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TNT takeover byFedEx edges closer

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qatar targetssustainablegrowth

abc keepssoaring with 27%volume increase

pharma marketgrowing

The weekly newspaper for air cargo professionals

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FEDEX’s 4.4 billion euro ($5 billion) takeover of TNT Express has passed the final hurdle, having obtained unconditional approval from the Chinese government’s ministry of commerce.

Chinese government approval was the final regulatory requirement to overcome, after the European Union and Brazil’s Conselho Administrativo de Defesa Eco-nomica approved the deal earlier this year, despite an appeal being filed in Bra-zil, which was dismissed. The deal is set to close soon.

FedEx Express president and chief exec-utive officer (CEO), David Bronczek says: “I want to thank the team members who collaborated with regulatory authorities around the world to help us reach this im-portant acquisition milestone.

“As we work towards closing the ac-quisition, we look forward to welcoming TNT Express team members to the FedEx family of companies as we expand our portfolio of solutions and connect even more people and possibilities.”

TNT Express CEO, Tex Gunning says it is a step closer to making the vision of combining the complementary networks of FedEx and TNT Express a “reality”.

Qantas Freight is to operate a domestic freighter network in Australia, to meet demands for e-commerce and express freight.

The network will be used by Australia Post and StarTrack customers and consist of six freighter aircraft featuring StarTrack livery, with continued priority access to cargo space in the Qantas Group’s passenger fleet.

To be launched in July this year – the network is part of the five year contract with a value in excess of 500 million Australian dollars ($374 million) signed last year for the transport of Australia Post’s domestic mail, parcels and express post until mid-2020.

From July 2016, the network will service nine destinations across the East and West coast of Australia using one Boeing 737-

400 (an additional aircraft to be operated by Express Freighters Australia), two 737-300s (part of existing Qantas Freight fleet) and three BAE146-300 (part of existing Qantas Freight fleet). Including the additional 737-400, Qantas Freight will have a total of 14 aircraft.

Qantas Group chief executive officer (CEO), Alan Joyce says the new arrangement focused on providing a fast, reliable and more efficient service to Australia Post and StarTrack.

Joyce adds: “Our transformation program has sharpened the efficiency and flexibility of our freight business, and sharing these benefits with customers is part of our competitive edge. Our focus in designing this agreement is to help our biggest freight customer better coordinate their supply chain and ultimately deliver a bet-ter service to their customers.”

Australia Post managing director and group CEO, Ahmed Fahour says the dedicated Qan-tas freighters would further strengthen the extensive delivery and logistics network that underpins both Australia Post and StarTrack.

make a decision on airport expansion, UK government urged

The UK government has been told to stop putting off the difficult decision on expanding airport capacity in the South

East of England by its Transport Committee.

The committee warns the oppor-tunity to end decades of political dithering has been “squandered” as it continues to put off a decision on whether Heathrow Airport (pictured) or Gatwick Airport should receive approval for an additional runway.

Members support a third run-way at Heathrow, as recommended by the government appointed Airports Commission, which deliv-ered its report in July 2015.

The government was due to for-mally respond to the commission in December 2015, but has delayed the decision until the summer of 2016, and the committee says this indecision is harming the UK economy. Some reports also sug-gest a decision won’t be made until nearer the autumn.

Transport Committee chair, Lou-ise Ellman MP says: “Across the world, cities are collectively plan-

ning to build more than 50 new runways with capacity to serve one billion additional passenger journeys by 2036.

“The growth of large hubs in the Middle and Far East and North America threatens our position as a hub of international aviation. The UK’s connectivity with the world’s emerging markets is a major concern.”

When the Airports Commission released its report in July 2015, it said expanding Heathrow would deliver economic benefits of up to £147 billion ($215 billion) over 60 years and over 70,000 new jobs

by 2050 as well as 40 new desti-nations, including 12 long-haul routes. It said Gatwick would be better able to cater for short-haul intra-European routes, but Heath-row is better placed to provide long-haul routes to new markets.

The Freight Transport Asso-ciation (FTA) welcomes the committee’s conclusions, saying this echoes what it had told the government a year ago.

FTA director of global and Euro-pean policy, Chris Welsh says: “Additional capacity at Heath-row is critical to allow importers and exporters to access new

and emerging markets in Asia, South America and the Indian sub-continent.

“FTA urges the government to take on board these recommen-dations and act quickly. Heathrow is critical for important sectors such as pharmaceuticals, high-end manufacturing and retailers.”

In response to the report, Heathrow Airport says: “The real, independent evidence continues to point towards Heathrow. The Transport Committee and the Prime Minister’s Airports Com-mission have confirmed that an expanded Heathrow will be an economic powerhouse driving jobs creation across the UK and fuelling a boom in British exports.”

Gatwick Airport feels the com-mittee’s report highlights what it claims are “the failures of the Airports Commission report” on the environmental impacts of expanding Heathrow, and the eco-nomic benefits, which it says are overstated.

The airport adds ending decades of delay and false starts can “only be achieved by giving the green light for Gatwick expansion”.

domestic freighter network to be run in australia by qantas

Volume: 19 Issue: 18 9 May 2016

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NEWSWEEK

2 ACW 9 may 2016

Volumes and yields down in Q1 at IAG Cargo

BRUSSELS AIRLINES CARGO’s March figures were strongly impacted by the shocking terrorist attacks at Brussels Airport on 22 March.

The carrier says cargo activity was “heavily influenced” by the attacks and until 21 March, the cargo load factor had amounted to 69 percentage points, while cargo traffic was largely affected after 22 March. A total of 2,609 tonnes of cargo was transported in March, which is a decline of around 21 per cent compared to March 2015.

In March, the carrier’s freight tonne kilometres reached 10,593 million, which was a 37.7 per cent fall in the same month last year.

Brussels Airlines chief commercial officer, Lars Redeligx says: “As expected, our March figures are very heavily impacted by the events of 22 March, which took away our main work tool, our home base Brussels Airport, for 12 days.

“Thanks to the dedication of all Brussels Airlines colleagues, the support of many partners and the flexibility of our guests, however, we were able to partially recover our operations from alternative airports, which was a very complicated logistical task.

“Between 24 March and 3 April, it enabled us to operate 1,010 flights or 38 per cent of our normal flight schedule.”

LUFTHANSA has seen net income in the first quarter become a loss of eight million euros ($9.2 million) while Lufthansa Cargo has struggled.

For the airline group, revenue was down 0.8 per cent to 6.9 billion euros and the loss of eight million euros compares to a profit of 425 million euros in 2015. The Logistics di-vision, which includes Lufthansa Cargo, saw revenue fall 21.8 per cent 480 million euros.

Lufthansa Cargo cut capacity in available cargo tonne kilometres by 1.6 per cent to 2.8 billion, volumes in revenue cargo tonne kilometres falling 4.8 per cent to 1.9 billion. Lufthansa Cargo’s load factor was down by 2.3 percentage points to 67.6 per cent. All regions of the world saw double digit revenue falls, with the Americas suffering the most, down 25.2 per cent to 193 million euros.

Tough Q1 for Lufthansa Cargo as volumes fall

IAG Cargo’s volumes were down 1.8 per cent in the first quarter of 2016, while yields dropped 6.9 per cent at constant exchange.

IAG’s commercial revenue of 262 million euros over the period from 1 Jan-uary to 31 March, 2016, was a decrease of 1.5 per cent compared to 2015.

Adjusting the prior year’s figures to reflect a directly comparable operation, commercial revenue fell 8.6 per cent versus last year at constant exchange.

IAG Cargo chief executive officer, Drew Crawley says: “These are respectable results in the face of a challenging mar-ket. The trading conditions experienced towards the end of last year have continued into 2016.

“The industry is also cycling over the [US] West coast port strike that dominated the start of 2015, producing an unusually

strong start to last year. Despite this high benchmark, the numbers reported today show that a relentless focus on premium products, strong cost control and precision management of our capacity and yields is helping our business to withstand these headwinds.”

On a bright note he says IAG’s focus on premium products continues to pay off with double-digit growth in tonnages of Constant Climate and Prioritise products.

Crawley adds: “Our network expan-

sion over the coming months will also be welcome news for our customers as we expand into strong cargo markets, we have announced routes from Madrid into both Shanghai and Johannesburg this year.

“Our expansion in South America to Lima, San Juan and San Jose will see new flows of perishable and pharmaceuticals enter our network. Meanwhile our new North American service into San Jose, Cali-fornia will enable hi-tech products to enter and exit one of the world’s leading innova-tion capitals.”

Crawley says in the second quarter the integration of Aer Lingus Cargo will pass several major milestones, bringing new routes to the IAG network from Dublin to Hartford, Newark and Los Angeles this year. He adds the IAG Cargo model remains “unchanged” and is confident it is right for the market conditions.

Terrorist attacks hit Brussels Airlines

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NEWSWEEK

3ACW 9 MAY 2016

T he airfreight market has faced another challenging month in March with freight tonne kilometres (FTK) fall-ing by two per cent while load factors keep tumbling, the International Air

Transport Association (IATA) reports.The results have been exaggerated by the

comparison with a particularly strong start to 2015 when airfreight received a boost due to the US West Coast seaport disruption.

Europe and the Middle East were the only regions to see an increase in FTKs in March, up 1.3 per cent and 2.4 per cent, respectively. Latin America saw the biggest decline, down 5.9 per cent, followed by Asia Pacific at 5.2 per cent. African FTKs were down 3.1 per cent and North America declined by 1.8 per cent.

IATA director general and chief executive officer, Tony Tyler says: “It is shaping up to be another tough year for air cargo. February 2016 world trade volumes were only 0.4% higher

than at the end of 2014. And the expectations of purchasing managers gives little optimism for an early uptick.

“The combination of fierce competition, capacity increases and stagnant demand makes this a very difficult environment in which to generate profits.”

The industry continues to struggle with over-capacity, with the worldwide load factor falling by four percentage points to 43.5 per cent.

Meanwhile, industry data analyst WorldACD

says March offered some “hope of a change for the better” in a few of the world’s air cargo markets, but year-on-year (YOY) yields in US dollars still dropped by 18 per cent.

WorldACD says although YOY volumes dropped by 0.9 per cent worldwide, the flows from Asia Pacific to Europe and the Middle East & South Asia (MESA) showed growth of 19 per cent and 12 per cent, respectively.

WorldACD notes in Q1 worldwide volumes dropped by 1.3 per cent, and yield in US dollars by 17 per cent, but the comparison has to be measured across the boost the Pacific got in Q1 of 2015 with the US West coast port slowdown.

WorldACD observes the two product cat-egories that have propped up the air cargo performance for quite a while (perishables and pharmaceuticals) continued to do so in Q1.

Perishable volumes increased by more than six per cent and pharmaceuticals by just under 10 per cent.

Load factors, FTKs and yields fall, but some rays of hope

TURKISH AIRLINES is to take delivery of 26 Boeing aircraft in 2016, with six 777-300ERs and 20 Next-Generation 737-800s.

Boeing has received more than 7,000 orders for Next Generation 737s saying this is because of its wide market base, efficiency and low operating costs.

Turkish Airlines chief investment and technology officer, Ahmet Bolat says: “The delivery of a further 26 Boeing air-craft this year, which form a substantial part of our long-haul and short-haul fleets, are integral to Turkish’s continued growth and we look forward to introducing the new planes on our domestic and international network.”

Over in Asia, China Eastern Airlines has finalised its order for 15 Boeing 787-9 Dreamliners and 20 Airbus A350-900s. The Boeing order is worth nearly $4 billion, and will increase the airline’s cargo payload on existing routes.

China Eastern Airlines chairman, Liu Shaoyong says: “We are very happy to introduce the new 787 Dreamliner into our long-haul fleet. The addition of these next-generation, fuel-efficient airplanes will play a key role in supporting China Eastern’s strategy for international expansion, and enable us to realise profits in point-to-point routes across the Pacific Ocean, and between China and Europe.”

WorLdNewsINCHEON INTERNATIONAL AIRPORT saw international air cargo volumes fall by 3.6 per cent in the first quarter (Q1) of this year. The gateway handled 621,000 tonnes and the transfer cargo volume was 236,000 tonnes, a fall of 4.3 per cent. By region, volumes rose to China by 6.3 per cent, to the Middle East by 5.2 per cent, and to South East Asia by 4.8 per cent, but fell 20.4 per cent to the US, and 10 per cent to Japan.

CHANGI AIRPORT’s cargo volumes surged 5.2 per cent to 171,180 tonnes in March and 3.3 per cent to 465,140 tonnes in the first quarter of 2016. This year, Changi has seen growth in every month, with January up four per cent to 157,900 tonnes and February increasing 0.1 per cent to 136,100 tonnes.

Airfreight volumes up 1.5% at CEVACEVA has maintained its momentum in the first quarter (Q1) of 2016, as airfreight volumes rose year-on-year (YOY) by 1.5 per cent.

The company notes in the face of a soft market, air vol-umes increased above a very strong Q1 2015, which was due to US West Coast port congestion.

CEVA says a stronger field sales focus has led to a number of wins with small to medium-sized enterprises, in-cluding on trade lanes from Europe to Asia or Latin America to Europe.

The Freight Management division achieved an earnings before interest, taxes, depreciation and amortization (EBIT-DA) of $10 million, a YOY rise of 57.1 per cent, due to a strong trade lane activity with China.

CEVA’s total revenue in Q1 was $1.56 billion, a 10.2 per cent fall on Q1 in 2015, while EBITDA was $55 million, down 7.8 per cent. Chief executive officer, Xavier Urbain says: “2016 continues the trend we started in 2015. Market headwinds continue to affect all industry players, yet de-spite this climate CEVA Air and Ocean volumes increased.”

Turkish and China Easternpen orders

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4 ACW 9 MAY 2016

NEWSWEEK

Justin Burns, ACW: What are the biggest challenges in the temperature sensitive cargo sector?Gruber: The industry is facing multiple challenges. In addition to reliability and speed, customers are demanding adequate facilities and handling procedures are in place that

guarantee a constant temperature range is maintain to protect the integrity and quality of products throughout the journey. The industry is also encountering increasing pressure from regulators to adhere to a growing burden of sometimes duplicate legislation. If these challenges are not overcome, air cargo risks

losing the opportunity presented by the global high value pharmaceutical products market, which is forecast to be worth nearly $1.6 trillion by 2020.

Justin Burns, ACW: How does IATA aim to enhance standards and quality of handling?Gruber: IATA has adopted a supply chain approach and is working closely with the industry to develop new standards and recommendations. This ensures the rules and guidelines on the transport of temperature sensitive products are effective and efficient. IATA has established the IATA Time and Temperature Task Force (TTTF). This group recommends healthcare standards for the air cargo industry. The work undertaken by the TTTF addresses temperature control management issues identified by industry and sets out recommended standards. Initiatives have included the use of the IATA Time and Temperature Sensitive label and the roll-out of the handling acceptance checklist.IATA’s Temperature Control Regulations (TCR) and Perishables Cargo Regulations (PCR) is used as a reference guide by all parties involved in the packaging, handling and distribution, by air, of temperature sensitive products whether its perishable or pharma products.Supply chain excellence is achieved as a result of applying procedures that are effective, efficient and meet the needs of customers. Training is paramount to effective implementation. The training of staff handling sensitive cargo is crucial to ensure that the integrity of the cold chain is maintained. Training for stakeholders involved in Time and Temperature Management is a prerequisite of the PCR, therefore the transport by air of healthcare products. It is essential each member of the supply chain understands what the specific requirements for compliance are, as well as of others in the chain. This allows for a greater understanding of the entire process and smoother integration. The IATA Training and Development Institute leads training in time and temperature sensitive cargo handling to ensure compliance with regulations.

Justin Burns, ACW: How important is it that time and temperature supply chain management are optimised?

Gruber: It is critical supply chain stakeholders involved in the transport of time and temperature sensitive products have a more collaborative approach. This helps clarify expectations and minimise the risks and challenges for airfreight within the cool chain.The pharma industry relies heavily on air cargo for its speed and efficiency. Improving industry logistical networks to achieve excellence in both time and temperature supply chain management requires transparency and co-operation amongst all partners. This provides the high quality customers demand.

Justin Burns, ACW: Are all parts of the supply chain investing in temp control facilities?Gruber: Many companies have invested in processes, procedures, systems, infrastructure and people to ensure they can guarantee their service offering to customers. This has helped to grow trust and rebuild confidence in the airfreight industry.However, there is still a lack of awareness from all parties in understanding how each segment of the supply chain fits together. To improve visibility and transparency, IATA formed the IATA Cargo Handling Council (ICHC). This group (of airlines and ground handlers) has developed a list of capabilities against which a cargo facility could be measured. The purpose is to enhance cargo handling capabilities to a consistently high standard while identifying possible non-compliance in critical areas such as safety or security.

Justin Burns, ACW: Is industry getting itsact together on temperature sensitive cargo?Gruber: Increased communication between stakeholders has meant there is a better understanding of the concerns of shippers. This has led to improvements in avoiding temperature excursions. While these still occur, there is a common understanding that roles and responsibilities towards eliminating this are shared. Stakeholders now work togetherto ensure appropriate packaging is used upfront, and the correct booking is made at point of origin. These actions have helped mitigate potential risk of temperature excursions.

One of the biggest challenges in air cargo supply chain is meeting the changing handling needs for temperature sensitive goods. The International Air Transport Association (IATA) is at the forefront of developing initiatives to raise industry standards.Air Cargo Week spoke to IATA’s senior manager for special cargo, Andrea Gruber about the sector.

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Tokyo Freight’s cargo volumes con-tinue to increase and it has seen good growth in the first quarter of the year.

The Qatari freight forwarder saw a 30 per cent uplift in shipments in

2015 compared to 2014 and from January to February in 2016 - it saw volumes rise five per cent and then seven per cent in March.

Tokyo Freight managing director, Shri M. Abdulla Moideen (pictured) says the strongest trade lanes into and out of Doha are Europe, the US and China.

The forwarder will soon open a new logistics centre near Doha’s main port, which is set to fur-ther drive growth.

Moideen explains: “We shall consolidate all of our services and capabilities into a single hub to take advantage of the proximity to imports com-ing into the country through the port.

“This will improve turnaround of volumes which will help us in boosting our business. We

are expecting a major turnarounds in terms of our volumes which will surely enhance our busi-ness prospects.”

Tokyo Freight has been boosted by the growth of Qatar Airways Cargo and Doha’s Hamad International Airport.

Moideen notes: “Doha, being the main oper-ational hub for Qatar Airways, they are offering a high level service in terms of frequencies and connections to/from Doha. We are also in an advantageous position by tapping into this opportunity in our favour and prefer to move our major service of business with Qatar.

“The new state of the art facility - Hamad International Airport - is offering a spectacular service in terms of its overall operations which is also complementing the operations of Qatar Airways as well.”

There are challenges and opportunities in equal measure for Tokyo Freight and doing busi-ness in the Middle East at the moment.

Moideen says there is tremendous potential in the years ahead in all sectors especially in logis-tics connected to the developmental activities towards the FIFA World Cup, to be held in Qatar in 2022, and being one of the key players in the Doha market, it hopes these opportunities will have a positive impact on its operations as well.

But there are concerns: “There is a concern on oil price fluctuation in the entire region, Qatar is one of the country who is having strong finan-cial capabilities, which will give confidence to the trade.”

Tokyo Freight has significantly expanded its fleet over the last 12 months in an anticipation of its move to a new logistics centre, and oper-ates a fleet of 52 trailers. It also had 33 more on order and due for delivery in the second half of 2016, while it plans to invest equally in services and infrastructure.

Moideen says there is “severe” competition among freight forwarders in the region, adding:

“But we are taking it in positive manner by offer-ing good services to our customers with certain cost advantage.

“Since Tokyo Freight is a well-established organisation with all the facilities of our own and we are much focused on customer satisfac-tion aspects.”

ACW 9 MAY 2016 6

The good times just keep rolling for Tokyo Freight in QatarMIDDLE EAST

ETIHAD AIRWAYS and Parma Airport have signed an agreement to develop cargo traffic at the airport of the central Italian city.

The exclusive agreement initially includes the establishment of a cargo transit centre at Parma Airport to receive cargo for forwarding to Milan Malpensa Airport for onward transport.

The project will be developed in conjunction with the freight arm, Etihad Cargo and partner airlines, providing an efficient solution to com-panies in the region for the rapid delivery of their products to global markets.

Etihad Airways with its equity partner, Ali-talia, offers bellyhold capacity on 38 weekly flights between Italy and the UAE.

In addition there are six weekly freighter services from Milan, including a twice-weekly service to Bogotá and the four times a week service to Abu Dhabi, which offer a combined capacity of 800 tonnes.

Etihad Cargo vice president, David Kerr says: “This agreement with Parma Airport is a fur-ther demonstration of our confidence in Italy, one of the largest cargo markets in Europe. We have already strengthened our freighter capacity out of Milan in the last few weeks, having placed a new 777 freighter on the Mi-lan-Bogotá sector, so the opportunity to use Parma gives us a further chance to strengthen our cargo services from Europe.”

Parma is at the centre of one of the largest exporting regions in Italy for high value goods.

These freight items require fast and secure transport, which are all factors that determine the demand for airfreight services.

Parma Airport chairman, Guido Dalla Rosa Prati says: “With the co-operation of Etihad Airways, the strategic development plan for the airport is already coming to life.

“I am proud of the agreement which will gen-erate new business opportunities for Parma and neighbouring territories.”

Work has begun to adapt the airport infra-structure for the new service to be operational from July 2016. Cargo and logistics will play a central role in the ongoing development plan at Parma Airport.

Etihad has also expanded its Middle East network to Kuwait by adding an additional freighter and introduced a new twice-weekly service into Muscat in Oman using an Air-bus A330 freighter service to Kuwait and to Muscat.

Meanwhile, Etihad as a whole has seen prof-its pass the $100 million barrier in 2015 while cargo volumes increased by four per cent to 591,000 tonnes.

Net profits rose from $73 million in 2014 to $103 million and revenue was up from $7.5 billion to $9 billion in 2015. Cargo vol-umes increased from 569,000 tonnes in 2014 to 591,000 tonnes in 2015. In 2015, Etihad Cargo, represented 88 per cent of cargo at Abu Dhabi International Airport.

aircargoweek.com

Etihad and Parma Airport sign agreement

D espite now being the world’s third largest air cargo carrier, Qatar Airways Cargo shows no signs of slow-ing down with Asia and the Americas its top target markets.

The carrier’s chief cargo officer, Ulrich Ogiermann says in the first quarter of 2016 tonnage is up 23 per cent com-pared to the same time last year.

Ogiermann says although industry reports proclaim weaken-ing trade and currencies in Asia, Qatar’s biggest air cargo market, it is confident of improvement there for the rest of 2016, as more aircraft join the airline’s fleet and new destinations are added to the network from the second quarter onwards.

Qatar’s traditional trade lanes from Asia to Europe, Europe to the Americas and Africa to Europe remain its best sectors, and Ogiermann notes the load factor in India and Bangladesh is con-sistently high, as it has 30 weekly freighter frequencies to the region, while bellyhold capacity on 102 weekly flights to 13 cities in India helps strengthen its market share in the region.

The carrier strategically divides its cargo capacity across its freighters and passenger aircraft with 51 per cent of shipments carried on freighters and 49 per cent in bellyhold.

Ogiermann sees “encouraging growth” in sectors where it operates both freighter

and passenger flights such as India, Europe and the Americas, noting: “Bel-lyhold cargo has been well received in our network simply because it is very cost efficient and appreciable in our industry where yields are always under

pressure.“The smart combination of efficient

belly space plus freighters allows us to adjust our services flexibly, meeting the needs of our customers as well as the dynamic air cargo business.”

This year, it will receive two more 100-tonne capacity Boeing 777 Freighters after its ninth 777F arrived on 1 May and another two 777F will be delivered in July and October. Ogiermann says they will be advantageously deployed to improve its Americas network, where it operates six freighters and 12 bellyhold flights, offering over 5,000 tonnes of freighter and bellyhold space every week.

He explains: “We certainly see opportunity for growth in the US market as our expansion in the Americas indicates – includ-ing the start of daily non-stop commercial service to Atlanta on 1 June.”

2016 will see its network expand and it will launch another 10 bellyhold routes to the likes of Marrakech, Sarajevo, Namibia, Helsinki, Auckland, the Seychelles and Atlanta.

Ogiermann says from a cargo carrier standpoint, it is “crucial” it monitors load performance across its network constantly and whenever opportunities arise, it may instate aircraft and fre-quency upgrade rationally. He adds: “For instance, we will be upgrading our flights to Geneva and Warsaw this year subse-quent to progressive air cargo demand in both markets.”

The carrier’s freighter fleet plan will include upturning mar-ket share in the Americas, Ogiermann says to date, the Americas market contributes 10 per cent of its capacity: “In anticipation of robust demand, we will continue to expand our freighter port-folio in the Americas in 2016, with a tactical plan to consolidate our cargo traffic to and from the Americas in Luxembourg, our European hub.”

Last month, it launched QR Express, an airport-to-airport air-freight service for time critical shipments, which Ogiermann says will see a phased roll-out after its successful launch at Heathrow Airport and it aims to launch it soon at major origins in Asia such as Mumbai and Hong Kong.

As for challenges it faces, Ogiermann says over and beyond common subjects most carriers face such as fuel price fluctua-tion, safety and security compliances, weakening economies, its biggest one is upholding its load factors and yields from the ever-increasing capacity in certain regions.

He is quite clear of how it will grow: “Our best prospect is the airline’s continued investment and expansion of our fleet. We expect to outperform the market by strategically placing capac-ity in the right areas and offering the right combination of cargo products to the right destinations.”

You can be sure its target is to be the number one air cargo carrier, up from its number three position it occupies now, but to

continue sustainable growth, Ogiermann believes service excellence is key and he says it constantly reminds itself to focus on innovation and tailor service offerings.

He feels Qatar will stay ahead of compe-tition by achieving consistency of handling in safety, security, quality and operational delivery: “We set high standards for these disciplines and the capabilities of the ground handling agents are rigorously assessed with each new route launch or expiry of handling contract at existing stations. Our network handling partner program enables us to have an established framework with the global handling companies to ensure our specific requirements are met, irrespective of location.”

Ogiermann says Qatar is well positioned to “compete and win in any economic circumstance” and is confident it has the ingre-dients for success, but says even for Qatar - it is a “testing time”.

He is upbeat about the market and says there are bright spots with pharmaceuticals, manufacturing spots changing, trade pat-terns changing, and e-commerce on the rise: “Pharmaceutical

products are of great importance for us - we have been working hard to get trade lanes certified by the big shippers. We see good prospects in pharmaceuticals, textiles, and perishables this year.

“We will continue to grow by matching the quantity of our capacity with the quality of our product, with a particular focus on a successive launch of exciting new products, backed up by state-of-the-art ground infrastructure and a team composed of the best talent in the industry.”

Americas market targeted

Qatar targets sustainable growth through network expansion

7ACW 9 may 2016

MIDDLE EAST

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ACW 9 may 2016 8

A irBridgeCargo Airlines (ABC) con-tinues to see volumes go skywards with a 27 per cent year-on-year increase in the first quarter of 2016 to 132,000 tonnes.

The airline says March was the best ever month in its 12-year history, handling 51,000 tonnes, a year-on-year increase of 35 per cent. The strong growth at the start of the year comes despite the timing of Chinese New Year hitting global trade and 2015 receiving an unexpected surge in demand due to the US West Coast sea-port disruption.

ABC executive president, Denis Ilin (pictured) says: “We did a lot of work last year to stay inch-close to our clients and it’s great to see that the airline’s developments back in 2015 continue to pay off in terms of the results we have achieved in the first quarter of this year.”

“Not just to survive in the current turbu-lent market conditions but to successfully grow instead, one needs to react quickly to the changing needs of the market, promptly adjusting one’s network in line with customers’ requirements.”

In 2015, ABC launched services to Singapore, Hanoi, Helsinki, Los Angeles and Atlanta, as well as increasing Tokyo to four times a week. ABC has continued to expand in 2016 with a third weekly Boeing 747 Freighter to Singa-pore and has launched African services through CargoLogicAir.

Volga-Dnepr Group, ABC’s parent company, signed a long-term agreement with Moscow’s Sheremetyevo International Airport to develop cargo operations. When announcing the agreement, ABC director general, Sergey Lazarev said: “Both Volga-Dnepr Group and

Sheremetyevo airport are strategically ori-ented towards development of a modern air cargo hub of international level at the premises of Sheremetyevo air-port. All the agreements and mutual obligations reached in this agree-ment are particularly intended to guarantee high quality level of air cargo services for our customers.”

Sheremetyevo director general, Michael Vasilenko said at the time: “We are delighted to see that it embraces not

only quantitative side when Volga-Dnepr Group guarantees an agreed volume of

transit, transfer and import-export cargo flows, but qualitative side as well with building of up-to-date hangar complex for maintenance and repair services, expansion of cargo facilities to offer han-

dling for special commodities and, most importantly, provision of

all the resources needed from our side.”

ABC keeps soaring with 27% volume increase in Q1RUSSIA AND CIS

Aeroflot’s cargo and mail volumes con-tinue to recover in 2016 after a long period of decline, with domestic traffic driving the growth.

In the first three months of 2016 cargo and mail volumes increased by 15.2 per cent to 33,614 tonnes, with international increasing by 7.8 per cent to 17,909 tonnes and domestic up 25 per cent to 15,707 tonnes.

In March, Aeroflot’s cargo and mail was up by 16.8 per cent to 13,103 tonnes, with international seeing a small increase of 2.5 per cent to 6,698 tonnes and domestic ris-ing by 36.8 per cent to 6,405 tonnes.

The load factor increased by 1.1 per-centage point to 60.6 per cent, driven by a domestic increase of 3.7 percentage points

to 66.8 per cent, making up for internation-al dipping by 0.2 percentage points to 57.7 per cent. In March, the load factor was up by 2.2 percentage points to 63 per cent. On international routes it was up by 0.8 per-centage points to 59.7 per cent and rose by 4.7 percentage points to 69.7 per cent.

So far in 2016, Aeroflot has added three Boeing 737-800s (including the one pic-tured above, named after writer, Nikolay Leskov), one Boeing 777-300ER, two Suk-hoi Superjet 100s and two Airbus A320s to its fleet, and retired two Airbus A319s and one A320.

In 2015, Aeroflot reduced its losses by 62.1 per cent to 6.5 billion roubles ($100 million). Cargo revenue rose by 10.5 per cent to 9.6 billion roubles.

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Domestic growth helps Aeroflot

A viation in Russia, along with the country’s economy, had a difficult year in 2015, with imports noticeably decreasing, but domestic traffic has been better, Mos-cow’s Sheremetyevo International Airport tells Air

Cargo Week.The airport says sanctions, falling oil prices and the strength

of the US dollar made 2015 challenging for the Russian economy and for air cargo, and the airport says companies are trying to reduce expenses. Moscow Cargo, the cargo and mail ground handler at Sheremetyevo, took over all handling for Aeroflot, which after a difficult first month has now become a successful partnership.

Sheremetyevo says: “In 2015 Moscow Cargo took part in Aer-oflot tender and was selected as a single provider of ground handling services of cargo and mail transportation for the company.”

“The first month after the start of servicing all Aeroflot flights was very difficult and busy but Moscow Cargo managed the task. As for now Moscow Cargo successfully handles almost 20 per cent more cargo on Aeroflot flights than a year ago.”

So far in 2016, domestic traffic has growth steadily and airlines are working on compensating for reduced imports, something

Moscow Cargo is trying to help with by minimising transfer times.“Moscow Cargo provides the shortest transfers, handles up to 6

cargo aircraft at the same time, develops the special goods trans-fer processes (PER, HEA). Airlines and airfreight forwarders are very interested in transit mail processing using airfreight bills.”

As part of a joint project with AirBridgeCargo Airlines, Mos-cow Cargo has put new refrigerating chambers designed for temperature sensitive pharmaceuticals into operations, which passed GDP validation on 21 March. “The refrigerating chambers are equipped with a modern temperature control system and storage conditions monitoring with temperature data online-con-trol available via web-application from anywhere in the world.”

Moscow Cargo is also building a new cargo terminal, designed to handle 380,000 tonnes a year, which will include an automated system of cargo storage, conveyor lines with access to the airfield, temperature controlled storage in packaging, automatic sorting of courier cargo with the integrated size and weight measure-ment system and automatic identification systems are provided in the new terminal.

“This terminal is unique for Moscow Air Cluster. The overall area of the terminal will exceed 40,000 m2. The terminal is being planned to put into full operation in the second quarter of 2017.”

9ACW 9 MAY 2016

RUSSIA AND CIS

Koltsovo ready for new challenges

EKATERINBURG KOLTSOVO INTERNATIONAL AIRPORT (pic-tured) is hoping to use its modern facilities to establish itself as a multimodal transport hub.

The airport tells Air Cargo Week: “The Koltsovo Cargo facil-ities have high-potential, are really modern, technologically and ready for new challenges.

“We’ve got expansion plans, currently we are working hard to increase multimodal handling in Koltsovo Cargo, e.g. international mail exchange by truck and by railway from China, nevertheless we continue negotiating with forwarders and cargo airlines about increasing frequencies.”

Volumes at Koltsovo fell by 11 per cent in 2015 to 22,631 tonnes compared to 25,563 tonnes in 2014. Cargo fell to 20,196 tonnes from 21,936 tonnes, and mail was down from 3,627 tonnes to 2,435 tonnes.

In the first three months of 2016, cargo and mail volumes have increased by 45 per cent to 6,815 tonnes.

FOLLOWING a difficult year in 2015, Astana International Airport (pictured) in Kazakhstan has seen recovery in the first quarter of 2016, and is hoping to keep this up as it pre-pares for the EXPO-2017 World’s Fair Exhibition.

Astana saw cargo volumes fall by 19.7 per cent to 7,889 tonnes in 2015 though the first quarter of 2016 saw a re-covery of 10.8 per cent to 1,807 tonnes. The airport predicts volumes will grow by 10 per cent in 2016 to 8,678 tonnes. The main imports the airport handles include construction materials, spare parts, plants, animals, medicine, apparel and equipment while equipment and spare parts are the pri-mary exports.

The airport tells Air Cargo Week: “At Astana the new build-ings are constructed in the frame of EXPO-2017, that is why the construction materials are very popular goods in air cargo traffic last days. Moreover, present time in Kazakhstan, par-ticularly in Astana, the trade relations are very developed, in this regard the apparel is imported from abroad.”

Astana is planning to construct a new storage facility. The airport says: “Astana Airport plans to construct in current year new modal storage for cargo handling, square will be about 1 000 m². There will be different storages for transit, DG, goods require temperature mode. We estimate to finish construction of cargo storage to the spring of 2017.”

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Domestic traffic make up for falling imports at Sheremetyevo

Astana prepares for EXPO 2017

The Austrian market is a challenge, but despite the dif-ficult conditions there was an increase in overall air cargo tonnage of more than four per cent in 2015.

Austrian Airlines, which is part of Lufthansa Cargo, has seen good growth, driven by its expanding network

and fleet upgrades.Lufthansa Cargo regional director for Austria, East and South

East Europe, Turkey and Israel, Hasso Schmidt (pictured) tells Air Cargo Week growth was driven by Innsbruck, Salzburg and Vienna and he expects more will follow: “The overall market sit-uation remains challenging though. The addition of Shanghai to the Austrian Airlines network in the course of the year raises high e x p e c t a - tions in terms of tonnage growth.”

Schmidt says Austrian, which offers bel-lyhold capacity on its network has seen

tonnage rise two per cent so far in 2016, compared to the same period in 2015, which reflects the increasing capacity offered by Austrian due to their network expansion.

According to CASS data in 2016, Schmidt says the market’s main trade

lanes out of Austria in descending order are to Chicago, Shang-hai, Seoul, Los Angeles, Tokyo and Mexico City. For the group as a whole, those trade lanes are Chicago, Tokyo, New York, Dubai, Mexico City and Bangkok.

He says the market wide main trade lanes to Austria are Seoul, Hong Kong, Shanghai, Tokyo, Chicago and Los Angeles, while for Lufthansa Cargo those trade lanes are Tokyo, Chicago, Shanghai, Bangkok, Seoul and New York.

As for Austria itself, Schmidt notes: “On the export side we see general cargo, and pharmaceuticals products having a pos-itive development. On the import side, it’s also pharmaceutical products having increased in the first two months of the year, compared to the same period in 2015.”

Austria is ideally located to grow its air cargo market further and Schmidt says the attractiveness of Vienna as a consolidation hub is further increased by Austrian’s expanding intercontinen-tal network. However, he notes: “But we also see with more and more intercontinental services operated to and from the neigh-boring countries in the Central and Eastern European region there is more direct uplift from there and less cargo trucked into Austria to be consolidated here. The previous ‘consolidation effect’ in Vienna as the closest airport with an intercontinental network therefore is decreasing.”

Schmidt feels gateways in Austria are geared for cargo growth and development, but a major barrier to growing the cargo busi-ness in Austria in his view, is the high airport costs.

As Austrian is part of Lufthansa Cargo, this has benefits for both. It gives Lufthansa a strong market position in Austria and Central Eastern Europe due to dedicated local teams, while the co-operation Schmidt says also generates synergies in relations to sales, cost efficiency, innovation and product diversity.

Austrian will continue to grow its network and in 2015 it added Colombo, Mauritius, Miami and Chișinău, while it sees great opportunities from a service started to Shanghai last month and routes to Hong Kong and Havana later this year.

ACW 9 may 2016 10

Alpine country standing tall in tough market conditionsAUSTRIA

VIENNA INTERNATIONAL AIRPORT has seen cargo grow by two per cent in the first quarter (Q1) of 2016, but posted a slight fall in March of 0.8 per cent.

Austria’s principal airfreight hub handled 64,548 tonnes in Q1 and 23,672 tonnes in March. In February it handled 20,204 tonnes, an increase of 1.3 per cent on the same month last year.

Freighter operators at Vienna include Asiana Cargo, Car-golux, China Southern Airlines, FedEx, Korean Air Cargo, TNT Airways, Silk Way Airlines, and Turkish Airlines Cargo.

Bellyhold volumes could be set for growth as various carri-ers have started new routes into and out of Vienna.

Last month, Air India begun operating a Boeing Dream-liner 787-800 from Delhi three times a week, as part of a co-operation with Star Alliance partner Austrian Airlines.

Airport operator, Flughafen Wien member of the manage-ment board, Julian Jäger says: “We are extremely pleased to be able to expand our long-haul offering from Vienna with Air India. This step clearly shows once again that our Star Alliance partners will continue to rely on Vienna as a flight hub in the future.”

Meanwhile, Air France-KLM Group budget carrier, Tran-savia has launched a new daily service from Paris-Orly Airport.

Estonian carrier Nordica is also jow offering new direct flight connections between Vienna and Tallinn. Nordica will operate up to five weekly flights to the Estonian capital city in co-operation with Adria Airways.

Nordica chief commercial officer, Erik Sakkov, says: “The new flights between Tallinn and Vienna comprise an import-ant step in our strategy of facilitating European access to Estonia. We are very happy to be able to connect these two historic capital cities.”

In March, Scandinavian Airlines (SAS) started flights to Copenhagen four times a week, returning after a seven-year break. Jäger explains he is delighted SAS has returned as it always had a good collaboration with the carrier.

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Vienna sees2% cargo uplift

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IJS Global GEFCO Netherlands (NL) has been awarded a Good Distribution Practice (GDP) certificate by the Dutch Ministry of Health.

The certificate shows the company fulfils the requirements of the European Commis-sion ‘Guidelines on Good Distribution Practice of Medicinal Products for Human Use’ and of World Health Organization guidelines.

IJS Global GEFCO compliance manager, Sarina Walidin explains: “This certificate proves that we comply with European Union guidelines and can therefore be considered a very reliable and quality-driven business partner for han-dling medicinal products.”

The GDP certification plays a key role in assuring the quality and integrity of the trans-port and distribution of medicinal products for human use. It focuses on the use of specialised

equipment, well-established pharmaceutical working procedures, and continuously improv-ing pharma handling expertise.

The logistics specialist is also involved in the International Air Transport Associa-tion’s Center of Excellence for Independent Validators (CEIV) in Pharmaceutical Logistics project.

Along with CEIV, both certifications will allow IJS Global GEFCO NL to expand its reach in the Life Sciences and Healthcare industry.

Last year IJS Global GEFCO opened a 24-hour Life Sciences and Healthcare warehouse facility at Frankfurt Airport in Germany.

It also last year opened a new temperature controlled facility at Heathrow Airport - as its strengthens its Life Sciences and Healthcare offering as it looks to grow in the sector.

GDP for IJS Global GEFCOPHARMA NEWS ROUND-UP

CEIV certificate at Brussels for Panalpina

Pharma market growing

Despite airfreight’s share in the pharma-ceutical transportation market falling to 11 per cent compared to 17 per cent, Air France KLM Martinair Cargo (AF-KL-MP) says increased demand means it continues to see growth.

Talking at a pharmaceutical logistics con-ference AF-KL-MP was hosting on 26 April in London, director of pharma, Renate de Walle (pictured) explained the growth came from the whole market expanding.

Airfreight’s share in the market has fallen from 17 per cent in 2000 to 11 per cent but remains the preferred transportation for the more valuable and urgent products, while the mass-produced pharmaceuticals and those with predictable demand patterns are increasingly going by seafreight.

During a humanitarian crisis, airfreight is often the best way to get aid to those in need. When Ecuador was hit by an earth-quake on 16 April, KLM Cargo flew 90 tonnes of aid relief to Quito on behalf of UNiCeF.

De Walle says: “Pharma grew because the pie is growing. The priorities are quality up and costs down, there is a price pressure there.”

The supply chain is being pushed towards more stability and reliability, lower pricing and tarmac protection, transparency, new routes and network flexibility and more flex-ible partners due to developments in the healthcare industry such as shift in disease patterns, more generic products, stricter regulations, rising demand from emerging countries and just-in-time delivery.

Both AF-KL-MP’s hubs, paris Charles de Gaulle Airport and Amsterdam Airport schiphol are international Air transport Association Center of Excellence for In-dependent Validators certified for both handling activity and airline processes.

De Walle welcomes the Pharma Gate-way Amsterdam initiative at Schiphol where partners including AF-KL-MP have created a pharma hub: “I see more airports doing this. Amsterdam has good collaboration and cooperation, it is not from a single airline but from the airport, from Air Cargo Netherlands and Schiphol. The partners talk togeth-er, share experience and help parties be-come equally strong.”

pANALpiNA has been awarded the inter-national Air transport Association’s (IATA) Center of Excellence for Independent Vali-dators (CEIV) in Pharmaceutical Logistics certificate at Brussels Airport.

Panalpina’s Belgium head of quality, health, safety and environment, Frank Rae-ckelboom says: “The certification is yet another proof of our excellent handling ca-pabilities for pharmaceuticals and medical products here in Brussels.”

Brussels is Panalpina’s first station to have obtained the CEIV certificate, which is becoming the benchmark for airfreight oper-ations for healthcare products.

The station is split into two areas – an area of 930 square metres is dedicated to cargo kept at controlled room temperatures between 15 degrees Celsius and 25 de-grees Celsius. Cargo needing to be kept at a temperature between two degrees Celsius and eight degrees Celsius can be stored in a cold cell of 32 square metres.

Panalpina’s corporate healthcare quality assurance and regulatory manager, Jaime Aznar says: “Our capabilities in Brussels and elsewhere in the world are not linked to the infrastructure alone. Our customers can rely on our own trained and very experienced staff on-site. They oversee all operations and immediately intervene if necessary. Our processes are tried and tested.”

Raeckelboom adds: “Our certifications give our healthcare customers assurance that we can safely handle their valuable and sensitive products, be it human or veterinar-ian finished products, active pharmaceutical ingredients or medical devices, in a man-ner that is fully compliant with the highest standards.”

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