Aircargopedia Newsblast: December 2017!
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27th December 2017  
 


Dear Air Cargo Professional:

If you ever wondered if profitability was a dirty word in the airline business, think again.

Southwest Airlines which was established in 1967 by Herb Kelleher as Air Southwest and then adopted its current name, Southwest Airlines, when it began operating as an intrastate airline wholly within the state of Texas, has been profitable for 44 years. The airline which has over 55,000 employees and operates 750 aircraft with more than 4,400 flights a day to 100 destinations in North America is famously known for creating fans as customers.
  DJ Ghosh

Speaking to a sold out audience in New York, Gary Kelly, Chairman & CEO, emphasized that conservatism and cost control were the cornerstones of Southwest's long term strategy, while trust and transparency were its biggest strengths. Southwest has been a major inspiration to low-cost carriers all over the world, and its business model using a single type of aircraft (B737s in the case of Southwest) emphasizes high levels of employee and aircraft productivity with low unit costs by reducing aircraft turn around time, particularly at the gate.

Gary Kelly
Gary Kelly

Under-served and overpriced markets are the target growth destinations for Southwest. Everywhere they go, they bring more flights, great service and lower fares, with a labor force which is mostly unionized. In the next twelve months they intend to add 8,000 new employees to their payroll. They are the number one airline in California and in Denver, while at New York's La Guardia airport, demand exceeds supply.

While Mr. Kelly did not mention Southwest's cargo business in his presentation, Southwest which does not operate freighters, is rapidly expanding it cargo product portfolio utilizing its passenger bellies, and has become a serious competitor for the likes of Delta Cargo in many of the markets that it operates.

I know for a fact that several studies have been undertaken to examine the possibility of replicating Southwest's low cost, single aircraft type model for the cargo business, but I am not sure if there are any successful examples that the air cargo industry can be proud of. Squeezing costs out of cargo airline operations is certainly one of the keys to profitability. Perhaps the cargo airline business needs its version of a Herb Kelleher to lead the way.

James Albaugh
James Albaugh

James Albaugh, (a former CEO of the Boeing Commercial Airplane Company) who I had a chance to listen to a few weeks earlier, reminisced that the low cost carrier revolution pioneered by Herb Kelleher was one of the top three innovations in the airline industry; the other two being aircraft leasing popularized by Steven Udvar Hazy and the overnight package delivery business which Fred Smith took to stratospheric heights. According to him, 'cost cutting' as a strategy is not really feasible in the long run. True cost cutting only comes from innovation. Expanding on the wisdom that he acquired from his 40 years at Boeing, he reminded us that programs that have problems always do better than programs that don't, and if you don't replace your product, somebody will. In this regard, the launch of Airbus was the best thing that happened to Boeing. They finally had competition.

Mr. Albaugh referred to the B787 as a 'transformational airplane'. While the aircraft had significant teething problems due to bad decisions to outsource the manufacturing of parts and sub-assemblies, most of these problems have now been ironed out, and the B787 is on track to be another great product for Boeing, continuing the US's lead in aerospace. While the Chinese build their passenger aircraft, he does not see them as competitors to Boeing and Airbus any time soon. Their sales will be mostly within China to Chinese carriers.

UNMANNED CARGO AIRCRAFT CONFERENCE: The 6th edition of this conference is to be held at the North Carolina Global TransPark in Kinston, North Carolina on March 20th, 2018. With the surging interest in Unmanned Cargo Aircraft(UCAs) and the looming pilot shortages in the regional air cargo carrier sector, this conference could become a game changer for the industry. As Dr. Hans Heerkens, chairman of the Platform Unmanned Cargo Aircraft(PUCA) states, "Unmanned Cargo Aircraft are not bound to the limitations of cockpit crew, offering the possibility of innovative configurations and applications, for example, ultra-short landing runs, fuel-optimized cruise speed and distributed propulsion". (www.unmannedcargoaircraftconference.com).


We hope to see you there.

Wishing you all the best for the Holidays and through the New Year

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”


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Kale Logistics Solutions wins the “Best IT Solution Provider” Award at the 3rd Logistics and Supply Chain Awards 2017

The award was presented to honour and recognise the technological contribution rendered by Kale Logistics Solutions in the Cargo Community Platform domain. Organised by Supply Chain Management Professionals (SCMPro), the Logistics Supply Chain awards (LSCa) identify and appreciate organisations who have fulfilled their role as industry innovators and have contributed in raising the standards of business excellence across the Indian transport and infrastructure sector

Mumbai, Dec 21, 2017:


Kale Logistics Solutions, a trusted IT Logistics partner for Fortune 500 companies worldwide, was awarded the “Best IT Solution Provider” at the recently held 3rd edition of the SCMPro Logistics and Supply Chain awards. The awards recognise the stalwarts and high- fliers of the logistics and supply chain business who have created a niche for themselves by driving innovation and raising the overall service standards of the industry. Several industry leaders and players from the supply chain and logistics fraternity came together on this countywide platform where Kale Logistics Solutions’ contribution to driving digitization and automation through IT enabled logistics and supply chain solutions were acknowledged and appreciated.

Kale Logistics Award

Speaking on the occasion, Mr. Krishnamurthy Gopalakrishnan, Head of Business Development (India & Asia- Pacific region), Kale Logistics Solutions, says, “It is indeed an honour to be recognised for our efforts in building a portfolio of products that connect the logistics and supply chain sector. This award comes at a right time when Cargo Community Systems are the need of the hour. Our solutions like UPLIFT - India’s first multi- modal cargo community system and CODEX - Container Digital Exchange are global benchmarks.”

Kale Logistics has built significant capabilities in next generation and emerging technologies to bridge the IT gap in logistics industry. With the guiding principle ‘Technology that Transforms’ the company has been driving innovation to transform the way business operations are executed for any logistics company by removing unnecessary inefficiencies and enhancing customer satisfaction


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New air cargo centre at Copenhagen Airport

20 December 2017

German developer to build new 20,000 m2 air cargo centre at Copenhagen Airport. Air cargo growing in importance for Danish companies.

Copenhagen Airport has signed an agreement with German developer AXXUS Capital to develop a brand-new air cargo centre in the eastern part of the airport. The new centre will occupy around 20,000 m2 and is expected to be ready within two years.

"Air cargo is vital for a major international airport such as CPH, so it's been important for us to find a partner that can both improve and develop our cargo services," says Copenhagen Airport's Chief Commercial Officer, Peter Krogsgaard. "We've found that partner in AXXUS, which is a specialist in developing air cargo facilities."

A large and growing proportion of cargo is currently flown not in specialised cargo aircraft, but in the baggage holds of passenger aircraft as so-called belly cargo.

"Especially on the long-haul intercontinental air routes, belly cargo is a particularly important part of the business," says Peter Krogsgaard. "This cargo can make up more than 10% of revenue on a route. Today, belly cargo accounts for 40% of the total tonnage at CPH and is up 7% this year. We're actively working to attract even more long-haul routes, so it's an important part of our strategy to create a good platform for air cargo at CPH."

Copenhagen Airport

Investment of DKK 300 million
AXXUS Capital will develop and build the new air cargo centre, which will be located in the remaining vacant space in the airport's current cargo area and thus have its own direct access to airside.

"The new cargo centre will have state-of-the-art technology and support both automated and manual processes. In terms of safety, it will be of the highest standard with separate areas for all safety levels, and there will also be optimal conditions for refrigerated facilities, which are vital for many customers in, for example, the pharmaceutical industry," says AXXUS Capital CEO Markus Wolf.

AXXUS Capital is investing DKK 300 million in developing the new centre:
"We see huge potential in developing air cargo at Copenhagen Airport. In the coming years, there will be an even greater need for good air cargo facilities for handling the growing cargo volumes to and from China and other places," says Markus Wolf.

Copenhagen Capacity, Greater Copenhagen's official organisation for investment, promotion and business development, agrees that there is a growing need for air cargo:
"Greater Copenhagen is increasingly popular amongst international logistic companies, and with their first investment in Scandinavia, Axxus Capital further cements the region's position as the growing hotspot for global logistics," says Copenhagen Capacity's CEO, Claus Lonborg. "The new €40 million air cargo centre will not only strengthen the competitiveness of Nordic and international import and export companies, it will also create a platform for further growth. We look forward to the ongoing collaboration with AXXUS Capital and wish them every success in Denmark."


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Astrophysics X-ray Equipment Installed at Metropolitan Water District

CITY OF INDUSTRY, Calif. (December 20, 2017)

Astrophysics, Inc. (Astrophysics) recently installed X-ray security equipment at the Metropolitan Water District, Los Angeles, California headquarters. The checkpoint equipment will be used to screen visitors at the agency's Board of Directors meetings and special events.

The X-ray equipment that was delivered and installed is outfitted with a mobility kit to allow for easy relocation inside the headquarters. The kit includes heavy-duty wheels, stainless steel handles and a lockable operator control panel that folds seamlessly into the system when not in use. This mobility kit gives operators the flexibility to move the equipment to wherever it is needed and easily adapt to changing security needs.

Astrophysics X-ray

Astrophysics, Inc. CEO Francois Zayek commented: "For many years it has been Astrophysics' honor to protect the critical infrastructure of the United States. I am very proud that the Metropolitan Water District chose us to assist them in the protection of their headquarters, staff and visitors."


WCS 2018

Qatar Airways Launches Inaugural Flight to St. Petersburg – Its Second Destination in Russia

DOHA, Qatar 19 December 2017

Qatar Airways’ first non-stop flight from Doha to St. Petersburg landed today at Pulkovo Airport, marking the airline’s second gateway in Russia. Qatar Airways flight QR279, today operated by the state-of-the-art Boeing B787 Dreamliner, departed Hamad International Airport (HIA) on Tuesday 19 December at 07:30, and arrived at Pulkovo Airport at 13:50.

On board the inaugural Qatar Airways flight to St. Petersburg, Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, was joined by His Excellency Mr. Nurmakhmad Kholov, The Russian Federation’s Ambassador to the State of Qatar. The VIP delegation was greeted upon arrival by Mr. Vladimir Yakushev, Pulkovo Airport Chief Executive Officer; His Excellency Mr. Fahad bin Mohammed Al-Attiyah, Qatar’s Ambassador to the Russian Federation and Mr. Alexander Golovin, Chairman of the Committee on Transport, Member of the Government of St. Petersburg.

Qatar Airways

H.E. Mr. Akbar Al Baker said: “I am delighted to touch down today on board our first commercial flight to St. Petersburg. Following the great success of our Moscow route, we are extremely happy to extend our reach into Russia. By launching this new route, we are committing to further supporting the Russian market, and providing inbound and outbound passengers a seamless journey through the skies.”

St. Petersburg, Russia’s second largest city after Moscow, is considered an important Russian port on the Baltic Sea. The culturally diverse city is filled with historical architectural gems, including the Winter Palace and the Kazan Cathedral.

Pulkovo Airport Chief Executive Officer, Mr. Vladimir Yakushev, said: “The launch of Qatar Airways service from Doha to Pulkovo St. Petersburg Airport represents new extraordinary possibilities for the city’s business and leisure travel market. With the exquisite product offered by the airline, St. Petersburg will receive a boost of both inbound and outbound tourism once connected to Qatar Airways’ worldwide route network via one of the most vibrant global air hubs, Hamad International Airport, in Doha.”

> read more


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Budapest Airport signs cooperation agreement with STO Express and EKOL boosting China e-commerce links

Budapest, Hungary, Thursday, 30th November 2017

Budapest Airport has signed a cooperation agreement with STO Express from China, and EKOL, the European 3PL company with a strong presence in Hungary.

The agreement establishes a cargo transportation network to deliver e-commerce products arriving from China to European customers.

STO Express will operate scheduled cargo flights to Budapest Airport, which is likely to generate a significant increase not only in total cargo traffic, but also in the field of e-commerce, the main profile of the Chinese company.

The agreement was signed during the annual conference of the “16+1 cooperation” initiative, comprising China and 16 countries from the Central and Eastern European (CEE) region, which got under way this week.

At the economic, commercial, and financial forum organised as part of the conference, STO Express, a leading Chinese logistics company, announced that, in line with the efforts of the Chinese government, it is developing its relations with the Central and Eastern Europe (CEE) region.

As part of this, it has designated Budapest Airport as its preferred hub for air cargo transportation.

Budapest Airport

STO Express’ first Boeing B747 cargo aircraft, filled primarily with e-commerce goods, arrived in the Hungarian capital in November, in the colours of Silkway Italia, initially as a charter flight.

Cargo traffic at Budapest Airport has increased by 36 per cent since December 2015. From January to October 2017, Budapest Airport handled a record of 103,800 tonnes of air cargo, up 14.5 per cent on the same period last year. Budapest has a balanced market share with exports at 52 per cent, and imports at 48 per cent.

The cooperation agreement was signed on behalf of Budapest Airport by Rene Droese, Director Property and Cargo, who commented: “On behalf of Budapest Airport, we warmly welcome this initiative by STO Express. Export-import between China and Hungary, and the entire CEE region, plays an important role in our rapidly developing market.”

“We believe that Budapest and Budapest Airport provide the best place for distribution by STO Express in the CEE region, and we will do our best to prove this in the near future. Our new air cargo base, Cargo City, will commence operations in the summer of 2019.

“It is noteworthy that, based on market data, e-commerce accounted for four to five per cent of retail sales in Hungary this year, with 20 per cent growth in this segment from January to June, compared to the same period last year.

“In terms of specific figures, this means online transactions of approximately USD600 million during the first half of 2017. E-commerce is thus clearly one of the areas with the greatest potential in the market, including air cargo.”


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ATSG Signs New Boeing 767 Freighter Lease Agreement with Air Incheon and Delivers Three More Dry-Leased 767 Freighters

WILMINGTON, OH – November 29, 2017

Air Transport Services Group, Inc. (NASDAQ:ATSG) announced today the signing of a new lease agreement with Air Incheon for one Boeing 767-300 converted freighter and an option for a second, both for 2018 delivery, along with the expansion of its dry-leased 767-300 freighter fleet with three deliveries in November.

The company said that its ATSG West Leasing Limited subsidiary in Ireland has committed to lease one converted Boeing 767-300 freighter to Air Incheon of South Korea for a multi-year term anticipated to commence on March 31, 2018. ATSG West Leasing has also granted Air Incheon an option to lease a second 767-300 freighter for delivery later in 2018.

Air Incheon currently operates two Boeing 737 freighter aircraft from its base in Seoul Incheon International Airport. A third 737 is undergoing passenger-to-freighter conversion via a contract with PEMCO, a division of ATSG’s Airborne Maintenance and Engineering Services (AMES) subsidiary.

YK Park, president and founder of Air Incheon, said, “Adding the 767-300 to our fleet means we can offer our customers more options for reliable, economical air lift throughout our growing network. We look forward to a lasting partnership with ATSG.”

Rich Corrado, Chief Operating Officer of ATSG, said, “We are very pleased to announce ATSG’s relationship with Air Incheon via this Boeing 767 freighter lease. Together with its expanding Boeing 737 freighter fleet, the larger 767 will extend Air Incheon’s range and level of service for its expanding base of customers in Asia and elsewhere.”

In November, ATSG’s Cargo Aircraft Management subsidiary completed delivery of three converted 767-300 freighters under multi-year dry-lease agreements, one each to Cargojet, Northern Aviation Services, and Amerijet. ATSG holds lease commitments for six of the eight 767s it currently expects to deliver through September 2018.


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