and Mississippi. Beyond those areas, you service, and the simple-to-use asset- warders. You might think dealing with a are talking about two days. That being said, tracking capabilities, stop by booth middleman wouldn’t streamline the process, Atlanta is a great distribution breakpoint, so #1227 at the Air Cargo Forum or visit but it most certainly does. Carriers wholesale we do have location on our side. www.swacargo.com today. out the cargo space to forwarders, who buy

50 october 2012 ACW featurefeaturefocusfocus Forecast misc Boeing predicts coming wide-body surge

Boeing has released its biannual cargo forecast that foresees a significant increase in wide-body freighters over the next 20 years.

Air Cargo Fleet freighter category comes to represent economic challenges, air cargo Growth and Change 36 percent of the world’s freighter traffic remains relatively flat, after fleet by 2031, compared to 31 percent rebounding strongly in 2010 from the he number of airplanes today and 22 percent a decade global economic crisis of 2008 and i n t h e w o r l d w i d e ago. By leveraging the significant 2009. Cargo operators have varied freighter fleet will efficiency and capability advantages freighter utilization, temporarily increase by more than of large freighters, carriers will be grounded portions of the fleet and/ T 80 percent during the able to manage projected traffic or retired older freighters in response next 20 years, as demand for air growth without proportionately to market uncertainties. In the long cargo services nearly triples. Large increasing the number of airplanes. term, the industry will benefit from freighters will play an increasing role Despite natural disasters and a this removal of surplus capacity and in air cargo transport, as the large continuing series of political and replacement of older freighters with

ACW october 2012 51 featurefocus Forecast

By 2031, freighters will provide nearly 45 percent of the world’s cargo capacity, despite the continuing trend toward passenger airplanes with greater belly-hold capability.

All charts courtesy of Boeing more efficient airplanes. ued product innovation and global in- projected freighter deliveries will re- Reflecting traffic stability, the num- terdependence. This demand growth place retiring airplanes, with the re- ber of airplanes in the freighter fleet will spur the world freighter fleet to mainder expanding the fleet to meet has remained virtually the same since expand by more than 80 percent — the requirements of project traffic 2009 (1,755 planes in 2009 compared from the current 1,738 airplanes to growth. Two-thirds of deliveries will to a current 1,738 aircraft). The mix 3,198 airplanes by the end of the fore- be freighter conversions, 60 percent of airplane sizes has shifted, howev- cast period. About 1,300 of the 2,754 of which will be from standard-body er, toward large freighters. The large freighter share of the fleet has grown from 26 percent to 31 percent since 2009. As deliveries of newer, larger freighters increased over the past 18 months, yields and load factors came under pressure. (Please note that the accompanying charts present actual data, as opposed to the rounded totals presented in the Boe- ing Current Market Outlook 2012-2031.) The industry’s oft-dem- onstrated resilience is pro- jected to prevail over recent adverse pressures. Demand for air cargo services will nearly triple by 2031 in re- sponse to the industry’s growing dependence on speed and reliability, contin-

52 october 2012 ACW featurefocus Forecast

er demand. Also, the advan- tages offered by freighter operations — including su- perior focus and control, timing and routing, capac- ity (volume, weight, hazmat, and dimensional), handling location and ramp proxim- ity — weigh into the picture. Most important, however, the forecast weighs the reli- ability and predictability of freighters, often offset a low- er-hold price advantage. Freighter orders during the first six months of 2012 were far fewer than the near- record number received in 2011, as a five-year delivery backlog exceeding 200 airplanes was worked passenger airplanes. Of the projected port costs, depressing demand for down. Volatile fuel prices accelerate 935 new production airplane deliv- services. At the same time, high fuel freighter retirements and enhance eries (valued at $250 billion), about prices are an incentive for airlines to the value of newer airplanes that offer three-quarters will be in the large replace aging airplanes, bolstering de- higher operating efficiency. Near- freighter category. mand for new freighters. term overcapacity exerts downward Cargo capacity supplied by dedi- The forecast takes into account pressure on the fleet, as relatively cated freighters will continue to rise several significant world freighter new freighters are parked and even slightly faster than lower-hold capac- fleet developments and trends. First, considered for retirement in the ity in the passenger airplane fleet. By it’s concerned with the introduction face of declining yields, load factor 2031, freighters will provide nearly 45 of wide-body passenger airplanes and utilization. Noise, emissions percent of the world’s cargo capacity, with increasingly capable belly-holds, and aircraft-aging regulations drive despite the continuing trend toward which continues to moderate freight- carriers to accelerate evaluation of passenger airplanes with greater bel- ly-hold capability. The freighter share of the total commercial fleet will decline slightly to 8 percent, even as the number of freighter airplanes grows. Continual increase in average freighter size and the influx of newer, more efficient air- planes will facilitate higher airplane utilization and load factor to meet projected demand growth without a proportional increase in freighter numbers.

Significant Developments and Trends

Diverse factors affect world freight- er fleet growth, often exerting con- trary pressures. For example, rising fuel prices increase air cargo trans-

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ALLI_1208118_Efreight_178x254.indd 1 17/08/12 11:00 their fleet requirements. Passenger carriers continue to emphasize the revenue potential of cargo. Airlines that operate both passenger airplanes and freighters typically enjoy 20-percent higher cargo load factors and increased yields in the belly-hold of their pas- senger airplanes. Cost-effective ground transport alternatives and abundant belly-hold capacity will moderate medium wide- body fleet growth in large established regional markets. Growth will con- centrate in a few large express car- riers and developing regions where difficult terrain or lack of alternative modes favor air transport. Profitable long-haul operation of medium wide- body freighters is challenging, even developments and strategies. The cur- quirements) from the total air cargo with full loads, because of the 20-per- rent and projected fleet is divided into demand, as developed for the World cent to 30-percent advantage in op- three payload categories by fuselage Air Cargo Forecast. We use analysis erational economics enjoyed by large width and payload capability, regard- from the companion Boeing publica- freighters. less of range or presumed service tion, Current Market Outlook, to eval- markets. The three payload categories uate available belly-hold lift for each Forecast Approach are standard-body (all freighters less carrier by region, as well as actual The model mix within the three than 45 tonnes); medium wide-body reported load factors. More recent freighter payload categories remains (40 tonnes to 80 tonnes); and large developments — such as the impo- unchanged from previous forecasts. (greater than 80 tonnes). sition of checked baggage fees and Our integrated top-down/bottom-up We begin with a top-down analy- restrictive security requirements on approach combines a thorough anal- sis of worldwide air cargo flows and belly-hold capacity — are considered. ysis of macro trends in the industry traffic. Next, we subtract current and The freighter fleet lift requirement is with detailed consideration of region- projected lower-hold cargo capacity the difference between total demand al- and operator-specific information, (adjusted for passenger baggage re- for air cargo services and the supply of revenue cargo capacity provided by the passenger fleet. Remaining air cargo traffic is apportioned to regional domiciles and specific car- rier freighter fleets. After identifying the likely nature and timing of future freighter offer- ings, an assessment is made of air- plane capability, performance and availability. At the regional domi- cile level for each airline (or from the bottom-up), such variables as fleet type and age, airplane size, re- tirements, utilization, load factor, market share, service, and market strategies are factored in. The ex- haustive top-down/bottom-up anal- ysis is rounded out, balancing these variables with total air cargo lift, traffic and availability of passenger aircraft for conversion.

ACW october 2012 57 featurefocus Forecast

Freighter Fleet the fleet’s capacity in 2001, supply flying. Yet, its size, high utilization and Development nearly 80 percent of that capacity to- high load factors allow the 747F to day. In particular, the largest line-haul provide more than half of the world’s During the past decade, the large freighter in service, the 747 freighter, total freighter capacity. freighter category boosted its share represents less than 17 percent of the Freighter operating costs have im- of the fleet from 22 percent to 31 per- freighter fleet, with about 235 pur- proved, across the fleet, by an average cent. Average freighter size increased pose-built and conversion freighters of about 1 percent per year for more nearly 2 percent per year, highlighting the importance of size and efficiency for freighter operations. It is not surprising, therefore, that the fleet-wide operating cost improvement trend of about 1 percent per year is expected to continue, even as fuel price and other cost pressures intensify. Several striking compari- sons illustrate the crucial im- portance of freighter efficiency and capability. Wide-body freighters account for about 65 percent of the current fleet, yet they supply 95 percent of its capacity. Within the wide- body fleet, the large category of freighters alone currently represents 31 percent of the freighters in the fleet, and this number will grow to 36 per- cent by 2031. Large freighters, which supplied 66 percent of

58 october 2012 ACW airplanes, operators targeting pre- mium, long-range service often find production freighters more attractive than conversion freighters. Greater reliability, utilization and capabil- ity can be significant competitive ad- vantages. During the next 20 years, about two-thirds of fleet additions for replacement and market growth will

than 20 years. This trend, which ex- tends all the way back to the replace- ment of piston-engine airplanes by jet freighters, is expected to continue throughout the forecast period. The accompanying chart shows operating cost averaged over history, which tends to smooth out the peri- odic nature of new freighter model introductions. The forecast portion of the curve, however, displays improve- ments expected from the replace- ment of older 747Fs and MD11Fs by more efficient 747-8 freighters and 777 freighters, as well as from future freighters yet to be introduced. Prof- itability margins are much narrower for freight carriers than for passenger carriers, owing in large part to com- petition from ground transport and passenger alternatives. The growth of the large freighter share of the cargo fleet reflects the heightened sensitiv- ity of freighter operations to airplane operating costs.

Production and Conversion Freighters While two-thirds of fleet additions will come from converted passenger

ACW october 2012 59 featurefocus Forecast

come from modified passenger and combi airplanes. Produc- tion freighters, though, will con- tinue to play an important role because their superior reliabil- ity, operating cost and capabil- ity can outweigh the significant on-ramp acquisition cost advan- tages enjoyed by conversions. The breadth of the airplane family can be as important in the conversion market as it is in the production freighter mar- ket. Therefore, aircraft manu- facturers and conversion pro- viders continue expanding their product offerings, matching size and capability to market demand. Cargo payloads, on average, generate only half as much revenue by weight as passenger payloads. Freighter profitability is, and better profit potential in the high- the greatest number of large freight- therefore, extremely sensitive to yield, long-distance markets typically ers, which are uniquely suited to airplane size. The relatively tight served by large freighters. long-haul, intercontinental markets. revenue performance of smaller Express carrier networks will take airplanes makes acquisition costs Freighter Deliveries the majority of medium wide-body highly significant, favoring freighter by Carrier Domicile freighters, ideally sized to support conversions. All standard-body fleet and Operational high-yield, time-critical operations. additions will be conversions — Model Standard-body freighters will serve mostly 737s, 757s, A320s and A321s. emerging regional and niche markets, The ratio of new freighters to Continuing a years-long trend as well as express markets. conversions increases with airplane in the Asia-Pacific region, all-cargo Nearly 40 percent of all freighter size. In the medium wide-body and combination carriers will take deliveries during the 20-year category, nearly 65 percent of fleet additions will be conversions. Because of the ready availability of newer medium wide- body passenger airplanes, many of these airplanes will be converted before the typical 15- to 20- year average service life for passenger airplanes. The most common wide- body conversions will be 747, 777, 767 and A330 passenger airplanes. In the large freighter category, only slightly more than 25 percent of fleet additions will be conversions. Production freighters can achieve higher utilization

60 october 2012 ACW for new freighter market growth. This text has been excerpted from Boeing’s World Air Cargo Forecast 2012-2013. A complete version of the forecast will be released this month at TIACA’s Air Cargo Forum & Exposition in Atlanta and online at www.boeing. com/commercial/cargo. ACW

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ACW october 2012 61 peopleevents Five Questions with… Richard Forson

ollowing the departure of Frank Reimen, Richard Forson has taken over as interim CEO and president of Cargolux. Forson, who still retains his chief financial officer responsibilities, recently sat down with Air Cargo World to discuss what this ap- Fpointment means for the European freight carrier.

1. It seems like there’s been a lot of change at the top an edge over pure-play cargo operators — not only because of Cargolux recently; how can you stabilize the ship as the belly space is a byproduct of passenger operations, but interim CEO? also because passenger traffic is less strongly correlated with the global economy. We have, indeed, seen some change at Cargolux re- From an EU ETS standpoint, we are fully compliant with cently, and I believe there is more change lying ahead of the requirements of the scheme and have not experienced us if we want to remain a leading player in the industry. any unfavorable impact. Ultimately, however, we must im- The airfreight industry has undergone a period of extreme plement a global system to avoid the potential distortion volatility since the economic crisis of 2008. Change is nor- of competition at an international level that would harm mal and should not be regarded with apprehension. We European hubs. are undergoing change in order to position our- selves correctly for the future. 3. Which regions and niche markets is Cargolux While it was profitable in the last decade, glob- eying for growth? al economic circumstances and the emergence and significant growth of new competitors com- We see some potential for growth in Africa pels Cargolux to review its business model and, and Latin America. Although China’s explosive if required, implement the changes necessary to growth has slowed down somewhat, the country remain a competitive and relevant player in the remains among the fastest-developing econo- air cargo market. It is my mission to ensure the mies in the world and offers attractive business sustainability of Cargolux — not only now and in opportunities, such as in the western region. the near future, but also 10 to 15 years from now. Overall, the Middle East and Asia rank among We must ascertain that we have the right busi- the most attractive regions. If we are to reinforce Forson ness model to withstand challenging economic our position there, we must secure the appropri- times and remain competitive in the global mar- ate traffic rights. Generally speaking, oil-produc- ketplace. And yes, I believe in my ability to affect change in ing countries are also of interest to us because our fleet, an interim position. This is largely a matter of vision, com- particularly our Boeing 747-8 freighters, is suited for the mitment and determination. We have no time to waste. transportation of outsized cargo. Management and employees must all pull together and rally We are, of course, keen to strengthen our leadership behind the same goals. And the permanent CEO must pur- position in a variety of niche markets, such as dangerous sue such goals equally hard when [he or she] is appointed goods, pharmaceuticals, outsized cargo and live animals. We later in the year. Change is a relative concept. Changes we have the equipment, experience and skills required to oper- make now may have to be further addressed as time passes ate successfully in this field. and economic conditions change even further. 4. Cargolux has been operating the 747-8F for nearly a year 2. How have the EU Emissions Trading Scheme and global now. How has this aircraft been a game-changer for you? financial woes affected Cargolux so far this year? The 747-8F is undoubtedly a cargo airplane in a class of Most of the issues we have confronted so far in 2012 its own. It is considerably more fuel-efficient than the 747- are not specific to Cargolux, but have plagued the aviation 400F and offers higher payload capacity. With double-digit industry as a whole. They include rising fuel costs, overca- improvements in fuel efficiency and carbon emissions, in pacity and depressed demand due to the eurozone crisis combination with a 30-percent noise reduction, the 747-8F and a challenging global economic climate. As a result, load has been very beneficial for our environmental performance, factors and yields have come under increasing pressure. especially in the light of the EU ETS. If you operate in a high-cost environment with restrained On the other hand, the 747-8F was built for [healthy] flexibility, such as nighttime curfews, the adverse impact on economic times; if trading conditions deteriorate, then it is profitability is even more intense. To a certain extent, com- more challenging to fill the big aircraft. We have been de- bination carriers with significant belly-freight capacity have (Continued on page 65)

62 october 2012 ACW peopleevents

AIRLINES Kuehne + Nagel, firmed as the full-time CEO of Air Cathay Pacific Airways has ap- similarly led K + N’s Menzies International, with a brief pointed 17-year company veteran Tom North American in- to grow the airfreight wholesaler Owen senior vice president for the dustry vertical. Prior through increased focus on online ac- Americas. Owen is based in San Fran- to this appointment, tivities and geographical expansion. cisco, Cathay Pacific’s U.S. headquar- Hoffman worked Koller first assumed responsibility ters, and is responsible for the overall for Panalpina as the for AMI in late 2010, management of the carrier’s Ameri- global leader of the hoffman while simultaneously can operations. During his tenure at automotive vertical. serving as execu- Cathay Pacific, Owen has transitioned Chris Carpenter has joined AIT tive vice president of from assistant to the general manager Worldwide Logistics as director of IT for Menzies Avia- of revenue and marketing to general life sciences and government. Car- tion. He has now re- manager of revenue. Most recently, penter, who began his career in the linquished his IT re- he served as chief operating officer transportation sector two decades ago sponsibilities, follow- of logistics for Steamships Trading as a driver with Priority Air Express, Koller ing the appointment Company Ltd. in Papua New Guinea, most recently served as president and of Martin Galling- a subsidiary of Cathay Pacific’s parent CEO of Priority. In his new role, Car- ton as senior vice president of IT, and company, Swire Group. penter is developing AIT’s presence the completion of a phased handover. John Evans is Etihad Airways’ in the life sciences and government In addition to his post as CEO of AMI, new general manager for the Philip- sectors. In addition to his market re- Koller is also one of Menzies Aviation’s pines. Evans, who has more than 35 sponsibilities, Carpenter oversees the executive directors. years of aviation ex- company’s New York City location, as perience, transfers to well as the Philadelphia station, where OTHER the Manila-based po- he is based. OAG Cargo has named supply- sition from Cyprus, SEKO Logistics has appointed Joe chain veteran Alv Hill interim execu- w her e he s er ve d Bento to its executive management tive vice president. as Etihad’s general team as chief sales officer, a role based Formerly an execu- manager for the past in North America. Bento joins SEKO tive consultant with year. Prior to this ap- from CEVA Logistics, where he served Ernst & Young, Hill evans pointment, he held as president of glob- has led numerous senior management al freight manage- European and global roles at Swissair and Gulf Air in the ment, president for strategy develop- UK and Thailand. the Americas region ment, reengineering Michael Rodyniuk has been named and, most recently, and transformation Hill executive vice chairman of Gavar- executive vice presi- programs. nie Holding, LLC’s dent. He had previ- By January, Airbus will reorganize (parent company to ously been president its organization in line with the com- Hawaii Island Air) bento of North America and pany’s 2020 Vision, making the manu- board of directors. chief marketing offi- facturer “more efficient and agile,” A veteran airline ex- cer for EGL, prior to its acquisition by according to an Airbus press release. ecutive, Rodyniuk has CEVA Logistics. The overall goal is to shorten the chain held top management Mike McDonald has been named of command, giving decision-making posts at Swissair’s SR Associated Global Systems’ district power to those not just at the top Rodyniuk Technics, Air Cana- manager of sales and service in San level of management. “This new or- da’s Zip Air, WestJet Francisco. In this role, he is respon- ganization will help us to strengthen and Winnipeg Airports Authority. He sible for service quality, cost control our leadership position,” Airbus’ CEO, has also served in managerial roles at and administration functions, as well Fabrice Bregier, said in a statement. United Airlines and American Airlines as the development of new business in “We are now ready to give more em- and, most recently, worked as chief the San Francisco Bay area. McDonald powerment and on-the-spot decision- operating officer of Exchange Income began his transportation career with making to our local teams in order to Corp.’s aviation segment. Profit Freight Systems/LEP Interna- scrap bureaucracy and shorten lines of tional, with positions in domestic and command. Boosting agility, efficiency THIRD PARTIES international operations, as well as and speed, and meeting our high cus- Damco has named 30-year-plus in- customer service. Prior to joining AGS, tomers’ expectations is the overriding dustry veteran Steve Hoffman the he served as operations manager for driver for us. This new organization global head for activities in the industrial AIT Worldwide in San Francisco. has all the ingredients to take our busi- sector. Hoffman, who joins Damco from Stephen Koller has been con- ness excellence to the next level.” ACW

ACW october 2012 63 We deliver the data, so you can deliver the goods.

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September 29-october 2 World Congress Center in Atlanta routesonline.com for more details. Abu Dhabi: Abu Dhabi Airports this October. The event features a Company, Etihad Airways and the conference and exhibition, and is co- February 20-22, 2013 Abu Dhabi tourism board are band- located with the Council of Supply Johannesburg: The second bien- ing together for the 18th World Chain Management Professionals’ nial international air cargo confer- Routes event. Abu Dhabi last hosted annual global conference. For more ence to take place in Africa aims to the exhibition in 1996. For more in- information, visit www.tiaca.org/ top the February 2011 Nairobi event. formation, visit www.routesonline. tiaca/acf.asp?snid=756955195. Scheduled for the Emperors Palace com/events/150/the-18th-world- in Johannesburg, the event will focus route-development-forum. October 8-12 on finding air cargo opportunities Los Angeles: The International Fed- in Africa. Visit www.stattimes.com/ October 1 eration of Freight Forwarders Asso- aca2013 for more details. Atlanta: Organized by Air Cargo ciations (fiata) will hold its annual World, the Air Cargo Forum’s golf world congress in Los Angeles for the March 7-10, 2013 event will take place at the scenic first time since 1977. Visit www.fia- Bangkok: For the 15th consecutive and historic Stone Mountain Golf ta.com for more information. year, members of the World Cargo Al- Club. The course features incredible liance, a global network of indepen- views of Stone Mountain, with its fa- February 10-12, 2013 dent international freight forward- mous Confederate Memorial carving. Cartagena de Indias, Colombia: ers, will come together to meet face- To register, go to http://acfgolf.air- The sixth staging of Routes Americas to-face with their peers to build new cargoworld.com. will be hosted by Cartagena-Rafael business relationships and strength- Nunez International Airport. The en existing ties. Details are sparse, October 2-4 event will bring together air cargo so keep checking www.wcafamily. Atlanta: The biennial air cargo decision-makers from North, Cen- com for updates. extravaganza heads to the Georgia tral and South America. Visit www.

(Continued from page 62) high fuel costs, slackening demand and ropean carriers are unable to retain a ploying the aircraft on the main trunk excess capacity, as well as increased maximum level of flexibility in order to routes where the payload advantage volatility and lack of visibility, are some adapt to a radically changed environ- can be leveraged. Having said this, I’m key issues. Another problem is that air- ment, their long-term survival will be convinced that the 747-8 freighter will freight is a global and highly competi- put at stake. continue to play a role in the airfreight tive business, yet cargo airlines don’t We are currently conducting an in- business. operate on a level playing field. There depth analysis of our business model. are huge differences due to cost and We are looking at every single aspect 5. What are some issues currently fac- regulatory advantages. of the organization to identify areas for ing the global airfreight industry that Airports in the Middle East, for in- improvement: where costs can be re- may become major sticking points in stance, operate 24 hours a day; labor duced, how revenues can be enhanced, the year ahead? How are you working cost is lower there and governments and how productivity can increase. I to overcome them? have the capacity to readily invest in have one main objective, which is to infrastructural developments to boost ensure that Cargolux will remain a rel- Deteriorating economic conditions, competitiveness and efficiency. If Eu- evant player in the long run. ACW

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ACW october 2012 65 aircargoClassifieds

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66 OCTOBER 2012 ACW aircargoClassifieds

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68 OCTOBER 2012 ACW bottomline

CARRYING EUROPE U.S. AIRLINES Monthly year-over-year percent change in overall freight traffic Monthly year-over-year percent change in domestic and Asia-Pacific freight traffic for European airlines. and international cargo traffic for U.S. airlines.

6 10 Overall 8 Domestic 3 Asia-Pacific 6 International 0 4 -3 2 0 -6 -2 -9 -4 -6 -12 -8 -15 -10 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12

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

CARRYING ASIA SHARING MARKETS Monthly year-over-year percent change in capacity, in International air cargo year-to-date percent change for available-tonne kilometers, and traffic, in freight-tonne July 2011 vs. July 2012 kilometers, of Asia-Pacific airlines. 9 Middle East 6 Capacity Traffic North America 3 Europe 0 -3 Asia/Pacific -6 Latin America -9 Africa -12 Total -15 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 -9 -6 -3 0 3 6 9 12 15 Source: Association of Asia Pacific Airlines Source: IATA

CARRYING INTERNATIONAL SEMISEMICONDUCTORS CONDUCTORS Monthly year-over-year percent change in total scheduled Worldwide monthly year-over-year percent change international freight traffic and capacity worldwide in sales of semiconductors and month-to-month in freight-tonne kilometers and available-tonne kilometers. percent change.

8 4

6 2 4 0 2 0 -2 -2 -4 -4 -6 -6 Capacity M-O-M -8 -8 Traffic Y-O-Y -10 -10 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 Source: IATA Source: Semiconductor Industry Association

ACW october 2012 69 forwarders’forum

Brandon Fried is the executive director of the U.S. Airforwarders Association Increasing regulation: A growing concern

or about 25 years, airfreight forwarders in the U.S. gime was imposed upon an industry long free of the CAB’s have been largely free of substantive federal regula- iron shackles. tions due to the demise of the Civil Aeronautics The TSA’s increased security requirements also brought Board. Of course, forwarders had to make sure that a new era of enforcement. Confusing regulations and fre- hazardous materials were properly transported on planes, quent visits from government security inspectors became but for the most part, the domestic industry was largely commonplace. Security training, locked doors and safety burden-free. cameras made the forwarder more Let us hope that the recent ad- of a policeman than a transportation vent of increased U.S. federal regula- Security training, expert. Those forwarders not taking tions do not portend a return to the compliance requirements seriously years before the 1978 dissolution of locked doors and safety began to pay the price through stiff the CAB. Many of us old enough to fines and jail terms. Many companies remember vinyl records and disco do cameras made the not willing to comply have dropped not miss the CAB’s rigidity. Forward- forwarder more of a out of the business or focused on oth- ers were forced to file tariffs when- er, less regulation-intensive modes. ever they wanted to change rates, a policeman than a Customs and Border Protection, an time-consuming and wasteful process, agency long seen as the collector of among other things. This changed with transportation expert. import taxes and duties, now has an the Airline Deregulation Act, which increased security role through its in- greatly reduced the U.S. government’s volvement in the Air Cargo Advanced control of the industry. Screening program. The initiative analyzes house airbill Free from CAB oversight, forwarders were free to re- shipment information before departure as a way to assess spond to market conditions immediately and were able to risk on shipments coming into the U.S. While the program capture more business with their newfound flexible-pricing is in a voluntary pilot stage, rest assured that a regulation ability. The ensuing years were certainly tumultuous, with or legislative requirement is coming soon. Forwarders are several new airlines entering and exiting the market. now working to figure out how to get the required informa- Unfortunately, other branches of government have begun tion into the CBP’s hands without decreasing the amount of to impose rules that harken back to the days when forward- time to prepare shipments before departure. ers barely made a move without Washington oversight. Until And thanks to recently passed transportation legisla- Sept. 11, the regulatory responsibilities and overall land- tion, there are new demands on forwarders arranging truck scape for freight forwarders was relatively clear. Now, the shipments. In an industry deregulated long ago, the federal regulatory burden on forwarders is constantly increasing, regulatory burden seems to be increasing. Of course, all of and industry insiders are beginning to worry about its cost. this is added on top of the ever-growing maze of regula- The government’s eager response to the 9/11 terrorist tions imposed by a number of different federal agencies attacks — the passing of the Air Transportation Security surrounding imports and exports. Act and the establishment of the Transportation Security All of us know that nature abhors a vacuum. The U.S. Administration — was swift. The new agency tracked down government sees a vacuum and appears to be filling the more than 4,000 airfreight forwarders in the U.S. that had void with an increasing regulatory burden. However well flourished under a relatively regulation-free environment. intentioned, this may create another vacancy where a suc- An elaborate and utterly confusing air cargo security re- cessful industry once thrived. ACW

70 october 2012 ACW © 2012 C.H. Robinson Worldwide, Inc. All Rights Reserved. www.chrobinson.com

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