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FedEx facing fine from US FAA

CARGOLUXAPPOINTSTER BRUGGEN

FINNAIR EXPECTSIMPROVEMENTIN CHINA

PACTL SEES6.5% VOLUMESSURGE

JETTAINERTARGETS MORECONTRACTS

The weekly newspaper for air cargo professionals

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FedEx is facing a $417,500 fine from the US Department of Transportation Federal Aviation Administration (FAA) for alleged-ly using an unairworthy aircraft.

The FAA alleges FedEx failed to rebal-ance a horizontal stabiliser tab control surface on a Boeing 727 after repainting the part.

FedEx allegedly failed to perform rebal-ancing requirements, which meant the aircraft was not airworthy, before operat-ing it on at least 133 freighter flights in that condition.

It is classified as a major repair requir-ing rebalancing of the control surface in the Boeing 727 Structural Repair Manual.

FAA administrator, Michael Huerta ex-plains: “Safety depends on every operator paying close attention to every regulatory requirement. It’s also critical for operators to implement internal controls to ensure that they’re following all applicable proto-cols and regulations.”

FedEx has asked to meet with the FAA to discuss the case.

Meanwhile, on a more positive note, the US integrator has had plans to takeover TNT Express approved by the European Commission (see page two).

Worldwide Flight Services (WFS) is to expand its cargo handling presence in the US by acquir-ing Consolidated Aviation Services (CAS).

Financial terms have not been disclosed about the deal and the transaction is subject to regulatory approval and other customary clos-ing conditions.

CAS, headquartered in New York, is one of the major cargo handlers in the US serving more than 250 airline customers.

WFS, which was acquired by Platinum Equity in September 2015, is active at over 145 major airports in more than 22 countries on five continents. WFS serves 300 airlines glob-ally, including the handling of over four million tones of cargo per annum.

WFS executive chairman, president and chief

executive officer (CEO), Olivier Bijaoui says: “The proposed acquisition will not only cre-ate a unique organisation in the United States that combines the best of both companies, but will also reinforce WFS’ position as one of the world’s premier cargo handlers.

“I know Mike Duffy, president & CEO of CAS, and the CAS team well, have worked with many

of them before, and have a great deal of respect for what they have accomplished. The success of CAS is a testament to the hard work of its employees, and the combination will create one of the most knowledgeable and experienced teams in this industry.”

Platinum Equity’s European investment team head, Bastian Lueken explains: “We are deliv-ering on our pledge to support the profitable growth of WFS by pursuing complementary, accretive add-on acquisitions which present immediate synergies.”

In November 2015, WFS also completed its acquisition of a 51 per cent shareholding in Fraport Cargo Services, confirming its strate-gic partnership with airport operator, Fraport for freight handling at Frankfurt Airport.

Settlement agreements in price-fixing case top $1bn

Air cargo settlement agreements made as part of a US antitrust law-suit over price-fixing have now reached more than $1.1 billion.

The latest to payout is Polar Air Cargo, which along with Polar Air Cargo Worldwide and Atlas Air Worldwide Hold-ings has agreed on a $100 million settlement.

This figure is one of the largest figures to date in the litigation case,

which has been active for more than a decade.

The industry-wide legal action arose from allegations about the pricing practices of a number

of air cargo carriers on routes to and from the

US from January 2000 through to September 2006.

Direct purchasers have been seeking com-pensation for alleged overcharges sustained as part of a price-fixing conspiracy.

Polar Air Cargo says the settlement resolves all claims against the companies by partic-ipating members in the class action. The companies’ say it continues to deny any wrong-doing or liability, and there is no admission of any wrongdoing or liability in the settlement agreement.

Polar has agreed to make installment pay-ments over three years to settle, with payments of $35 million due on or before 15 January 2016, $35 million on or before 15 January 2017, and $30 million on or before 15 January 2018. The payments are set to be funded from cash available on hand.

Atlas Air Worldwide president and chief executive officer, William Flynn (pictured) says: “We are committed to the highest standards of ethics and governance. It is important to put this legacy matter behind us and focus our full attention on the continued execution of our strategic growth initiatives.

“Our business continues to generate sub-stantial cash flows, and we look forward to capitalising on the significant opportunities ahead to deliver value for our shareholders, employees and customers.”

The settlement agreement is subject to approval and acceptance by the United States District Court for the Eastern District of New York.

Legal firm Kaplan Fox says so far plaintiffs have entered into settlements with 25 defen-dant groups totaling $1.1 billion, of which settlements with 22 defendant groups for $848 million have been granted final approval by the court.

Korean Air has paid out the most at $115 million, followed by Polar Air Cargo, but others have included EVA Airways $99 million, Singa-pore Airlines $92 million, China Airlines $90 million, and British Airways $89 million.

The case is still pending against three defen-dant groups, including Air China and Air China Cargo, Air India and Air New Zealand.

WFS to grow footprint in the US by buying CAS

Volume: 19 Issue: 2 18 January 2016

aircargoweek.com

NEWSWEEK

T he European Commission has unconditionally rubber-stamped the FedEx planned 4.4 billion euro ($4.8 billion) takeover of Dutch courier express delivery

firm TNT Express.In a statement released by both, the

integrators says they have obtained the backing of the Commission as it concluded that the deal “does not raise any competi-tion concerns”.

FedEx Express regional president for Europe, David Binks says: “We are extremely pleased to receive the European Commission’s unconditional approval. We believe the combination of TNT Express and FedEx will provide significant value to the employees, customers and sharehold-ers of both companies.”

FedEx and TNT Express say they con-tinue to work constructively with the regulatory authorities to obtain clearance

of the transaction in the remaining juris-dictions, in Brazil and China.

FedEx and TNT Express add they are making timely progress and continue to anticipate that the offer will close in the first half of this calendar year.

The integrators reached a conditional agreement on the deal in April 2015, before FedEx made the offer in August and TNT shareholders approved it in October.

The European competition authorities rejected a 5.2 billion euro offer for TNT by UPS in 2013, but the FedEx deal was given the green light as it has less activity in the European market.

The takeover would give FedEx a sig-nificant foothold in the European express market. Industry forecasters say the two firms will have a combined 17 per cent share in Europe, in second place to DHL, but ahead of UPS.

2 ACW 18 january 2016

EU gives green light to FedEx takeover of TNT

BOEING delivered 762 commercial aircraft in 2015, 39 more than 2014, which it says is a record.

The manufacturer says it received 768 orders worth $112.4 billion, and at the end of 2015 had 5,795 unfilled orders. Of the 768 net orders, 588 were Boeing 737s, two were Boeing 747s, 49 were Boeing 767s, 58 were Boeing 777s and 71 were Boeing 787s.

Boeing says the highlights of the year included five cus-tomers, Oman Air, Scoot, American Airlines, KLM Royal Dutch Airlines and Vietnam Airlines receiving their first 787 Dreamliners.Airbus says it exceeded its targets for 2015, achieving a new record of 635 aircraft deliveries for 85 customers of which 10 are new. These deliveries comprised of 491 A320 Family aircraft; 103 A330s; 27 A380s; and 14 A350 XWBs.Airbus achieved 1,036 net orders from 53 customers (of which eight are new). At 2015 year-end the overall backlog had climbed to 6,787 aircraft valued at $996.3 billion.

AIRFREIGHT volumes fell by 1.3 per cent in November with the weak growth in economies such as China and India un-able to offset declines in other major markets, according to Airports Council International (ACI) FreightFlash.

In November the only region of the world to see an increase was Africa, rising by 11.9 per cent. Latin America-Caribbean saw the biggest fall in November, down 2.9 per cent, with Bra-zil posting an “alarming” decline of 17.6 per cent (Rio Galeao Airport pictured).

ACI says: “Global airfreight markets show volumes in decline by 1.3 per cent in November, thereby removing the optimism from the first half of the year. In the last four months, air-freight plunged into the negative territory twice – in August (-0.4 per cent) and in November (-1.3 per cent).”

The association says growth in China and India was weak, at 2.1 per cent and 3.2 per cent, respectively. This was not enough to offset declines in other markets, including the US falling 1.9 per cent, Japan dropping 3.7 per cent and Germany declining two per cent.

ACI: volumes in decline

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Boeing and Airbus deliveries soar

NEWSWEEK

3ACW 18 JANUARY 2016

A irfreight volumes fell by 1.2 per cent year-on-year (YOY) in Novem-ber but are above the low point of August 2015, suggesting the declin-ing demand may be bottoming out,

according to the International Air Transport Association (IATA).

The association says the Middle East was the only region to see a rise in November, up 5.4 per cent though falling oil prices are impacting some economies. Latin America saw the largest decline, down 6.4 per cent YOY and falling 1.4 per cent from October due to political and eco-nomic problems, particularly in Brazil.

IATA director general and chief executive offi-cer, Tony Tyler says: “The freight performance in November was a mixed bag. Although the headline growth rate fell again, and the global economic outlook remains fragile, it appears that parts of Asia-Pacific are growing again and globally, export orders are looking better.”

“In fact, the downward trend in FTK [freight tonne kilometres] volumes appears to be bottoming out. But there is a great deal of uncertainty. The current volatility of stock mar-kets shows how much the health of the global economy – upon which air cargo depends – remains on a knife-edge.”

Among the other regions, Asia-Pacific saw FTKs fall by 1.5 per cent in November com-pared to 2014 but volumes were up 1.9 per cent on October. IATA says demand in advanced economies drove export growth in some coun-

tries, particularly in Japan.Europe saw demand fall by two per cent

while capacity rose by 2.2 per cent. Volumes were flat from October to November but IATA says there are indications that stronger man-ufacturing and export orders could increase airfreight demand.

IATA says in North America volumes fell by 3.2 per cent YOY while capacity increased by 5.8 per cent, but the 0.4 per cent increase from October to November could mean recov-ery. IATA says: “Most recent readings of exports orders have been very close to indicating con-traction, which doesn’t bode well for US trade export volumes.”

In Africa, demand fell by six per cent and capacity rose by 6.6 per cent though it remains one of three regions, alongside Asia-Pacific and the Middle East to record year-to-date growth. The November decline was caused by under-performance in Nigeria and South Africa.

IATA: declining demand may be bottoming out

AIR CHINA has finalised an order for six Boeing 777-300 Extended Ranges worth $2 billion as it modernises its fleet and expands its international network.

The Chinese airline now has 90 Boeing aircraft on order, including 787-9 Dreamliners.

Boeing claims that the 777-300ER is the most fuel and cost efficient aircraft in its class.

It will receive further improvements this year, which will reduce fuel use by two per cent.

Boeing Commercial Airplanes senior vice president North-east Asia sales, Ihssane Mounir says: “The 777-300ER has consistently proved its value as a long-haul flagship for our customers around the world, making it the preferred choice for Air China’s international expansion.”

“This order reflects the strength of our decades-long re-lationship with Air China and we look forward to partnering with Air China on additional opportunities in the future,” Mounir adds.

WorldNewsEMIRATES will upgrade its bellyhold service from Dubai to Washington DC to an Airbus A380 from 1 February.The carrier says it will replace the ex-isting Boeing 777-300 Extended Range used on the route. Emirates says the A380 will serve the strong customer demand and restore route capacity following United Airlines’ planned with-drawal from the Washington DC - Dubai route after 25 January.

CEVA LOGISTICS has appointed Ka-maljit Hunjan as senior vice president for global healthcare operations, effec-tive from this month. He will be based at the firm’s Heathrow Airport office and report to chief operating officer for contract logistics, Brett Bissell. Hunjan joins from General Electric Healthcare in the US.

Airbus order for BoC AviationAIRCRAFT leasing company, BOC Aviation has ordered an additional 30 Airbus A320s, bringing its total Airbus orders to 306.

The order by the Singapore based company, owned by Bank of China, is for 18 A320neos and 12 A320ceos. BOC Aviation has 12 Airbus A330s and 294 A320s on order, including 64neos.

BOC Aviation managing director and chief executive officer, Robert Martin says: “This order underscores our continued confidence in the reliability and operational effi-ciency of the A320 family aircraft, and reflects its popularity among our customers for short and medium haul routes.”

Airbus chief operating officer for customers, John Leahy explains: “Its latest order not only demonstrates its con-tinued confidence in our product for its airline customers but recognises the A320 as a sound financial asset in its portfolio.”

“We appreciate the mutually beneficial and strong rela-tionship we have built with BOC Aviation over the past 20 years,” Leahy adds.

Air China pens Boeing order

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NEWSWEEK

4 ACW 18 january 2016

AIRPORTS in Europe has seen volumes fall by 0.6 per cent in November because of large declines at non-European Union (EU) hubs, particularly in Russia, according to Airports Council International (ACI) Europe.

Among the non-EU airports, volumes fell by 12.8 per cent because of economic and trade weakness in Russia, while EU hubs in-creased by 1.3 per cent.

Moscow’s Sheremetyevo International Airport saw volumes fall by 16.7 per cent to 13,618 tonnes while Domodedovo Inter-national Airport (pictured) declined by 22.2 per cent to 11,197 tonnes. Between Janu-ary and November volumes increased by 0.5 per cent across Europe.

ACI Europe director general, Olivier Jank-ovec says: “Overall growth in freight traffic remained almost flat due to significant traf-fic losses at Russian airports which dragged down non-EU traffic to -12.8 per cent – whereas EU airports posted a +1.3 per cent increase.”

Among Europe’s top five airports, Frank-furt Airport saw volumes fall by 4.3 per cent to 183,274 tonnes in November while

Paris Charles de Gaulle Airport increased by 3.1 per cent to 169,100 tonnes. Amster-dam Airport Schiphol rose by 1.3 per cent to 144,790 tonnes while Heathrow Airport declined by 3.1 per cent to 132,211 tonnes. Luxembourg Airport entered the top five as volumes increased by 9.5 per cent to 71,497 tonnes.

Istanbul’s Ataturk International Airport fell out of the top five as volumes dropped by 24.8 per cent to 50,873 tonnes.

This put it behind Cologne Bonn Airport, which saw volumes increase by 3.5 per cent to 65,413 tonnes and Liege Airport, which rose by 1.9 per cent to 56,946 tonnes.

Between January and November, Frank-furt’s volumes fell by three per cent to 1.8 million tonnes, while Paris Charles de Gaulle was down by 1.6 per cent to just under 1.7 million tonnes. Amsterdam dipped by 0.9 per cent to just under 1.5 million tonnes and Heathrow declined by 0.3 per cent to 1.3 million tonnes. Despite poor performance in November, Ataturk retained fifth place in the year to date figures, handling 684,576 tonnes, an increase of 3.2 per cent.

Gerard Ter Bruggen has been appointed regional director for West and North Europe by Cargolux Airlines after leaving Gulf carrier Qatar Airways.

Ter Bruggen started with Cargolux on 1 Janu-ary and is based in Amsterdam. His area covers the UK, Scandinavia, the Baltic States and the Benelux countries.

Before taking the Cargolux job, Ter Bruggen

(pictured) was the Qatar Airways cargo man-ager for North and Western Europe.

Cargolux executive vice president sales and marketing, Niek van der Weide explains: “We are very pleased to have Gerard in our team of six regional directors in Area two (Europe, Africa, Middle East and Indian subcontinent).

“His vast experience and excellent contact with the major customers are an important fac-tor and will certainly help Cargolux to further expand and strengthen the rela-tionships with our clients.”

Ter Bruggen has more than 35 years of expe-rience in the airline industry, having worked at Martinair, Pan Amer-ican World Airways, Dragonair Cargo and Cargo B Airlines.

Newark cool for United Cargo

UNITED CARGO has opened its TempControl Center at Newark Liberty International Air-port for temperature sensitive cargo.

The facility was opened on 6 January in an event attended by United Cargo president, Jan Krems, and United Cargo senior man-ager of cargo operations at Newark, Jose Rosado. It includes temperature controlled rooms, capacity for 48 RKN units, electrical

connectivity for all units and features to en-sure the units can be moved in and out of the centre as easily as possible.

Krems says: “This new centre represents two things: United Cargo’s commitment to providing the best service possible to Temp-Control customers at our Newark hub and our commitment to remain a worldwide lead-er in the transport of pharmaceuticals and other temperature controlled-commodities.”

Rosado says: “United Cargo has several advantages in our Newark hub, including our extensive widebody network and our experi-enced cargo sales and operations team. But the cool chain business is extremely com-petitive in New York, and that’s one of the main reasons we built this new centre.”

United will also open a centre at Chicago O’Hare and San Francisco. It has added Vi-enna, Austria to the TempControl network.

Cargolux appoints Ter Bruggen in Europe

European airports seevolumes fall 0.6%

aircargoweek.com

ACW 18 january 2016 6

F innair Cargo maintained 2014 vol-umes into 2015 in China, and is expecting a slight improvement for the start of this year, its sales director Asia, Tomi Asikainen (pictured) tells Air

Cargo Week (ACW).Asikainen says: “To and from China the overall

demand levels have maintained at 2014 levels but we have not been strangers to the industry wide yield decrease, which pulls the overall per-formance to negative when comparing to 2014.”

He continues: “We’re expecting a slightly pos-itive development in demand to and from China compared to last year. Current trends suggest the pressures on yields will continue during 2016.”

Finnair operates year-round services to Beijing, Chongqing, Hong Kong, Shanghai and seasonal flights to Xi’an. It will start four times a week services to Guangzhou from 6 May until

29 October. Asikainen says: “Finnair continues to develop its services for Chinese markets and will open a new direct route from its Helsinki hub to Guangzhou with four weekly frequencies between 6 May and 29 October.”

“Guangzhou, which is the third largest city in China with a population of 13 million, is a major trade and transportation centre, and the main manufacturing hub in one of mainland China’s leading commercial and manufacturing regions.”

Finnair’s main import to China continues to be general cargo but pharmaceuticals have increased significantly in recent years. Asika-inen tells ACW: “We’ve seen considerable increase in our pharma export within recent years. Origin China traffic is also mainly general cargo but dangerous goods is also a significant contributor.”

Shanghai services have been helped by the

introduction of the Airbus A350 (pictured) on 21 November, and Beijing received one on 6 January. “[The] A350 has brought a tremen-dous addition to our Shanghai route, on average we’ve gained just over 20 per cent increases in our loads, to and from Shanghai. Beijing fol-lowed as the third A350 route after Shanghai and Bangkok.”

The Chinese market is very important and offers huge opportunities but there is a lot of competition. But Asikainen believes Finnair’s location in Helsinki and its A350s give it an advantage over rivals. “There is a lot of com-petition but Finnair is well positioned to serve the Chinese cargo market thanks to various fac-tors, Helsinki’s ideal geographical location and the well functioning airport enabling punctual

service as well as the introduction of Finnair’s brand-new A350 XWB aircraft on long-haul routes between China and Europe.”

Finnair will be opening its COOL Nordic Cargo hub at Helsinki Airport will help Finnish-Chi-nese trade.

Asikainen says: “In Spring 2017 our new cargo terminal, the COOL Nordic Cargo hub at Helsinki Airport, will open and further boost our service offering with a dedicated 3000 square metre areas reserved for special cargoes, such as pharmaceuticals and perishables.”

Finnair expects slight improvement in ChinaCHINA

Shanghai Pudong international air-Port Cargo terminal (PACTL) has seen volumes increase by 6.5 per cent in 2015 to 1.6 million tonnes.

Exports increased by 4.8 per cent to 947,654 tonne while imports surged nine per cent to 651,657 tonnes. PACTL vice president, Lutz Grzegorz says: “Despite dif-ficult market conditions, we were able to develop our business fully in line with our expectations.”

Grzegorz tells Air Cargo Week (ACW) that he expects another strong year for 2016 with growth of up to five per cent. “I continue to see a positive trend, especially in the import sector. This is due to the recent e-commerce development and the increasing import of con-sumer goods such as perishables, pharmceuticals and other high value products.”

He continues: “The overall mix of commod-ities we handle is quite large. Throughout last year we registered a clear increase in the handling of perishables, pharmaceu-ticals and other high-value articles on the import side.”

In December, volumes increased by three per cent to 141,048 tonnes, with imports rising by eight per cent to 60,988 tonnes but exports fell 0.5 per cent to 80,060.

On 23 November it started trial operations of PACTL Cool Center, a 3,500 square metre facility featuring climate zones for different temperatures with a capacity of 100,000 tonnes a year. Grzegorz tells ACW: “The trial operation of our new cool centre has run smoothly so far and will come to an end very soon.”

He says PACTL regularly redesigns and further automates handling processes.

PACTL has been working on improv-ing the customs processes for imports to reduce throughput times for perishables and phar-maceuticals in Shanghai. He adds: “We support the estab-lishment of a joint IT platform linking all the relevant parties

of the supply chain at Shanghai Pudong international airport.”

PACTL sees 6.5% volumes surge

aircargoweek.com

F inavia and Capital Airports Holding (CAH) have signed a memorandum of understanding (MoU) establishing a sister airport agreement between Helsinki Airport and Beijing Capital Interna-

tional Airport.The parties hope the MoU will develop and strengthen

the connection between Finland and China, particularly between Helsinki and Beijing. Finavia and CAH intend to establish best practices and share knowledge, cre-ate co-marketing activities in respective home markets, exchange personnel and build competence. Staff exchanges between Helsinki and Beijing Capital airports are expected to begin in 2016.

Finavia, Helsinki Airport’s operator, chief executive officer (CEO), Kari Savolainen says: “Cooperation with the largest air-port operator in China is no doubt a remarkable milestone for us. It will contribute to the attractiveness of both operators’ air-ports and to the development opportunities of the Finland-China routes.”

“For Helsinki Airport, it represents an outstanding opportunity to develop a competitive edge regarding the Asian and especially

the Chinese market in comparison to other airports in Northern Europe.”

CAH president and CEO, Liu Xuesong, who is also chairman of Beijing Capital International Airport, says: “We value highly the establishment of sister airport relationship with Finavia. We see Finavia as one of the leading and most competent airport groups … We look forward to our cooperation.”

Finnair operates daily flights between Helsinki and Beijing using an Airbus A350 and direct services to Chongqing Airport, also managed by CAH.

The operators of Hong Kong International Airport and Shenzhen Bao’an International Airport have signed an agree-

ment to optimise airspace in the Pearl River Delta (PRD) region.

Airport Authority Hong Kong, Hong Kong’s operator, and Shenzhen Airport Management Company, which manages Shenzhen, signed the agreement to support each other in their medium and long-term expansion plans. The agreement was signed by Airport Authority chief executive officer, Fred Lam, and Shenzhen Airport Management Company president, Wang Yang.

Lam says: “The agreement has been signed after many rounds of meetings between the two parties. The strengthened cooperation between the two airports can enhance the optimisa-tion of airspace resources in the PRD region.”

“The two airports will also support the medium and long-term expansion plans of each other which will facilitate the long-term development of both airports and contribute to the economic advancement of the PRD region.”

The airports will set up a working group to regularly review and follow up on projects proposed in the agreement. They will also hold seminars to share experience in marketing and interna-tionalisation of airport management.

Airports sign agreements to improve business and expand

7ACW 18 january 2016

CHINA

Chinese carriers are upgrading their fleets with new air-craft as they look to expand internationally to cater for growing domestic e-commerce demand.

On 7 January, Air China finalised its order for six Boeing 777-300 extended Ranges (eR), to modernise its fleet and expand its international network.

Boeing Commercial Airplanes senior vice president north east Asia sales, ihssane Mounir says: “The 777-300eR has consistently proved its value as a long-haul flagship for our customers around the world, making it the preferred choice for Air China’s international expansion.”

in December, China Southern Airlines committed to purchasing 80 Boeing 737s, of which 30 will be next Gen-erations and 50 will be MAXs, worth $8.8 billion.

Also in December, SF Airlines took delivery of its first Boeing 767-300 Boeing Converted Freighter (BCF).

sF Airlines ordered the 767 to meet ever rising demand for e-commerce in China. The Chinese express market is forecast to be among the fastest growing segments in air cargo, largely due to e-commerce while Boeing predicts domestic Chinese services to increase by 6.7 per cent an-nually over the next 20 years.

sF Airlines vice president of maintenance and engi-neering, Xi Liang says: “Our goal is always to provide our customers with a higher quality, highly efficient express service. This is a goal we believe the 767BCF will help us accomplish. With its larger capacity and higher fuel efficien-cy, we look forward to the 767BCF ensuring quick shipping to our customers.”

sF Airlines is not the only Chinese carrier purchasing con-verted freighters for the e-commerce sector. in December, China Postal Airlines (pictured) ordered 10 Boeing 737 next Generation BCFs and in september YTO Airlines com-mitted to the 737-800 BCF pending programme launch. in addition to the 10 737BCFs, China Postal Airlines also or-dered seven Boeing 757-200s to be converted.

China Postal Airlines president, Yufeng Li says: “This is a historic order both for China Postal and Boeing. The 737-800 BCF will bring to our freighter fleet more advanced avionics, better fuel efficiency and lower operating costs that will ensure China Postal’s continued success as a lead-er in the industry.”

Boeing Commercial Aviation services vice president of sales, Rick Anderson says: “We are confident the 737-800 BCF with its more advanced avionics, better fuel efficien-cy and lower operating costs will provide the airline with a competitive advantage in the marketplace.”

Carriers modernise their fleets

aircargoweek.com

ACW 18 january 2016 8

R io Galeao–Antonio Carlos Jobim International Airport’s cargo busi-ness goes from strength to strength and 2016 is set to be a banner 12 months with volumes to rise as Rio

de Janeiro welcomes the Olympic Games.Rio Galeao Cargo’s director, Patrick Fehring

says in February the Brazilian airport will open a new 4,300 square metre domestic cargo ware-

house, which will house operations for LATAM Airlines, Avianca, GOL and Azul.

“This will significantly improve the customer proposition for these carriers. On the back of these improvements we will explore opportuni-ties for domestic cargo growth with our airline partners,” Fehring says.

The airport is investing $6 million into its cargo facilities, and last year spent $5 million on a pharmaceuticals complex, which has boosted efficiency and will drive growth.

Fehring explains: “The $3 million refur-bishment of our exports and domestic cargo warehouse is nearly completed, significantly improving working conditions for our airline partners and government agencies.

“In 15 June, we inaugurated our new pharma centre, a 11,000 square metre, facility which has tripled our pharma capacity to meet the grow-

ing demand from pharma importers.“We are planning to make further investments

in the expansion and upgrade of our pharma complex this year.”

The airport is pursuing the International Air Transport Association CEIV Pharma Certifi-cation and is the first Latin American (LATAM) airport to have signed up for it. It hopes this will significantly improve competitiveness once it is gained around August this year.

2015 was a challenging year for the LATAM air cargo market and Brazil in particular, due to political instability as well as a decline in eco-nomic activity. The airport says the Brazilian market as a whole suffered and it saw a slump in its international volumes.

Fehring explains: “However, we managed to grow our share of our home market Rio de Janeiro in 2015. As Brazil’s second largest inter-national airport, RIOgaleão Cargo can count on a stable bellyhold network and does not depend on freighter capacity, which quickly adapts to market conditions. We managed to reduce freight clearing time by 20 per cent in 2015,

improving our attractiveness for customers that may have opted for another gateway in the past.”

The airport’s main exports in 2015 were pharma and perishables (mostly papayas and fish), but also textiles, and oil and gas parts. Its man export markets are Europe, the US and the rest of LATAM. On the import side, Europe represents 40 per cent of volumes, and North America 32 per cent. Oil and gas and pharma represented 19 per cent and 13 per cent respec-tively of import volumes in 2015.

Fehring says: “These market segments are set to grow above average once the economy recov-ers and our infrastructure investments reflect this. We see market share opportunities in 2016 in machinery and technology.”

The 2016 Olympic Games in Rio is set to gen-erate significant volumes this year, Fehring says. “We are expecting some 20-25 charters with general cargo in both directions and an addi-tional 11 freighters with horses for which we have already adapted our infrastructure.”

And the airport could welcome another freighter in 2016, to add to the two a week from Miami. Fehring says it is discussing with operators about a regular weekly European service.

Brazilian hub getting set for a big yearWORLD AIRPORTS

Challenging 2015

SOME European hubs saw freight slumps in 2015, as weaker than expected global trade and economic woes hit volumes.

However, some grew strongly and among them was Brussels Airport (pictured) which says it saw a “vigorous” 7.8 per cent growth in 2015, driven by the full freighter segment and express services.

Brussels says the rise to 489,303 tonnes is an “exceptionally strong result” in com-parison with other European airports and as airfreight was bleak in Europe in the last 12 months.

Brussels Airport Company chief execu-tive officer, Arnaud Feist says growth was thanks to the arrival of four new cargo carriers. He adds: “2016 is looking very promising, with the launch of several new destinations, by Brussels Airlines, among others, which is launching a direct flight to Toronto in March and will be increasing its flights to Africa in the course of the year, and United Airlines will be offering a sec-

ond daily flight to New York this summer.”In 2015, bellyhold cargo volumes were

almost the same as in 2014, but express services and full-freighter cargo saw strong growth of seven per cent to 187,700 tonnes and 18.1 per cent to 121,937 tonnes, re-spectively, compared to 2014.

The gateway says it should be noted Ethi-opian Cargo stopped flying from Brussels in November. This contributed to full-freighter volumes dropping by 25 per cent in the last two months of the year.

Meanwhile, fellow European hub Heath-row Airport saw its cargo volumes fall 0.2 per cent in 2015. The gateway handled 1.49 million tonnes of freight last year, a slight decline on figures in 2014.

However, in December, cargo volumes were up 0.8 per cent, with increases driven by growth from emerging markets – nota-bly, Nigeria up 50 per cent, China up 20 per cent and Turkey up 20 per cent.

Heathrow announced plans in November to invest £180 million ($277.6 million) to double its airfreight volumes, by improving infrastructure and cargo processes to make freight operations more efficient.

In December, the UK government put off a final decision on whether to expand Heath-row for another six months. An independent assessment will be made on the impact that expansion would have on the environment.

Brussels flying, Heathrow stable

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A frica is a continent of opportunity, yet air cargo growth rates are still below what some observers think the region is capable of.

Economic development and intra-Africa trade continue to grow, but there is more potential to be

unlocked, as market expansion is held back by political uncer-tainty, a lack of infrastructure and logistics investment.

One gateway expanding its cargo offering is Johannesburg’s O.R. Tambo International Airport in South Africa, Africa’s larg-est cargo hub that is especially growing its international tonnage.

Up to the end of November 2015, the airport saw a six per cent increase in international cargo, but a slight decrease in domestic cargo as the country’s economic woes have an impact. All in all, O.R. Tambo saw a 4.5 per cent rise after 11 months of last year.

The best performing trade lanes into the airport are Europe, Asia and the US, which are the biggest trading partners for South Africa.

Operator, the Airports Company South Africa (ACSA) explains there is many kinds of cargo being transported through the hub, which includes perishables, pharmaceuticals, and automotive, but is not limited to these commodities.

The airport has ambitions to grow tonnage in 2016 and ACSA tells Air Cargo Week: “ACSA is working very closely with munic-ipalities our airports are situated in to strengthen aerotropolis developments around their airports, specifically at O.R Tambo International.

“The Ekurhuleni Metropolitan and the Gauteng Province are in the process of developing infrastructure for cargo and logistics around the airport, working very closely with O.R. Tambo Inter-national Airport.

“With this collaborative approach between local and provincial government and the airport, we are confident of attracting more businesses into the region and into our airport.”

ACSA says it is evaluating several options to increase the capacity at O.R. Tambo, and has been approached by new carri-ers, including freighter and bellyhold airlines and expects new entrants into the gateway during 2016.

Many observers see the key to growth in Africa is rising intra-Af-rica air cargo trade, and encouragingly, ACSA saw an increase in intra-African traffic from its airports and believes this trend will

continue through 2016 and beyond.There are opportunities and chal-

lenges in equal measure for the air cargo industry in order to grow in Africa, ACSA believes: “South Africa and O.R. Tambo is the cargo hub of Africa and we will do everything on our power to remain the cargo hub for Africa.

“Close cooperation between government, municipalities, cities and airports is needed to ensure an increase in industrial develop-ment but also to ensure smooth and efficient operations for cargo and logistics.

“South Africa is privileged to have amongst other feats, an advanced customs system, which can be compared to some in Europe. This is one of the essential parts in running an efficient cargo operation.”

It is clear that O.R. Tambo will be growing its cargo volumes in the future, as it is focuses on making freight operations more efficient and sees air cargo as a vital revenue generator.

9ACW 18 january 2016

WORLD AIRPORTS

ISTANBUL NEW AIRPORT is set to open in the spring of 2018 and will give a major boost to Turkey’s freight capabil-ities and air cargo industry.

When complete the 10.2 billion euros ($11 billion) gate-way will improve cargo infrastructure for the likes of Turkish Cargo and Pegasus Cargo, giving them the opportunity to grow volumes, cargo handling abilities and route networks.

Located 35 kilometres from the centre of Istanbul on a 7,650 hectare site close to the Black Sea, the airport will replace stretched Atatürk Airport and provide the capacity needed to support the continued rapid growth of air traffic and the hub operations of Turkish Airlines.

The airport will initially boast three runways, which will rise to six runways once the first of two planning developing phases is activated. It is one of the largest infrastructure projects to be undertaken in the history of Turkey.

Istanbul New Airport will be one of the world’s biggest hubs and the first artists impression of the air traffic control tower has been released. The 96-metre high tulip shaped tower (pictured) will be the symbol of the Turkish gateway and the design by AECOM and Pininfarina has been chosen by the operating consortium IGA. Construction is scheduled to begin in May and set to be completed in October 2017.

Growth plans

Africa’s busiest cargo hub looking to grow in 2016

Istanbul New Airport on track

aircargoweek.com

ACW 18 january 2016 10

J ettainer had a prolific 2015 and the unit load device (ULD) management firm has lofty ambitions this year.

The subsidiary of the Lufthansa Group signed up a further five new airlines last year, taking its total to 18 and says it won every tender it took part in.

Jettainer’s managing director, Carsten Hernig says the company was able to fully meet its target figures in 2015 and is continuing its ambitious growth path into this year. There has been a growing trend from carriers over the last 12 months once again, to outsource the management of ULD’s and Hernig sees this will continue.

“Still, we experience that more and more airlines identify the outsourcing of their ULD management as one of the last opportunities to increase efficiency and reduce cost. This is of course due to the ongoing cost pressure in cargo and passenger business. However, as we continuously gain new customers, this trend is also triggered by our increasing presence in the global market,” Hernig says.

Jettainer has set its sights on winning new ULD contracts and as it is working for more and more recognised airlines, Hernig says its

perception is growing: “We also figured out potential customers value our dedicated ULD fleets as well as our dedicated teams based at the airline’s major hubs. We hope this will help us further increasing our presence in target markets such as Australia, South America and Africa,” Hernig says.

He explains one challenge is developing awareness and to educate all parties involved in the supply chain regarding protection of ULDs and prevention of potential damages as these represent a “significant cost factor”.

Jettainer’s new facility JettHub at Frankfurt Airport has helped increase efficiency and transparency, Hernig says.

He adds the firm expects a rising d e m a n d for efficiency advantages and need for new inno-vations in 2016. He expects Jettainer to gain more ULD contracts in 2016, as it has a full sales pipeline, but was unable to name potential clients on the radar.

GERMANY

LUFTHANSA CARGO carried 1.6 million tonnes of freight in 2015, which was a slight year-on-year decline in volumes on 2014, but IT says customer satisfaction levels re-main high.

The carrier says the total volume declined slightly in a “challenging market environ-ment” and it carried around two per cent more freight the previous year.

Lufthansa Cargo increased the capaci-ty offered by two per cent over the last 12 months. However, with sales falling slightly, capacity utilisation was also down. The full-year load factor was 66.3 per cent, down 3.4 percentage points.

Lufthansa Cargo chief executive officer and chairman of the executive board, Peter Gerber says: “Last year was not an easy one for the airfreight industry. Turbulence in the Chinese market and the strong US dollar, that affected a lot of industries, stretched us all to our limits. Strikes called by the Vereinigung Cockpit Pilots Union and the cabin crew union UFO also weighed heavily on us at Lufthansa Cargo.”

Lufthansa Cargo continued to invest in its own product and network last year, adding new routes to the likes of Turkmenistan, Vietnam and Brazil to its schedule. It says the high customer satisfaction level of the previous year was maintained. Gerber adds Lufthansa Cargo will remain flexible and op-erate close to the market in 2016.

The Lufthansa subsidiary is withdraw-ing two MD-11 Freighters from its fleet to further increase capacity utilisation on the freighter routes. The airline is offering its customers flights of its five Boeing 777 Freighters as well as 12 MD-11Fs. On top of this, Lufthansa offers capacity via its Aero-Logic subsidiary, which has eight Boeing 777Fs.

Lufthansa Cargo customers can also make use of the belly capacities of Lufthan-sa and Austrian Airlines.

Jettainer targets more contractsETIHAD AIRWAYS and airberlin are appeal-ing the German government decision to reject 29 route codeshares, accusing it of caving into protectionist tactics and lobby-ing from Lufthansa.

The Administrative Court of Braunschweig agreed the German Ministry of Transport was entitled to reject the codeshares. A notice of appeal has been filed in the high-er administrative court in Luneburg, with Etihad saying it is committed to doing busi-ness in Germany.

Etihad Airways president and chief ex-ecutive officer (CEO), James Hogan says: “We will fight all the way to protect our in-vestment, to protect our partnership with airberlin and to protect competitive choice in German air travel.”

Airberlin CEO, Stefan Pichler says Lufthan-

sa would be the biggest benefactor of the codeshare ban. “Airberlin is Lufthansa’s sole competitor in the German domestic market. We keep the competition honest, strong and effective as otherwise Lufthansa would have a monopoly which would be di-sastrous for German consumers.”

Etihad took a 29.2 per cent stake in air-berlin in 2011 with support from the German regional and national governments. Hogan says the codeshare had operated for years without any concerns over competition or consumer choice.

Codeshares rejected

Volumes fall for Lufthansa Cargo

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NEWSWEEK

The European and transatlantic air cargo markets have a new force in the shape of Norwegian Cargo, which is putting more emphasis on its freight operations.

Norwegian Cargo head, Bjørn Erik Barman-Jens-sen tells Air Cargo Week cargo is increasingly a key part of the airline’s long-term international growth. “It’s no secret we are an innovative low-cost carrier targeting passengers to fly with us at affordable fares, but cargo also presents an additional revenue stream helping us offer affordable low fares to our passengers,” Bar-man-Jenssen says.

He says the carrier’s low-cost long-haul flights between Europe and the US are unlock-ing new opportunities for Norwegian. “We are transitioning from a Nordic airline to a global carrier and with this in mind, our awareness is increasing among freight forwarders in key markets like the UK and US.”

Next year, the carrier takes delivery of four Boeing 787-9 Dreamliners, which offer more capacity than the Boeing 787-8 Dreamliners, and capable of carrying up to 20 tonnes of freight. Barman-Jenssen explains this extra capacity, gives forwarders on both sides of the Atlantic more options and flexibility.

He adds: “Not only is our robust expansion creating new opportunities but we also value the importance of mutually beneficial part-nerships. Our collaboration with Jan de Rijk Logisitics has expanded our road network in the UK and Europe while flying international

airmail for Royal Mail has also raised our profile. As we continue to grow and enhance our airline in 2016, there is no doubt Norwe-gian Cargo will continue to unlock new ways that provide great value and services to our customers.”

The Nordic air cargo market is seeing chal-lenging times ahead because of the low oil prices, Barman-Jenssen explains, and the depressed market has “unsurprisingly” resulted in lower volumes causing shippers to look out-ward to other markets for opportunities.

There are opportunities for Norwegian with its strong base at Gatwick Airport and Bar-man-Jenssen says e-commerce is taking off in the UK and it is seeing high demand for inter-national mail as Royal Mail, which dispatches goods for major retailers, who benefit from its long-haul capacity from London to the US.

“Since we launched long-haul flights in 2013, we‘ve seen consistent growth in airfreight ship-ments, which shows despite a challenging home market, our long-haul expansion is curbing its impact and benefiting Norwegian’s position in the market,” he says.

Cargo volumes through Gatwick will get a boost in 2016 as Norwegian launches services to Boston from 27 March, to Oakland/San Fran-cisco on 12 May while services to Los Angeles will rise from three a week to five in May. Bar-man-Jenssen says with Norwegian’s combined short-haul and long-haul capacity, Gatwick is giving it clearance for future growth.

DHL to buy e-commerce stakeDEUTSCHE POST DHL GROUP has acquired a minority stake in French e-commerce lo-gistics specialist Relais Colis.

The German freight intregrator has bought a 27.5 per cent holding and says it will enhance access for DHL divisions to the French e-commerce market, which is Europe’s third largest.

Investment will also support further de-velopment of Relais Colis pick-up point

network and specialised delivery services to e-commerce customers.

Relais Colis explains it wants to en-hance access for its DHL divisions and their customers.

DHL says the move will allow its divisions, primarily DHL Parcel, to open up additional channels and expand its offering of val-ue-added logistics services for e-commerce customers to the French market.

Relais Colis will benefit from additional volumes of DHL’s extensive network and the knowhow of a leader in the German parcel market. Relais Colis is a trusted partner of a number of top-tier e-commerce players, thanks to its range of specialised solutions, including pick-up point deliveries and home deliveries for larger packages.

It employs about 450 people, with a net-work of three national hubs, 22 branches and 4,800 pick-up points.

Aircraft carrying post crashes in NorwayAN aircraft carrying post and other parcels for Norway Post has crashed on the border of Norway and Sweden.

The Bombardier CRJ200PF, owned by West Atlantic, operated on behalf of Posten Norge, was on its way from Oslo to Trom-so when it declared a mayday at 23.31h on 7 January. The crash site was located at 03.10h on 8 January near the Norwegian border by Lake Akkajaure in Sweden’s Lap-plandsfjallen. It had been transporting mail, small parcels and express parcels.

Posten Norge chief executive officer, Dag Mejdell says: “Although we still do not have a complete overview of the accident, there

is no doubt that this has been a very serious accident. Our thoughts are with the families and colleagues of the missing pilots.”

The aircraft was built in 1993 and had flown 38,601 hours since then. West At-lantic, based in Gothenburg, Sweden, had operated the aircraft since 2007 and flown it for about 10,000 hours. There were two crew members on board, the captain was 42 years old and had been with the company since 2011, while the 34 year old first of-ficer had been with the airline since 2008.After the accident Posten Norge and West Atlantic cancelled a planned mail flight to Norway’s Svalbard archipelago.

Norwegian looking to grow in 2016

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