With the right digital tools and clever ways to leverage different strategies that generate business, Swiss WorldCargo capped off 2018 with high volumes and revenues despite a slowdown on global trade.
Ashwin Bhat, Head of Cargo at Swiss WorldCargo, the airfreight division of Swiss International Airlines formed in 2002 as capacity wholesaler for airport-to-airport cargo, says the company continues to exceed expectations and is on a path to further digitalize its systems to ensure seamless connectivity across continents.
“While Swiss WorldCargo does not disclose its cargo sales and volumes, we can proudly state that 2018 was a successful year for us. We are continuing to exceed our own expectations by leveraging different strategies that allow us to successfully meet and satisfy the needs of our different customers worldwide,” Bhat told Air Cargo Update, noting that the company’s focus on quality service and customer satisfaction helped its team end 2018 on a good note.
The Zurich-based SWISS has at its disposal an airfreight network to over 130 destinations in more than 80 countries with access to daily truck connections between key business centers across Europe and other countries.
Going Digital
A trusted name in belly hold capacity, SWISS offers one of the most modern fleets in Europe, and a wide-range of products, including truck services.
“On long-haul flights, we operate a mix of Airbus A340-300, Airbus A330-300 and Boeing 777-300ER aircraft. For short and medium-haul flights, we offer a mix of Airbus A321-100/200, A320-200, Bombardier CS100 and CS300 and A319-100,” said Bhat.
“Our product portfolio is wide-ranging, and intends to meet diverse and often-times complex shipping and handling needs. Our selection covers different customer needs: a temperature-controlled supply chain, as well as security, reliability and speed. Our full product offering consists of SWISS X-Presso, SWISS Valuables, SWISS Celsius Active, SWISS Celsius Passive, SWISS Celsius Passive Solutions, SWISS Argus, SWISS Mail and SWISS General Cargo,” he added.
The cleverly named SWISS Argus is one of the company’s added value services designed to protect the entire supply chain and all products along the way.
“It offers increased theft protection through special storage options, as well as attendance and security checks prior to departure as well as after landing. It also provides secure product handling through the entirety of the supply chain, meaning that customers are able to handle products which they otherwise would not specifically be able to,” Bhat briefly explained.
The SWISS cargo chief said the company is bent on scaling up its digitalization programs to improve customer service/satisfaction, make the shipping process faster and enable more transparent access to company products and services.
“Digitalization will continue to play an important role at Swiss WorldCargo, and we remain focused on developing different customer-focused digital tools. Technology allows us to enhance our products and services offerings, while helping us to meet ever-evolving customer and industry needs,” he said.
For instance, Bhat said Swiss WorldCargo is implementing IoT technologies on its systems to improve tracking information. The company is also increasing its eAWB penetration as well as participating in different tech-inspired initiatives at IATA like eCargo, Message Improvement (MIP) and Electronic Consignment Security Declaration (e-CSD), to which the company is a pilot carrier.
Bhat explained the company puts high importance on its customer service and digitalization is at the core of fulfilling this to ensure fast and efficient transactions.
“As mentioned, we will focus on continuing to leverage technologies that can enhance our products & service offer, with the clear intention of meeting ever-evolving industry needs. As customer service is so important to us, we will also continue our focus on improving transparency and insights for our customers everywhere, without losing the focus on the core USPs of Swiss WorldCargo,” he said.
“And of course, we will seek to continue innovate and to develop the right services and solutions. Along with seeking ways to move ahead and developing new tools that help us and our customers to benefit and progress,” he added.
Modern-day cargo
The multibillion e-Commerce industry continues to change the global business landscape with direct impact to specialized sectors like air freight and logistics.
Bhat said SWISS is prepared to make the necessary adjustments to fully embrace this growing global market.
“We continue to see the growth of e-Commerce. While certainly not a new trend, every year we see an increasing market demand for the transportation of ecommerce goods – either as mail or as cargo. This, in turn, causes a demand for high quality, reliable and fast transportation,” he said.
“At Swiss WorldCargo, we will continue to leverage our extensive network and recognized Swiss quality, which is how we believe we can add value. We will continue to serve as a link between the various parties of the e-Commerce logistics chain, providing our customers with the necessary tools for sustainable growth,” he added.
But along with the rise in demand, comes the sustainability challenges. Bhat said SWISS WorldCargo is pinning its hope on technology to help solve these problems which include sky congestion and limitations on airport infrastructures.
“Within Swiss WorldCargo, we are developing a number of measures using the potential of technology to challenge this issue. Of course, we are also able to continue to benefit from our hub, specifically because of our short connecting times and quality-focused ground handling agents,” he noted.
Ashwin Bhat: The airfreight specialist
A chemistry graduate from the University of Mumbai,
Bhat entered India’s vast workforce as a cargo accountant at a subsidiary of Swissair. He stayed with the company for seven years before moving to Swiss Cargo AG which led him to his current role.
Bhat has been with SWISS since 2002 and climbed his way up the corporate ladder serving in various capacities and management roles, most notably as head for the Americas, the Middle East and Asia.
A chemistry graduate from the University of Mumbai, Bhat entered India’s vast workforce as a cargo accountant at a subsidiary of Swissair. He stayed with the company for seven years before moving to Swiss Cargo AG which led him to his current role.
Three years since his appointment as Head of Cargo at SWISS, Bhat has proven his capabilities to sail the company through good and bad times, living up on its name as the top belly carrier for pharmaceuticals and other specialized cargoes.
Last year, SWISS announced its total QEP (Qualified Envirotainer Provider) accredited stations have reached 36, an industry distinction and an assurance in the ever growing global pharmaceutical industry of its commitment to provide best-in-class services to its customers, which was further substantiated by receiving the IATA CEIV Certification.
Bhat who continues to steer SWISS to growth briefly describes their markets as follows:
Middle East
Swiss WorldCargo offers daily flights to Dubai and Muscat, giving us a strong presence in the region and allowing us to carry out shipments of high-value goods.
Asia
Swiss WorldCargo offers regular flights to Singapore, Hong Kong, Beijing, Shanghai and Bangkok, in addition to Phuket and Saigon seasonally. Additionally, SWISS serves Tokyo, Mumbai and Delhi which rounds out the presence in Asia. With these flights, we are able to connect major industrial and financial centers throughout Asia with Switzerland.
Europe
We fly and truck to all major destinations in Europe. This offers seamless international connections through Zurich through via hub (which offers the fastest connection time in the industry). It also offers direct city-to-city transport from Zurich to different cities on the continent.
Africa
We cover many major destinations – Johannesburg, Dar-es-Salaam, Nairobi, Cairo, and others through seasonal capacity (Cape Town, Malé), through which we can showcase our strong traffic in the region. We focus on carrying out various high-value products from the region both to/from Switzerland and to/from Africa & other destinations throughout the world.
Americas
The Americas continues to be a major market for us, and we offer daily services to Miami, New York, San Francisco, Los Angeles, Boston and Chicago year-round. We are focused on a variety of shipments that cover this region, and further destinations can be reached via a dedicated trucking route, which complements our network.
Behind all successful companies are people. The employees who think and execute the work. The management that oversees the operations and directs its future. And the consumers who patronize the products or services that companies sell.
Despite the emergence of new technologies that have taken over many sectors in recent years, the value of human capital remains strong in the air cargo industry so much that it continues to invest on people, empowering them with new knowledge, skills and techniques.
ECS Group, the largest integrated GSSA worldwide with more than 1,000 strong employees across 69 offices in 47 countries, is taking its human capital investment a notch up with the launch of #NexGenLeaders—a project that challenges the best young innovators to come up with new ideas on how to help improve the air cargo industry.
Adrien Thominet, CEO of ECS Group, explained to Air Cargo Update the project is aimed at discovering new talents and tomorrow’s industry leaders and giving them the opportunity to grow in the GSSA industry.
“We indeed have the intention to launch an ambitious project on the international scale to discover tomorrow’s industry leaders. In the four corners of the world, the project will be an opportunity for students, startups and ECS group employees to make their ideas known and to deploy their talents with the same goal: rejuvenating our industry by way of innovation,” says Thominet who is deeply passionate about empowering the Millennials with industry opportunities.
“Known as #NexGenLeaders, this project will consist of a challenge lasting almost 6 months, with a totally dematerialized on-line part followed by a live finale. The grand jury consisting of experts from our industry will elect the best projects which will be revealed during the Munich “Air Cargo Europe” event in June 2019,” he added.
The project involves collaborating with many colleges and universities worldwide as well as numerous nurseries and accelerators. ECS said #NexGenLeaders will be a wide-ranging activity for the company this year. The initial response has been encouraging with even airlines and transit agents pledging support.
“Convinced of the value of this project, several partners (airlines and transit agents) have also promised their support to help us carry this project through,” said Thominet.
A Dynamic Network
With an operation that spans through continents, dozens of countries, involving multi-cultural workforce working at different time zones, ECS Group says people united with common goals despite their diversity is the core strength that drives it to succeed.
“The strength behind ECS Group has always been our expertise and, more particularly, the expert input of our collaborators all over the world. Local group managers are fully aware of their market and have established privileged ties with their partners. These “local heroes” as we sometimes call them form a single joint network enabling our Group to develop over the years. Our managers and collaborators have a wide range of profiles adding to our complementary capability and making our Group particularly dynamic from the commercial standpoint,” explained Thominet.
“The men and women in the group are the keystone behind our growth. Although we have our eyes constantly turned toward the future, we also count a great deal on the new generation to take up the everyday challenges and invent tomorrow’s industry with a new way of seeing things and having groundbreaking ideas. We are convinced that their new ways of seeing things, from an external standpoint, are the ideal complement for the skills of our more experienced collaborators,” he continued.
Combining the expertise of the company’s experienced people while welcoming innovative ideas, help ECS Group maximize its resources and spell growth.
“What we are striving to do at ECS Group is to add together all these strengths and complementary profiles. They represent our ace card and we are reaping the benefits of this strategy every day, within the group, the affiliates, and more generally on an industry-wide scale,” said Thominet.
New deals
ECS Group capped 2018 with new partnerships, collaborations and prospects for expansion. First, it welcomed new shareholder Naxicap, a multibillion private equity firm focusing on leverage buyouts and growth capital.
Thominet said Naxicap’s entry as investor will enable ECS Group to “considerably bulk up our investment plan and work on new acquisitions to expand our already considerable network even more.”
In Latin America, ECS Group formed a new partnership with the Brazil-headquartered BCS Air, enabling it to expand on the market.
“Our partnership is the result of a long friendship and we are now reaping all the benefits. The BCS AIR team, headed by the particularly proficient João Ferreira, this is what one might call a perfect team, recognized as the leading GSSA in Brazil, for technical and innovative accomplishments. The team is dynamic, enthusiastic and deeply committed to the future of our group and its expansion, especially in Latin America,” Thominet shared.
Last year, ECS also demonstrated its growing expertise on Total Cargo Management (TCM) by replacing the airline entirely for the complete cargo chain.
“This service offer, the heart of our strategy, illustrates the confidence that our airline partners put in our expertise and performance. We have this type of partnership with JetStar Asia, Air Italy and more recently with NokScoot. We are particularly proud of this cooperation which points toward the future of our group,” said Thominet who noted that this is an important goal for ECS Group that requires deep commitment from its team.
This year, ECS Group envisions keep up with its positive growth with new projects, products and innovations with Thominet saying they are “constantly on the lookout for new, solid and sustainable partnerships.”
“ECS Group now has locations in the four corners of the world and our network extends to every continent. it does not prevent us from continuing our organic growth however, through acquisitions (recently in Latin America with BCS AIR and last year with EXP-AIR Cargo in Canada); other projects are under way and every day is a challenge to plan the way our group could deploy further. We take great care of this network which is what makes us strong, stronger from day-to-day. It is particularly true in North-east Asia and the Pacific where we have several ongoing projects for expansion to help us better set up in the region,” the CEO said.
Adrien Thominet, the CEO of ECS Group, has been with the company for more than 23 years. An economics graduate, he first worked in New York and Tokyo before settling back to his roots, Paris, France.
Constantly looking out for growth, this pragmatic and dynamic business leader who helped steer the company to new heights in the GSSA industry, shares more insights with ACU on different issues facing the air cargo industry.
As someone who has been in the GSSA business for many years, please briefly tell us the perks of nurturing a career in this industry.
Our industry is somewhat water-tight but it does actually offer thousands of opportunities. With the constantly growing demand, the air cargo industry is developing continuously, and the field of possibilities is as open as ever. The industry players are all driven by the same concern for performance and renewal.
The industry is particularly effective for those who dare. In this line of thinking, it is also possible to bring to the fore innovative ideas, and to move the traditional ways of doing things. In short, it means constantly maintaining action and taking up new challenges every day. From a more personal standpoint, I have had the opportunity of working in a group which has never stopped its expansion in terms of performance and geographical coverage. My job is especially interesting, as is the group in which I work. Being constantly in the field, face to face with the players who make and keep this industry alive is an experience which is a long way from the humdrum will never be a simple routine.
The Yellow Vest Movement in France is gaining momentum, what’s your stand on issues being raised as one of the biggest employers in the GSSA industry?
Above all, the Yellow Vest Movement is a protestation movement reacting to the government policy (tax on automobile fuel, increased cost-of-living). At ECS Group, we do not “do” politics but at the heart of our concerns lies the well-being and development of our cooperators. There is a very strong team spirit at ECS group and we want to develop it, by setting up various tools and processes, by internal communication, organization and above all, by involving the teams to the utmost so that they feel that they are supported by the group.
The Yellow Vest Movement has not affected our group in any way and has not had any impact on our quality of service and our in-house organization.
In terms of innovations, please share with us your latest projects in this front.
Internally, we have begun to deploy business intelligence and reporting tools. These innovative solutions will revolutionize our way of working and dealing with the various markets. Not only are these tailor-made tools easy to use, but they also represent a considerable gain in time and boost our performance enormously. We will soon be announcing a new product.
Innovation is therefore the heart of our concerns and our everyday work, without it being a constraint. On the contrary, we see it as a tool, a driving force and a target. That is why innovation is part of the 5 values at ECS Group.
In your opinion, how can the air cargo industry in general address problems with digitalization?
As mentioned previously, the matter of innovation, digitization or any other conversion of our methods should not be seen as a constraint but as a chance. Change is often considered warily, whereas it should be greeted enthusiastically.
Digitalization is essential for our industry and we must accompany this change. Obviously, the change is already taking place but without everybody’s backing, it will take longer for the process to be implemented entirely. Performance improvement and making our daily work easier should offer the means of overriding any reticence in changing our way of working.
Africa’s need to connect to the rest of the world, even its remotest parts, inspired a UK-educated Kenyan-Indian entrepreneur to venture into air freight industry. State-owned freight carriers in Africa just came out in recent years leaving the private sector to handle humanitarian missions and open up opportunities for African entrepreneurs seeking business across the globe.
“My inspiration was derived on the challenge to access the inaccessible, connect the disconnected, and reach the unreachable,” Sanjeev Gadhia, founder and CEO of Astral Aviation told Air Cargo Update in an email interview.
Gadhia, a banker by profession, first set up a logistics company in Kenya at age 25 after earning his degree in London. Seeing the African communities’ need to be connected, he decided to set up Astral Aviation and his gamble paid off.
“Aviation plays an important role in trade and development in Africa, however, the reality is that Africa is fragmented due to its size and number of countries which make up the continent,” explains Gadhia.
“During the past 18 years, we have uplifted the lives of various communities in Africa, whether it is exporting their flowers, vegetables and fish to the markets of Europe, or importing medicines & humanitarian cargoes to communities, who are at life’s edge,” he proudly says.
Great challenges
Serving Africa early on has been very tough for any air freight carrier, including Astral Aviation, due to violence, sectarian and tribal conflicts, lack of infrastructure, bureaucracy & unstable govern-ments.
Gadhia said South Sudan and Somalia were among the countries in Africa extremely difficult to serve in the early years because of violence and security issues.
“We had several challenges coming from the private sector, such as lack of regulations, infrastructure, comp-liance & bureaucracy in some of the regions we operated in,” he said.
“By far the biggest challenges were the political and security risk which we encountered in very difficult regions such as South Sudan and Somalia, when we commenced our scheduled flights over 8 years ago, although the present situation is very safe,” he added.
South Sudan only became an independent country in 2011. It has the third largest oil reserves in Sub-Saharan Africa and is also rich with petroleum, iron ore, copper, diamonds, zinc, tungsten, among other minerals and natural resources.
But despite its vast natural resources, it remains one of the world’s most underdeveloped with high illiteracy rates.
After decades of civil unrest, Somalia, on the other hand, is slowly rebuilding itself. It has the largest population of camels in the world actively traded across the region.
Up for expansion
Last year, Astral Aviation handled 40,000 tons of cargo and expects to handle similar volume by end-2018. But the company has bigger plans for the coming years with the help of its new shareholder NAS/Network Airline Services which has offices in over 30 countries around the world.
“Astral Aviation is a fairly small airline in Africa. However, we have some big plans for the region. We uplifted approximately 40,000 tons of cargoes in 2017 and expect a similar tonnage in 2018,” shared Gadhia.
Astral Aviation currently has a team of 60 employees. In addition to its head office in Nairobi, Kenya, it also concurrently hold offices in Tanzania, Uganda, Rwanda, Somalia, South Sudan, Comoros and Mozambique.
“We are expanding our fleet by acquiring B737F and B767F in 2019 with new destinations intra-Africa and also to and from DWC. We are setting up a hub in West Africa in 2019 and in South Africa in 2020 which will enable us to implement our Pan African vision of having three hubs in Africa which will cover 60% of the continent,” shared Gadhia who noted that their biggest market remains the intra-African market.
Additionally, the company is also exploring business opportunities in using commercial drones for cargo which would enable even the remotest parts of the continent access to freight.
“We are working on several projects using commercial drones which will enable us to offer unique and innovative solutions to Africa’s problems,” Astral Aviation’s CEO added.
Though small, Astral Aviation has built a trusted name for itself in the very competitive air cargo industry and Gadhia says every day is a great moment for their team for they know that they are making a difference.
“It’s an honor and privilege to be a part of the fastest growing aviation industry in the world. Our greatest moment is felt every day when we make a difference in the lives of the people we serve and the partners who entrust us with their cargoes,” says Gadhia. “A proud moment is winning the Stat Times ‘African Carrier of the Year Award’ four times in a row at the Air Cargo Africa event.”
Tough yet ripe for growth
Africa remains a tough place for aviation business due to a number of factors but it also has huge potentials for growth.
“Africa is a tough place to run an aviation business due to the dominance of foreign carriers who control 80% of the passenger and 85% of cargo traffic to and from the continent. High cost of business, Lack of Infrastructure, Political Risk, Weak Regulatory Framework and Lack of finance are some of the challenges we have experienced,” explained Gadhia who noted that in terms of aviation, Africa represents only 2% of trade.
Citing the International Aviation Transport Association’s (IATA) research and forecast, Gadhia said “33 countries in Africa will Africa will experience high level of growth, with very encouraging signs of liberali-zation with the adoption of SAATM (Single African Air Transport Market).
SAATM is a flagship project of the African Union seeking to create a single market for the air transport industry in Africa. Once fully enforced, it would mainly liberalize flight frequencies and capacity limits in the continent.
The banker turned aviation entrepreneur
Born in the lakeside town of Western Kenya, Sanjeev Gadhia was educated in Bangalore, India and studied at the University of London for his degree in banking and finance.
Sanjeev’s exposure in the aviation industry began at 17 when he worked for his uncle’s travel agency in London where he specialized in selling package holidays to the US and Canada, inspiring his great interest in traveling.
Upon his return to Kenya, at age 25, he set up his own company dealing with procurement and logistics.
“My interest in aviation was in the glamorous passenger business, however, on my return to Kenya, I felt the need to specialize in air-cargo due to the lack of freighters in East and Horn of Africa, to meet the humanitarian requirements of the UN,” recalls Sanjeev who is a banker by profession.
At 30, Sanjeev branched out to aviation, establishing Astral Aviation which specializes back then in sending aid and relief to the region and eventually diversifying in project cargoes in Tanzania.
“My journey continued to diversify into Western aircraft which we operated in the East African region after which our JV with Network Airline Services/ANA Aviation UK resulted in us operating 2 x B747F’s between Africa and Europe,” the entrepreneur said.
Though small compared to other air carriers in the region, Astral Aviation sustained growth over the past 18 years.
Astral currently operates a fleet of F27 (5 tons), DC9 (15 tons) and B727-200 (24 tons) Freighter within its intra-African network spanning to 50 destinations, in addition to a wet-leased B747-400 Freighter on the Nairobi – London and Liege sector.
For Sanjeev, success is a journey, not a destination. It involves a lot of work, dedication and perseverance.
“The journey of an entrepreneur is based on hard-work, commitment and self-confidence. Patience and perseverance is an important trait for success. In Africa, we have many opportunities and even more challenges, with the temptations of taking short-cuts which often lead to devastating results. There is no short-cut to success which is a journey and not a destination,” Sanjeev shared.
About Astral Aviation
Within its intra-African network, which encompasses 50 destinations, Astral operates a combination of scheduled and adhoc charters along with value-added leasing services. Its interline agreements with over 20 Interline Partners; along with preferential agreements with the leading global and local freight forwarders; and partnerships with over 25 global GSA’s, facilitate the consolidation of cargoes at the freighter-friendly Jomo Kenyatta International Airport and Liege Airport.
Astral Aviation has been a recipient of International Award in Excellence in Air Cargo, African Carrier of the Year in 2011, 2013, 2015 & 2017 by Stat Times.
Astral Aviation is a member of :
African Airlines Association (AFRAA)
The International Air Cargo Association (TIACA)
Kenya Association of Air Operators
Kenya Private Sector Alliance (KEPSA)
Kenya National Chamber of Comm-erce & Industry (KNCCI)
Neutral Air Partner (NAP)
IATA ICH (Non-Airline Member)
The UAE’s advanced infrastructure and forward thinking policies continue to push its economy to grow with World Bank and other international financial bodies forecasting growth to accelerate in the country in 2019 and 2020 when it hosts World Expo in Dubai.
Dubai, the country’s financial capital, is fast rising in global trade, posting external non-oil trade in the first nine months of 2018 AED965.3 billion. Re-exports registered 13 percent growth to touch AED299.2 billion, while imports reached AED 592.2 billion, and exports AED97.7 billion, government records showed.
Dubai Customs pointed out Dubai’s distinctive performance in external trade reflects the success of government policies and initiatives and strategic sustainability development plans to support growth in various economic sectors, including air freight and logistics.
But decades ago Dubai, home to the world’s tallest structure, the Burj Khalifa, which puts to shame even New York’s tallest buildings, was once just a fishing village with barren desert and only one-high structure, the World Trade Center, built in 1979.
WTC was also the tallest in the Middle East at that time, created under the leadership and vision of the late Sheikh Rashid bin Saeed Al Maktoum, father of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, who continued to transform Dubai into a major global city that everyone looks up to.
Dilip K. Sitlani, vice president for business intelligence & operations of First Priority Cargo, who came to Dubai for the first time in the 1980s as a teen to join his family was among those who saw the emirate’s major transformation.
Combining work with studies, Sitlani got his break in the air cargo industry when he got hired as duty officer for ramp and load operations at Cargolux Airlines, the Luxembourg-based freight carrier which was among the first carriers to do business in the city.
Under his father’s visa, Sitlani managed to work for Cargolux, rising from the ranks throughout his nearly 20-year career at the company.
“Whatever I know today, it’s from Cargolux. I’ve been in the cargo industry for 30 years and the experience has been excellent. There’s a lot of learning. Cargo situation changes every day,” said Sitlani.
Cargo grows with Dubai’s growth
With everything imported to the UAE and the rest of the oil-rich Middle East back in the day, the cargo industry flourished in the region, particularly in Dubai, now considered one of the busiest logistics and freight hubs in the world.
Sitlani said all food, personal effects and even soil from all over the world were flown to Dubai and studied for their potential to grow various trees, fruits and vegetables, a clear indication of the government’s push to provide for the UAE’s food security despite its harsh climate and unfavorable natural conditions.
“Actually, the cargo industry played a big role in Dubai’s growth. All the food, trees, special soil, and so on, were flown from different parts of the world. Special scientists were brought here to study them. Today, you have all sorts of trees growing and you even have the Miracle Garden. That’s how far they have gone,” said Sitlani. “It’s been a great experience to have grown up in Dubai as a kid.”
Sitlani credited Sheikh Mohammed and the Royal family for their vision to transform Dubai into a futuristic megacity.
“These are all made possible through the vision of His Highness Sheikh Mohammed. He was the Defense Minister when I came to Dubai and he gave a statement that he will change Dubai and follow his father’s vision. What you see today is all from Sheikh Rashid who had already planned DP World, the Maktoum Airport and so on. He just followed that vision and now, of course, his son, the Crown Prince, is doing the same,” he said.
The UAE’s air freight market is projected to grow 4.8 percent between 2017 to 2021, largely driven by expansion projects combined with new investments in the logistics sector. From 2012-2016, its freight market grew by 8.6 percent compounded annually. This year, the UAE is forecast to handle nearly 5 million tons of cargo, the third largest in the world.
Africa’s leading partner
First Priority Cargo specializes in serving the African market out of the need of the continent for a reliable air freight company.
It has Ethiopian Airlines, the largest airline in the African continent, Sharjah International Airport, and Air Arabia, the first low cost carrier in the region, as partners.
“First Priority Cargo specializes in cargo into Africa. Africa is our key market. And it’s been going strong ever since. All people from Africa shop in Dubai and they send it back home through us,” said Sitlani.
Contrary to popular notion that it’s difficult to do business in Africa, Sitlani said their experience has been blissful saying, “All transactions are in cash & the risk is very little. Africa is good.”
First Priority Cargo flies six full flights a month to Nigeria’s capital Lagos and its key city in the north, Kano. From there, the shipments are distributed to the country and other nations in Africa.
“They come and shop here and we deliver it directly to Lagos and Kano. We do a huge range in Africa. From Kano and Lagos, the goods are distributed all over Africa,” explained Sitlani. He described the goods as mostly “personal effects, electronics, furniture, a mix of everything.”
“Dubai is the shopping paradise for Africans,” noted the business executive who credits the company’s strong team work for First Priority Cargo’s positive growth.
“Team work is our number one priority. It’s like the first priority,” said Sitlani highlighting that quality customer service is also one of their strengths.
Speed and reliability
Anvar Majeed, First Priority Cargo director for UAE, says the company focuses on building a niche market known for speed and reliability.
“We excel in rendering total logistics solution, building close partnerships as well as relationships. The secret to our success is the excellent service we provide to our customers at very economical rates,” said Majeed.
He credits Sitlani for steering the company to the right direction and introducing innovations.
“Our group VP Business Intelligence Dilip Sitlani has moved us ahead with new ideas and innovations and signed up with Sharjah Airport for a screening machine in our facility and would be the first agent in the UAE to have this facility of pre-screening,” said Majeed.
First Priority Cargo’s facilities in Sharjah are open 24/7.
The company which handles the delivery of Lamborghini on behalf of Al Jaziri Motors, the official distributor of the Italian luxury sports car in the UAE, won two awards in July from two major carriers—AirFrance/KLM Cargo and Turkish Cargo.
Partners through subsidiaries
Through its subsidiaries, First Priority Cargo’s customers from Africa who may need services for shipments elsewhere can also get assistance.
Sitlani explained one of their subsidiaries offer multimodal services with access to hundreds of destinations thanks to ties to three of the world’s biggest airlines—Emirates, Etihad Airways and Turkish Airlines.
“We have this Block Space Agreement with Emirates, Etihad and Turkish Airlines which other agents don’t have. We can virtually use them for any routes,” Sitlani explained, noting that with the agreement customers can reach “all destinations in the world.”
This year, the subsidiary reached another milestone when it opened its new office at the Dubai Airport Freezone (DAFZA) which launched this month its 24/7 operations to meet the demand of its growing clients.
“We’re now open 24/7 and we have two DG (dangerous goods) experts on board,” said Sitlani noting that the company is both GCA (UAE General Civil Aviation) and DAFZA compliant in handling dangerous goods or hazardous materials—chemicals, mixtures of substances, manufactured products or articles which can pose risk to people, animals or the environment if not properly handled in use or in transport.
As a fully licensed and approved DG handler, the subsidiary has its own dedicated DG handling area within its warehouse confines, equipped with an expert team of dedicated and highly qualified DG personnel to handle all its customers DG requirements.
These facilities are extended to both Dubai and Sharjah in view of providing timely handling of all DG shipments. The service offerings include repackaging of DG shipments as per IATA DG regulations for air shipments and IMO regulations for ocean shipments and cover any and all DG or hazardous materials classified commodities.
Air, land and sea
Apart from unparalleled route link through its airline partners, First Priority Cargo has advantages through subsidiaries that offer global air charter flight solutions, arranging and organizing dedicated freighter flights, to and from any destination worldwide at short notice.
Clients have the option to choose from bulk, narrow-bodied or wide-bodied freighter aircraft fit to carry emergency supplies, relief cargo, live animals, and vehicles, among many other things. They also deal with international ocean freight, working in tandem with some of the world’s leading shipping lines.
In land, its subsidiaries also offer reliable and on-time solutions available 24/7 throughout the year, guaranteeing the quickest routes. With partners across GCC countries and worldwide, the firms also manage a comprehensive Door-to-Door or Door-to-Port Road Haulage service to cater to customers’ distribution needs, whilst taking care of all the tedious customs and border formalities.
“Our strength is in offering our customers tailor-made solutions, with the best available schedules and transit times at competitive prices. We are capable of handling consignments of any size, with assurance of expert handling by a team of experienced professionals,” said Sitlani.
The cargo business in Dubai has been in an upward swing and the trend is likely to continue through 2020 when the city hosts World Expo.
Apart from general cargo, one of its subsidiaries also acts as the GSA for Cebu Pacific, a privately-owned budget airline in the Philippines, and other destinations it serve in the Far East like Hong Kong, Singapore and Incheon City in South Korea.
With about over 700,000 Filipinos working in the UAE, the company is also working with Cebu Pacific to introduce a door-to-door cargo service throughout the Philippines.
“Right now, were doing air-to-air delivery but soon we will be launching door-to-door delivery with our offsite agents in the Philippines,” said Sitlani.
Inspiring journey
Working at his teens in the air cargo industry, you would think Dilip Sitlani would grow tired of it. But his passion in this highly competitive world went on for decades, bringing him new heights in his career at every opportunity.
He began his career as duty officer for ramp operations and load control with Cargolux Airlines, mainly looking after the ramp operations on a day-to-day basis. He described himself as an “expert in offloading and loading the 747/400 & 747/800.”
He eventually became the operations manager at Cargolux where he spent the first two decades of his career before moving on to Sharjah Airport Authority, Dubai World Central and Dubai Airports, where he held key manage-ment positions for many years.
Last year, Sitlani moved to First Priority Cargo & simulta-neously held the position of vice president for business development and operations of two of its sister companies in the logistics industry.
For Sitlani, staying loyal to your career will lead to leaps and bounds in the long run.
“First, get educated because that’s very important today,” advises Sitlani who began working in the air cargo industry in his teens. “Hopping and skipping won’t get you anywhere that’s what I learned.”
And despite his well deserved achievements, Sitlani who holds a BA from the University of Mumbai and numerous specialized certifications, remains humble, a trait he says is necessary to lead effectively and reach your goals.
“Be humble. Keep your feet on the ground. Regardless of what’s written in your business card, when you leave your office, you’re just another human being,” Sitlani humbly says.
Over 15 years ago, while the world was holding its breath monitoring the massive US-led military takeover of Iraq, a young engineer was silently crafting a vision and learning how to build a reliable express delivery service to Iraq—a country doomed by wars and conflicts for decades.
Eng. Majid Saidgul Babasheikh Barzanji’s efforts led to the inception of MATEEN Express, a vision-driven company founded on the new generation’s passion to innovate, make a difference and radically improve the lives of Iraqis who have long been suffering from geopolitical conflicts.
“We’re unique in the sense that we started MATEEN Express out of our own needs for systematic reliable logistics and supply chain in Iraq,” shares Barzanji, Chairman and Co-founder of MATEEN Express & Logistics, who is from Kurdistan, the oil-rich region in northern Iraq.
Barzanji holds the distinction as one of the very first to explore possibilities and potentials in the commercial air cargo and express services to Iraq when the country and the Iraqis needed it the most.
MATEEN Express laid the foundation for a completely new era in express delivery, supply chain, logistics integration and airfreight forwarding into Iraq, within Iraq and ex-Iraq. It was the first that offered air cargo and express deliveries for all commercial sectors such as computers, computer parts and mobile phones that were newly-introduced in the war-torn country, among many other life changing commodities.
Barzanji’s team commenced operations of MATEEN Express in 2003. By 2005, it quickly spun-off, simultaneously registering the company in Baghdad, Iraq; Dubai, United Arab Emirates and; in Erbil, the capital of the Kurdistan Region in northern Iraq, under its well-thought brand name MATEEN Express.
It then quickly expanded to China, opening up two main branches in Guangzhou and Yiwu, with multiple private and shared operational hubs across Shanghai, Guangzhou, Shenzhen and Hong Kong. The company kept on developing new concepts, launching new services, improving its offerings, strengthening its workforce with more talents, gaining more grounds and expanding steadily.
By 2014, the group had grown to own 25 branches across the UAE, Iraq, Kurdistan, China and Turkey, employing over 450 staff of 14 nationalities, including Spanish, Germans, Britons and others with origins from the Middle and Far East, among other nations.
Since its establishment in early 2003, MATEEN Express has been operating in its empowering visionary slogan of “Connecting Iraq to the world”—which became literally necessary for every new Iraqi entrant in the field to establish their authenticity.
MATEEN Express proved it’s resilient with no other operators capable of living up to the company’s pledge to its growing customer base in Iraq.
From Soviet era aircraft to modern cargo planes
Despite huge logistical challenges, MATEEN Express began operations in Iraq chartering or co-chartering Soviet-era military freighter aircraft, the Antonov-12, the world’s largest cargo plane (AN-12), and the transport plane Ilyushin II-76, originally designed to deliver heavy machineries to remote areas.
Barzanji says the ease of operating these types of aircraft made their operations seamless apart from imparting to their team invaluable experience in all operational and commercial aspects of flying.
In 2009 the company began commercially operating Western palletized freighters (Boeing-747F, A300F and DC8-63F) into Erbil and Sulaimaniya in the Kurdish Region.
“The DC-8-63F was never operated to Iraq or Kurdistan commercially, let alone on schedule.” Barzanji says, adding, “The core operational difference between the western equipment versus the Soviet ones served MATEEN Express so well in every aspect, especially in dramatically shortening the timings.”
“It enabled us to offer shorter cut-off time in receiving cargo from freight forwarders and direct customers like the DC-8 at the point of origin. The process takes shorter time, from landing until the cargo is cleared and delivered to their final destinations. Most often, the total time saved was almost 6-8 hours, a full working day.”
“The switch to DC-8-63F saved the trading cycle by more than half leading to much more efficient usage of the capital for MATEEN Express’s customers, while saving on fuel consumption and loading more on an aircraft type that was mostly abandoned by almost all operators,” he said noting that the company’s good experience with DC-8 prompted it to start operating the B-747F.
The businessman said the B-747 is no stranger to Iraq with other service providers using it both for military and Iraqi government charter flights.
“But it is totally different when you have to fill in a 100 tons aircraft with individual shipments of over 170 customers (freight forwarders, integrators, direct customers). The sum all these, and our participation in every exhibition in Iraq since 2004, the sizeable investment in our infra-structure and human capital, as well as our prominence on local media, qualified us to lead this industry from the ground up. Whatever we did or say, it took only 6-12 months to be copied by others, where we installed a facility, a copycat opened nearby…,” he added.
Logistics with roots & heritage
Mateen refers to a mountain in Kurdistan (Northwest of Erbil) which in Arabic means “strong, solid, stable, reliable and trustworthy,” among a host of other positive adjectives.
“Mateen is an Arabic word with a very rich meaning,” Barzanji explained on how they came about with the company name from a selection of 28. “We believe a brand name should be selected based on the essence of the company’s vision and mission.”
True to its name, MATEEN Express made history when it landed the first air commercial shipment in Baghdad Airport and the first commercial cargo flight that went into Erbil Airport, even before it could gain its IATA code.
Barzanji worked in Iraq for sometime as an engineer before moving to the UAE to work as a junior design engineer for a major consulting engineering firm based in Abu Dhabi.
Closely monitoring geopolitical changes in the region, especially after the 911 events and the global mobilization of troops to the area, Barzanji connected the dots and made a good sense of what could come next in Iraq, before making a leap to become an entrepreneur.
In 2002 or two years after moving to the UAE, Barzanji left his job and ventured on his own business dealing with info-tech/telecom distribution and retail. He eventually established MATEEN Express in Iraq and the UAE with colleagues.
With first-hand insight of what Iraq needs in terms of transportation and logistics, Barzanji introduced the modern concepts of supply chain management such as cash flow management, stock management, just in-time deliveries, quick market connections, repair-and-return among others in to the country despite the odds.
Within just a short period of time, MATEEN Express has successfully established itself as a reliable and trustworthy logistics company that customers can depend on in good or bad times.
Barzanji said the company achieved that by living up to its core values of honesty and serving customers to the best of their abilities.
“We always do what is best for the customer. We strongly believe that one of the key responsibilities of any logistician is to advise the customer how his shipment could best be delivered (cost, transit time, routing and entry point, potential risks, required documentation, among others). In many cases, we let go a portion of our profit by offering what is best for the customer. We had some tough time how to practice this when we started offering ocean freight service to the public,” he said.
“This trait alone has served us so well. Beyond any marketing efforts, we gained the trust of everyone, customers, associates, service provider and government departments and authorities,” he added.
The engineer turned businessman said they have many experiences where honesty was put to the test. For instance, in November 2007, right before the Dubai Airshow, the company received a call from a major oil firm, “requesting for a miracle” to immediately transport two heavy machineries to Iraq.
“The client (VP of Service & Procurement) told my colleague, ‘We have two MOROOKA towing tractors kept with another operator for seven days already and despite screaming to them repeatedly how desperately we need them on site, they failed to take any action.’ So, we received the vehicles at Dubai Airport before noon of 7th November 2007.
“It was a difficult situation due to the Dubai Airshow 2007, DCAA temporarily ddidn’t give permission for IL-76’s to fly. We had to act very quickly to save the client. So, we met the customs manager at DAFZA to approve retrieving the vehicles out of Dubai customs bonded warehouse (Dubai airport FLC), and re-arranged our flight plan to load them from Sharjah. We did it…Following a well-engineered collaborative effort of our flight, ground, customs, safety and transport teams, we delivered the units right before the sunset of 9th Nov 2007, just like a miracle.”
Barzanji said what impressed the client more than the company’s flexibility to deliver on its promise is its honesty.
“They agreed to a full charter price due to their critical situation, but we managed to load about 8 tons of commercial cargo on the same flight and shared a copy of the original manifest with them. We shared the revenue of this excess cargo as discount on their bill. They couldn’t believe how far we would go in putting our values in practice,” he recalled.
Helping rebuild Iraq
Since 2003 Iraq has been facing a different kind of war, reconstruction and rebuilding. Its violent past destroyed much of its basic infra-structure, cities and villages wiped out, millions displaced & rendered jobless.
Officials estimate Iraq would need at least US$88.2 billion to restore. Of this, about $17 billion would just go to rebuilding homes.
The World Bank says Iraq’s growth outlook is set to improve in 2019 with oil production expected to increase due to favorable security environment and a gradual pickup of investment for reconstruction.
In post-war era, MATEEN Express’s primary role of transporting and delivering what Iraq and its people needs remains vital.
It ships on a regular basis high-tech disinfectant from Mexico to key cities in Iraq to protect people from bacterial and germicidal infections, especially when there are large gatherings for religious purposes.
It is also actively helping Iraqis striving to rebuild their livelihood by hauling products they ordered overseas such as equipment, building materials, machineries, cosmetics, vehicles, among many others.
The company also encourages clients to communicate their concerns and needs to help broaden their options. “We cater to a broad and wide range of services,” says Barzanji who noted that part of their success in serving customers is being based in Dubai which is safe and business friendly. “You don’t feel like a stranger in Dubai. We’re based in the UAE and that helps.”
With offices in Dubai, Turkey and China, MATEEN Express is strategically positioned to effectively meet the current and future logistics and supply needs of their clients.
“It’s a fact that whatever happens in the political landscape has an impact on business. Logistics and freight forwarding, their nature of business is responsive. Somebody is buying something, regardless of the mode of transportation and time sensitivity. In general, for any business to grow, commercial activities must grow,” concludes Barzanji who was elected in 2015 as board member in the Executive Committee of the National Association of Freight and Logistics, a nonprofit group representing the freight and logistics industry in the UAE. The body entrusted him to chair the Air Freight Subcommittee.
Deeply rooted in Iraq with personal insight on the ground, Barzanji shares his thoughts on what to expect on the future of the air cargo industry in the country, once the envy of many with its vast oil resources and wealth.
Well, on global and regional levels, the air cargo industry faces many challenges. The soft global economy, the new trade wars, flight disruptions due to political situations and conflicts would be just a few.
Many major freight operators reported continuous prolonged losses, some quit already, or have downsized dramatically, yet the ball is still rolling.
Conflicts in our region create opportunities for charter operators with ties to the military. But this business model is based on instabilities and chaos and what comes with them is the surge in need of supply – mostly conflict-related – even if humanitarian issues are involved sometimes just used as coating.
On the contrary, for commercial scheduled freighter operations to be profitable and sustainable, peace, stability, and positive market conditions are required.
For a long time, I practically have proven the concept that I believed in –”If a freighter operator flies on schedule; everyone will fine-tune his or her supply with it.”
Yet over the last couple of years, the global market landscape had imposed tough times on every freight operator to become creative in introducing new routes. In fact, maintaining current operations is already a tough challenge for almost everyone.
You hear merger talks here and there; You see collaborations among operators thought to be sort of competitors. Airlines that used to say we fly solo now cooperate on different levels, and so on.
Bear in mind, sustainable commercial air cargo, is the product of close cooperation and collaboration of so many stakeholders, governmental, private and semi.
Any successful efforts – e-air waybill – for example, involves airlines, freight forwarders, shippers, ground handlers, police & airport security, airport authorities, customs department, technology providers – Calogi for example – as well as industry bodies like IATA, FIATA, the latter represented by NAFL in the UAE.
This leads me to the question where we started. What is next for the air cargo industry in Iraq?
Let’s agree on some facts. This oil-rich country is pretty much devastated in every aspect. With over 15 years of continuous destruction going on, entire cities are flattened to the ground, no real infrastructure roads, bridges, power stations, dams, hospitals, universities, hotels, entertainment facilities, you name it. Any time real rebuilding efforts show on the horizon, there will be massive requirements for logistics and supply chain services, air cargo included.
But let’s be realistic. The Iraqi government, if there is one soon and I don’t expect it to march to real different drummer, will have pretty much the same problems as its predecessors. The past governments were not very successful in truly developing much when it comes to the air cargo industry.
Any government (past, present and future ones) needs a strong drive to put all these stakeholders to collaborate and to improve the air cargo industry. And what would be the source of this drive?
None of the previous governments showed much interest in developing Iraq’s air cargo industry. Is this going to change? I don’t think so. The very nature of air cargo fades out compared to the fanciness of passenger aircraft and private executive jets, good looking air hostesses and super prestigious airport terminals unless there is a real drive sourced from deep understanding of the significance of air cargo and its impact on people’s lives, contribution in enhancing the supply chain performance and hastening the economic cycle as well as the success or failure of any real business and industries such as pharmaceuticals, telecoms, fresh and frozen food, to name a few.
As for Kurdistan, first it does not have control over its own sky or the airports. Second, the September 30, 2018 election is yet to have its results cleared, and a new KRG could take a few months to get into action.
Even when it is operative, I don’t think we will witness major improvements in the foreseeable future. We will have to wait for the actual rebuilding of Iraq to start, until then, I think standing tall and ready to engage is a challenge for many.
‘’Having been a cornerstone in social, cultural and economic terms for hundreds of years, Istanbul will serve as a brand-new mainstay for the global air traffic. Acting with its young and dynamic team, Turkish Cargo aims to increase the number of cargo dedicated direct destinations to minimum 150 from 85 by 2023, and to respond the requests in the most ideal way. – Fatih Cigal, Senior Vice President for Cargo Marketing, Turkish Cargo.”
Turkey is scheduled to unveil on October 29 its new airport, the Istanbul New Airport, spread over 76.5 million sqm of land, which can handle as much as 200 million passengers a year and 6 million tons of cargo, making it the largest airport in the world, thus far, when it opens.
Strategically located connecting Europe, the Middle East, Asia to as far as Africa, Turkey is bent on using its geographical advantages to rollout a thriving business in aviation, logistics and air freight, designed to create at least 1.5 million jobs.
Fatih Cigal, Senior Vice President for Cargo Marketing at Turkish Cargo, told Air Cargo Update in an email interview, the new airport was created with thoughts of bridging the gap between continents through affordable means of transportation to support businesses and economies.
“This mega hub will serve as a bridge between Asia and America, Europe and Africa continents, and will rise as a new point of departure with its feature of being a transit center in air transportation. Being one of the fastest growing air cargo brands in the world, Turkish Cargo will increase its capacity and be capable of carrying and handling 4 million tons of cargo on annual basis with its modern and modular premises covering an area of 165 m2 at Istanbul New Airport, to be completed in 2018,” explained Cigal who assumed his new post early this year after handling other key management positions in Turkish Airlines since 2005.
“The cargo tunnels, to be built between the cargo premises and the Yankee area, will save time and maximize the security,” added Cigal who studied industrial engineering at Istanbul Technical University.
New Cargo City
The country’s new airport boasts of a modern cargo city that can accommodate more than 30 wide-body aircraft to simultaneously dock at parking positions located in front of warehouses.
They are designed to use the air side service tunnels by passing beneath the runways and taxiways to avoid affecting passenger aircraft traffic.
The Cargo City will host ware-houses, agency buildings, customs office and all cargo/logistics operations with service points for banks, cafes and restaurants, dry cleaning, salons, prayer areas, veterinary, medical center and test laboratories, among others, to support various companies in the area.
With 456,000 sqm planned for car parks that can handle 18,000 big and small vehicles, traveling within the Cargo City would be seamless.
Turkish Cargo’s new hub
Turkish Cargo’s existing cargo terminal has 43 private cargo rooms and different specialized facilities for different types of cargoes. In its new hub, this would be further enhanced with modern facilities.
“The existing cargo terminal has 43 private cargo rooms (total 3500 m2) Cold Storehouses (-21 °C, 0 °C, 2-8 °C, 15-25 °C ) Live Animals (AVI) Rooms, Dangerous Goods (DG), Rooms Vulnerable (VUN), Cargo Rooms Valuable (VAL), Cargo Rooms Radioactive Cargo Rooms,” said Cigal.
“The mega-hub Istanbul New Airport, which will be replacing the existing Ataturk Airport, is due to open with its first phase in October this year and is a clear statement of intent for Turkey to become a major air cargo gateway and the investment in technology for the air cargo sector,” he stressed.
Once the first phase is opened, the company’s cargo capacity will increase to 2 million tons annually up to 6 million tons eventually.
“With the new airport, we will be increasing our cargo capacity to 2 million tons annually with an airfreight footprint of 1.4 million sqm, including cargo aircraft parking areas, which will allow simultaneous handling of 35 wide-body freighter aircraft,” Cigal said.
With the Turkish government’s support, Turkish Cargo’s new hub will have state-of-the-art facilities to facilitate easy storage and trans-portation of different types of goods at various destinations across the world.
“Thanks to its investment in automatic storage systems and the layout plan to support special products and services, Turkish Cargo’s new cargo terminal will have bespoke temperature-controlled facilities for cold chain pharma and perishables products, plus high-tech warehousing for mail express cargo and e-commerce,” Cigal said.
“The new Pallet Container Handling System will have a total of 2000 positions, of which 200 are used for cold ULD and ASRS with 16,800 position capacity which are planned to be used in warehouse handling.”
The cargo executive also stressed their new hub will have two main storage areas—the 2,500 m2 express cargo operating area & the 5,000 m2 dedicated for cold chain with 1,500 m2 strictly just for pharma shipments.
“The postal and e-commerce operation area is 5,000 m2 and it provides the possibility of doubling the capacity and will be offering direct connection with the PTT facilities,” he added.
Growth in e-Commerce
Turkish Cargo’s ultimate goal is to become one of the world’s top 5 air freight companies. Cigal said the company’s infrastructural innovations and improvements are geared towards this goal, which he believes, will be achieved given their good performance in recent years.
In 2017, Turkish Cargo carried 1.1 million tons of cargo and it expects to wrap up the year with 1.3 million tons.
Cigal said e-Commerce grew by 30 percent in recent years and all indications point to continued growth in the coming years. Turkish Cargo, he said, is already making plans to cater to this growing market.
“The most rapid growth in air cargo traffic is achieved in e-commerce transportation with an annual growth rate up to 30%, in recent years. The e-commerce products, sent from Asian Far East to Europe, achieved a growth rate of 66% in the last 2 years, and the global e-commerce volume is expected to increase to 3.5 trillion US dollars in 2019,” said Cigal.
“The domestic e-commerce companies have had the chance to sell their products to the markets, covered by Turkish Airlines and Turkish Cargo, via online market place, providing a contribution to Turkey’s annual exports target of USD500 billion,” he noted.
To better serve the growing e-Commerce market, Cigal said Turkish Cargo is investing on smart storages, information and communication systems as well as other logistics infrastructure requirements in their new cargo terminal at Istanbul New Airport.
“Besides its fleet and facility investments, Turkish Cargo has been following the evolution of commerce today and the future expectations, and makes a move accordingly and realizes its investments in the field of e-Commerce through the current and future agreements,” said Cigal.
In a bid to widen its clout in the Chinese market, Turkish Cargo signed last August a partnership agreement with the Chinese express cargo group ZTO and Hong Kong PAL Air to focus on the global e-Commerce market and door-to-door service.
Domestic & Int’l Growth
With Turkish products getting more popular across the world in recent years and Turkey’s air transportation getting recognized for its reliability, Turkish Cargo’s role as an enabler and trading partner of sort is further strengthened.
And Cigal has high hopes the company will soar higher as it strives harder to achieve its goals while helping traders and economies.
“Combined with the cargo carriage capacity of Turkish Airlines which is flying to more countries than any other airline in the world with a network covering 307 destinations in 122 countries and the direct cargo flights to 85 destinations operated by its additional cargo aircraft fleet, Turkish Cargo will maintain its upward growth without slowing down,” Cigal said with optimism.
“When we move into Istanbul New Airport soon, we will realize many substantial innovations that will be of particular concern to the global air cargo trends. Our modern premises, to be capable of handling 4 million tons of cargo on annual basis, have currently the largest capacity,” he added.
Flying cargo since 1936, Turkish Cargo is bent on becoming a power house in the global air freight industry with unrivaled quality of service and efficiency at reasonable costs.
“Having been a cornerstone in social, cultural and economic terms for hundreds of years, Istanbul will serve as a brand-new mainstay for the global air traffic. Acting with its young and dynamic team, Turkish Cargo aims to increase the number of cargo dedicated direct destinations to minimum 150 from 85 by 2023, and to respond the requests in the most ideal way,” said Cigal.
“In 2019, we plan to provide services in our 165,000 m2 cargo facility at Istanbul New Airport. We will be moving faster and more confidently our goal of becoming one of the world’s top 5 air cargo companies,” he concluded.
Istanbul New Airport taps sea for fuel supply
Instead of using nearly 2,250 transport vehicles to deliver fuel at Istanbul New Airport, Turkey is utilizing the low-cost fuel supply transfer via ships through the 12-km pipeline it built to connect fuel tanks to the airport.
Last August, the airport had its first refueling test with 63,000 tons of oil delivered and transferred from its Fuel Supply Port.
“The first refueling took place less than 80 days before the opening of İstanbul New Airport that will be the world’s largest airport built from scratch with the capacity of 200 million passengers. The fuel needs of İstanbul New Airport will be met by sea, instead of being delivered by land, and the first fuel shipment of 63 thousand tons was made from İGA Fuel Supply Port built for that purpose,” IGA shared to the press.
İGA Fuel Supply Port’s fuel capacity is two-fold of the fuel capacity of airports in Turkey at 6 million cubic meters, it added.
Daily fuel consumption at Istanbul New Airport is estimated at 13,200 cubic meters.
“We will have the advantage of cost-effective fuel transport by sea to İGA Fuel Supply Port from all parts of the world thanks to this infrastructure. The port will ensure the fuel provision and security of supply form the areas where affordable base fuel prices are offered. The tanks of İGA Fuel Supply Port has annually fuel intake capacity of nearly 6 million cubic meters,” it said.
Aviation connects people and business. In the Sultanate of Oman that fact is taken by the government to its core, investing heavily not just in planes, but also in infrastructure, technology and human resources.
Oman Air Cargo, cargo division of Oman Air, the national carrier of the Sultanate of Oman, which traces its roots to ground handling services in 1970 until it was officially established as an airline in 1993, is leaping ahead with customized solutions and bigger plans in a globally competitive industry that accounts for more than a third of the international trade.
Last year, the company posted a 38 percent increase in cargo volume compared to just 5 percent in 2016. It sees growth on the horizon this year with the first half of 2018 showing a 25 percent increase in business.
“Oman Air Cargo continues to be one of the most innovative and fastest growing cargo carriers in the world and in 2017 carried 87,830 tons of cargo,” said Oman Air Cargo’s Senior Vice President Mohammed Ali Al Musafir. “The main trade lanes driving business last year were from the Far East, the Indian subcontinent and Europe. But growth has also been helped by our newer services to Guangzhou, Manchester and Nairobi.”
Stimulating the economy
Apart from tourism, Oman’s aviation industry also plays an important role in creating jobs and business opportunities not just for the country but for companies and individual traders in various economies across and beyond the region as well.
Oman Air is one of the country’s biggest employers and it facilitates air transport solutions for traders and businesses that export and import food products, pharmaceuticals, perishables, machineries, equipment, among many others.
“Contributions from Oman Air, as the national airline, to the economy of the Sultanate of Oman have been very significant and these are expected to show further growth. Each new destination started, adds to an already existing successful bilateral relations apart from the trade, business and tourism prospects. In addition to our online network, we work with almost 75 interline partners which helps us extend our selling horizon to all continents across the globe,” Al Musafir pointed out.
Oman Air currently has a fleet of four Boeing 787-8, four 787-9 Dreamliner’s, six Airbus 330-300s, four Airbus 330-200s, five Boeing 737-900s, 21 Boeing 737-800, four Embraer 175s and three 737 MAX. But by the end of 2018, the airline will have taken delivery of five new MAX aircraft and three 787-9s. And by 2022, Oman Air’s total fleet size is expected to be around 70, Al Musafir disclosed.
The veteran executive who has more than 30 years of experience in the aviation industry says Oman Air has major plans to further grow its freight sales share in the region by competing better with other carriers.
“The airline has major plans to grow its cargo share in the GCC states and compete against carriers within the region. Oman Air Cargo is one of the fastest and most innovative cargo carriers in the world with a much improved infrastructure at its Muscat Hub–the new cargo facility has certainly expedited this process,” Al Musafir shared.
“With the new and improved facilities at its hub, Oman Air Cargo is working on launching specialised products with customised solutions for its customers. During the end of 2017, we upgraded our cargo reservations and operating system by implementing ‘SmartKargo’ which has helped us in simplifying the booking and reservation process providing real time updates on shipment tracking to our customers,” he added.
Part of that plan also calls for investing on new technologies that will facilitate easier and seamless transactions for Oman Air Cargo customers for better transparency and transhipment of cargoes.
“Going forward we will be working on the implementation of e-AWBs within our network starting with specific lanes. Automation of business process and information transparency to our customers is one of our prime objectives and we continuously work towards improvising on it,” Al Musafir noted.
New facilities
To complement Muscat Inter-national Airport’s new passenger terminal, Oman Air also upgraded its cargo facility and operations.
“The facility features a 22,780 square-metre, air-conditioned warehouse with the capacity to handle 350,000 tonnes of cargo per annum – a substantially larger capacity than the previous cargo facility. The new facility includes 367 pallet or 734 container configurations for Unit Load Device (ULD) storage over three levels, as well as 2,208 Euro Pallet Positions – all serviced by Elevating Transfer Vehicles (ETV),” Al Musafir shared.
New bays for trucks and other vehicles involved in hauling and transporting cargoes have also been built for easier movement.
“Accompanying these are dedicated bays that can accommodate three ‘Code F Freighter’ Aircraft, along with 25 40-foot truck parking bays (or 50 20-foot truck bays), as well as 400 car parking bays and 34 truck docks,” said Al Musafir.
The facility also features Bulk Cold Rooms (consisting of 3 chillers, 2 freezers, and 1 ambient room), and ULD Cold Rooms with 28 airline pallet positions in the chiller rooms, and 8 airline pallet positions in the freezer rooms. In addition to this, there are Scissor Lift & ULD Bypass Lane facilities, as well as X-ray machines for joining and trans-shipment cargo screening.
A new Live Animal center with state-of-the-art features has also been created at the new terminal to ensure that animals are given the best possible treatment while under their care.
“In addition, the facility has a 2,500 square-metre Live Animal Centre, a 228 square-metre Dangerous Goods Room (DGR) with the capacity to handle 90 skids and loose cartons, and a Vulnerable Goods Cage with 264 pallet positions. The Diplomatic Room, Human Remains Room, Radioactive Room and Strong Room make up the remainder of the facility’s handling units,” said Al Musafir.
“The entire facility is supported by 24-hour services for import and export cargo, and its automated cargo system for documentation and warehousing, export cargo acceptance, and imports cargo delivery,” he added.
Improvements also extend to Oman Air Cargo’s service level in terms of speed, efficiency and safety.
“Service level has been one of the key factors in the continuous growth and success of Oman Air Cargo. Over the years, we have been able to improvise our services and keep our commitments to our customers. We follow the principle of ‘under promise and over delivery’ which helped us gain the trust of our customers in Oman Air Cargo product over the years,” Al Musafir noted.
“The move to our new cargo facility at our hub will bring a lot of enhancements to Oman Air Cargo product in terms of speed, efficiency and safety which we will share with our customers and industry partners as we progress.”
Resilient to Challenges
Al Musafir said the air freight industry is primarily driven by speed, thus, the length of time cargoes are processed at airports greatly affect the movements of goods. And so does the fluctuating global oil prices which affect cargo sales volume and freight prices.
“Air freight is primarily driven by speed and one of the traditional and major challenges for air freight industry has been the lengthy process at airports in moving shipments. There has been changes and improvement over the years with implementation of e-freight, however, we still have a long way to go as majority of the airports are yet to upgrade their practices and implement e-freight procedures,” said Al Musafir.
Nevertheless, he believes “air cargo still remains both time-efficient and cost-effective for businesses compared to other modes of transport and as an airline we do all we can to ensure that any decisions we take do not negatively impact our customers and stakeholders.”
“As a business, we are also very keen to use the growth of e-commerce to support the business wherever possible by using Muscat as a distribution HUB and Oman Air Cargo as the preferred carrier for e-commerce business within the region,” said Al Musafir.
Bullish outlook
Majority of goods that Oman Air ship are considered general freight but it is very confident on increasing the sales volumes in terms of high value products such as pharma-ceuticals, valuables, dangerous goods, etc., with the opening of its new hub.
“Majority of the business currently carried on Oman Air Cargo is general freight with more than 80% of the business being transit. Having said that, around 7% of our business consists of perishables and expected to increase with the introduction of new stations in Africa such as Casablanca which started in July 2018 and as we expand our network going forward,” said Al Musafir.
The cargo executive said the company’s new facilities will enable them to “cater to the requirements of temperature control and pharmaceutical customers.”
“We can carry temperature control shipments in intact units during transit using the ETV system which can store ULDs in specific temperature requirements. We are also working with the local authorities and handler at Muscat to increase the reefer options at airport i.e. ramp to the warehouse and vice-versa. This will help us in providing end to end cool chain solution to our pharmaceutical customers with the required certifications such as GDP and CEIV,” he explained.
In June of this year, Oman Air began serving the Istanbul route which also proved positive for its cargo department.
“The launch of the Istanbul service, which commenced in June, has been a great success for Oman Air Cargo. The new route between Oman and Turkey will also continue to strengthen bilateral relations between the two countries, enhance the trading and tourism prospects, as well asenables Oman Air Cargo customers to have direct routing options for their business needs between Oman and Turkey,” said Al Musafir.
The Markets
Middle East
Located within the Middle East region, bilateral trade relations are at the heart of Oman Air’s business and with multiple frequencies per day, it helps our customers move cargo volumes within the region. The airline currently operates direct international flights from Muscat to Abu Dhabi, Bahrain, Doha, Dubai, Jeddah, Riyadh, Dammam, Madina, and Kuwait, in the Gulf region as well as Cairo, Amman, Tehran, Mashhad, Najaf, Zanzibar and Dar Es Salaam within the wider Middle East/Africa region.
Due to location proximity, which brings with it many advantages and volume of business traded, Oman Air Cargo is placed strongly in this region. Being strategically placed from a geographical perspective, our sea-air product, using Salalah and Sohar Ports as sea-air hubs, is a great advantage to our customers to connect their business from the Indian Subcontinent and Far East stations to Europe and US, saving time and transportation costs.
Europe
Oman Air currently flies to seven key business and finance hubs in Europe—London, Manchester, Milan, Munich, Frankfurt, Paris and Zurich. Choosing to fly to these locations has proven very fruitful for us and we are keen to build on this. In addition, the airline recently launched a direct flight from Muscat to Turkey. Our Pan-European trucking network connects to more than 70 destinations within Europe though our online gateways.
India and Pakistan
Flying to 11 destinations in India and three in Pakistan, it is undoubtedly clear to recognise that these are key destinations to Oman Air.
In 2017, the Sultanate of Oman and the Republic of India agreed to increase the number of flights between the two countries through an open sky air service agreement and this decision has been mutually beneficial for trade partnership. What’s more, the trade and business relations extend to destinations within the Indian Subcontinent such as Sri Lanka and Nepal.
Africa
Africa is certainly a growing market for Oman Air. We are constantly reviewing the network with the aim of expanding our routes across Africa. The airline already flies to Cairo in Egypt, Nairobi in Kenya, Zanzibar, Dar Es Salaam in Tanzania and as of 1 July, we now fly four times a week to Morocco’s Casablanca’ offering yet more choices to our customers and opened another door for bilateral trade between Oman and Morocco. Our network and planning team is working hard to assess the viability of other new routes. For instance, Khartoum in Sudan is being investigated thoroughly as a potential additional route to serve.
Mohammed Ali Al Musafir
With rich and valuable experience in the aviation industry spanning over 30 years, Mohammed Ali Al Musafir is looked upon as one of the most influential and knowledgeable movers in the industry.
Working for Oman Air since 1996 or for the past 21 years, Al Musafir has witnessed the company’s growth from a narrow body operating regional carrier to a wide body operating intercontinental carrier.
In 2016, he took the responsibility of leading Oman Air Cargo and has since been instrumental in turning around its business to a robust one, posting 38th percent positive growth in 2017 from merely 5 percent in 2016.
As the head of Oman Air Cargo, Al Musafir is also highly regarded for his astute business sense, nourishing talents and keeping a healthy work environment, sharing his success with his young and well experienced team members who have contributed to the company’s growth, year-on-year, focusing on improving the quality of service to their customers.
Horse handling is a steady business, with peaks in case of international competitions…of about 2000 horses handled annually. The other species are less visible but extremely important as well. One-day-old chicks being sent to the Middle East or Africa for farming, pigs imported and distributed in Europe, protected species being exchanged between zoos for DNA variety. Live animal handling is exciting and our staff always do requests for us to go the extra mile.
Luxembourg may just be a tiny nation in Europe with a very small population but it’s big in numbers and innovations. It’s a high-income economy and the second richest country in the world known for its innovative industries in logistics, biotechnology, pharmaceuticals, IT and so on.
It is also the world’s second largest investment fund asset domicile with estimated US$4 trillion deposited in its financial institutions. It is ranked as the second safest tax haven in the world after Switzerland.
In recent years, Skype and Amazon have shifted their regional headquarters to Luxembourg as the country began to establish itself as one of the leading global centers for start-ups, digital financial services and financial technology hub engaging in RegTech, security & authentication, DLT & Smart Contracts, mobile & e-payments, automated investment services, Big Data and analytics.
And that sophisticated way of doing business and looking at things transcend to the country’s robust air freight industry and supply chain.
Big in Europe
LuxairCARGO, the leading air freight handling agent at Luxembourg Airport, is proof of Luxembourgers’ innovative spirit and push for high quality service and excellence.
The company, which caters to all categories of cargo and aircraft, handled a record 938,000 tons of cargo last year and it’s ranked as the 8th top company in the industry.
Laurent Jossart, Executive Vice President of LuxairCARGO, told Air Cargo Update the growth continues this year despite some bumps like a slowdown in volumes last May.
“During 2017 we experienced a double digit growth and an exceptional peak season. Excellent results for all our customers are always very positive, but for us the most important was to keep the service level at the top and having faced no congestion leading to delays for our customers,” said Jossart who was the Chief Financial Officer of LuxairGroup before assuming his current post in 2014.
“This year started extremely well with again a historical first quarter in terms of volumes, but as of May, we have seen a slowdown of the growth but with volumes still above 2017 and our budget. Today, the outlook for the rest of the year is still within the expectations.”
Jossart said part of their success is investing on technology, infras-tructure, people and innovative ideas that will enhance their services, thereby, retain and attract more customers.
“Since the move of our activity from the former facilities to the current Cargocenter, we continuously invested in technology, hardware (infra-structure and handling equipment), software and not least, our staff for professional development. The annual level of investment currently exceeds 5 million Euros,” he explained.
Last year, the company renewed its contract with Hermes Cargo Management System’s to support LuxairCARGO’s handling operations but with provision for acquisition.
“In 2017, we took the decision to renew our cargo management system with the acquisition of HERMES and the implementation will start mid-September 2018 by gradually switching our customers to the new system.
Digitalization is key to reduce costs and further increase the quality and transparency of our activity. It will help us to also streamline our processes and communication as well as reduce or even eliminate manual data records,” said Jossart.
More innovations
Two years ago, LuxairCARGO adopted the so-called truck slot system (TSS) which essentially digitalizes the truck acceptance and parking control system at the airport and using tablets as tool to communicate between trucking companies, dispatching and carriers.
The project successfully worked, speeding up the movement of goods, the loading and unloading process and transactions between parties.
Jossart said that’s just the beginning as the company is planning to introduce more innovations to further enhance their services and protect the interest of their customers.
“But the investment in a new CMS is only part of the game as the best way to give a total transparency to the air freight industry starts with the electronic transmission of accurate data. We still suffer from missing FWB, FHL and loose tremendous amount of time fulfilling tasks which were supposed to be fully automated already at the end of the last century. (Cargo 2000),” he said.
“Now we hope that the Cargo IQ will finally bring the expected results, meaning 100% of data interchange between forwarder and carrier. This would really ease our task, reduce the time spend with non-added value works and improve the product,” he added.
The cargo executive said e-commerce may have brought good business in the industry but the company sees general cargo as still the legacy product that will keep the air freight sector sailing in good or bad times.
“Our customers mainly fly wide bodied aircrafts with specialized cargo products as well as general cargo but e-commerce is just general cargo. We do not keep record of the tonnages it represents in comparison to the other products. This is anyway a very little part of our activity, even if it is getting more and more sensitive in terms of time of transfer or delivery to final consignee,” said Jossart.
The cargo expert said it’s difficult to ascertain e-commerce’s future growth with challenges seen looming like low customs charges, among others.
“Even though e-Commerce is currently booming on intercontinental flights, we assume that the volumes will stagnate, even decline again on the long term as the distribution to the end customer will happen more and more on a continent level (limited to the same customs union areas to avoid costly customs clearance for low value shipments). So Customs could become the show stopper for the growth of individual intercontinental deliveries as a big part of these shipments are declared as low value,” he said.
Growth in pharma & perishables
Mainly driven by aging and growing populations, pharmaceutical products will remain an important part of the global healthcare industry and the air freight sector.
Experts forecast the global pharmaceutical industry to grow 6.3% CAGR in 2018 to US$1.2 trillion. And these products would require air freight to preserve their quality while being transported across the world.
LuxairCARGO is cognizant of this fact with Jossart describing pharmaceuticals as “success story.” The company continues to invest on good facilities for these products along with international certifications.
“The PIL, pharmaceuticals and healthcare products, is a success story. We invested massively in a dedicated infrastructure in 2013, about 4 million Euros, and have been through the GDP certification process. In the meantime we have been already recertified in 2017,” he said.
“We were one of the first air cargo platform to realize an important investment for pharma business and had worldwide been the first platform being GDP certified including the forwarders, carriers, trucking companies and of course us as handling agent. It is a community quality process. We are in for the pharma product with excellent results in term of reputation and reliability,” he noted.
LuxairCARGO handled 31,000 tons of pharmaceuticals in 2017 and forecast it to grow up to 34,000 tons this year.
“We will invest further in the infrastructure in 2019 to automatize the transfers to the cool cell area (70 ULD positions) and continue to believe this market segment will develop in the future,” Jossart stressed.
LuxairCARGO also continues to see growth in the variety of perishables that the company handles for their clients.
“Perishables are a historical product. We have 400 m2 of coolers plus cools cells for up to 70 10ft ULD storage, but again this is mainly transit cargo, handled as quickly as possible before going to its final destination. On import side, fruits and flowers from Central America (Ecuador and Mexico) are the fastest growing products,” said Jossart.
Horse handling steady business
LuxairCARGO prides itself with a reputable and state-of-the-art live animal center with horses as top residents at any given time.
Jossart said the company takes very seriously its role in handling animals up for transportation that “passion for animals” among new recruits is a requirement.
“LuxairCARGO has invested regularly in a complete and state-of-the-art live animal center. Next year, we will renew our center for ungulate species. This year we inaugurated a new groom area, two years ago it was an extension for horses, in total 45 stalls. This allows us to handle large amounts of animals simultaneously up to full cargo flights. Horse handling is a steady business, with peaks in case of international competitions (Olympics, etc.), of about 2000 horses handled annually,” the cargo executive said.
Apart from horses, the company also handles animals of different varieties transported to different parts of the world.
“The other species are less visible but extremely important as well. One-day-old chicks being sent to the Middle East or Africa for farming, pigs imported and distributed in Europe, protected species being exchanged between zoos for DNA variety. Live animal handling is exciting and our staff always do requests to go the extra mile. In fact, one of our conditions while recruiting staff for our AVI station is the passion for animals,” said Jossart.
Expansion and challenges
The Cargocenter, which LuxairCARGO manages at Lux Airport, has been expanded thrice over the past two decades since it was inaugurated. This year, it’s seeing more improvements with the opening of four more parking bays that will allow simultaneous parking of 12 widebody cargo aircraft.
“The Cargocenter we manage since 22 years has been expanded already three times since the inauguration and still allows some growth in the future but the fleet of our customers is requesting more and more ramp parking positions. Last peak season, we have some hours each week reached the maximum capacity of the ramp,” Jossart explained.
Ponts et Chaussées, the engineering and construction body of the government, began work on the project in 2016 and by autumn of this year, the four parking bays will be available for use.
“We will in autumn this year bring into service four additional parking spots that will allow simultaneous positioning of 12 wide bodied aircrafts. Today, we have to limit the access to the handling due to parking spot limitation. This increase will give more freedom of operation to the carriers. If the market remains as strong as the last 20 months, we will consider the necessary infrastructure adaptations to meet the growing demand,” Jossart shared.
A veteran in both aviation and cargo industries, Jossart forecast growth to be sustained in the sectors but the challenge of keeping up with the changing times remain, especially in far flung areas.
He believes digitalization, which the aviation sector embraced first, should also be fully applied in the air freight industry “to have a complete visibility and transparency in the transportation chain.”
“By having accurate and live data on hand, the individual processes can better be analyzed and steered. Additionally, process disruptions can more easily and earlier be detected and corrective actions taken in order to assure the on time delivery and thus protect our customers. We also noticed that the requests received from the forwarders remained the same for the last 20 years,” said Jossart.
“In fact, what is still missing is a reliable transparency and live update of the shipment status made available to the forwarder, shipper and consignee. Unfortunately the electronic interchange is not yet respected everywhere with the same consistency and precision,” he opined.
Game Changer
Laurent Jossart, Executive Vice President LuxairCARGO, is among top executives in aviation and cargo industries with wide and extensive experience, known for pushing the limits and instituting reforms.
Prior to joining LuxairGroup in July 2006, he was the Managing Director of Brussels South Charleroi Airport credited for its successful restructuring, including designing a new terminal and negotiating with its main client, Ryanair.
In 2013, Jossart was awarded “CFO of the year” in Luxembourg in his capacity as CFO of LuxairGroup, a position he held for seven years before taking the challenge of helping LuxairCARGO become more attractive and competitive.
“I have started in air cargo only in January 2014 when I moved to LuxairCARGO. Before, I was the CFO of LuxairGroup and in this position, I gained already some insights through the financial data. However, it has been a real challenge especially as since 2013, we have seen a growth of 34%(250kt) or in average an increase of 7.9% per year,” he shared.
“During the first year, I restructured and stabilized the operational teams to be able to align the processes to the current needs.”
With proven track record to deliver good results, Jossart is highly regarded in Europe’s business community and for those aspiring to follow his path, here’s his advice: “Be passionate, result oriented and creative. Also you need to care for and challenge your staff to go the extra mile. Be ready to meet wonderful cargo people sharing the same enthusiasm.”
And for those facing challenges in the cargo industry, Jossart who studied at Solvay Brussels School of Economics and Management (SBS-EM), the business school of the Université libre de Bruxelles (ULB), one of the largest universities in Belgium, says it’s best to deal with it in a creative way.
“With creativity—air cargo people always find the solution for any challenge.”
Technology has changed the way we live and that will be fully exploited in airports as they grapple to handle more than 7.8 billion passengers forecast to travel across the globe by 2036.
Industry experts say governments around the world are investing approximately US$1.1 trillion in airports and related construction projects to cope up with the current and future demand. Of the figure, the Center for Aviation (CAPA) says US$255 billion are being invested in new (Greenfield) airport projects and US$845 billion in new runways, terminal buildings, or terminal extensions.
Asia-Pacific tops the list with projects valued at US$291.2 billion, CAPA noted. The Middle East and Africa (MEA) comes next at US$163.5 billion, with Saudia Arabia and the UAE accounting for the lion share with their airports up for further modernization. In North America, the US leads with projected spending of over US$90 billion.
China, the world’s most populous country with over 1.4 billion people, is spending US$76.7 billion for its airports. Its capital, Beijing, is taking as much as US$12.6 billion of the budget to increase its airport’s capacity to 100 million which is scheduled to open in October 2019.
Analysts say China’s domestic air-travel traffic will quadruple to 1.6 billion, thus, the government envisions increasing from 207 its domestic airports to 260 by 2020.
Already choking with its steadily increasing air travelers, India is spending US$62.2 billion to make 100 airports operational by 2035, collectively able to handle one billion passengers. Next year, India’s aviation industry is forecast to be the world’s third largest.
Tomorrow’s airports
Hailed for innovative concepts and state-of-the-art facilities, oil-rich countries in the Middle East are rivaling their counterparts in the West for bespoke design and technological advancements when it comes to airports.
In the UAE, the capital Abu Dhabi and the megacity Dubai have both ongoing airport construction projects designed to strongly support the country ‘s future economic growth.
Costing Dh19.1 billion, Abu Dhabi’s Midfield Terminal will boast of contemporary art and architecture exuding openness and modernity. It has long-span arches with a roof that is almost twice as wide as the Heathrow International Airport and a central terminal space that can easily fit 21 football fields.
It will have 65 gates and can handle more than 45 million passengers a year who will be treated with visual connectivity between the airport’s outdoor landscaping and indoor spaces spread over six levels which have a hotel, shops, restaurants and a n art gallery, among other amenities.
First opened in 2010 to handle only cargo planes, Dubai World Central (DWC) is up for a major expansion to become the region’s first integrated multimodal transportation platform connecting air, sea and land.
Its main component, the A l Maktoum International Airport, is envisioned to be the world’s largest with capacity to handle up to 260 million passengers annually with the airport capable of landing four aircraft simultaneously.
The airport is designed to have three passenger terminals—one strictly for Emirates; two, to other airlines, and; three to low cost carriers. It will also have hotels and shopping malls, maintenance facilities and multiple concourses. Additionally, it is proposed to be linked to Dubai International Airport through a high-speed express rail system. Dubai had secured US$3 billion financing for its airport projects.
Sharjah, the cultural capital of the UAE, is also constructing a new terminal scheduled to be launched in 2021 in a move designed to increase the airport’s capacity to 25 million annually. The project is part of the AED1.5 billion expansion plan.
The emirate of Fujairah in the UAE is also transforming its airport with US $ 180 million budget amid anticipated in flux of more passengers.
In near by Oman, Muscat International Airport’s new terminal is expected to boost its capacity to 20 million passengers annually. The Sultanate is also planning to refurbish regional airports in Ad Duqm, Sohar and Ras Al Hadd.
In Egypt, three new airports are being built costing US$18.5 billion. One of them, the Sphinx International Airport, is slated to open this year.
Saudi Arabia, which has 27 airports across the Kingdom, is building four new airports with the help of the private sector. Riyadh’s newly-modernized King Khalid International Airport is scheduled to be opened in 2019 while the new Taif International Airport is expected to open in December 2020.
Despite having enough cash, Saudi Arabia is exploring three main models to privatize its airports. The first method enjoins the private sector to manage its airports which is being done for Dammam and Riyadh Airports.
Second model is the public-private partnership (P3) and the third, management contract, is being tested in Jeddah.
Not only are new airports being built in Saudi, the Kingdom is also upgrading airport systems in many aspects.Dammam Airports Company (DACO), for instance, has signed two strategic agreements with Vanderlande and Serco Middle East last May at the 18th Airport Show held in Dubai.
Vanderlande, the global market leader for value-added logistic process automation at airports, agreed to work with DACO on introducing a state-of-the-art Baggage Handling System (BHS) at KFIA that will help make travel procedures smoother for airport personnel, passengers and airlines.
“Guided by our vision to transform airports and redefine the travel experience, our efforts in the last 10 months have focused on expanding the airport’s operational efficiency, as it witnesses a steady growth in passenger traffic and an increased demand for commercial services. We are pleased to partner with global leaders like Vanderlande and Serco Middle East to execute our long-term plans for the airport, and transform it into a major hub for air transportation within the region and beyond,” said Turki Abdullah Al-Jawini, Chief Executive Officer of Dammam Airports Company.
Serco Middle East, meanwhile, will install cutting-edge fire and rescue services at the airport.
Dammam Airpor t is investing Dh1.37 billion to refurbish its airport which include the expansion of its cargo village.
Bahrain, which recently discovered new oil sources in the tiny kingdom, is building its second international airport on an artificial island for US$1.1billion. The project’s first phase is expected to be completed in the third quarter of 2019. The new airpor t is projected to boost Bahrain’s passenger traffic to 14 million annually.
Kuwait is also constructing a new airport terminal to handle 25 million passengers a year. Costing US$4.3 billion, the new facilities will accommodate all types of aircraft.
Set to open late this year, Istanbul New Airport will be the biggest in the world with capacity to handle up to 150 million passengers with potential to be increased to 200 million.
The new airport will become the hub of Turkish Airlines which flies to more than 121 countries. Covering 76.5 million square meters, the site will have 228 passport control desks, two terminals, six runways and futuristic hotel rooms with trendy brand Yotel opening its first property in Turkey.
The old Ataturk airport, which in 2016 was hit by a terror bomb attack, will cease to operate when the new old located about 22 miles from the city center is opened.
Technology and immigration
With the use of technology, Dubai International (DXB), which last year handled more than 88 million passengers, managed to reduce immigration process within 6 seconds through the use sophisticated equipment and data intelligence.
Thani Al Zaffin, director general and board member of Emaratech who was among the panelists at the Global Airport Leaders Forum “Airport Collaborative Decision Making (A-CDM), emphasized technology is not only hastening the process but also making passengers happy.
Technology is also being used in the simplest of things at airports for convenience and seamless flow of activities while dealing with tens of thousands on a daily basis.
Airports Council International said airports generate about 40 percent of its income from non-aeronautical revenue sources such as car parking, land rents, terminal concession and advertising. In 2016, this totaled to US$152 billion. PS Nair, Chief Executive Officer of GMR Group, said knowing how to serve well your customers made a difference.
“When we took over Delhi’s Indira Gandhi International Airport the commercial revenue was negligible. Today, the same airport is ranked number 1 in the world in service quality,” said the CEO of GMR Group which operates Rajiv Gandhi International Airport, Hyderabad and Mactan Cebu International Airport in the Philippines.
By 2030, Smart Gates at Dubai airports will officially be fully adopted and used to reduce human involvement in processing travelers for immigration purposes, Major General Mohammed Ahmed Al Marri, Director General, General Directorate of Residency and Foreigners Affairs – Dubai (GDRFA-D), emphasized at the recently held Airport Security Middle East Conference.
Col. Hamooda Belsuwaida Alameri, Assistant Director-General Operations at General Department of Airport Security, Dubai Police, meanwhile noted, technologies have been put into strategies to make Dubai airports safer and secure for everyone.
“Dubai police has plans to coordinate its human resources and capabilities to ensure security at airports. The airport security challenges are land side security, cyber security and security checkpoints. Airports, the police and the security agencies need to collaborate and exchange information as well as to do risk assessments to ensure security on all fronts,” Al Marri added: “We are constantly evolving with the advent of modern technology and artificial intelligence tools. This may be one of the factors facing some sectors, requiring the deployment of innovative and intelligent solutions by governmententities and contribution to promoting Dubai’s global leadership.”
Imagine handling more than 2.3 million kilos of cargo (about 2,500 tons) everyday for 365 days in different cities and airports, under different circumstances, time zones and rules, for different owners. Only the toughest and the most efficient can do such tasks with stakes so high in this digital age where dissatisfactions are openly aired with full consequences.
ECS Group overcomes those challenges day-after-day, successfully transporting more than 902,000 tons of cargo across the world in 2017. And it continues to work and prepare for the changing and challenging demands of the foreseeable future.
Adrien Thominet, the CEO of the Paris-based ECS Group, one of the world’s top GSA companies which has 69 subsidiaries and 137 offices in 47 countries, said their success comes with a lot of investments on people and technologies that require many counterchecks to ensure a seamless process in the competitive air freight industry.
“In 2017, we transported more than 902,000 tons around the world. It means almost 2,500 tons per day. The only way to be successful is to invest in high performed and advanced IT system in order to monitor our operations in time, no matter the time zones. The Group’s information and reporting systems, KPI, dashboards allow us to monitor the performances contributing to fulfillment of our objectives regularly and precisely,” shared Thominet.
It also helps that the company has the right partners and new intelligence tools to offer its principals the best services and industry practices.
“Centralized stations to coordinate bookings, dedicated offices to care for our customers products from A to Z and being able to reply in due time to any setbacks, support from ECS HQ top management: being part of an integrated GSA means that you have the capability to secure all your business, financially and humanly speaking,” Thominet pointed out.
“We bring synergies, solid and global network, security, and of course, more technologies: business intelligence, tracing, any kind of information regarding the cargo. The expertise is tenfold and boosted.”
Growth Year
After lackluster years, the air freight industry, with windfall to the supply chain, started picking up last year, many made historic volume growths and profits.
Thominet said 2017 was indeed one of their strongest and most intense with record high activities in the industry. Not only did ECS Group performed well but it also created jobs for 200 people during the year.
“The air freight activity had been very intense in 2017, especially last Quarter. About ECS Group, in 2017 our managers have shown of strong involvement. This year was tremendous and people were really happy to be part of this mix of opportunities and new challenges to face. Almost 200 people joined ECS Group in 2017, mostly in Asia with the acquisition of AVS,” shared Thominet who described the company as like a family where everyone works as a team.
ECS acquired AVS last year and among its immediate impact is enabling the company access to 11 countries in Asia.
In Latin America, ECS also expanded its footprint setting up offices in Chile, Peru, Colombia and Equador.
Still in the Americas, the company made an alliance with Exp-Air Cargo in Canada, sealing its position as a key general sales and service agent in the continent.
“This is part of the strategy of our network deployment and of course in line with the market we are active in,” said Thominet who continues to break new grounds for ECS Group. “In 2017, more than expansion, we did integrate all those subsidiaries and developed all the synergies we set up already. In 2018, we provided our principals an extensive network. The only integrated GSSA network.”
Africa, with its vast mostly untapped natural resources, also remains a huge potential market for various industries, including air cargo. And ECS, which counts Niger Air Cargo as among its clients in the region, is cognizant how efficient air transportation can dramatically change an economy.
“There are still lots of challenges in Africa but we see many opportunities in the air cargo industry. With the development of new services, the importance of e-Commerce and digitization, we are exploring new opportunities in this region. Regarding the figures, the Airports Council International (ACI) World reported high growth momentum in global air freight in January, posting 8 percent increase as compared to the previous year, in line with the rolling year-end figures,” said Thominet.
Asia-Pacific
In Southeast-Asia, ECS Group forged alliance with Royal Brunei Airlines to pool synergies in cargo sales for Europe as well as North and South Asia.
“The collaboration with ECS enables Royal Brunei to control 19 stations in different parts of the world and benefit from a network filling space where required, and thus, providing the highest yield to the airline. Royal Brunei is a vibrant and growing airline with a great diversity of customer-oriented and reliable services,” said Thominet.
“Its values and network perfectly match ECS’s setup in Asia, allowing synergies that no other GSSA can offer. We are looking forward to playing a key part in promoting the further success of Royal Brunei,” he noted.
Elsewhere in the Asia-Pacific, Thominet said ECS is also working on something to penetrate China, now the world’s biggest economy with unrivaled appetite for online sales.
“We also have some plans in China that are about to materialize. China’s continuous economic growth was particularly strong in the previous year. Year-on-Year, it saw growth of 23%. East China saw a volume increase of 35% y-o-y. Same for North of China. High technology and consumers goods (+55%) keep on rising,” explained Thominet.
Thominet who has been in the industry for over 20 years says “deregulation and liberation” are mainly driving growth in many ASEAN countries complemented with the introduction of low cost carriers in a lot of key routes.
“Development and change has been driven, however, by a new breed of low-cost airlines serving domestic and short-haul regional routes. The development of new routes and more connectivity always give a boost to the economy. Those regions are very interesting in term of Total Cargo Management. For instance, as a TCM contract, we represent Jetstar Asia in all countries in the region,” the ECS Group CEO said.
Middle East & South Asia
The Middle East and South Asia, India in particular, remain an important market for the industry.
In February, air cargo volumes in the region rose by 7 percent and capacity jumped by 7.6 percent.
Thominet said this is a good indication of a vibrant trade and economic activities in the region which are further enhanced by e-Commerce, particularly in India, home to over 1.4 billion people.
“More goods are being traded in this region and that is driving growth in air freight. Despite an escalation of protectionist measures, the demand for air cargo continues to be strong, with 6.8% growth last month. India is one of the top markets for our industry,” Thominet said.
Adding: “e-Commerce is transforming the landscape of our industry, and hence, we need to develop our capabilities to optimize new technologies. India is a real Eldorado for all technologies development, hence, our two brands — AVS and Globe Air Cargo — are connected to this fast increased trend. Recently, Globe Air Cargo India just won the representation of Ukraine International. ECS is already representing PS in most of the region of the world.”
Finnair has chosen ECS subsidiary Globe Air Cargo to represent it in the United States from May 1. The airline, which serves major gateways at Chicago, Miami, New York and San Francisco directly from Helsinki, will utilize an Airbus 350 on the routes.
Europe
Despite controversial political issues in Europe, the continent remains an important trade route for the majority of regions across the world and Thominet is of the opinion it will continue to generate growth and demand for the air cargo industry.
“GSSA core business is most accomplished in Europe in comparison with other continents. De facto, ECS Group most important set-ups are based in Europe since more than 30 years. Hence, our subsidiaries are very strong there and most of them lead in their respective countries,” said Thominet.
In recent weeks, ECS Group secured important partnership agreements in Europe, boosting further its clout in the continent.
“As a matter of fact, we finalized many very precious partnerships during the past few weeks. Globe Air Cargo NL (GAC NL), one of the leading Cargo General Sales Agents in the Netherlands and member of the ECS Group, has forged an operative partnership with IAG Cargo to expand and optimize its services for freight customers. ECS Group is already representing IAG Cargo in Germany, Austria, and Scandinavia before IAG Cargo has formed the partnership with GAC NL,” he said.
The company also secured deals to represent Hainan Airlines in Spain, Georgian Airways and Air Armenia Airlines in France.
More than two decades ago, an adventurous and young Adrien Thominet was selling wines in the United States. As fate would have it, the French national was then introduced to the General Services Sales Agent (GSSA) industry and moved to the ECS Group in 1996 devoting countless hours and taking on various management positions and eventually becoming its Chief Executive Officer in 2017.
The CEO says he never thought he would reach this far though he described himself as “ambitious.” As head of one of the most trusted and top GSSA companies worldwide, Thominet currently oversees 1,000 employees across ECS Group’s 37 offices in 47 countries and burdened with the task of stimulating further business growth.
Some days he would be in Asia. Other days, he would be in the Americas, Europe, the Middle East, Africa or anywhere in the world. But this busy father of four still takes time to nurture his family, endearing him more to the ECS Group which he also treats like a family.
Read on the rest of Air Cargo Update’s Q&A with Thominet who is not only highly regarded for his proactive business sense but also for his penchant for giving people a chance to grow in their career where possible and helping the younger generation, the so-called “Millennials”, get employed in an industry predicted to grow even more.
Please share with us in details the services that you currently provide to clients and the innovations that you have introduced as value added incentives for them?
ECS Group likes to provide tailor made or customized services. We feel that under no circumstances would there be only one or a sole way to do business. When we represent an airline, we’re cognizant of the fact that there is not one sole offer to suit a supposed client. We offer them flexibility tailored to their needs.
At ECS Group, we adapt the contract to match our prospects’ expectations. From CSA to Total Cargo Management, from back office support to supervision of the ground services, we have the capabilities to offer any kind of services.
And of course, digitalization is another “area” of maximum involvement for us. Our customers, different airlines, are expecting more advanced tools to optimize the yield, to develop pricing strategy and to manage the capacity.
Today, we are able to provide our customers with those new expected IT solutions. We got a global new team just hired to bring expertise and stronger added value to this IT system. We keep on working on providing and developing such new kind of services, new dynamic and new proactive supports.
Although China remains the world’s factory, it is increasingly becoming more popular as the top market for consumers, especially for e-Commerce. What are your thoughts about this?
Digitalization is mainly driven by e-Commerce. As a matter of fact, e-Commerce is pushing for more traceability and more efficiency on the delivery. More than e-Commerce, IoT is running the world today.
By 2020, there would be 25 billion connected things. Internet of Things (IoT) will definitely transform the world, and of course, our industry.
Everywhere, IoT runs the world’s economy. Even becoming vital. There is no other way to proceed and as a matter of fact, it will keep on being more and more inescapable for all the actors of the air cargo industry.
Today, transparency brought by Internet of Things is already impacting the sky ( tracking , temperature control, the Cloud, etc.) and all the supply chain can already benefit off its non-disruptive impact.Data efficiency, capacity management, routes optimization, new software solutions, time-saving, performances maximization. Yet,
this is not and won’t be a magic solution until all in our industry dares to embrace and to invest money, people and time into this blessing reality. The point is how to deal with it.
As G S S A , we are part of this transformation. And we deal with it for long time but we still have to go faster. Hence, in the next two months our Revenue Management Department will have three more people. This is important to deliver and develop sophisticated services and innovative GSSA solutions over those regions as airports and
regional careers have developed tremendously.
In fact, for example, today the three main airports of China are totally choco-bloked and we can observe a
real need to find new solutions for passengers and cargo business also.
The region of Sichuan is becoming a new platform for the Cargo. Chengdu airport is becoming the 4th main airport.
Hainan Airlines is now getting online in Shenzhen. Provinces are now bourgeoning and as a G S S A we have to adapt
ourselves so that to get aligned with this transformation. This is so challenging!
How do you prepare your staff to handle e-Commerce products and have you made or asked any airlines for physical adjustments to maximize space on aircraft when carrying such individualized packages?
At E C S Group , each of us i s concerned by e-Commerce. But beyond feeling involved in this economic transformation, we have to be able to provide the right services to match with it. Hence, for many months now, new technical experts have joined our group. For instance, in China we worked with local experts with proven track record of creating e-Commerce solutions. His strong partners portfolio associated with the ECS’s
network is highly productive in terms of original option to maximise capacities and revenues of our principals.
Same, at the HQ, we hired a team fully devoted to revenue management. When they happen to work all together, the result is just astonishing and super brilliant. This is what led us to create an e- Commerce cell. Working in line
altogether, we try to give the most appropriate reply to the market’s demand.
And above all, the relation we have with the airline we represent based on trust and transparency allows us
to multiply the partnerships in our portfolio.
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
