The air cargo industry is constantly on a battle with external forces like the global economy disturbances, issues on political stability, oil prices movement, among others, that impact its growth and development.
Remarkably, it manages to bounce back each fall and continues to account for one third of all goods transported around the world valued at more than $6 trillion annually,reflecting its importance, especially in today’s digital world.
Volatile yet profitable given the right conditions and circumstances. Such is the nature of this business that despite the odds, new players emerge every now and then.
ULS Airlines Cargo, now on its 15th year, is among new industry players demonstrating strength, innovation and resilience.
The Istanbul-based cargo carrier, which also offers logistics and warehousing, has survived the latest turning point in the industry, which for the most part was caused by the lingering trade war between the world’s biggest economies, US and China, changing bilateral deals between countries and continents, political instability, security threats, among other global challenges.
Market Expansion Plans
Shukru Can, Managing Director of ULS Airlines Cargo, said the company was established in 2004 with its home base at Istanbul Ataturk Airport. It currently has three A310-300 cargo planes on its fleet with total carrying capacity of 120 tons.
The company primarily offers scheduled cargo flights as well as charter or long-term aircraft rental (ACMI) with other airlines.
Can, who took on the role of ULS MD in April 2019, said his vision is to grow the company’s business mainly through partnerships with big airlines across the world.
We have three aircraft at the moment,” shared Can, an aeronautical/aerospace engineering graduate of Istanbul Technical University. “But we’re eyeing expansion mainly through partnerships with big airlines.”
ULS had so far operated more than 10,000 charter flights, primarily for its clients in Dubai, Saudi Arabia, the Far East, Hong Kong, China and Turkey.
“We also provide ACMI and charter flights for Dubai, Saudi Arabia, Far East, Hong Kong and China. Turkish Airlines is also one of our main customers under ACMI,” Can told Air Cargo Update in an interview in Munich on the sidelines of Air Cargo Eur ope where he said the company made new deals.
“We had more than 10,000 charter flights. We carry live animals, oversized cargo or take cargo to challenging points like Afghanistan, Somalia or Iraq, Kathmandu, Santo Domingo (Dominican Republic),” he added.
A 34-year veteran in the global aviation industry, Can began his career with Turkish Cargo and went on to expand his professional experience working overseas in countries such as France, England, Malaysia, Singapore and Nigeria.
Can believes there are opportunities to be made in Africa and Latin America which he described as “open cargo markets.”
“Africa and South America are open markets for cargo players. They have good potentials. I see big future in Africa, together with the big players,” said Can, a highly experienced aircraft engineer and aviation executive who also taught at Istanbul Technical University Faculty of Aeronautics and Astronautics.
Hopeful in 2020
Can said ULS’s biggest market is Europe and it continues to explore the continent for possibilities through partnerships and collaborations.
The cargo carrier regularly hauls live animals, fresh vegetables and fruits, among other perishables and products, between Turkey and Europe and other parts of the world. Recognized for its high regard for global safety standards, ULS also transports dangerous goods requiring special attention.
Yasin Ata, ULS Airlines Cargo Commercial Manager, in a separate interview said their company may be small but it’s very dynamic and flexible with strong financial backing.
“Our company is small but it’s very dynamic and flexible. Our investor is also strong financially. We want to expand our aviation business by opening an MRO (maintenance, repair and overhaul) services,” said Ata.
He said ULS carried less cargo in 2019 but it remains optimistic for what the future holds, especially in 2020.
“We are eyeing A321-200F cargo conversion program to expand our fleet. We are currently operating the golden A31-308F aircraft which carry 40 tons gross,” he said.
“We look forward to seeing 2020,” he added, noting that the second half of 2020 may likely be better with the global economy projected to bounce back after a downturn forecasts to trickle in the first half of the coming year. “Better economy means better cargo.”
Can who continue to break new grounds for ULS said part of his vision is to make the company an ideal partner for bigger players that need help in carrying out their operations globally.
“Our vision is to continue having dynamic and flexible partnerships with the big players and tackle their problematic areas,” said Can who noted that ULS can also put an aircraft under their registration and fly it on behalf of clients.
ULS Airlines Cargo main services
ULS Havayolları Kargo fleet of aircraft can be rented for short or long periods, with flight crew and all maintenance costs and the cost of insurance (with ACMI conditions). This service is for an airline to respond to a year or longer, to meet the needs of the business or to create additional capacity. It is also possible to paint the name and logo of the company leasing on the aircraft for a long-term lease of one year or more.
According to ACMI conditions, “Aircraft, flight crew, all maintenance cost of the aircraft and cost of insurance” belongs to ULS Airlines Cargo and such costs as airport ground handling, landing-take-off and fuel related to the operation of the rental belongs to the company who rents the aircraft.
ACMI Service Airways
With its International Air Operator Certificate, ULS Havayolları Kargo also operates in Europe, Asia and Africa with its specialized staff. Its Operations and Dispatch Departments are available 24 hours a day.
ULS Airlines Cargo says it has stocks of pallets at various points in Europe. Its combined positions of P1P and PMC pallets can also be applied to carry some special materials such as aircraft engines. It can also provide special containers for specific loads such as horses and other farm animals.
ULS also accepts charter flights to natural disaster areas or battlefields to carry the burden of other airline companies, government agencies, local or international charities, organizations that supply and distribute the materials for rescuing life
Airbus forecasts need for over 39,000 new aircraft, including freighters, in the next 20 years
The world’s passenger and freighter aircraft fleet is set to more than double from today’s nearly 23,000 to almost 48,000 by 2038 with traffic growing at 4.3% annually, also resulting in a need for 550,000 new pilots and 640,000 new technicians.
By 2038, of the forecast 47,680 fleet, 39,210 are new and 8,470 remain from today. By updating fleets with latest generation fuel efficient aircraft such as the A220, A320neo Family, the A330neo and the A350, Airbus believes it will largely contribute to the progressive decarbonisation of the air transport industry and the objective of carbon neutral growth from 2020 while connecting more people globally.
According to Airbus’ latest Global Market Forecast 2019- 2038, of the figure, 25,000 aircraft are for growth and 14,210 are to replace older models with newer ones offering superior efficiency.
Resilient to economic shocks, air traffic has more than doubled since 2000. It is increasingly playing a key role in connecting large population centers, particularly in emerging markets where the propensity to travel is amongst the world’s highest as cost or geography make alternatives impossible.
Today, about a quarter of the world’s urban population is responsible for more than a quarter of global GDP, and given both are key growth drivers, Aviation Mega Cities (AMCs) will continue to power the global aviation network. Developments in superior fuel efficiency are further driving demand to replace existing less fuel efficient aircraft
ACL Airshop’s operations are primarily centered in three major airports̶ Amsterdam AMS, Hong Kong HKG, and New York JFKenabling it to control and balance the complex logistics of its steadily-growing ULD fleets at three ideal time zones, including clients who require logistics fleet technologies from the company.
In 1979, a little known company in Greenville, South Carolina started shipping horses by air.
By 1984, it invented the short-term leasing business for airline containers, opening up its first shop of unit load devices (ULDs)—the ACL Airshop.
Today, ACL Air shop is one of the world’s leading providers of comprehensive ULD and cargo control solutions for the aviation industry with offices in more than 50 locations on 6 continents.
Its global footprint is undeniably massive with products and services used by more than 200 international airlines and at majority of the top 100 air cargo hub airports worldwide.
Air Cargo Update speaks to Steve Townes, Chairman & CEO of ACL Airshop, and CEO/Founder of Ranger
Aerospace, a private equity consolidator and management holding firm specializing in mergers and acquisitions on aerospaceand aviation with hundreds of millions in various buyouts and consolidations and investing transactions
since 1997.
Ranger Aerospace acquired ACL Airshop in February 2016 and since then the company had seen dramatic transformation in terms of sales, services and product offers.
Townes, a former American Army ranger who studied engineering at United States Military Academy at West Point turned serial entrepreneur and philanthropist, said growing ACL Airshop’s network has always been their goal.
“This was our strategy following the acquisition by Ranger Aerospace and its large capital partners. The strategic mantra of “GROW THE NETWORK” carries with it hundreds of sub-tasks, but that over-arching goal has been clear from the start,” Townes shared.
We currently offer ULDs that are enabled with Bluetooth Low Energy tracking technology. This technology can provide our customers with various data points: temperature, location services, connectivity with airway bills that allow forward facing updates to the cargo customer. In addition, we are the launch customer for VRR’s new collapsible main deck container – a true game changer in terms of U LD imbalances and repositioning.
its large capital partners. The strategic mantra of “GROW THE NETWORK” carries with it hundreds of sub-tasks, but that over-arching goal has been clear from the start,” Townes shared.
“At the beginning of the “Ranger Chapter,” we interviewed customers about the value proposition of ACL Airshop. The voice of customer comments was uniformly positive, and they all said, “We hope you will provide ULD services in more hub airports.” So that was the genesis of “Grow the Network.” Our customers wrote our strategy,” he pointed out.
Global presence
ACL Airshop’s operations are primarily centered in three major airports—Amsterdam AMS, Hong K o n g H K G , a n d New Yor k JFK—enabling it to control and balance the complex logistics of its steadily-growing ULD fleets at three ideal time zones, including clients who require logistics fleet technologies from the company.
Wo r l d wide , ACL has 220 employees, 30 percent more before Ranger Aerospace took over, and its likely to increase with the company’s planned global expansion.
“We currently have 220 full-time employees around the world, which is roughly one-third larger than when Ranger acquired ACL Airshop in February 2016. We have added manufacturing capacity, more repair stations , and new tech nology services, resulting in a number of highly skilled professionals and technicians added to the ranks,” Townes said.
“Our overhead staffing has been kept to a slow-growth strategy, as we leverage the experienced executive teams across a larger base. The company is very flat and thin, without redundant layers of cost which customers typically do not value,” he explained, adding, their staff will likely increase to about 300 as the company pursues its goal of expanding to at least 75 of the world’s Top 100 airports in the next few years.
ACL Workshop’s staff may be lean but they are well compensated and highly valued resulting to the company being voted as among the “Top Workplace” to work in the United States.
“We are proud that we were voted a ‘Top Workplace’ for a company of our type and size by that nationwide survey. It is conducted by experts from outside the company, through “blind” surveys and interviews directly with employees , completely objective. Thus, it is wonderful feedback to be rated so highly by our own people, in comparison to othercompanies in the aviation sector,” said Townes.
ULD solutions & repair
Transporting horses via air since 1979 or 40 years ago, ACL Airshop has long made its mark in carrying live animals safely and securely through specialized ULD solutions with accompanying highly – trained professionals.
It has well – trained grooms , educated equine veterinarians ensuring that each horse receives unique care and custom placement depending on gender and size. Its solutions include collapsible stalls to save space and money with a single position fitting 4 stacked stalls for return trip.
Wes Tucker, Executive Vice President & CEO of ACL Airshop, said the company offers varied ULDs, including those with advanced tech features.
“ACL Airshop specializes in the most popular pallets used in both upper deck and lower deck operations. Additionally, containers used in lower deck passenger operations and main deck ULD’s commonly used for e-commerce packages are also part of our ULD portfolio,” said Tucker.
The ACL ULDs, which can be leased or sold, typically have an average service life of 7 to 10 years, depending on the region and customer, explained Tucker and noted that “We are actively involved in various end-of-life recycling programs with OEM’s and Operators.”
Apart from ULDs, ACL also offers nets, straps, fitting and corner ropes, which are very important in securing the safety of transported goods on air.
“We offer a variety of different cargo securement products. Cargo nets are an absolute necessity for 95% of the pallets used in any operations. When special cargo is involved, we offer a diverse array of solutions in the form of FAA certified straps and lashings. Our unique capability to supply customers from
different manufacturing facilities around the world provide customers with a seamless supply chain – unencumbered by long, ocean transport times,” said Tucker.
ULDs & technology
Adapting to the digital age, ACL also offers ULDs with Bluetooth tracking devices. The company had since introduced the Find My ULD app and implemented CORE Insight’s Bluetooth logistics technology for its valued air car riers and cargo customers.
“The air cargo industry in general, and the ULD segment in particular, are now pushing stronglyahead to enhance service, accountability, reliability, and speed with new logistics technologies of various types. Ultimately,these efforts should also reduce the overall life-cycle cost of ULDs, and create end-to-end visibility in the entire ULD ecosystem for shippers of air cargo goods,” said Townes.
“The “Holy Grail” goal that everyone seems to be aiming for is tying the Airway Bill to the ULD and to the tracking device/fleet control system. Accomplishing that will not be easy, but it is our next step on our innovation journey.
“These technology changes create new differentiation from a business perspective. Our view is that a market leader MUST also be a technology leader , hence our relentless investment in new systems and fresh thinking. Our customers expect this of us.”Tucker noted the ACL ULDs with Bluetooth enable customers to access important data about their shipment while it is being transported.
“We currently offer ULDs that are enabled with Bluetooth Low Energy tracking technolog y . T h i s technology can provide our customers with various data points : temperature, location services, connectivity with airway bills that a l low forward facing updates to the cargo customer. In addition, we are the launch customer for VRR’s new collapsible main deck container – a true game changer in terms of ULD imbalances and repositioning,” he said.
New modern facility
Apart from technology and people, ACL has also invested on infrastructure. It recently opened its new ultra-modern manufacturing center in South Carolina, its home state and one of the fastest growing area in the US in the aerospace industry.
Townes said A C L ‘ s n e w manufacturing center in South Carolina replaces the original factory from the company’s legacy years. It is envisioned to be self-sustaining in the long-term through better throughput and productivity.
“We decided to keep this flag firmly planted in the home state of the company, which has become one of the fastest-growing US states in the aerospace industry. With improved layouts, LEAN workflow designs, and upgraded capital equipment, we are estimating the new factory will quite literally “pay for itself” through better throughput and productivity. We will measure that at the end of this year, to be sure,” the ACL Chairman and CEO said.
“So although our cost of occupancy went up, the new efficiencies are yielding measurable savings against the same amount of work and numbers of personnel. Thus, we are gauging that our output can go up as demand rises,” he added.
ACL’s new factory is a collaboration between many parties who believe in the company’s potentials to grow
even bigger than what it is now. “The new factory was the result of
strong partnering with the developer (who actually funded the bulk of the capitalization); the general contractor and its magnificent team o f subcontractors; the architecture/ engineering firm who created an impressive modernistic design; plus, the real estate experts, bankers, and many others. We have a robust supply chain manufacturing capacity that now stretches from South Carolina to Germany, China, and Taiwan,” said Townes.
Steve Townes. A name hardly missed at West Point being the mule donor in perpetuity for the football stadium and animal mascots of the top American military school where he earned his engineering degree in 1975, the Eisenhower Award and the honor as the top graduate from the Army Ranger School.
Townes later trained with the Lanceros, the counter-guerilla forces of Colombia in South America, where he also learned Spanish.
Townes’ name is also etched at the Smithsonian National Air and Space Museum’s ‘Wall of Honor’ as “Air and Space Friend.”
But beyond that, Townes, who also has an MBA from Long Island University and PMD from Harvard Business School, is best known for his astute business s e n s e , intelligence , discipline ,humility and philanthropic deeds.
After forming in 1997 Ranger Aerospace, a private equity firm specializing in acquisitions and mergers in the aerospace and aviation industries with hundreds of millions on its portfolio, Townes continued to build on his businesses, giving jobs to people and inspiring others to make their dreams come through.
Read on his market insights on ACL Airshop, Ranger Aerospace’s latest acquisition, as the company pursues expansion across more cities and countries.US & Canada: We see steady, mature growth ahead for North America.
Middle East: For Mid-East and Eurasia, some of our fastest-growing accounts are from that region.
China: We are now in multiple cities in Mainland China and, of course, Hong Kong. This region is strategically hugely important for us. It is our fastest growing region of the world, following the cargo growth, e-commerce, demographic, and macro- economic growth trends of those burgeoning markets.
India: We have carefully explored (this year) entering the Indian sub-continent. We are selecting Handling Partners for several of the main cargo hubs, and hope to be making announcements sometime in 2020 about our next steps in India.
Europe: Like N. America, Europe is a steady, mature market for us. We continue growing, however, with new footprints of important activity in sites such as Liege Belgium and Milan Italy. Our primary hub for Europe and all international operations remains Amsterdam.
Africa: We have one support site in Kenya, and have been exploring others in cargo-heavy sites in Africa. Our growth there will depend on the factors that drive each of our airport support expansions: customer pull, cargo tonnage, numbers of flights, repairs requirements, competitive situation, and “Top 100” as our preference.
Latin America: We have grown aggressively in Latin America in the past few years. The city pairings with Bogota, our flagship location, are remarkably robust across the region as well as to other continents. We are enthused about adding more cities to round-out our operations, from key airports of Mexico all the way southward across the S. American continent, focusing on our criteria for flights, tonnage, customer pull, repairs, etc.
Asia: Without doubt, this has become our fastest- growing worldwide region. Just 5 years ago we had one strong outpost at Hong Kong. Now we have 16. Others are planned in key hubs of the Asia-Pacific theater, including India. The entire ACL Airshop team has done a phenomenal job in expanding our footprint and service network in Asia. Despite current tariff wars, we are confident about the continued long-term growth for our business in Asia-Pacific.
Bordering the Russian Federation on the north, Iran on the south, the Caspian Sea on the east, and Georgia on the west, Azerbaijan has the geographic advantage of having the shortest distance to connect Europe to Asia and beyond with ample resources to finance businesses to realize economic gains from its unique geopolitical landscape.
With abundant deposits of oil and gas, Azerbaijan, once part of the Union of Soviet Socialist Republics, ( USSR ) quickly established its own oil-based economy following the collapse of the communist regime in 1991.
But the volatile global economy had taken its toll on Azerbaijan’s oil-dependent economy, leaving it vulnerable to external shocks, peaking between 2014 -2016,
devaluing the country’s currency by as much as – 31 percent exacerbated by record high in flation rates, according to reports.
Azerbaijan had since recovered from its economic crisis, posting moderate growth of + 1 . 4 % increase on real GDP in 2018 and +2.4% year-on-year during the first half of 2019, according to the latest report of global research market leader Euler Hermes.
“Increased gas exports from the Shahdeniz Phase II field, thanks to the Southern Gas Corridor pipeline becoming operational, as well as strengthening domestic demand on the back of lower inflation and interest rates, have lifted economic growth to +2.4% y/y in H1 2019. We expect this moderate dynamic to continue and forecast full-year GDP growth of about +2.5% in both 2019 and 2020. However, global uncertainties, including the rise in trade tensions and potentially lower oil prices, pose downside risks to this forecast,” Euler Hermes said in its report.
“Inflation has picked up slightly to 3% y/y in June 2019 but we expect it to remain in check in the near future, averaging about 3% in 2019 as a whole and 3.5% in 2020. However, the potential impact of global uncertainties on emerging market currencies in general, as well as ongoing domestic banking sector vulnerabilities, pose upside risks to this forecast,” it added.
Caspian’s leading cargo airline
Uniquely positioned to undertake projects diversifying its oil based economy while promoting growth in Central Asia, Azerbaijan had long envisioned to grow its foothold in the Caspian region through the development of its logistics and aviation sectors.
The state-owned Silkway West Airlines—one of 23 businesses under Azerbaijan’s Silk Way Group formed in 2006 continues to thread the path of becoming Central Asia’s leading cargo airline, growing its route network to more than 50 destinations.
Records from the State Statistical Committee of the Republic of Azerbaijan showed from 21,000 tons of air cargo in 1990, the country’s air freight industry hauled 208,000 tons in 2018, and signs for more growth are in the horizon as demand for e-Commerce in the region rises.
In late 2018, Silk way We st Airlines received its new Boeing 747-400 plane, increasing its total fleet of 747 freighters to 10. The move is part of the airline’s long- term goal to further grow its scheduled network while enhancing options for charter flights among its growing clienteles.
This year, the cargo carrier made major leadership roles in its key markets—the United States and Asia-Pacific—positioning itself to aggressively compete in these growing regions.
On September 27, the airline launched its long awaited freighter operation from Oslo Gardermoen Airport connecting
the Norwegian salmon industry to its hub in Baku.
“We are excited to offer the Norwegian Seafood industry increased connectivities through our Global Aircargo Hub in Baku.
Silkway has been flying Norwegian Seafood for many years through other European gateways, and we are now very pleased to finally add Oslo to our global network,” Silkway Commercial Director Europe Riad Fataliyev said in a statement.
Silkway says it will use a B747- 400F for the Oslo Friday flight connecting the whole Far East via Baku where its state-of-the-art facilities for air cargo are located.
Apart from investing on new planes to spruce up operations of Silkway WestAirlines, the Azerbaijan government also vastly expanded the carrier’s cargo facilities with sophisticated cold storage and a modern general cargo terminal at the Heydar Aliyev International Airport in Baku.
Eurasia Trans-Hub
Azerbaijan President Ilham Aliyev said the country will continue to invest in logistics and transportation industries as part of long term plans to diversify Azerbaijan’s economy and position itself as the trans-hub in Eurasia.
Part of this is to export gas to Azerbaijan’s neighboring countries through pipelines connecting the country to Turkey and the European markets.
In 2013, Turkey and Azerbaijan signed an initiative agreeing to link through the South Caucasus Gas Pipeline project the Turkish border to the south of Italy to deliver the Azerbaijani gas to its European markets.
This project, also known as the “Southern Gas Corridor”, is expected to be fully completed by 2020, enabling Azerbaijan to reposition itself as a major gas supplier in Europe.
In a July 2019 meeting with EU President Donald Tusk, Aliyev expressed hope Azerbaijan’s investments on logistics and transportation sectors would strengthen its ties with Europe politically, socially and economically.
Tusk, for his part said, the Southern Gas Corridor “quite literally connects us” referring to Azerbaijan and Europe, saying, “This positive momentum should bring our partnership to a higher level, directly benefit all our people, and accompany Azerbaijan’s own reform processes and economic diversification.”
Apart from investing on major gas pipelines, Azerbaijan is also building the Baku-Tbilisi-Kars railway which links the Soviet-era rail systems of Azerbaijan to Georgia and Turkey and eventually, to the rest of Europe with projected peak capacity of 17 million tons of cargo per year, once fully operational.
The project’s first phase will enable the railway to handle million passengers and 6.5 million tons of cargo.
And there’s also the Alat Port, opening up a new transit trade route between Europe, Central Asia, South Asia and the East and allowing for multi modal North / South and East/West transit which has rail ferries that can transport 52 train cars at a time. About 4 million tons of cargo (oil excluded) were handled at Alat Port in 2018, the government said.
The government vows to continue transforming Azerbaijan into an international transport hub. And this process includes the development of the shortest multi modal land corridors between China and the EU; creation of the North South Transport Corridor; attraction of transit cargo as part of the Great Silk Road; digitalization of the Great Silk Road through Azerbaijan`s Digital Transport Network and TA S I M projects, and; commissioning of new international airports & construction of new roads across the country.
Boeing Forecast: Russia and Central Asia-Europe air cargo market to grow 3.4% annually over the next 20 years
The Russia and Central Asia market accounts for approximately 1.4 percent of the world’s total air cargo traffic in ton- kilometers and 2.4 percent in tonnage.
Air trade originating in or destined to Russia and Central Asia was estimated at 1.3 million tons in 2017, based on the region’s airport statistics. Growth averaged 2.7 percent from 2007 to 2017, based on tonnage handled at airports.
Fueled by high oil and gas prices, Russia and Central Asia air trade expanded 50 percent after 2009, peaking at 1.3 million tons in 2011. Contraction in the region’s air cargo volumes gathered pace in 2014 and 2015, as investment in extractive in dustries slowed, consumer spending fell, and trade sanctions were imposed on Russia for its support of the conflict in Ukraine.
Regional air trade expanded 10 percent and 14 percent in 2016 and 2017, respectively, as the world economy recovered , commodity prices stabilized, and Russia reoriented much of its international air trade toward East Asia rather than Europe.
The Russia and Central Asia–Europe air cargo market will grow at an average annual rate of 3.4 percent for the next two decades.
Russia and Central Asia air exports to Europe will grow at a rate of 3.6 percent to reach 107,000 tons by 2037. European demand for Russia- produced specialty chemicals and industrial metals, specialized scientific equipment, and aerospace goods will bolster growth for the forecast period.
Pro-business legislation and an improved foreign investment climate could promote an export-driven economy for a wide array of manufactured and semi manufactured goods, leading to the high- growth projection. Conversely, continuing regional conflicts, laws and regulations adverse to new businesses, or renationalization of industries would impede air trade growth, leading to the low-growth projection.
With innovations and hard work, AA Cargo has evolved to being one of the world’s leading air freight carriers. In the United States, it holds the record as having the youngest fleet, part of its conscious effort to help stave off the world’s growing environmental problems amid looming threats of climate change.
American Airlines Cargo prides itself in transporting approximately more than 100 million pounds of goods on a weekly basis to hundreds of cities across continents. That translates to nearly 7,000 flights every day to some 324 airports. Its global impact is undoubtedly very significant with countless lives and businesses intertwined in the process.
Formed in 1930 through the union of some 80 small airlines, the Dallas, Texas-based American Airlines traces its roots to having World War I surplus planes to having the most sophisticated aircraft in today’s modern world. It holds the global record as the first airline to introduce scheduled air cargo service and the first to apply air cargo tariff based on density, volume, value and perishability.
With innovations and hard work, AA Cargo has evolved to being one of the world’s leading air freight carriers. In the United States, it holds the record as having the youngest fleet, part of its conscious effort to help stave off the world’s growing environmental problems amid looming threats of climate change.
In an exclusive interview with Air Cargo Update in Munich, Germany on the sidelines of Air Cargo Europe 2019, the amiable AA Cargo President Rick Elieson shared his thoughts and insights on the company’s policies, products and services and its growing responsibility in connecting businesses around the globe amid a volatile political and economic environment.
A company veteran who rose from the ranks, Elieson began his career at the Japanese Desk of American’s DFW Reservations Office in 1994. He has been at the helm of running AA Cargo since 2017 and a year since then, the company reaped record growth.
Now, Elieson is steering the company’s more than 6, 000 employees to greater heights through innovations, new business strategies and goals as the company approaches its 90th year in the industry. Read on the rest of our interview in this Q&A.
American Airlines is considered the largest airline in the world and you obviously make a huge impact on the lives and livelihood of many people across the world that rely on your services. How is the company taking this role?
More than 50% of Americans fly each year. That i s a massive responsibility when you think about all of the business deals that are closed, the loved ones that are reunited, or holidays that are enjoyed. We make the world a smaller place, and bringing people together and caring for them on life’s journey is core to who we are.
The impact we have on the lives of the other 50% of people who do not get on an airplane is less apparent, but no less important. Our role in cargo allows us to care for them too. IATA estimates that 35% of the world’s trade as measured by value is moved via air cargo.
That means that beyond the thousands of jobs that American Airlines Cargo creates, we are helping to deliver the things that matter most in people’s lives. It ranges from simple things like the blueberries that were on my salad last night to more meaningful items like the vaccines that allow my children to safely congregate and attend school this week.
Joining me for dinner last night was a friend who lost his dear wife to cancer a little over a year ago. Advances in personalized medicine and the way in which medical research and development occurs is now crossing borders and dependent on reliable and speedy service that scheduled air cargo provides, increasingly similar to the way modern manufacturing crosses borders throughout its production. We are proud to be part of the changing shape of healthcare and the advances of that industry to improve and save lives.
It is a virtuous cycle as cargo is also a meaningful contributor to the bottom line at American Airlines. This is particularly true when you think about our international network. We closed 2018 with record operational performance, volume and revenue. We take our role very seriously and we are recognized as an integral part of the airline as a whole.
I am especially encouraged by the progress we’re making for the future in the foundational areas of our business—such as growing our fleet, modernizing our technology, investing in our team members and really listening to customers and making changes to meet their growing demands. That will pay dividends for years to come.
“We’re currently making significant investments in technology with the development and upcoming implementation of our new iCargo system. The first phase of this modernization journey will be introduced this fall, and will continue to roll out into 2020. The investment in iCargo and the accompanying evolution in how our team can serve customers is our organization’s largest investment in our history — allowing us to improve our products and increase our capacity for customers.”
– Rick Elieson, President,
American Airlines Cargo
As far as CSR is concerned, how do you reach out to communities on a global scale? Please elaborate.
As the world’s largest airline, we’re proud to give back in the communities where our team members and customers live and work. We focus our efforts in three main areas that our team members have said are most meaningful to them:
Our heroes: Supporting U.S. military members and honoring their devotion to the ideal of liberty and freedom
Our well-being: To improve safety and wellness, and bring hope to patients anywhere in the world
Our social good: Meeting the needs of global citizens by improving stability, sustainability, health and care
Our team members do great work in their communities through volunteering, charitable giving and community outreach. Last year, team members donated more than 155,000 volunteer hours and as a result we donated more than 20 million miles to local charities on their behalf.
American also proudly supports nonprofit organizations that work to make a difference in communities and provide assistance to eligible nonprofits.
Our customers also have a history of giving generously to the causes we support, and we are proud of our loyalty programs that allow customer to give with miles.
Within Cargo specifically, we focus on supporting Cystic Fibrosis Foundation and St. Jude Children’s Research Hospital. Our cargo team members organize fundraisers, participate in events, and donate funds to these charities.
AA Cargo is big into perishables. Please share with us some of the products that the company carry across continents as well as facilities and expertise used to keep them fresh en-route to their final destinations.
Perishables can cover a multitude of areas. One significant product we continue to see is fresh fish. Last year, I
had the opportunity visit a salmon farm in Chile for one of our key customers and learn first-hand about that business – from breeding to how they raise the fish, to how they are processed and how we can best partner with them to protect that investment and improve our services.
That was a fascinating and educational experience, and helped me appreciate what a privilege it is to be part of
transporting such a staple item.
In general, Latin America is a huge export market for perishables. From mangoes in Peru to papayas in Brazil,
worldwide demand continues to rise and we continue to seek new ways to provide this market segment with solutions that are valuable to them.
Perishables are a product that really benefit from our immense network, particularly during peak holiday seasons where we are well-equipped with our wide-body aircraft to handle the flux in demand.
We recognize that for perishable shipments like seafood, fruits, flowers and berries, time and temperature are of the essence, so we employ state-ofthe-art equipment to ensure the freshness of perishables along their journey.
On top of the temperature-controlled containers and refrigeration facilities we have throughout our network, we have a day-of-departure team that actively monitors flight times and temperatures along the way to make sure these sensitive shipments get delivered fresh off the plane.
Another key area is pharmaceuticals. We offer various cooling solutions to customers with our ExpediteTC° product, and we constantly review and evolve our offering based on input and demand. The product includes service features and benefits, dedicated infrastructure, enhanced tracking technologies, and temperaturecontrolled containers. Our goal is to ensure this product remains nimble enough to accommodate new
customer requirements while also meeting the demands of an increased regulatory environment. It is something in which our team takes great pride in helping to make possible.
In addition, we have a flagship, purpose-built pharma facility at Philadelphia International Airport (PHL) where we have made significant investments and commitments to the pharmaceutical and healthcare industries.
We also have infrastructures positioned across the world at many locations including Dallas-Fort Worth International Airport (DFW), John F. Kennedy International Airport (JFK), Miami International Airport (MIA), San Juan Luis Muñoz Marín International Airport (SJU), Heathrow Airport (LHR), Charles de Gaulle Airport (CDG), and Frankfurt Airport (FRA).
Please briefly describe to us the following markets in terms of importance for AA Cargo: United States, Middle East, Latin America, Canada, Africa, Asia-Pacific and Europe.
As the world’s largest airline with a vast global network, of course, all markets are important to us. One destination is no more important than another –rather, it is our ability to connect the world with fast, reliable service that makes us special. We’re here to serve our customers and meet their individual needs.
Obviously, the USA is home market, and we carry cargo on both wide body and narrow body flights within the
USA. Our narrow bodies and their frequency of service are ideally suited to accommodate the ever-growing eCommerce business which predominantly consist of small parcels.
Latin America is another important market for us as we operate the largest number of wide-body frequencies
from the U.S. to that region. Brazil and Argentina are particularly significant in this regard and we have remained committed to these markets throughout their economic ups and downs.
Europe has long been another key market for us with cargo operations at London Heathrow, Paris and Frankfurt,
and a growing range of other cities now served year-round or seasonally. We recently announced new direct routes from our U.S. hubs to locations including Krakow, Prague, Budapest, Tel Aviv and Casablanca beginning in
2020.
Asia is especially dear to my heart and I’m happy about our longstanding operations in China, Japan, Korea and Hong Kong. We’re encouraged by the two new slots at the Tokyo Haneda Airport (HND) for service beginning in 2020. Those slots include a daily DFW-HND flight using a 777-200ER, and a daily LAX-HND flight using a 787-8. That’s in addition to our more recent services from Los Angeles to Australia and New Zealand.
American has the youngest fleet in the industry and we understand the company is acquiring more planes. What’s the latest on this and its potential impact to your business?
In April 2018, we announced an order for an additional 47 B787-8 and – 9 aircraft which are scheduled for delivery between 2020 and 2023. They are designed to replace our A330-300 and B777-200 aircraft and provide a modern, fuel efficient addition to our fleet. These aircraft provide exceptional cargo capacity and will allow us to continue to expand our global network.
Please share with us new innovations and tech advancements recently introduced at AA Cargo. Please elaborate.
We continue to focus on improving our customer service. In such a fiercely competitive business it is sometimes
difficult to point to the returns of investing in the customer experience, but I’m convinced that is the right lens for anyone who wants to remain in business long term, and I think our customers should expect no less. We’re currently making significant investments in technology with the development and upcoming implementation of our new iCargo system. The first phase of this modernization journey will be introduced this fall, and will continue to roll out into 2020.
The investment in iCargo and the accompanying evolution in how our team can serve customers is our organization’s largest investment in our history allowing us to improve our products and increase our capacity for customers.
The advancements will include a revolutionized operating system and platform for innovation which will significantly enhance the customer experience so that our internal team and our customers can grow faster together. It is exciting to see how investments like this will help to shape the industry over the next several years.
There’s been a lot of talk about climate change, how serious is American in addressing this issue through the services it provides?
American is committed to safeguarding the environment, and we are doing all we can to proactively
minimize our impact – recognizing that the success of our efforts will affect future generations. That’s why we’re pursuing a goal to cut our CO2 emissions in half over the next 30 years, and Cargo plays a major part in the pursuit of this goal.
We are being aggressive and believe it is imperative that we can chart a course for success in what is increasingly a resource-constrained world. Our efforts in the air and on the ground to operate more sustainably are also in line with the expectations of our team members, customers and shareholders.
One example of this is with our aircraft. Our fleet renewal program is retiring older models for more fuelefficient aircraft, and we’ve brought on 500 new planes since 2013 making our fleet the youngest U.S. fleet in the industry. We’re burning less fuel, reducing emissions and cutting energy costs. The new models are also quieter, improving passenger comfort and reducing the impact of noise on communities near airports where we operate Another example is through optimizing arrival times, reducing aircraft weight and implementing sustainable and commercially viable alternative jet fuels (SAF) to achieve greater fuel efficiencies that reduce
emissions.
Over the past four years, American reduced emissions by nearly 6.4 million metric tons of CO2e compared to where we were in 2014. And while better air quality in our skies is improving, we’ve procured new ground support equipment that meets or exceeds emission guidelines on land as well. At the end of 2018, more than a
quarter of our GSE fleet was either electric or used lower emission propane.
Please tell us more about the company’s environmental initiatives and your goals relevant to this. The demand for air transportation is expected to nearly double by 2036, according to IATA. As this demand grows , so too will related environmental risks, costs, and externalities.
To combat this and prepare for the increase in demand, American has an environmental management system
(EMS) that provides a systematic approach for complying with environmental regulations and mitigating the risk for potential issues.
As part of our audit process, Environmental Coordinators at each location perform regular self-audit and inspections to ensure we are exceeding environmental regulatory standards. In addition, American’s Environmental Department performs much larger and more in-depth audits of our largest locations. In 2018, American performed 10 of these audits.
When we build a new facility, or upgrade existing facilities, we use environmentally friendly construction practices , including seeking Leadership in Energy and Environmental Design (LEED) standard certification.
From a cargo perspective more specifically, we are al so fully committed to the industry’s eAWB initiative. We’re actively working to achieving a 100 percent eAWB usage from all of our customers. We also of our aircraft, engines and related components. Most importantly, the global aviation industry as a whole needs continued support to develop low-carbon alternative fuels.
What sort of embedded image would you like AA Cargo to have in the public’s consciousness in terms of its services and environmental impact?
Many people are unaware of the significant impact that air cargo has on the quality of their life. They take it for granted. I’m OK with that. I actually believe that is a compliment and a testament to the smooth and efficient
way in which we serve the world’s needs.
Every time I walk through a cargo terminal, I swell with pride at the positive difference we make in the world. Not for me, not so that people give us any more credit for it – but I wish more people were more aware of the impact air cargo has only because I believe it would increase their gratitude for the things they consume, and appreciation for the way our lives are interconnected around the globe. deploy more than 7,500 reusable, l ightweight compos ite cargo containers that reduce weight and save more than 1 million gallons of fuel every year. Our stations recycle roughly 85,000 pounds of shrink-wrap every year — the equivalent to 1.2 million water bottles.
We understand that the company is also exploring the use of alternative fuels. Kindly share with us the latest on this initiative.
In October 2013, the United Nation’s International Civil Aviation Organization (ICAO) signed a landmark agreement to cap emissions from international aviation at 2020 levels, with carbon-neutral growth
thereafter. American supports this industry-wide goal and the collective process by which it will be implemented.
As we work toward ICAO’s vision of carbon-neutral growth post 2020, we also challenge our partners to help us
achieve this goal. Government investment in existing and NextGen air traffic control are vital, as is ongoing research and innovation by suppliers of our aircraft, engines and related components. Most importantly, the global aviation industry as a whole needs continued support to develop low-carbon alternative fuels.
What sort of embedded image would you like AA Cargo to have in the public’s consciousness in terms of its services and environmental impact?
Many people are unaware of the significant impact that air cargo has on the quality of their life. They take it for granted. I’m OK with that. I actually believe that is a compliment and a testament to the smooth and efficient way in which we serve the world’s needs.
Every time I walk through a cargo terminal, I swell with pride at the positive difference we make in the world. Not for me, not so that people give us any more credit for it but I wish more people were more aware of the impact air cargo has only because I believe it would increase their gratitude for the things they consume, and appreciation for the way our lives are interconnected around the globe.
Powered by six turbofan engines and wings spanning 88.4 meters long, the mammoth AN-225 Mriya is 9 meters longer than the world’s largest passenger aircraft, the Airbus A380 superjumbo.
Tens of thousands of planes fly over the skies every hour but there is truly just one that dominates the airspace when it comes to size, capacity and power, the Antonov AN-225 Mriya, the world’s biggest and heaviest aircraft. Powered by six turbofan engines and wings spanning 88.4 meters long, the mammoth AN-225 Mriya is 9 meters longer than the world’s largest passenger aircraft, the Airbus A380 superjumbo.
Capable of carrying as much as 250 tons, it had accumulated 242 world records over the past 30 years in hauling super heavy or breakbulk cargo worldwide that includes ships, trains, small planes and helicopters, satellites , rails, super heavy generators, aerospace materials, and so on.
It’s a unique engineering marvel that remains unmatched since it first flew on December 21, 1988. There is only one Antonov AN-225 in the world with the completion of its twin put on hold in 1994 or three years after the collapse of the Soviet regime.
In 2016, China tried to take over where the Soviets had left off on AN- 225 but the project failed because the 70 percent completed giant plane couldn’t be transported to the country. AN-225 is scheduled to remain in service until at least 2033, according to experts.
Ukraine’s prid
Ukraine, a former USSR state which i s marking its 28th year of independence on August 24 from the Soviet communist regime after it collapsed in 1991, holds the pride to Antonov AN-225 Mriya’s (Ukrainian for ‘Dream’) creation.
Conceived and built in the 1980s during the Cold War era, AN-225 was originally designed to carry the Buran Spacecraft, Russia’s answer to America’s Space Shuttle, from the assembly line to the sprawling deserts of Kazakhstan at Baikonur Cosmodrome where Yuri Gagarin launched his pioneering space voyage in 1961.
AN-225 successfully completed its mission and there were plans to build three more of its kind to support Russia’s space exploration projects but the Soviet Union collapsed in 1991, leaving Ukraine and the other former USSR states on their own.
Ukraine, which today remains embroiled in bitter political and military conflicts with Russia, founded Antonov Airlines, a wholly government-owned cargo carrier specializing on super heavy cargoes. “Antonov Airlines is a division of what was called the Antonov Design Bureau, one of a number of design bureaus within the former Soviet Union. They developed more than a hundred different types of airplanes since 1947 when they first set out and the airline was formed in 1989 before the collapse of the Soviet Union,” Graham Witton, Managing Director of Antonov Airlines, told Air Cargo Update in an interview in Munich, Germany where Antonov Airlines was among the major exhibitors at the four-day Air Cargo Europe 2019.
An aviation executive who began his career in 1997, Witton who has been promoting Antonov planes for commercial cargo since 2000 was appointed in 2016 to oversee the company’s sales & operations.
“ There was clearly a market identified in the commercial sector for Antonov Airlines,” said Witton who noted that the sales and financial aspects of the company are handled in its UK office whilst maintaining a separate satellite office in the United States.
Soaring Charter Sales
The demand for Antonov AN-225 Mriya’s services is at an all-time high and so are with the company’s other planes that includes a fleet of seven AN-124-100 with capacity to carry up to 150 tons, the 60-ton payload AN-22, as well as smaller AN-74 and AN-26 aircraft.
Witton said business is good at Antonov particularly in 2018 with the company posting nearly 70 percent in growth identifying their key markets as Europe and the United States and some in the Middle East.
In a separate interview, Andriy Blagovisniy, Antonov Airlines Commercial Director, echoed the same to Air Cargo Update, saying, “Business is growing. We increased our sales team. We now keep 66.7 percent of the whole market and there is prospect for more growth.”
Blagovisniy said the race among countries in the aerospace industry and the United States’ resolve to increase i ts dominance in the outerspace is fueling growth for super heavy cargo which Antonov dominates.
“We work in different industries oil and gas, energy, industrial, maritime, and the growing aerospace sector,” said Blagovisniy who studied aircraft engineering and international relations in Ukraine. “We fly everything. We can fly even trains and ships. In the aerospace industry, we transport satellites from production facilities to launch points. The US and Europe are our main markets.”
The two said Antonov Airlines continue to tap innovative ideas to keep up with the changing times. It recently developed two new plane models which the global aviation industry could potentially benefit from. “We want people to be aware that here we are, a Ukrainian carrier, not perceived as a sensitive nation to deal with. We’re very flexible to the customers’ needs. A friendly team that can be as personal and flexible as a customer wants,” said Witton.
And while Antonov AN-225 Mriya’s production line had closed a long time ago, technology continues to be harnessed and introduced to the world’s only super cargo carrier to ease its load of providing lift to the heaviest cargo up for delivery on all corners of the planet.
Oleg Antonov, a prominent Tupolev Medal, the highest aircraft designer, was the award in Soviet aerospace man behind the legendary construction.
Antonov planes. He was Ukraine officially credited for establishing the recognized Antonov as a Antonov Design Bureau in Doctor of Science, Kiev, Ukraine, now known as Academician of the Antonov Airlines, in honor of Academy of Science of the his legacy. Ukrainian SSR (1968), Hero A man of many talents, of Socialist Labor (1966). Antonov passed away on Prior, he was elected as a April 4, 1984 at age 78. His member of the Supreme death came just a month Soviet of the USSR of the after he received the gold 5th, 6th & 7th convocations.
During his lifetime, Antonov had been decorated with three Orders of Lenin, the Order of the October Revolution, the Order of the Patriotic War 1st class, the Order of the Red Banner of Labor and the Medal ‘Partisan of the Patriotic War’ 1st class. On November 19, 1984, the OKB-153 was formerly renamed Antonov Design Bureau in his honor.
Source: www.antonov-airlines.com
Antonov Airlines turns 30
Antonov Airlines is celebrating its 30th anniversary in commercial cargo industry this year with much optimism.
Ukraine’s cargo carrier which was founded in 1989 pioneering in transporting outsize and heavy cargo across the globe looks to a better future with technology and innovation on hand.
“As we look back on 30 years of Antonov Airlines, and the projects that we have completed, we see one of our strengths is the flexibility of our business to adapt to changing markets,” said Graham Witton, Managing Director, Antonov Airlines.
“We are transporting more outsized cargo than ever before, anything from wind turbine components to city centre trams, and practically anything in between.
“We are also moving further into the aerospace industry as digital communications become more integral in the global economy.”
On 11 August 2009, Antonov An-225 ‘Mriya’, the world’s largest aircraft, made history in the Guinness World Record when it transported a generator with a total payload of 187.6 tons from Frankfurt, Germany to Yerevan, Armenia, breaking the record for heaviest single piece of air cargo ever transported.
“When the business first started, many items such as satellite containers, generators and transformers were too big or too heavy to fly on conventional freighters,” said Paul Furlonger, Director, Antonov Airlines, who has been with Antonov Airlines since those first days in 1989.
“Antonov Airlines, as the first commercial operator of the An- 124-100, had to quickly pioneer methods of loading using great creativity and flexibility.
“At the beginning, we were doing things for the first time, almost every time, and over the years, after many thousands of flights, our processes have become more refined & our expertise enhanced so that we now undertake ever more challenging & complex projects with absolute confidence,” added Furlonger.
Created by the global marine wildlife charity, Whale and Dolphin Conservation (WDC), the SEA LIFE TRUST Beluga Whale Sanctuary is one of the biggest developments in captive whale and dolphin care and protection in decades and the first of its kind to be created for cetaceans.
The Luxembourg – based Cargolux Airlines , Europe ‘ s leading all-cargo airline with its modern and efficient fleet consisting of 14 Boeing 747-8 freighters and 16 Boeing 747-400 freighters, made the epic journey possible with careful planning, technical experts and time-tested capabilities to undertake special projects.
No to hunting trophies
Cargolux Airlines CEO Richard Forson, a first generation South African-Chinese, told Air Cargo Update nature is something close to his heart growing up in the African continent communing with animals, wildlife & their natural environment.
In an interview in Munich , Germany where Cargolux participated in Air Cargo Europe 2019, Forson shared there’s a need for a global movement to protect more nature and wildlife.
Illegal wildlife trade is indeed a serious crime threatening the world’s wildlife population. It is in fact a multibillion business and is today the world’s top fourth transnational crime.
The United Nations estimated the value of illegal wildlife trade in 2016 as somewhere between USD7-23 billion annually while the Interpol recently pegged its value at USD20 billion. Africa appears to be the most vulnerable for animal poaching devastating its wildlife populations, threatening their survival for years to come.
For years now, Cargolux had taken a number of ethical measures protecting animal rights. It had banned a number of controversial commodities such as lion bone or hunting trophies from shipment across its network.
The airline is also a signatory to the United for Wildlife International Taskforce on the Transportation of Illegal Wildlife Products to fight illegal animal trafficking. And as an advocate for animal welfare, Cargolux reviews each demand for animal transport carefully to ensure ethical practices are upheld throughout the transportation chain.
Sustaining Growth
Forson first came to work for Cargolux in 2012. By 2016, he was tapped to lead the company which has more than 2,000 employees world wide . Remarkably , the company made unprecedented financial growth when he assumed his post and the momentum keeps going.
“I think a lot of it depended on the market and also being in a position to work as a team,” Forson modestly said when asked how he managed to bring major profits within just a short period of time.
“It started in 2016, the fourth quarter, it was really a surprise for every one in the industry . I t improved in 2017 and 2018 was also a very good year for us.”
Cargolux’s consolidated net profit after tax for 2018 amounted to USD211.2 million, nearly double its 2017 profit of USD122.3 million despite a global softening in market demand in the second half of 2018.
The company attributed its good performance to increased demand for its transport solutions with the Cargolux Group producing a total of 8,409 FTKs across its worldwide network while the available ton kilometers grew to 12,375 million resulting in an overall load factor of 67.9% for the year.
Forson also credited their growth t o “ strong focus of the management on their capacities and yields, increased demand for specialized shipments, a record year for our charter division and the diversification into offering ACMI solutions all contributed to the performance achieved” and their dedicated staff.
“No one is more important than the other. If I don’t have someone to load in the aircraft, we won’t be able to fly,” Forson said of their operations. “It’s a 24/7 365 job as far as I’m concerned, day or night it’s up in the air (the freighters).”
He added that he continues to encourage employees to work harder to make Cargolux a success. “I tell them if they want sustainable jobs then help me make Cargolux a sustainable business from a financial perspective, from an environmental perspective while keeping our social responsibility towards employees and the community that we operate in.”
The CEO said it helps that Cargolux continues to invest on people, technology, facilities and infrastructure making their work easier and more efficient for customers who demand quality service.
“To be sustainable we have to be agile. We have to be flexible. And to do that you have to be ready to change in a moment’s notice. You have to accept that there will be some issues along the way but the important thing for me is to realize that there are solutions available
for those issues,” said Forson who has been in the aviation industry since 1990 working his way up to become the CEO of one of the world’s biggest cargo carriers.
Cargolux plans to hire more people while taking major transformations like completely overhauling its IT system to streamline processes, synergize teams internally and enhance customer experience.
Forson said these are all part of the company’s lean and green philosophy and on going digitalization initiatives.
“We’re now taking it to the next step. A lot of things will be automated,” he said.
Cargolux seems to be heading for another busy year. The cargo carrier announced in June it’s serving Jakarta , the 16th destination in its Asia-Pacific network. The once a week flight leaves the Grand-Duchy on Sunday and arrives in Jakarta on Monday. The rotation then continues through Hong Kong and Ashgabat before returning to Luxembourg on Tuesday morning.
On July 1, it launched a third weekly frequency to Xiamen to meet growing customer demand. The new service , C V 9 7 2 1 i s operated every Monday morning, departing Luxembourg at 8:10 a.m. with arrival in Xiamen on Tuesday at 4:40 a.m.
The return flight, CV9731, is scheduled to leave Xiamen at 6:15 a.m. and is routed through Los Angeles before returning to Luxembourg where it lands at 6:15 a.m. (All times provided are local), cementing Cargolux ‘ s strong position in China and on transpacific trade lanes
Little Grey and Little White’s epic journey back to the wild
“The world’s first whale sanctuary represents a pathway to the end of the keeping of whales and dolphins confined for entertainment. We are proud to be a partner of this important project that will improve welfare for these belugas, and show the world that there is an alternative to whale and dolphin captivity.”
Little Grey and Little W h i t e continues to do well after safely landing in Iceland on June 19 following a 6,000 mile flight from China.
The SEA LIFE Trust says the two captive whales will continue to be monitored while in the sanctuary in a natural bay on Heimaey, one of the Westman Islands, located off the southern coast of Iceland.
Throughout their 11.30-12-hour flight journey, Little Grey and Little White were monitored by their care teams to ensure they remained safe and comfortable. A Cargolux engineer and a team of global veterinary expert swith experience i n transporting marine mammals were also on board, to guarantee the whale’s welfare, whilst ensuring flight safety requirements were upheld.
“We’re absolutely delighted Little Grey and Little White have safely touched down in Iceland. This is a complex but inspiring project and we’ve been working with the whales for months helping to prepare them for travelling to their new home,” said Andy Bool, Head of SEA LIFE Trust.
“We’ll continue to carefully monitor the whales but we’re pleased with their overall progress and welfare checks, which have been taking place throughout the relocation. The co- ordination of this project has been down to so many people and we’re extremely grateful for all their hard work, and are thrilled this epic journey has gone as planned.”
The 747-400ERF freighter plane was welcomed onto the tarmac with a ceremonial water salute from two fire trucks firing a water arc over the plane, in celebration of Iceland’s newest residents’ safe arrival.
Richard Forson, Cargolux President and Chief Executive Officer, added: “We are delighted that Little Grey and Little White enjoyed a seamless journey onboard our Cargolux aircraft. The success of this undertaking is the reflection of the dedication and commitment of teams
across all of our organisations who worked tirelessly to make this happen.
“This epic relocation required complex logistical efforts, and we are proud to have been part of this incredible journey. We hope that Little Grey and Little White rapidly adapt to their new home and that their story will serve as a precedent for other cetaceans held in captivity.”
Created in partnership with global marine wildlife charity, Whale and Dolphin Conservation (WDC), the SEA LIFE TRUST Beluga Whale Sanctuary is one of the biggest developments in captive whale and dolphin care and protection in decades and the first of its kind to be created for cetaceans. “Having been originally involved in discussions about a sanctuary with SEA LIFE 20 years ago, and having helped with this beluga whale project from the beginning, WDC is naturally very excited to be part of the welcoming committee for Little White and Little Grey as they touch down in Iceland,” Cathy Williamson, Whale and Dolphin Conservation’s End Captivity Programme Policy Manager concluded.
“The world’s first whale sanctuary represents a pathway to the end of the keeping of whales and dolphins confined for entertainment. We are proud to be a partner of this important project that will improve welfare for these belugas, and show the world that there is an alternative to whale and dolphin captivity.”
The sheltered bay will be the world’s first open water sanctuary for beluga whales in what is a ground-breaking
global marine welfare project. The bay, which measures approximately 32,000 sqm with a depth of up to 10m has been chosen to provide a more natural sub-Arctic environment and wilder habitat for these amazing whales to call home.
The UAE is our home market. We’ve had strong performance across all our global trade lanes. Our strategic positioning in Dubai allows us to connect to sea freight as well through Jebel Ali Port and this aspect of air-sea connectivity has also done really well. We had a solid finish for the last year with positive growth. We have a strong offering for the other markets in the GCC region with our connectivity on flights as well as trucking. One of the main verticals is the import of perishables into markets including KSA, Lebanon, Jordan, Oman and Iran.-Nabil Sultan, Divisional Senior Vice President Emirates SkyCargo
Emirates SkyCargo moved close to 2.7 million tons of cargo in financial year 2018-2019, impacting the lives and livelihood of millions across continents in both developed and emerging markets, ensuring that they get the best value for their money in today’s challenging world beset with political, economic and environmental uncertainties.
With good cargo volumes mainly on perishables and pharmaceuticals, the Dubai-based air freight carrier grew its annual revenue during the period by 5% to AED13.1 billion (about USD3.6 billion) despite experiencing headwinds in the form of increasing fuel prices and currency exchange movements’ negative impact, shared Nabil Sultan, Divisional Senior Vice President, Emirates SkyCargo.
“Despite a challenging and competitive market, Emirates SkyCargo had a strong performance in the 2018/19 Financial Year. We moved close to 2.7 million tons of cargo and positively impacted the lives of millions of people globally,” said Sultan, a US-educated Emirati who has been with the company since 1990.
This year, Sultan said Emirates SkyCargo is focusing on specialized products amid increasing demand from customers to address their specific needs.
“Our success and recognition in the industry has been the result of our continuing focus on developing and refining our specialized offerings. Customers have been demanding specialized care and handling for their shipments,” Sultan explained noting that in addition to the company’s flagship Emirates Pharma, Emirates Fresh and Emirates Wheels products, it launched Emirates AOG for the rapid transportation of aircraft components and Emirates Pets for the safe and comfortable journey
(including door to door in select markets) for pets such as domestic cats and dogs. “We will continue to focus on specialized products for 2019.”
Watching Global Trends
With geopolitical conflicts directly impacting the movement of goods, businesses across many fronts, especially those in the air freight industry which accounts for a third of global trade valued at about US$6 trillion annually according to the International Aviation Transport Authority (IATA), are closely monitoring global trends.
Emirates SkyCargo is among key players in the global air cargo industry closely watching global trends, preparing to adjust its operations for any eventualities.
“For the coming year, we are closely monitoring global trends. With the outlook of trade flows being impacted between the US, China and Europe, due to the introduction of tariffs, there is no doubt that there could be an impact on cargo volumes,” Sultan explained.
“We are also closely watching developments in the European economy with Brexit and other geop olitical considerations . However , there are always opportunities we can tap,” he added. “E Commerce continues to post double digit growth, boosting production in some markets. The emergence of new markets has also resulted in some non-traditional cargo movements. We continue to analyze these trends and will react by ensuring that our capacity is best deployed where there is demand.”
British Prime Minister Theresa May is scheduled to step down as Tory leader on June 7 and will subsequently serve as caretaker PM until the Tories have selected her replacement by end-July.
The UK and the UE agreed to a second delay to Brexit until October 31.
If no deal is made by then, UK’s access to the European Single Aviation Market may be in peril along with other matters connected to the transportation sector like cross-border shipping, rail, trucking and even logistics.
Analysts said upon execution of Brexit without clear aviation/ transport deals with the EU, UK-licensed airlines will lose their right to fly to and from EU and between the remaining EU member states.
The heightened trade tension between the US and China , meanwhile, continues to take its toll on import and export sales volumes between the countries with consumers directly impacted on additional tariffs imposed on traded goods.
Green perishables
In 2018, Emirates SkyCargo transported about 400,000 tons of perishables, 40 percent of which are vegetables and fruits, and 30 percent meat and seafood, with the world demanding all sorts of cuisines and ingredients sourced from all corners of the planet.
“In today’s connected world, people are becoming increasingly familiar with cuisines and ingredients from other countries and regions. This is helped by popular culture including TV shows as well as more international travel. Over the years, this familiarity has led to an increasing demand to transport food and other related perishable items across the world,” Sultan said.
“Air Cargo is able to fulfill this need because of the ability to transport goods rapidly . So fruits and vegetables, loaded after harvesting, can remain fresh even as they arrive at their destination,” he added.
Emirates SkyCargo’s wide route network spanning six continents adequately meet the global demand for food from all corners of the world.
“ The largest segment of perishables that we carry tends to be fruits and vegetables accounting for over 40% of all perishable cargo that we transport. We see large volumes of fruits and vegetables being transported from Africa (Kenya, Egypt, and South Africa), South Asia (India, Sri Lanka), South East Asia and Australia,” Sultan explained.
“Meat and seafood form about a third of the total volume of perishables transported. Major export markets for meat tend to be Australasia, South Asia and Africa and for sea food some of the major export
markets include Norway, Chile Sri Lanka and South Africa. The Middle East market is a major consumer of meat and sea food,” he added.
From Kenya in Africa and Equador in Latin America, Emirates SkyCargo, hauls tons of fresh cut flowers directly to Amsterdam, the site of the world’s largest flower auction market.
India: The Gulf’s food source
Geographically close to the Gulf, India’s rich and abundant agricultural landscape has always been a top source of food imports for many countries in the Middle East which was complemented with the presence of millions of Indian migrants in the region.
“India is an important market for Emirates SkyCargo. With more than 170 weekly flights to nine stations in the country, we facilitate an important volume of trade to and from the country including the export of pharma and perishables,” said Sultan.
Every month, the freight carrier transports between 4,000 to 5,000 tons of perishables from India to other parts of its route network. Last year, the Indian perishables it moved totaled close to 53,000.
Mangoes are among India’s top seasonal commodity while vegetables that grow all-year-round like Okra, chillies, ginger, among many others, are regularly transported to the region and elsewhere.
“Mangoes are an important seasonal commodity that we help export from India, particularly Mumbai and Ahmedabad, to the Middle East, Europe (especially UK) and the US. But other than mangoes there are important quantities of other Indian fruits and vegetables that are exported to the Middle East and other markets where there is a considerable presence of Indian diaspora. Fruits and vegetables transported include Okra, drumsticks, green chillies, gourds, ginger, mushrooms, papaya, guavas and so on,” said Sultan.
The volume of food cargo sourced from India rises depending whenever any major religious festival is observed in various communities.
“In terms of seasonality, we see a rise in exports of perishables to the Middle East during Ramadan and a spike in exports of fruits and vegetables around Indian festivals to the Middle East—especially Vishu and Onam, which are important events for expats from Kerala settled in the region,” Sultan explained.
Perishables: Our specialty
Transporting millions of kilos of fruits and vegetables on a daily basis, Emirates SkyCargo is renowned for keeping them in their natural state with sophisticated storage facilities on land and on air as well as expert handlers in the industry.
Sultan said Emirates Fresh, launched in 2017, is the company’s answer to address the requirements of their global customers in transporting fruits, vegetables and other perishable cargo.
“We have three tiers to this product offering. Emirates Fresh is the basic offering which is used for transporting perishables with a fairly high level of temperature tolerance. The Emirates Fresh Breathe product predominantly caters to delicate perishables such as cut flowers, bouquets, cut fruits and vegetables. The cargo gets temperature controlled and prioritized ground handling,” he said.
Emirates Fresh Active is the company’s dedicated product to high-value perishables like fine wines, cheese, caviar, etc.
“Emirates Fresh Active is a very specific product and meant for the crème da la crème high – end perishables such as fine wines and cheese, caviar, high end fruits and frozen goods that cannot withstand any deviation in temperature. We use temperature controlled containers to ensure that we do not compromise product integrity,” Sultan explained.
These specialized products are complemented by the company’s state-of-the-art facilities at its cargo terminals at DXB and DWC in addition to supporting products such as the White Cover range of thermal blankets and the Emirates Fresh Ventilated Cool Dolly which are important top reserving the freshness of the perishables being transported.
Global leader on pharma
A global leader in transporting pharmaceutical products across the world, Emirates SkyCargo moved over 73,000 tons of pharma across its network in 2018—reflecting a double-digit growth compared to its previous record year-on-year.
“We transport a wide range of pharmaceutical products from generics and vaccines to oncology medication. Over the years, the sophistication of the pharma cargo we transport has increased and so has the specialisation of the services we provide,” said Sultan.
The company’s three – tiered offering for global pharma customers, Emirates Pharma, first launched in 2016, is highly regarded for its innovative solutions to preserve the medical or biosciences being transported.
“Emirates Pharma Plus is ideal for high value pharmaceuticals with a thermal cover that can withstand minor temperature fluctuations during handling and transportation and Emirates Pharma Active works best for high value pharmaceuticals that are extremely temperature and time sensitive, and need to be transported in active containers,” said Sultan.
“We continue to experience a strong double digit rate of growth in the volume of pharmaceuticals that we transport. The growth in the first four months of this year has so far been robust and we do not expect any change in the upward trend in the volume of pharmaceuticals transported,” he added.
Emirates SkyCargo has more than 8,000 sqm of dedicated pharma handling spaces across its two cargo terminals in Dubai. Both are certified as compliant to EU GDP standards.
Additionally, the company has trucking service between Emirates SkyCentral DXB, its terminal for handling cargo from passenger aircraft and Emirates SkyCentral DWC, its terminal for handling cargo from freighter aircraft that runs 24/7.
“We have a fleet of 49 trucks and there are also 12 dedicated reefer trucks making sure that the cool
chain is not broken when the cargo is being transferred from our passenger to freighter aircraft or vice versa. We have streamlined our processes to an extent where we are
able to deliver a transit time of just 4.5 hours between the arrival of goods on freighter aircraft to their departure from passenger aircraft and the other way around,” said Sultan.
“The trucks almost act as a seamless conveyer belt in transporting pharma cargo between the two airports. In addition, we have invested in developing additional equipment and initiatives to ensure that pharmaceutical cargo is transported safely and securely through our hub and aircraft,” he added.
‘There is a strong ethical value to our business’
EDITOR’S NOTE: In this segment, Nabil Sultan, Divisional Senior Vice President, Emirates SkyCargo, talks about the human side of the air cargo industry, making sure that people’s personal belongings—medications, high-value cars or art pieces, to cherished pets, among others—move without delay or damage. And ensuring that what may be left behind is taken care of. Indeed, it’s a unique business that requires skills, resources, efficient systems and a lot of ethics.
he air cargo industry is Tindeed very unique. We play an important role in the facilitation of international trade and air cargo is an important vehicle that has a direct impact on a nation’s economic development and GDP. Countries and exporters rely on us to offer them robust capacity to support their exports in a timely manner as this has a strong impact on trade and livelihoods.
By itself air cargo is fairly different from the passenger side of aviation. Whereas, customers are able to manage by themselves for processes such as transfer within the airport, boarding and so on; for air cargo you really require a seamless process in the background for the shipment to move from one end to another.
It requires close monitoring and a granular attention to detail to make sure that the cargo moves without damage or delay. Some of the cargo we transport such as perishables or temperature sensitive pharma need to be moved within a specific time frame.
Also much of the cargo that we move could hold a strong personal significance to our customers. Whether this is lifesaving medication, cherished pets such as cats or dogs, beloved possessions such as cars, personal effects or artwork there is a strong connection on a personal effect to cargo that travels on our aircraft and this means that we have to doubly vigilant that our processes are fail proof.
There is a strong ethical value to our business. And this ultimately leads me to the question of how I begin my day.
The first part of my day involves looking at what didn’t work the previous day. Were there any shipments that were left behind? What issues did we face as a team? What worked and what didn’t? Our daily operational meeting at 7.30am is a time for me to regroup with the team and to dissect the results of the previous day.
The key priority for us, of course, is to make sure that anything that went wrong, for example shipments that missed their milestones, are immediately given attention and steps taken to rectify the status.
We look at all aspects of the process including making sure that we are transparent with our customer in communicating to them and giving a complete status report on when they can expect the shipment, the recovery and rebooking details, time of arrival at the final destination.
Ultimately customer satisfaction and customer trust is what drives our business forward and it is very important that we do not lose this. I place a high importance in reacting immediately to make sure that the customer is kept abreast of all details.
Once the key priority operational issues from the previous day have been looked into, the rest of my day is devoted to strategy and analysis. We need to monitor industry trends, analyze how well our capacity has been utilized across our global operations spanning more than 155 destinations across six continents and making decisions based on this data.
Keeping an eye to future developments is also an important part of my role, looking into how better we can serve our customers going forward.
The rest of the day is taken up by looking at our performance and market information in granular detail, understanding potential gaps or red flags and working with our diverse and talented team to ensure that we exceed customer expectations with our world class service.
ZIA CARGO can handle any type of cargo, including oversize, thermosensitive, dangerous, valuable goods and live animals, without restrictions….It has enormous growth potential. For example, we are the only enterprise in our region that can potentially offer cargo transportation by air, road, rail (the airport has access to a nearby industrial line connected with the Moscow Railway) and river transport (in the vicinity of the navigable Moskva River).
Globalization and economic liberalization continue to unfold in different ways in many parts of Russia nearly three decades since the collapse of the communist Soviet Union in 1991.
In the city of Zhukovsky, located about 40-km southeast of Moscow, whose economy is mainly anchored on aviation and scientific research, investments are pouring in mainly on the aviation and transport industries.
In 2016, the city opened a new airport—the Zhukovsky International Airport also known as the Ramenskoye Airport—owned and operated by Ramport Aero, a joint venture between the international holding company Avia Solutions Group and the Russian state corporation, Rostec. Ramport Aero is mainly engaged in airport construction, development and management with projects across Russia, Poland, Italy and Lithuania.
The fourth airport in Moscow after Domodedovo International Airport, Sheremetyevo Airport and Vnukovo Airport, the Zhukovsky Airport, which used to be a testing facility during the Cold War, is open for both classic and low-cost airlines and is designed to handle up to 12 million passengers by 2020.
In 2018, the airport which has the longest runway in Europe (5,400 m), paved the way for the opening of the Zhukovsky International Airport Cargo (ZIA CARGO) which mainly handles air freight and mails for Central Russia.
Flexible & limitless
Zhukovsky Airport’s rapid development in terms of passenger traffic three years since its establishment creates opportunities for ZIA CARGO to grow and its long runway also enables the air freight company to receive and serve any type of aircraft without any take-off weight restrictions.
“ZIA CARGO is a cargo and mail handling operator located at Zhukovsky International Airport (Moscow Region, Russia), a new and rapidly-developing airport. One of the advantages provided by the airport is the longest runway in Europe (5,400 m). It allows us to receive and service any type of aircraft without any take-off weight restrictions,” Evgeny Solodilin, CEO of ZIA CARGO, told Air Cargo Update in an email interview.
Though commercially driven, ZIA CARGO’s main goal is to provide reliable means of air transport for Russia in general and foreign airlines and operators at Zhukovsky International Airport.
“Our number one task is to establish an efficient and reliable service provider for Russian and foreign airlines, both for the current partners of Zhukovsky International Airport, and the upcoming cargo operators and airlines,” Solodilin explained.
“In fact, for companies from the European, Middle Eastern and Asian regions, ZIA CARGO is a new way to central Russia. And we will do our best to make this journey as convenient and simple as possible. It’s not about market dominance. Our mission is to provide our potential customers with different options,” he added. Strategically located in the economic center of Russia, ZIA CARGO is fast becoming an important component of business operators in Russia and other nearby countries in the central region.
“We are located in the economic center of Russia: statistics show that Moscow and the Moscow Region account for up to 80% of the runway and the volume of air cargo in Russia. This opens up wide possibilities for the development of the chosen business model,” Solodilin said.
“The proximity of federal and regional highways, a developed system of warehousing and logistics center in the region and, of course, the airport’s dedicated air zone, everything speaks in favor of Zhukovsky International Airport. I am certain that ZIA CARGO will eventually become an impactful player in the air cargo market of the region.”
Transport & Logistics Hub
Encouraging passenger and cargo volumes on Zhukovsky Airport and ZIA CARGO’s opening along with the long-term business plan for the city convinced Ramport Aero to invest an additional US$35 million to fully transform it into a transport and logistics hub.
The project involves constructing a modern multimodal warehouse complex, a cargo terminal and an additional aviation apron for servicing cargo aircraft.
“The development of the transport and logistics complex will take place in several stages. Currently, total project investments amount to $35 million. We will be able to double the production capacity of the complex by 2023 with the help of additional funds,” explained Solodilin.
ZIA CARGO is designed to handle any type of cargo, including oversize, thermosensitive, dangerous, valuable goods and live animals, without restrictions, says Solodilin. The company’s current expansion project which includes building an additional aviation apron (82,000 sqm) will enable it to simultaneously handle multiple freighters.
“The project implementation will allow us to simultaneously service 4 cargo aircraft of the B747 type (or up to 6 aircraft of the B737 type). As of April 2019, these projects are 80% complete. The opening of the complex will take place in the second half of 2019,” Solodilin explained.
ZIA CARGO is also envisioned to operate 24/7 and the construction of a modern cargo terminal is crucial to this.
“The infrastructure of the cargo terminal is designed to meet the modern requirements for efficient and safe storage and transfer of cargo. It will support 24-hour and precisely accurate tracking of cargo operations, including loading and unloading aircraft, organizing storage and subsequent & transportation of any cargo types ,” the company CEO noted.
Since its opening in 2018, ZIA CARGO had seen slow but steady increase on air freight volumes.
“2018 was the first year of ZIA CARGO’s operation, so it may be too early for any concrete results. This was a period of much testing and training. Cargo handling is currently operating under the conditions of limited customs infrastructure: we are engaged in receiving and shipping domestic cargo that does not require complex terminal handling,” said Solodilin.
“For the first year, we have already handled 5,000 tons of cargo. This figure may seem extremely insignificant in the grand scheme of things, but what we ultimately achieved is a five-fold increase in volume while using the same infrastructure. This year, with the new terminal’s timely start of operation, 12,000 tons of cargo will be handled. And the full projected capacity of 100, 000 tons per y e ar w i l l b e achieved in 2022-2023,” he added.
Growth in the horizon
Zhukovsky International Airport handled 1.16 million passengers in 2018, more than double its 2017 record of 425,500 passengers. But with the Russian government aggressively pushing to entice more domestic and international tourists to visit the country, it’s envisioned to handle as much as 12 million passengers by next year.
Increasing cargo volumes with its growth was factored in, thus, the construction of a modern cargo terminal for ZIA CARGO was also put in place.
“The construction of a modern cargo terminal was originally included in the development plans of Zhukovsky International Airport, since the efficient operation of an international airport in a region as busy as Moscow and the Moscow Region is simply impossible without a cargo handling sector,” shared Solodilin.
“The lack of specialized solutions is
a serious limiting factor. In fact, the formation of the ZIA CARGO was the first step taken of the second stage of the development of Zhukovsky International Airport’s ground infrastructure. The development of cargo transportation is a crucial part of the airport operation,” he continued.
The multi functional transport and logistics hub complex would tremendously increase cargo capacity at Zhukovsky Airport by as much as 100,000 (250 tons per day).
With total area of 9,200 sqm, the complex boasts of temporary storage warehouse, customs and other vital facilities like office areas, shipment tracking service, among many others.
“ The cargo site will provide simultaneous reception and processing of shipments through six cargo gates: 2 for domestic lines, and Evgeny Solodilin, CEO, ZIA Cargo
4 for international flights. The areas inside the terminal will be divided in a similar fashion. In addition to the cargo infrastructure, the building will contain offices of the partner organization and government services,” said Solodilin.
Quality & value
With Zhukovsky considered as the Russian center of research and development in the aircraft industry, a significant part of cargo hauled in the area consists of aviation components, spare parts and equipment, but other types of general cargoes are also being transported on a regular basis with the city growing.
Solodilin said ZIA CARGO stands ready to offer its partners/customers a really good deal with high level of service.
“We are able to offer our partner a really good deal. And we are not talking about pricing policy only. Customers will be able to take advantage of the full support cycle. Various products will be offered. For example, the possibility of providing additional services within the logistics chain, especially the first mile and last mile services,” Solodilin noted.
Adding: “We are also ready to offer integrators and major forwarders the Time Advantage service that will allow for a unique advantage – a dedicated airside, which will help the customers with large cargo turnover to receive accurate and timely flight service strictly on schedule and devoid any risk of delay due to the air traffic.”
ZIA CARGO, the CEO also stressed, offers a cargo package that involves hauling goods on air and land as well with the company’s links to key modes of transportation in Russia.
“Cargo handling services will be provided in a single package: transportation via road and air, handling documents, customs clearance. If necessary , new enterprises will be created for these services, including a specialized track delivery company,” he said.
“ZIA CARGO has an enormous growth potential. For example, we are the only enterprise in our region that can potentially offer cargo transportation by air, road, rail (the airport has access to a nearby industrial line connected with the Moscow Railway) and river transport (the airport is located in the vicinity of the navigable Moskva River).The key to success lies in studying the needs of the customers and offering individual solutions,” he concluded.
Frankfurt-based air freight carrier Lufthansa Cargo handled about 8.9 freight-ton- kilometers in 2018 valued at EUR2.7 billion, up by 7 percent compared to 2017, making it still one of the world’s best and biggest in the industry.
And despite political and economic uncertainties in many parts of the world that inevitably affects the movements of goods and the overall throughput of the air cargo industry, Lufthansa Cargo remains optimistic for growth in the horizon with improving economic demographics in emerging markets that require air freight services.
That optimism translates to investments of about EUR400 million to expand the Lufthansa Cargo Center (LCC) with the backing of the Supervisory Board of Deutsche Lufthansa AG, according to Peter Gerber, CEO and Chairman of the Executive Board.
While there is still enough land around Frankfurt Airport for LCC expansion, German engineering and technology would come into play with vertical and modular developments planned for existing facilities.
Construction in Frankfurt is scheduled to begin next year. Once completed in 2024, Lufthansa Cargo is convinced its investments would pay off with the facilities able to offer better capacity yields and quality. In Munich, Lufthansa Cargo is also investing on a new Cool Center
Revenue Growth
At its annual press event held at the Lufthansa Aviation Center, Gerber pointed out the company’s 2018 profit grew to EUR268 million (adjusted EBIT), the company’s second best result in its history since it was founded on November 30, 1994.
“Our employees have shown full commitment and done an amazing job for our customers. The result gives us additional momentum for new investments in the future,” Gerber pointed out.
Dr. Martin Schmitt, Board Member for Finance and Human Resources who is also Lufthansa Cargo’s CFO, said the profit that the company generated would be used to modernize its means of production and that includes modernizing its fleet and embracing more digitalization.
“We managed to increase our revenue per unit and lower our unit costs last year. We will use the profit to modernize our means of production, which will further enhance our cost efficiency,” said Schmitt.
Digitalization
Gerber said Lufthansa Cargo’s e-AWB penetration has reached 73.9 percent, based on December figures. The company has also introduced the fully automated “Rapid Rate Response” specifically targeting clients seeking immediate bookings or online transactions such as through cargo.one which offers spot pricing tools.
Lufthansa Cargo is also working to fully digitalize its Global Revenue Management, including the “checkin
process” for air freight to speed up the process. Staff’s work places as well as training courses are also planned to be more digitalized to make them more accessible and flexible to people.
“We will continue to systematically drive digitization along the entire transport chain. We are the first cargo airline in the world to offer our customers completely paperless booking and handling for standard cargo. With our
new, fully digital PreCheck process, we will now significantly accelerate and simplify handling processes for our customers. And we will also continue to roll out the eDGD electronic dangerous goods declaration so that even more customers and shippers will be able to benefit from this digital solution,” said Gerber.
Modernizing its fleet
Lufthansa Cargo, which currently has 12 McDonnell-Douglas MD- 11F and 6 Boeing 777F, is moving ahead with its fleet modernization plan.
Last month, it received the first of two brand-new B777 that it ordered from Boeing as replacement for 2 MD-11F which it intends to retire. The company’s entire MD-11F fleet will gradually be phased out through 2025.
The new plane had since been flown to transport cargo between Frankfurt, Beijing and Shanghai. The new Boeing freighters are intended to be generally used for Mexico City, Sao Paulo as well as to Osaka, Chennai, Hyderabad, New
Delhi, Atlanta and Chicago.
The Boeing 777F aircraft are said to be more fuel efficient, tailored for long-haul flights and have more space to haul more cargoes.
“The Boeing 777F is not only the world’s most powerful, efficient and environmentally friendly freighter, it is also a visible sign of our modern-ization strategy,” Gerber said when he announced the acquisition of the planes. “With the
growth of our Boeing 777 freighter fleet, an important milestone has been reached on our way to forming
a company for the next generation.” The Boeing 777F has a full payload capacity of 103 tons and can stay in the air for 10.5 hours covering a distance of over 9,000 km non-stop.
Optimism prevails
The on going trade dispute between the US and China is taking its toll on the global air freight industry, Gerber pointed out. Add to that are the uncertainties that Brexit has created with Britain’s withdrawal from the European Union that creates ambiguities on the movement of goods to and from the country to the European bloc
made of 27 countries.
“So far, we have no clear view on how 2019 will develop,” Gerber told the press emphasizing that it’s hard to predict what lies ahead in the near term due to volatile global situations.
But he noted there are reasons for optimism on the horizon based on presumptive facts such as the growing middle class in many emerging markets that raises people’s income and generating more economic activities in many
parts of the world.
“If you ask me, what happens in the next three months, I honestly don’t know. But in the next five years there will be considerable growth,” he said.
According to the nonprofit organization World Data Lab, half of the world’s population is now considered middle class with the rapid growth taking place in Asia. By 2030, their number is projected to grow to 5.3 billion and will have significant and political impact to global trade and economics.
Among the emerging markets that Gerber has high hopes is Africa where its partner, Brussels Airlines Cargo, is fully integrated. “Brussels Airlines Cargo was fully integrated in our company, making us much stronger in Africa,” he said.
The Lufthansa Cargo CEO also pointed out the company has also widened its business alliance with other major carriers in Asia and elsewhere such as with ANA Cargo, United Cargo and Cathay Pacific Cargo.
Peter Gerber was born in Gießen on 1 March 1964. After passing his university entrance exams in 1983, he studied law and business management in Gießen and Hagen. In 2008, he additionally completed the Senior Executive Program of Columbia University, New York. Gerber joined Lufthansa in 1992, starting his career in human resources and the law department. His main responsibilities were to develop a new pension scheme and the Miles &
More program. This was followed by various assignments within the Group, including “Programm 15”, Lufthansa’s strategic cost-saving project.
In 1997, he was put in-charge of intercompany transfer pricing, fees and charges with focus on airport and
air traffic control costs, as well as relations with the federal state authorities. From 2001 to 2004, Gerber was responsible for and directed the Group-wide “D-Check” program, which aimed to consolidate corporate earnings.
From June 2003 to August 2011, Gerber was the Lufthansa spokesman for the “Air Transport Initiative for
Germany”. In addition, he had responsibility for strategic corporate development in 2004.
From December 2004 to May 2009, Gerber was in charge of corporate industrial relations and social security
within the Lufthansa Group. In June 2009, he was appointed to the Executive Board of Lufthansa Cargo AG with responsibility for Finance and Human Resources.
In June 2012, Gerber switched to the Executive Board of Lufthansa Passage Airlines, where he was responsible for the Human Resources, IT & Services division. He has been the Chairman of the Executive Board and CEO of Lufthansa Cargo AG since May 2014.
Gerber is also Chairman of the Super visor y Board of Albatros Versicherungsdienste GmbH and holds a seat on the Supervisory Board of Fraport AG. He is married with two children.
“We’re looking at very signicant global growth and there will be quite a bit of focus on Africa. I hope in a few years, we’ll be doing more business with more countries on the continent”
This April, WFS will start building a new state-of-the-art pharma facility at Copenhagen Airport amid volume rise of 90% year-on-year in the area, a good example of how much the company is willing to invest on tech-laden facilities. Work on the project covering an area of 1,500 sqm will soon begin and is designed to provide end-to-end handling in temperature-controlled environment for 2-8° pharma products incorporating acceptance, offload, prestorage, build-up and storage
The Paris-Based Worldwide Flight Services(WFS) currently holds the title as the world’s largest aircargo handler with over 270 airlines as clients across five continents and annual revenues over EUR1.2 billion. But it’s bent on getting bigger and better with the launch of a major global growth project planned to be carefully executed over the next five years.
Cerberus Capital Management, a New York-based global leader in alternative investing with over US$50 billion in assets across complementary credit, private equity and real estate platforms, which acquired WFS four months ago from Platinum Equity, together with WFS’s executive team, is strategically identifying and mapping out growth areas across the globe, including emerging markets in Africa.
“We’re embarking on a major global growth project that is going to carry us for the next five years,” Barry D.Nassberg, Group Chief Commercial Officer of WFS, told Air Cargo Update in an interview in Johannesburg, South Africa, on the sidelines of Air Cargo Africa conference.“We’re doing that with the new shareholders which have owned the company for the past four months.”
In Africa, WFS operates in only one country, South Africa, and its services limited only to cargo handling. But that may change with the company’s global growth expansion plans.
“We’re looking at very significant global growth and there will be quite a bit of focus on Africa. I hope in a few years, we’ll be doing more business with more countries on the continent,” Nassberg enthusiastically shared.
Africa: A Challenging Coast
Though endowed with abundant natural resources, Africa, which is twice the size of Russia, bigger than Canada and even the United States and China put together, remains largely poor and unexplored for business opportunities in this sector, due to many challenges.
Nassberg said while the challenges in Africa are not vastly different than other places in the world, a lot of work needs to be done to open it up for more foreign investment and allow international companies to operate peacefully and effectively.
“The challenges in Africa are not vastly different in what you see in other places in the world. Yes, it’s security. It’s bureaucracy. It’s government protectionism. It’s often policies that are not well thought out from our perspective. Markets are not as open as we’d like them to be. Issues with transparency to be frank and that’s a problem for us,” the WFS Group CCO briefly described some of the challenges international firms face in the continent blessed with large deposits of oil, petroleum, minerals and other natural resources.
The WFS CCO said Africa must also invest more in education and providing awareness about business opportunities with equitable partnerships with foreign investors.
He explained that the era of “no questions asked investment” is long gone with companies putting strong emphasis on accountability and the social benefits their investment brings to the host countries.
“I think the era of sort of no questions asked investment is behind us. Companies that want to make significant investments want to know how they would benefit from such investment and how countries would benefit from it,” said Nassberg recalling that Asia, Southeast Asia in particular, also struggled to open up for businessin the 70s, 80s and the 90s but eventually achieved considerable developments over time.
“You’d like to be able to do the same in Africa and there’s no reason not to achieve that but we’re not quite there
yet,” he said
Innovations & Technology
As one of the world’s leading companies providing ground handling services for cargo, passenger and ramp handling, premium services, baggage and technical expertise, WFS heavily invests on technology, innovations and people to make its services more efficient, thus, better serve customers.
Nassberg said the company had made considerable investments in new technology, including working with international bodies like IATA to use and transition its systems to digitalization.
“Well, in the air cargo industry, it’s (digitalization) a major topic of not only discussion but development. We work closely with international organizations such as IATA on the digitalization of international commerce and international air cargo. Removal of obstacles, removal of documentation as a barrier ,embracing technology and all of this,carry through to how airlines operate their cargo divisions,” Nassberg explained.
“And we, as an extension of the airlines, are doing the same in terms of our ground operations so that’s bringing in new systems compatible with eCargo initiatives, working very closely with customs authorities, introducing latest scanning and RFID tech into our ware house management, introduction of robotics into our warehouse, among other things. We are fortunate that we have the resources. We are ready and we are probably more ready than some of the airlines we serve or the forwarding community,” he added.
This April, WFS will start building a new state-of-the-art pharma facility at Copenhagen Airport amid volume rise of 90% year-on-year in the area, a good example of how much the company is willing to invest on techladen facilities.
Work on the project covering an area of 1,500 sqm will soon begin and is designed to provide end-to-end handling in a temperature-controlled environment for 2-8°C pharma products incorporating acceptance, offload, pre-storage, build-up and storage.
Accessible through four dedicated cargo doors, the facility will accept loose shipments and pre-built units,offering a storage area large enough for 300 EUR pallets and 30 PMC pallets. WFS expects the construction process to be completed in time for the new building to undergo IATA CEIV Pharma pre-assessmentin July.
WFS is also upgrading the existing temperature control areas in its current facility in Copenhagen to handle growing volumes of pharma products requiring a 15-25°C temperature range, its second investment in pharma facilities at the
airport in under two years.
Other WFS tech and innovation enhancement projects elsewhere around the world are also in the pipeline, including new pharma facilities in Paris CDG and Johannesburg.
Sustainable global career
With close to 27,000 employees serving hundreds of airlines across 198 major airports in 22 countries on five continents, WFS is considered one of the biggest employers in the industry.
Sustaining livelihood for these people who support families isn’t WFS’s only agenda—it’s also actively campaigning to upgrade industry image and standards among the millennials across the globe.
Nassberg explained the general perception is that air cargo is a very unsexy industry, dealing mostly with boxes and ware houses . But that is now changing with the global business landscape transforming and
conforming to the digital age.
“People have a particular vision that air cargo is by appearance a very unsexy industry. What could be interesting dealing with boxes in a dark warehouse? But actually it is a very exciting business and we spend a lot of time thinking how to get that message across to young people,” said Nassberg.
He said WFS has reached out to students coming out of secondary schools looking for entry level positions or even university graduates looking for tech-oriented jobs or a challenging work environment for new recruits. The industry pays reasonably well and offers abundant training and new opportunities.
“There is so much that this industry has to offer. And we are dedicating a lot of resources on how we recruit and
train. Our biggest one is in Paris, the Airport College Roissy, where we groom young people for careers in
airport services,” he said.
As an integral part of the air freight industry, companies like WFS sit at the forefront of globalization and it’s making things happen for many communities and economies.
“Whether it’s pharmaceuticals, food products, everything, from the four corners of the world, are moving within hours. When you walk through a shop, it’s a marvel in a way when you start thinking it was sitting in a field 24 hours ago to be picked by a farmer, prepared, packaged and shipped to arrive at a shelf of a supermarket and in the middle of that process are companies like ours,”
Nassberg explained.
Gender Equality
Women working in the air cargo industry used to be a rarity says Nassberg who has been in the sector for over four decades now, 26 years of which at WFS.
“In four decades, I have seen massive changes. It was a rarity to see women, frankly anywhere in the air cargo industry, whether be in frontline or senior or middle or senior management positions. That has changed. I’m very happy that that has changed. But as an industry, we need to make greater efforts to promote more gender equality,” says Nassberg.
Today, women are actively employed in the industry even holding top management positions.
WFS is among companies in the industry striving to promote gender equality, knowing that women can perform as effectively as their male counterparts in all areas.
“I’d like to think that we as a company have made a lot of inroads for women and we have pushed gender equality as a goal. There’s a good representation of women up to and including the executive committee of the company and we do actively look to fill positions with well qualified female talent,” said Nassberg.
“There are no barriers to women in our industry, other than the perceptions of the past. Women bring an additional dimension to it. I would encourage those looking at nontraditional career path to look at air cargo,” he said but noted it’s still a long stretch to reach a 50-50 ratio.
The aviation & air cargo maven
With his signature fedora hat, a friendly smile and an expert look,it’s hard to miss Barry D.Nassberg at any major cargo events.
The Group Chief Commercial Officer of WFS, Barry has been around the industry probably far longer than most executives with over 40 years solid experience yet still keeps his feet on the ground.
His longevity in surviving this tough yet dynamic industry is tested time and again at WFS which changed management six times over the course of his 26 years career at the firm.
The secret, Nassberg says, lies on being flexible & adaptable as well as taking advantage of opportunities that come your way.
“Things change. This is a very dynamic industry and the success or failure of companies is often dictated by economic conditions. Sometimes by changes in ownership. Changes in management. Be flexible. Be adaptable.Take advantage of opportunities. It worked for me,” Nassberg shared.
“I have moved many times. I’ve worked under many leadership teams in the 26 years I’ve been with this company. Six different shareholders and each one with somewhat different agenda and style,” he noted to illustrate his
point.
Barry says aviation is the only industry he has ever wanted to work in even as a child and his love for it has brought him life and to so many cities and places across Europe, the US, Asia and beyond.
And the future still looks bright for this aviation and air cargo expert highly regarded in the industry for his invaluable insights and resolve to push for growth.
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
