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CEIV pharmaattained by PCF

challenges galore in africa

cut the fat, not the muscle

hactl sees e-commerce growth

air atlantaicelandicperforming well

The weekly newspaper for air cargo professionals

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THE Perishable Centre Frankfurt (PCF) has gained the International Air Trans-port Association’s Center of Excellence for Independent Validators (CEIV Pharma) certificate.

Europe’s largest airfreight centre for temperature-controlled logistics handles everything from fish, meat, fruit, vege-tables and flowers, and an increasing amount of pharmaceutical products.

PCF managing director, Rainer Witten-feld says: “Health is man’s most valuable possession. We are aware of this respon-sibility and have successfully met the highest standard in the handling of fre-quently vital medication. We are proud to continue to provide our customers with first class handling of pharmaceutical products at the highest standard with this certification.”

The centre handles around 120,000 tonnes of airfreight and works with processing authorities, airlines and for-warders at temperatures ranging from -25 degrees Celsius to +25 degrees Celsius.

Cargo is moved from aircraft directly into the 20 temperature zones spread over 9,000 square metres with direct ramp access and to road feeder services.

Global airfreight volumes inched up slightly by one per cent in April this year, according to the latest statistics from the Airports Council International (ACI).

The airport association says global trends are less optimistic as compared to air passen-ger markets.

In Asia-Pacific, air cargo grew year-on-year (YOY) by 1.3 per cent, while in Europe saw YOY growth of 5.4 per cent, the Middle East was up 4.9 per cent, Africa was flat with no growth or decline, Latin America-Caribbean was up 1.5 per cent, but North America is estimated to fall by 3.2 per cent.

ACI explains: “Out of top 20 airfreight hubs, seven airports reported growth rates of one per cent or less. Because airfreight is highly

concentrated, with the top 20 airfreight hubs occupying almost half of global volumes, this weak growth among the major airports pulls down the global growth figure.”

Significant airfreight volume losses were seen at Istanbul-Ataturk, Jakarta, Kuala-Lum-pur and Rio de Janeiro-Galeão, which saw falls of 5.5 per cent, 35.2 per cent, 15.6 per cent and 44.3 per cent, respectively, but there was

impressive growth of 19.1 per cent at Doha and Dubai 4.8 per cent.

At the country level, ACI says the three larg-est markets balance each other out and it grew by 3.7 per cent in the US, three per cent in China and remained flat in Japan at 0.3 per cent. Ger-many and India remain promising with 4.6 per cent and 4.5 per cent growth in volumes respectively.

freighter fleet expansion on the Ethiopian radar

Ethiopian Cargo is aiming to grow its freighter fleet to 18 aircraft by 2025 from the eight it operates today.

Speaking at the Africa Air Cargo Summit 2016 in Addis Ababa on Tuesday, 21 June, the carrier’s chief executive officer, Tewolde Gebramariam said growing its fleet is a key part of its 2025 Road-map strategy, which it has drawn up to plot where it wants to be in a decade’s time.

Ethiopian’s other targets by 2025 to grow its cargo business are to increase revenue from the $425 million it achieves today to $2 billion; up tonnage to 820,000 tonnes from the 350,000 it han-dles now and boost the number of freighter destinations it serves to 37 from the 35 it does now.

Gebramariam said Ethiopian, Africa’s largest airfreight carrier, is aiming to achieve $200 mil-lion in annual profit by 2025 and explained: “We want Addis Ababa to be the gateway for the continent of Africa.”

All these developments he says will be achieved through the strat-

egy that includes “four pillars” - investing in its fleet, infrastruc-ture, ICT systems, people and processes.

Gebramariam also explained to delegates in Africa that Ethiopian’s new Cargo Terminal 2 at Addis Ababa, which will be the largest air cargo facility in Africa and it is investing $115 million in - is now 50 per cent complete.

He noted it is being built to meet increasing demand and growth and it will be opened in

two phases. Each phase will give it 600,000 tonnes.

It now has a terminal capable of handling 250,000 tonnes. The first phase will open in May 2017 and the second when demand is there.

Gebramariam also explained Ethiopian is targeting new busi-ness between Europe, Asia and to Africa and is looking at developing a pharma centre in Addis Ababa.

Business target areas are door-to-door logistics services, and e-commerce volume growth

through partnerships with inte-grators like DHL, UPS, Aramex and FedEx.

Ethiopian has its main hub in Addis Ababa, a second in Lome, Togo and is developing a third hub in Lilogwe, Malawi and will soon be the first African carrier to receive an Airbus A350.

Of the state-owned carrier’s rev-enues, cargo makes up 15 per cent, compared to 85 per cent on the passenger side.

Speaking before Gebramariam was Minister of Transport of the Federal Democratic Republic of Ethiopia, Wokneh Gebeyehu who said that Africa is on the rise and is one of the fastest growing regions in the globe.

This was due to an expanding middle class, and continued good economic growth, while he also hailed the importance of air cargo to Africa and Ethiopia, but said it is vital airfreight is moved as easily and fastest in future as possible.

Addis Ababa has more interna-tional airline connections, 85, than any other city in Africa, and is fol-lowed by Casablanca with 82 and Cairo with 72.

slight rise in global airfreight volumes, aci reports

Volume: 19 Issue: 25 27 June 2016

aircargoweek.com

NEWSWEEK

2 ACW 27 june 2016

KENYAN cargo handler Siginon Aviation has renewed its ground handling agreement with Singapore Airlines Cargo (SIA Cargo) at Jomo Kenyatta International Airport (JKIA) in Nairobi for three years.

The new deal follows a rigorous audit of Siginon’s processes, facilities and systems in the newly opened air cargo terminal on the airside of JKIA.

Siginon Aviation has handled SIA Cargo at JKIA for over a decade, and says the rela-tionship has been renewed repeatedly due to the handlers achievement of high service standards in ground handling.

Siginon Aviation divisional manager, Jared Oswago says: “We are committed to consis-tently serve our airline customers with exceptional service that is benchmarked against global standards of service.

“The renewal of the ground handling agreement by Singapore Airlines reaffirms our com-mitment to ensure customer satisfaction and business growth.”

Siginon Aviation launched operations in its state of the art air cargo terminal in 2014 as well as acquired a series of global certifications.

CHINESE e-commerce firm BFM has entered into a memorandum of understanding (MoU) with DTDC, India’s largest express delivery network.

This MoU also includes DCG Tech Limited, an e-commerce tech company founded by DTDC’s promoters and directors, to jointly develop an e-commerce business in India.

According to the MOU with a non-compete clause, a joint venture will be formed to build an e-commerce platform. The co-operation aims to engage the experiences and resources of the companies to allow sellers mainly from India and China to introduce their products to global buyers.

A new online platform (BFMe.in) will be set-up targeting logistics and fulfillment with the support of DTDC’s international network. BFM will provide marketing and supplier resources in China.

Indian and Chinese firms sign e-commerce MoU

DHL Express has launched the larg-est express facility in Myanmar – to support the nation’s fast-growing economy which is forecast to rise

by 8.5 per cent in 2016.Located in Yangon and occupying over

50,000 square feet of space with a built-up area of 32,500 square feet, the facili-ty’s expansive handling capacity is set to support Myanmar’s strong import and domestic demand.

DHL Express country manager for Myan-mar, Mark Ong says: “DHL launched this facility to cater to Myanmar’s increasing logistics needs, driven by growth sectors such as infrastructure, oil and gas and gar-ment industries. It is designed to handle massive shipment volumes expected over the next decade – to the year 2025 and beyond.

“The new service centre is located close

to the airport – which enables us to ensure faster deliveries for more customers, con-necting them to our global network of over 220 countries and territories worldwide and our global standards of service and quality.”

DHL Express executive vice president of commercial for Asia Pacific, Aladad Khan notes as Myanmar continues to develop,

Myanmar’s exports and imports in the year ending March 2016 are expected to grow by 12 per cent to $12.5 billion and 21 per cent to $16.6 billion respectively, which will “open up a myriad of opportunities within the region”.

The DHL Express Myanmar network, now includes four service points, three ser-vice centres and a fleet of over 30 vehicles.

DHL opens new express facility in Myanmar

SIA Cargo renewsagreement with Siginon

aircargoweek.com

NEWSWEEK

4 ACW 27 june 2016

AirBridgeCargo grows 31% in May

AirBridgeCArgo Airlines (ABC) has continued strong growth with volumes in-creasing 31 per cent in both May and the first five months of 2016.

The Russian carrier carried 50,482 tonnes in May and 238,154 tonnes in the first five months, assisted by expanding its network through new and increased routes. ABC has started a Houston – Abu Dhabi

route and started flights to Africa via its partner, CargoLogicAir. The existing Singa-pore and Munich services have benefitted from a third weekly frequency each.

ABC executive president, Denis Ilin says: “Our figures for May are a good indicator of our performance as they demonstrate that our sales and business forces are targeted in the right direction. Despite flat market conditions and depressive yields,

we have seen confident support from our clients and this has bolstered our opera-tions and ensured further growth.”

ABC increased its coverage in China on 16 June with twice-weekly flights to Chongqing, operating on Wednesdays and Fridays. Chongqing is ABC’s sixth Chinese route after Beijing, Chengdu, Hong Kong, Shanghai and Zhengzhou.

Cargolux Airlines International has expanded its product portfolio with CV Select and CV Select+, giving preferred access to premium capacity and vastly

reduced cut off times.CV Select gives preferred access to premium

capacity and booking commitment, while CV Select+ reduces cut off times before departure to 30 minutes before shipments have to arrive at the airport.

The products were announced at the Air Cargo China tradeshow in Shanghai.

At the show, Cargolux also gave updates on the progress of its Chinese joint venture, Car-golux China, which is expected to take off in late 2017.

Cargolux also released provisional time schedules for Cargolux China, which includes flights to the US and Mexico, Australia, Japan and South Korea, Vietnam and Bangladesh.

Fedex has reduced its losses in the fourth quarter of 2016 to $70 million as it cel-ebrates “a historic year of significant accomplishments”.

The company reduced its losses from $895 million in the same period of 2015, while revenue increased from $12.1 billion to $13 billion.

FedEx says results were helped by pro-gramme initiatives at FedEx Express and volume growth at FedEx Ground while an additional operating day and fuel costs also helped.

For the 2016 fiscal year, FedEx saw reve-nue increase to $50.4 billion and net income was up to $1.8 billion helped by programme initiatives at FedEx Express, e-commerce growth and fuel costs.

FedEx chairman, Frederick Smith says: “Fiscal 2016 was a successful year for FedEx in many ways, of particular note was our cor-porate operating margin improvement. Our May 25 acquisition of TNT express capped a historic year of significant accomplishments

that benefited shareowners, team members and customers, and strongly positions FedEx for long-term profitable growth.”

During the fourth quarter, FedEx Express revenue increased marginally to $6.72 billion while operating income was up 27 per cent to $757 million.

FedEx Ground saw revenue rise by 20 per cent to $4.3 billion and operating income was up nine per cent to $656 million due to higher volumes and increased revenue per package.

FedEx Freight saw revenue increase by two per cent to $1.6 billion and operating income stay at $137 million, as increased salaries and employee benefits offset higher revenue and improved efficiency.

FedEx completed the 4.4 billion euro ($5 billion) takeover of TNT Express on 25 May.

At the time of the acquisition, Smith com-mented: “The timing of this historic event is important, particularly in the current market environment where global e-commerce is growing at double-digit rates.”

Cargolux expands product portfolio

2016is a “historic year” for FedEx

aircargoweek.com

NEWSWEEK

5ACW 27 JUNE 2016

Developing intra-African networks is essential to grow the continent’s air-freight market and new agreements set to come into play will give this a significant boost.

Boeing’s Thomas Crabtree, who analyses air cargo markets, told delegates at the Africa Air Cargo Summit in Addis Ababa on 21 June that the African market has been growing from five to seven per cent over the last few years, but only six per cent of the volume is intra-African.

The biggest four intra-markets in 2013 he said were South Africa to Kenya, Ethiopia to Nigeria, Kenya to Nigeria and South Africa to Nigeria.

Ethiopian Cargo’s director of global cargo sales and services, Berhanu Kassa told delegates: “Intra-Africa is growing and freighter services will play a key role to intensify this.”

He added: “African carriers can form different levels of cooper-ation to develop the intra-African network for the benefits of the continent.” His airline is adding to its hub in Ethiopia by opening hubs in Togo and Malawi.

Astral Aviation’s chief executive officer, Sanjeev Gadhai felt intra-African networks are a big opportunity for airlines, but explained: “African carriers needs to invest in more freighters and expand as that is what is required to grow the intra-African market.”

He also told delegates the Single African Air Transport Mar-

ket, which is set to be active next year and has been signed by 20 countries will have a positive impact and along with the Tripartite Freed Trade Area, which includes 26 countries and is the biggest free trade agreement in the world - will drive intra-African trade and networks.

But Gadhia warned: “It is tough for African airlines as we are feeling the impact of foreign carriers (such as Emirates, Qatar Airways, Turkish Airlines) operating increasing services and bringing capacity into Africa.”

Kassa said the main intra-African network commodities Ethiopian is seeing is agricul-tural products and manufacturing goods, while Gahdia said Astral is handling lots of perishables, motor vehicles and an increasing amount of consumer goods, as the continent’s middle

class develops.One of main concerns raised though was the high number of

one-way trade lanes on intra-African routes due to an imbalance of imports and exports between African countries and this is a major challenge facing carriers.

Intra-African network development vital for the continent’s market

PERISHABLES is the largest cargo sector in Africa and a vital market for air cargo operators.

Delegates at the Africa Air Cargo Summit in Addis Ababa heard on 22 June from AFKLM-Martinair Cargo director of Eastern and Southern Africa, Noud Duyzings about 2.7 mil-lion tonnes are moved from Africa to the rest of the world, more than twice the amount of general cargo and 240 per cent growth over six years. Kenya is the largest market with 36 per cent, followed by Egypt and Ethiopia.

Airflo Panalpina managing director, Conrad Archer says its moves 99 per cent of perishables from Africa on airfreight. 93 per cent of these are flowers, three per cent vegetables like peas and beans and other perishables make up the rest.Export markets are Netherlands (73 per cent), the UK (17 per cent), South Africa (two per cent) and other regions the rest.

Perishables vital for air cargo

Challenges galore in Africa

AFRICA’s air cargo market faces a raft of challenges, despite posting good growth over the last few years.

Kenya Airways Cargo commercial director, Peter Musola told delegates in the session ‘Africa – the Big Picture’ at the Africa Air Cargo Summit in Addis Ababa on 21 June these in-clude safety and security, a lack of market access, poor air cargo infrastructure, high production costs – such as the cost of fuel - 21 per cent higher than the world average.

Other challenges are complex Customs regimes, corruption and poor governance and volatility of currencies, giving an ex-ample of Nigeria, which has suffered by plunging oil prices and owes $0.5 billion to foreign airlines.

Musola noted Europe and the MESA (Middle East and South Asia) account for 90 per cent of air cargo volumes into and out of Africa. He said market is dealing with low load factors and overcapacity.

The International Air Transport Association’s (IATA) region-al director for Africa, Sidy Gueye also explained to delegates there has been pressure on yields and revenues due to rising capacity in the marketplace. In April, available freight tonne kilometres surged by 25.6 per cent year-on-year, but the load factor dropped to 25.7 per cent.

AFRAA secretary general, Elijah Chingosho felt airlines must focus on e-freight to grow business performance to minimise costs via more paperless processes.

Africa’s electronic air waybill penetration was 53.4 per cent in April, below IATA’s 2016 target of 56 per cent, but above the global average in April of 38.3 per cent.

aircargoweek.com

ACW 27 JUNE 2016 6

The seventh Air Cargo China exhibition and conference at the Shanghai New International Expo Centre from 14-16 June was arguably the most successful yet.

Thousands of visitors passed through the gates to discuss China, one of the world’s most dynamic markets in transport logistics, and the most thriving in the air cargo industry.

Air Cargo China was part of transport logis-tic China and organised by Messe Muenchen International. Speaking at the opening cer-emony, member of the management board, Gerhard Gerritzen hailed the rise of the event and the interest from both international and domestic logistic companies.

This year, Air Cargo China featured more than 60 exhibitors from across the globe while the number of local logistics service providers con-tinue to increase.

Exhibitors included Emirates SkyCargo,

Saudia Cargo, Qatar Airways Cargo, Turkish Cargo, Brussels Airport, Cargolux, and Air Asia.

Russia, China’s largest trading partner, this year became the first partner country for trans-port logistic China, Asia’s biggest logistics event.

Air Cargo China featured three conference sessions. Reviews of each are below and on page seven.

The prestigious Air Cargo Week World Air Cargo Awards in nine categories also took place at the Kerry Hotel on 15 June - celebrating air cargo excellence.

The luxurious Shanghai Ballroom was the venue, seeing nine rounds of cheering and applause for the accolades up for grabs.

Before the sumptuous dinner, the audience of more than 350 air cargo professionals were treated to Chinese acrobatics, a Broadway jazz dance and other entertainment acts.

Winners included Hactl (Hong Kong Air

Cargo Terminals Ltd) which won Air Cargo Handling Agent of the Year, Air Charter Ser-vice (Air Cargo Charter Broker of the Year), Brussels Airport (Airport of the Year), Kales

Airline Services (Air Cargo General Sales Agent of the Year), Saudia Cargo (Air Cargo Industry Achievement Award) and Etihad Cargo (Cargo Airline of the Year Award).

Shanghai the epicentre of air cargo debateAIR CARGO CHINA REVIEW

DURING the final conference session at Air Cargo China, in-dustry professionals discussed new business models from competitors such as Alibaba, and whether air cargo will ben-efit from omnichannel logistics.

Moderator, MARESCH owner, Bernd Maresch, and co-mod-erator, joe.systems owner, Dr Joachim Ehrenthal were joined by Swiss WorldCargo head of marketing, Alain Guer-in, Amsterdam Airport Schiphol director of cargo, Jonas van Stekelenburg, Studium ad Scaldim owner, Dr Wouter Dewulf and China Air Express general manager marketing & sales department, Helen Zhang for the final session, ‘Omnichan-nel logistics – will air cargo miss out or get a piece of the pie?’ on 16 June.

Ehrenthal expressed concerns during the session, saying: “The network design is changing, it is more fragmented. You can’t just put inventory somewhere.”

During the session, Guerin told delegates: “Omnichannel means e-commerce, traditional cargo has been replaced by e-commerce, little parcels. If we don’t change we will miss out. Swiss fly the aircraft everyone else is flying, we have very strong processes. We need to team up with people, we are teaming up with the Swiss Post network.”

International Air Transport Association (IATA) head of cargo industry management, Anne Marie MacCarthy, who was in the audience, expressed her view that data needs to be shared more effectively and the industry needs to work together.

She said: “We have a lot to learn from each other. IATA sets standards and also wants to see end-to-end supply chain handling harmonised because of other market rate development.”

The news that online retailer, Amazon is to move into air-freight was also a discussion topic. Amazon will start leasing 20 Boeing 767-300 converted freighters from Atlas Air later this year, and plans to ramp services up fully by 2018.

The panel speakers had a variety of views on Amazon’s move into airfreight. Zhang said she felt it was too early to comment, while van Stekelenburg expressed doubts about whether Amazon was making a good move.

MacCarthy said she believed the “risk is minimal” for Am-azon as it is leasing the aircraft.

We must change or we will miss out

aircargoweek.com

The modal shift to seafreight for some perishables has “always been there” in the marketplace but there still remains good business, the second conference session at Air Cargo China heard on 15 June.

This was the view of Cargolux director for product management for pharmaecuticals and temperature-controlled shipments, Stavros Evangelakakis (middle right) who was speak-ing in the session - ‘Temperature Control: Air cargo’s safe havens or last resort’ – moderated by MARESCH owner, Bernd Maresch.

He explains about perishables cargo: “It is not a safe haven, needs are must. If you are operating in Africa and South America, you cannot be economically viable – you have to take perishables. Perishables have always been there for air cargo. It is a must – not only a safe haven.”

He also says certain cargo commodities will always continue to use air cargo and as for pharmaceuticals, he notes years ago not many shippers would move pharma by air, but this is changing as standards improve, adding: “For us, pharma is very important to air cargo.”

All the panelists in the session agreed that the Interna-

tional Air Transport Association’s Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) has boosted standards, but needs to become global and not just restricted to certain trade lanes, while it is being recognised by pharma shippers.

Brussels Airport’s head of cargo, Steven Polmans (second right) told delegates he feels air cargo must up its game as far as efficiency is concerned for temperature-controlled cargo. He notes: “Increasing our efficiency is our biggest challenge as the way we are dealing is not sufficient as we are not meeting the standards required for shippers across the chain.”

Brussels has created its Air Cargo Belgium organisation and in Polmans’ view the industry can only meet the challenges it faces by bringing together all parts of the chain as a community.

Polmans adds: “We have to talk about and create transparency and we are agreeing on this, but this is not happening. We are trying to protect our market and commodities.”

And Evangelakakis feels different parts of the supply chain need to “take responsibility” for transporting temperature-con-trolled cargo as they are currently not doing so and he also wants to see shippers embrace the air cargo community and see more positive stories from shippers.

In conclusion, Polmans was quite frank and wants ambitions the industry has set, to be raised 10 times higher, as says: “I think we (air cargo) are 10 years behind on doing new things.”

Not quite a safe haven, but perishables still vital

7ACW 27 june 2016

AIR CARGO CHINA REVIEW

WHEN cutting costs, companies must make sure they cut fat and not muscle, managing director and partner at Ac-centure, Fox Chu told Air Cargo China conference delegates.

During the session, on 14 June, ‘Cutting overhead costs in air cargo – what works, for whom, and why?’, speakers dis-cussed how outsourcing could reduce costs for companies, and the potential pitfalls.

Chu says: “The consistent theme of this year is cost sav-ings or efficiency. In this industry the cost structure is very high, in the good times of very high growth this was not a sig-nificant problem but the margins are down and this creates headaches for senior management.”

Describing the care needed when cutting costs, Chu’s de-scription was: “Cut fat but don’t cut the muscle.”

Chu was joined by Jettainer head of marketing and com-munications, Martin Kraemer; International Air Transport Association head of cargo industry management, Anne Marie MacCarthy; Swissport senior vice president global cargo sales and account management, Rudolf Steiner; and ECS Group chief operations officer, Adrien Thominet.

The session was moderated by MARESCH owner, Bernd Maresch; and co-moderated joe.systems owner, Dr Joachim Ehrenthal.

Steiner told delegates he was often amazed at Swissport’s own costs. “We are always looking for cost synergies, I’m always amazed at the costs in our processes, for the accep-tance process there are nine pieces of paper, stored for two years.”

MacCarthy added airlines need to move away from paper processes and implement electronic air waybills (e-AWB) as cargo spends too long waiting for information before it can be moved.

She explains: “We need to move away from paper process-es, AWB to e-AWB, there are nine pieces paper from handling agent, 22 docs handled 41 times across supply chain. We need to embrace e-AWB you can’t change how handle paper until paper removed from supply chain.”

Thominet pointed out that the cuts must be carried out properly of they could cause more problems. “If it is not done properly you will recreate costs on the side.

“If you reduce cost on commission you will recreate the cost somewhere else, if it is not done properly cost against pro-curement people, you are not helping supplier or principal.”

Cut the fat, not the muscle

aircargoweek.com

ACW 27 JUNE 2016 8

Hong Kong Air Cargo Terminals (Hactl) is expecting 2016 to remain challenging but the rise of Chinese and Asian e-commerce will provide growth, executive director, Vivien Lau

(pictured) tells Air Cargo Week (ACW).Hactl, which celebrated its 40th anniver-

sary in May, has seen more bulk e-commerce shipments for fulfilment centres closer to con-sumers, something that will help Hactl’s carrier

customers as well as Hactl and its integrated logistics sup-

port services subsidiary, Hong Kong Air Cargo Services (Hacis).

Lau, who is also managing director of Hacis, tells ACW: “We

are optimistic that the new e-commerce busi-

ness into China and Asia,

driven by a discernible trend to ship in bulk and handle fulfilment closer to the destination mar-ket, will continue to grow.”

She says 2016 has been challenging but in line with expectations following the year of con-trasts in 2015.

“On the one hand, the slowing of Chinese manufacturing output impacted exports, but we began to see an increase in import activ-ity – particularly e-commerce traffic, moving in bulk from overseas suppliers. Our val-ue-added logistics subsidiary, Hacis, is gearing up to serve this fast-growing sector, with a new e-commerce depot at Nansha, and more planned.”

The slowdown in the Chinese economy has impacted Hactl’s business but Lau is expecting that the industrialisation of other countries in the region such as Myanmar, Thailand and Viet-nam will help imports and exports in the future.

Lau says: “Some of this trade will be with the West, while much will be intra-Asia. Because of Hong Kong’s established role as the major regional air hub for Asia and Australasia, with unmatched global and regional connections, we are optimistic that this regional growth will benefit Hactl.”

Hactl has also benefitted from being appointed the cargo handler for Myanmar National Air-lines, which started four times a week Yangon – Hong Kong services on 4 December 2015 using a Boeing 737-800.

Lau says Hactl wants to take on more airlines but capacity constraints at Hong Kong Inter-national Airport (HKIA) are making this a challenge.

“Many new airlines have been approaching Hactl as part of their plans to set up new opera-tions in Hong Kong, but their ability to appoint Hactl depends on their ability to obtain flight slots – and this is challenging while we have a two-runway system. We are providing new applicants with support whenever possible.”

The two biggest challenges in Hong Kong are capacity constraints and its distance from

the residential areas but Hactl is successful in retaining staff.

Lau says: “Hactl’s long-term staff retention programme remains very successful in retain-ing staff, so that we are the only handler that does not resort to inexperienced agency labour. Our system and process upgrades have also improved our productivity per capita so that we can do more without increasing head-count.”

She says HKIA is close to saturation, and freighters are being pushed into nighttime slots, which causes short-term peaks in ramp han-dling activity but Hactl is coping.

“Hactl has coped very well with the changes, by investing in new mobile computing resources that have transformed our ramp operations and enabled them to adapt to the new situation.”

“But the ideal will be when we have a third runway, and can return to a situation of spare runway capacity and greater flexibility: so that more freighters can be handled throughout the day, more air services can be accepted into Hong Kong, and the airport’s cargo business can return to unconstrained growth.”

Hactl sees Chinese and Asian e-commerce growthCARGO HANDLING AGENTS

New contracts

HKIA close to saturation

aircargoweek.com

L uxair Cargo is confident it will handle over 800,000 tonnes of cargo in 2016 helped by increased rotations from Qatar Airways and other customers expanding, business development and contract manager, Antoine Decker tells Air Cargo Week (ACW).

Describing the year so far, Decker says the Luxembourg Air-port based handling agent has seen three per cent growth despite February falling by an unexpected 4.5 per cent.

For the rest of the year, existing customers have expansion plans, which Decker says means Luxair Cargo is confident it will handle over 800,000 tonnes in 2016. “This positive outlook and strong growth however are on the other hand challenging as our warehouse space and infrastructures have to be reshuffled and new staff have to be trained and integrated into the existing teams without compromising Safety and Time – Cost – Quality.”

To cater for increasing volumes, Luxair Cargo is building addi-tional build-up stations in its warehouse as well as expanded unit load devices facilities.

Decker tells ACW: “Due to the fact that all of our carrier cus-tomers operate with full freighters through LUX, the number of oversized and heavy shipments is permanently increasing. A sec-ond outsized cargo shelter is being built during the second half of 2016 which increases the total available area by 50 per cent.”

Another area for growth is the home carrier, Cargolux Airlines International’s links with China through its dual hub at Zheng-zhou Xinzheng International Airport. Decker says Luxair Cargo has benefitted from Cargolux operating seven freighters a week between Luxembourg and Zhenghzou, and Asia represents more than 40 per cent of volumes handled in Luxembourg so the airline increasing market share will bring benefits.

Luxair Cargo customers have also benefitted from its pharma and health-care hub being good distribution practices (GDP) certified. Airport operator, lux-Airport has signed memorandum of understandings with Hong Kong Air Cargo Terminals and Eastern Air Logis-tics to create GDP-secured trade lanes to Hong Kong and Shanghai, respectively.

Decker comments: “For the customers, a GDP certified trade lane is safe to use as they have a guarantee that all processes are in compliance with the high standards of a temperature controlled supply chain.”

Luxair Cargo is considering International Air Transport Asso-ciation (IATA) Center of Excellence for Independent Validators (CEIV) Pharma certification, something it will evaluate in 2017.

He says Luxair Cargo would apply for IATA CEIV certi-fication if it is of benefit to customers and if there is the demand, commenting: “Our aim is not to have all possible certifications on hand but to provide the best and most safe handling processes to our customers and their own clients, the shippers.”

9ACW 27 JUNE 2016

CARGO HANDLING AGENTS

LUG aircargo handling is to take over the cargo handling of Japan Airlines’ (JAL) flights and road feeder services at Frankfurt Airport from 1 July.

The handling agent will handle JAL’s daily Boeing 777-300ER and Boeing 787-9 Dreamliner services with bellyhold capacity to and from Frankfurt, as well as the JAL Cargo’s road feeder services.

LUG managing director and chief executive officer, Patr-ik Tschirch (pictured) says: “We are delighted that we have been able to impress such a customer as JAL Cargo provid-ing unparalleled service with our superior service quality and win the airline as customer. We expect a handling volume of 800 – 1000 t per month. JAL Cargo’s global network is going to further expand our international footprint.”

JAL Germany general manager, cargo & mail, Sachito Akimoto says: “I believe the company is a perfect fit for JAL Cargo’s wide product portfolio and premium service goals. LUG will help us to fulfil our customers’ expectations and satisfy our own am-bitions in terms of high quality service, safety standards, and responsiveness to customer demands.”

LUG to handle JAL cargo

SWITzERLAnD based handling agent, Cargologic has syn-chronised cargo handling facilities and procedures with SATS and Swiss WorldCargo to create a quality corridor between Singapore and zurich.

The quality corridor is primarily focusing on pharma-ceuticals; with Cargologic and SATS having both gained International Air Transport Association Center of Excellence for Independent Validators Pharma certification, as well as being Good Distribution Practices compliant.

Cargologic managing director, Marco Gredig says a third of Swiss exports by value are transported by airfreight, partic-ularly pharmaceuticals. “The investment in our relationship underscores our faith in zurich as one of the top cargo air-ports for handling pharmaceutical products.”

“We believe this gives a clear signal to the pharmaceutical industry to use Cargologic and SATS in zurich and Singapore respectively. Together with our partner SATS we will improve all involved processes to a very high quality level to fulfil the needs of our customer Swiss WorldCargo.”

Cargologic joins quality corridor

Luxair Cargo aiming to exceed 800,000t in 2016

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Business has turned out fairly well at aircraft lessor Air Atlanta Icelandic, according to chief executive officer, Hannes Hilmarsson (pictured).

The ACMI (Aircraft, Crew, Maintenance and Insur-ance) market has been challenging in the first quarter

across the air cargo industry for companies leasing aircraft to other carriers.

Hilmarsson says: “We started the year with relatively moderate expectations, knowing well what the current market conditions are like and the continuous pressure faced on yields.

“That being said, the first quarter of 2016 turned out relatively well, as the performance of our Boeing 747-400 Freighter fleet has been good, which we’ve capitalised upon and our fleet utilisation, which is our key driver for efficiency, has been above our initial projections.”

Demand in the air cargo ACMI market has in general been some-what soft, he notes, but Air Atlanta Icelandic has seen fairly steady numbers in its own operation in recent months.

Hilmarsson says: “We expect the same trend to continue in the short term and we have a positive view on the market, but you have to be creative and always keep in mind that as an ACMI/charter provider you always have to offer your customers reliable, value added services, with strong emphasis on reliability, safety and efficiency.”

Most regions have proved challenging for ACMI firms, but what are strongest regions and where is Air Atlanta Icelandic seeing demand?

“Air Atlanta Icelandic had eight 747-400 freighters flying on ACMI programmes in first quarter of 2016, and the operation and has been reasonable and in line with the previous year, ” Hilmars-son notes.

He adds: “The majority of our freighters are concentrated operating for our customers via the Middle East and between Asia-Europe, as well as into Africa.”

There are growth opportunities and Hilmarsson says there are, and always be, certain key routes that will continue to require a 747-400F, as they cannot be serviced by passenger aircraft alone

He says: “And there simply is no other aircraft that can offer the same unique operating characteristics as the 747-400F. We’re therefore evaluating a couple of production freighter as possible fleet additions, parallel to our discussions with our customers.”

There are operating challenges in the marketplace for Air Atlanta Icelandic such as the slowdown and economic turmoil in Chinese markets, which Hilmarsson says of course, has “our attention, just like everybody else’s in the market”.

He notes: “The price and volatility of fuel will then of course continue to play a key role in determining the 747-400s level of efficiency in the coming years.”

The question is whether Hilmarsson sees Air Atlanta Icelandic expanding its fleet over the coming years.

It now operates a fleet of 15 - eight 747-400F and seven 747-400 passenger aircraft, all operated on year-round ACMI Projects.

He explains Air Atlanta has “excellent economies of scale and operational efficiency” through the fleet it runs, but is in a position to expand.

Hilmarsson says: “Given the size of our operations, availability of crew and built-in flexibility, we’re in a good position to add more 747-400Fs to the fleet in 2016, should there be demand in the mar-ket which we feel likely given recent developments.”

He concludes that Air Atlanta Icelandic entered 2016 backed by 30 years of solid reputation for delivering quality ACMI services to both passenger and cargo customers.

He explains that the future is looking bright and it is looking to grow: “Our position in the market today remains strong and it’s steadily improving, and we are eager and motivated to continue our journey to make Air Atlanta Icelandic the first choice when international airlines and global forwarders look for additional capacity or a solid partner to work with.”

ACW 27 june 2016 10

Air Atlanta Icelandic performing well despite market challenges

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Offering flexibility, reliability andvalue added solutions

This year Air Atlanta Icelandic, one of the world’s most reputable ACMI & Charter Airline, celebrates its history of 30 successful years in the sky.

With a core fleet of sixteen B747-400 passenger- and freighter aircraft, together with the company’s A330 and A340 operating capabilities, the company can offer its clients flexible, reliable and value added Passenger and Cargo solutions, be it on ACMI, CMI or Charter basis.

With headquarters in Iceland and operating around the world, Air Atlanta Icelandic conducts its Air Operations according to EU / EASA requirements as well as IATA / IOSA standards. IATA’s benchmark for Global Safety Management underlines Air Atlanta Icelandic’s commitment to Safety through the concept of Quality & Compliance.

With a dedicated group of over 1,200 staff members from more than 45 different nationalities and an impressive list of customers past and present, such as Saudia, AirBridgeCargo, Air Madagascar, Chapman Freeborn, Cargolux, Etihad and Malaysia Airlines to name a few, Air Atlanta Icelandic has proven to be a flexible and efficient service provider, capable of setting up shop on short notice, anywhere in the world.

SERVICES

ACMI - Wet LeaseBeing able to add Passenger or Cargo capacity at the right time, swiftly and efficiently, can mean the world of difference in today’s ever changing business environment. Whether it is to meet seasonal fluctuations or test and open new markets, an ACMI leased Aircraft from Air Atlanta Icelandic will enable you to focus on your core competencies and strengths, without having to invest in Aircraft, pilots and the necessary training and infrastructure.

CMI - Aircraft Management A customized, outsourcing solution for both Passenger and Cargo Aircraft owners.Getting a new aircraft type, need access to crew training and/or Maintenance supervision and management? Interested in the economies of scale that only over fifteen aircraft in operation can bring? Or do you want to be free from recruiting and training your own crew, running flight ops and performing day-to-day maintenance?Air Atlanta Icelandic has in recent years specialized in setting up CMI (Crew, Maintenance and Insurance) services, whereby the customers’ aircraft is registered under Air Atlanta Icelandic’s AOC and operated and managed by the company’s extensive pool of professional, EASA licensed crew and technicians, as if it were its own, flying your preferred routes and schedules.Air Atlanta Icelandic’s CMI services can be structured in several ways, depending on the customer’s preferred level of day-to-day involvement, with Air Atlanta Icelandic taking full responsibility for the operational control and maintenance supervision of the aircraft, to the highest of EU/ EASA and IOSA standards.

Charters / Special missionsIf you require ad-hoc or longer-term Passenger- or Cargo charter flights, VIP tours or special missions, Air Atlanta Icelandic can provide you with a safe, reliable and cost-effective solution with our fleet of sixteen B747-400 passenger and freighter aircraft. Air Atlanta Icelandic can offer versatile charter solutions or an all-inclusive package, not only standard ACMI services, but also the necessary traffic rights and landing permits, fuel, passenger-, cargo- and aircraft handling worldwide.In addition to flights operated on behalf of charter brokers, freight forwarders and tour operators, Air Atlanta Icelandic has performed several high-profile charter series where careful planning and attention to detail goes hand in hand. Current and previous clients include the likes of Iron Maiden, U2 and the Olympic Flame, all of which successfully flew around the world with Air Atlanta Icelandic.

www.airatlanta.com l sales@airatlanta.com

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