WWW.AIRCARGOWORLD.COM JANUARY 2009 Trends & Analysis INTERNATIONAL EDITION Creating a Sustainable Reputation CCoverINT.inddoverINT.indd 1 112/19/082/19/08 11:07:38:07:38 PPMM Project1 12/18/08 8:09 AM Page 1 WE SPEAK SAFETY In the world of dangerous goods transportation, safety can be tailor-made solutions to address your specific safety issues a complicated language. And a failure to understand and follow through our consulting department. We can even guide you in the many nuances of its rules and regulations can be costly monitoring your performance within the air cargo market, so you and dangerous. But IATA can help: our expertise in safety is have the security of knowing that your goods will arrive without recognised and trusted throughout the industry. penalty, safely and on time. We can help you interpret the special requirements of air cargo The 50th edition of the DGR is now available. To find out more operations. We can provide the training you need to master the about the IATA Cargo Safety and Compliance Solutions portfolio, securing and shipping of dangerous goods. We can configure or to buy the DGR online, go to www.iata.org/wespeaksafety Consulting_Publications_Training Cargo Safety and Compliance Solutions Trends & Analysis January 2009 CONTENTS Volume 12, Number 1 COLUMNS Opinion Q&A 8 AMERICAS Mr. Smith goes to 18Former Cathay Pacific Washington for an oil change CEO looks into the future 12 EUROPE 2009: It could be good, bad or really ugly says Lufthansa 14 MIDDLE EAST An ethical Maximising the money - from business? Abu Dhabi aviation 16 ASIA 20Emirates Chairman says it’s possible Pearl River carries manufacturers to Viet Nam 2009 Airline Guide DEPARTMENTS 23More capacity - and hopefully more freight 2 Viewpoint 4 News 46 People U.S Hub 47 Events & Spokes 48 Bottom Line They just keep growing 40and growing and... Delta Blues 43Pearl River Slows as global downturn hits www.aircargoworld.com Air Cargo World (ISSN 1933-1614) is published monthly by Commonwealth Business Media. Editorial and production offices are at 1270 National Press Building, Washington, DC, 20045. Telephone: (202) 355-1172. Air Cargo World is a registered trademark of Commonwealth Business Media. ©2008. Periodicals postage paid at Newark, N.J. and at ad- ditional mailing offices. Subscription rates: 1 year, $58; 2 year $92; outside USA surface mail/1 year $78; 2 year $132; outside U.S. air mail/1 year $118; 2 year $212. Single copies $10. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Directory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. 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January 2009 AirCargo World 1 001TOCINT.indd1TOCINT.indd 1 112/19/082/19/08 11:11:12:11:12 PPMM Editor Editor’s Simon Keeble • [email protected] Note Associate Editor Jessica Binns • [email protected] Contributing Editors Roger Turney, Ian Putzger Art & Production Director Jay Sevidal • [email protected] Editorial Offices 1270 National Press Bldg., Washington, DC 20045 (202) 355-1153/1172 • Fax: (202) 355-1171 PUBLISHER Going Dutch Steve Prince • (770) 642-9170 • [email protected] NT’s welcome by the UK government to partner with the Roy- Advertising/Business Office 1080 Holcomb Bridge Rd. • Roswell Summit al Mail is entirely consistent with both history and EU compe- Building 200, Suite 255 • Roswell, GA 30076 Ttition laws. But will it be the Dutch or Germans who will sort (770) 642-9172 • Fax: (770) 642-9982 and deliver for 28 million British homes? China India Beijing Office Madhav Kulshreshtha In a year that will see the launch of the Lufthansa/DHL Aerologic joint ven- Nancy Sun (Sun Junqin) [email protected] [email protected] +91 124 420 3323 ++86 10 5879 5885 ture, the final acquisition of an ailing Martinair by founding shareholder KLM Japan Shanghai Office Masami Shimazaki poses an opportunity for the Dutch. Isabella Hou (Hou Ying) [email protected] [email protected] +81-42-372-2769 ++86 (21) 5116 8877 While Deutsche Post’s management in Bonn - led by now disgraced former Thailand Guangzhou/South China Chower Narula McKinsey consultant Klaus Zumwinkel - used its market position and piggy Sherry Yuan [email protected] [email protected] +66-2-641-26938 bank to acquire a dominant position in the global mail and logistics industry, ++86 10-5879-5885, ext. 601 Taiwan three hours drive away TNT was creating a European competitor. Europe, United Kingdom, Ye Chang Middle East [email protected] David Collison +886 2-2378-2471 However, unlike the German DHL reincarnation that went on to lose a few +44 192-381-7731 [email protected] Australia, New Zealand $billion, Dutch TNT sold its non-asset based business for lots of cash to con- Fergus Maclagan Hong Kong, Malaysia, [email protected] Singapore +61-2-9460-4560 centrate on being an Integrator. Joseph Yap +65-6-337-6996 Korea And Postman. [email protected] Mr. Jung-won Suh +82-2-3275-5969 Now, as the Dutch, French and Germans face off in a European Union ap- [email protected] parently free of artificial barriers to postal competition, it will be interesting to International Advertising Offices see who grabs the British mail prize - surely not the Spanish, they already have Classified Advertising the airports. and Reprints Laura Rickman • [email protected] KLM/Air France, Martinair and TNT have an interesting confluence of all- (770) 642-8036 cargo capacity that could be used to expand door-to-door freight and mail de- Administrative Assistant Susan Addy • [email protected] livery between Europe and Asia. Display Advertising Traffic Coordinator Martinair was begun 50 years ago to take advantage of business opportuni- Tracey Fiuza • [email protected] (973) 848-7106 ties ignored by a fairly sclerotic KLM. Electronic Rights and Syndication Barbara Ross • [email protected] Founder Martin Schroeder was careful not to compete with the national air- (973) 848-7186 line and soon discovered all sorts of ways to make money from it – whether it CUSTOMER SERVICE OR TO SUBSCRIBE: (888) 215-6084 was providing capacity or pilots for a scheduled service, or flying in-calf heifers to developing nations on behalf of Dutch farmers. To paraphrase a former Cargolux slogan, you name it, he did it. And for sev- eral decades the airline produced profit after profit for its KLM, Nedlloyd and bank shareholders. 400 Windsor Corporate Park Now the carrier and its 2,000 employees are facing, as IATA’s Director Gen- 50 Millstone Rd., Suite 200 • East Windsor, NJ 08520-1415 eral and CEO Bisignani puts it, “the worst revenue environment in 50 years.” (609) 371-7700 • (800) 221-5488 President and CEO Alan Glass The EU Competition Commission has already implied that Martinair is un- Interim CFO Pete Spinelli likely to survive as a long haul passenger airline. Vice President, Magazine Group Liam Power President, PIERS Brendan McCahill However it has always been a cargo innovator. Particularly under Schroeder’s Vice President, Directory Databases Amy Middlebrook iconic leadership. Such experience could now serve as a catalyst for KLM and Vice President, Production & Manufacturing Meg Palladino TNT to form a new all-cargo company in order to further compete with the Director of Circulation John Wengler Boys from Bonn. Or Leipzig. Or Frankfurt. President, OAG Aviation Steven G. Casley & Cargo Solutions The EU might welcome some additional delivery options from TNT’s CEO POSTMASTER: Send address change to: Air Cargo World, 400 Peter Bakker. Clearly the British do. Windsor Corporate Park, 50 Millstone Road, Suite 200, East Windsor, NJ 08520-1415.© 2008 Commonwealth Business Media Inc. — All Rights Reserved For more information visit our website at www.aircargoworld.com 2 AirCargo World January 2009 002EditorialINT.indd2EditorialINT.indd 2 112/19/082/19/08 11:21:34:21:34 PPMM Project1 6/17/08 12:27 PM Page 1 UpdatesNews Royal Mail’s 11,500 outlets across Britain that currently provide a six day a week postal service to 28 million homes. Mendelson explained: “The univer- sal service helps to bind us together as a country. And, as well as its social importance, it is the means by which many companies build and operate their businesses, but it doesn’t come free.” In fact the UK government is spending $2.6 billion to 2011 to main- tain the network’s viability. In the UK, TNT Post handles more than 2.3 billion addressed mail items per year and employs close to 1,000 people. Combined UK revenues are $2.2 billion. Another interested party likely will be Deutsche Post. In 2007 its UK mail TNT Bids For UK Mail Stake subsidiary produced revenues of $232 million – plus $3.5 billion from DHL rompted by the UK Government’s endorsement of a new UK in the same year.