AN-124 converted into a spare parts depot
This leads to the absurd situation that Antonov can block Volga-Dnepr from spare part supplies and vice versa, each side strongly supported by their respective governments. Should the carriers not adhere to international rules for the use of licensed spare parts, they risk being banned by many countries, because of posing a safety hazard.     
How unbearable the situation has meanwhile become is reported by Russian media. They speak of an AN-124 belonging to Antonov Airlines that has meanwhile been decommissioned and converted into a spare parts depot for supplying the remaining Ukraine registered Ruslans with components.
As things stand, there are many indications that more AN-124s are awaiting the same fate sooner or later. This even more since Antonov officials have left no doubt that producing an AN-124 successor would become too costly for their company, also because of the limited market demand for a similar mighty freighter aircraft, as recently announced by them.
 
Escalating conflict over the AN-124
Meanwhile, the next conflict between the two antagonists is just around the corner, kicked off by a statement made by Russian Deputy Prime Minister Yuri Borisov. In an interview with news agency Interfax he declared that his government opted for repairing the D-18 engines of the Volga-Dnepr operated AN-124s independently, without consent by Ukraine’s Antonov Company. A couple of overhauled D-18 engines have already been returned to V-D by the assigned MRO provider, the politician confirmed. He further spoke of 12 engines per year that need to be overhauled, enough to equip three Ruslans with rebuilt aircraft jets.
Ukraine's response to this unilateral measure is still pending.

Heiner Siegmund

Boeing’s financial deficit announced last week is the highest ever in a single quarter. In parallel with the figures’ presentation, the management officially confirmed that the company has set aside US$4.9 billion after taxes payable to MAX clients as compensation for the operational downtime of the aircraft causing thousands of flight cancellations and delayed deliveries.
 
And another announcement was of interest: the U.S. plane maker finally agreed to grant compensation payments in the region of 100 million euros to the bereaved families. This had been preceded by hefty protests of relatives and dependents of the victims. 
However, far higher are the costs resulting from the grounding of the B737 MAX 8. In the first six months, total Boeing deliveries dropped 37 percent, totaling 239 aircraft. The decline mainly affects the MAX 8 variant.
 
777X maiden flight delayed
Part of their summer cleanup was the management’s official confirmation that the timeframe for the launching flight of the 777X, a new long-haul plane standing on their sales list, had been pushed back because of ongoing turbine problems. According to plans, the first and largest variant of the 777X series, the B777-9, was supposed to first take to the skies on June 26. However, the maiden flight was canceled due to ongoing technical shortcomings of the General Electric GE9X engine that Boeing selected for powering the new jetliner. According to Flight Global, components showed premature deterioration during the test program.
Despite the program’s irksome setback, GE’s VP Commercial Engines Bill Fitzgerald remains confident that the GE9X will get green light by Washington’s FAA in fall and conduct its first flight before the end of this year.
 
Lufthansa is not amused
Mainly affected by the delay is launch customer Lufthansa that firmly ordered 20 B777-9s and signed a letter of intent for another 14 aircraft of this very cargo-friendly aircraft, offering ample space in the lower deck compartments for shipments.
LH intended to operate the enlarged Triple Seven by the end of March 2020, when the summer schedule begins. Due to the ongoing engine problems and the lengthy testing and certification programs following their elimination, it is highly unlikely that this date can be met. Similarly hit are other B777-9X customers, among them Cathay Pacific, Singapore Airlines, All Nippon Airways, Emirates, and British Airways.
 
Airbus remains tight lipped but capitalizes on Boeing’s woes
While Boeing is weakening, archrival Airbus is likely to take the pole as the world’s leading aircraft manufacturer again for the first time since 2011. According to Reuters, the European aircraft manufacturer delivered 389 jetliners in the first six months of this year. That's a y-o-y increase of 28 percent.
The European aircraft manufacturer denied commenting on the current problems of its U.S. competitor.

Heiner Siegmund

LH Cargo approves CSafe RAP

Lufthansa Cargo is the latest airline to approve the introduction of the CSafe RAP Temperature- Controlled container into service. The carrier intends to introduce the container throughout their network of more than 300 destinations in 100 countries.
The CSafe container is specially designed using the company’s registered ThermoCor VIP insulation which the company states offers an innovative cooling and heating system which is unique to the industry.
The CSafe temperature controlled unit maintains pre-defined temperature set-points throughout the total transport time and is, the company says, effective in the extremist of outside conditions ranging from -30C to +54C. Thorsten Braun, Senior Director of Industry Development & Product Management at LH Cargo stated that: “ with the addition of the CSafe RAP we are further expanding our portfolio of active cool containers, which is second to none, while intensifying our existing relationship with CSafe.“

ABC flew racehorses from Moscow to Amsterdam

Nine precious racehorses traveled on board an ABC B747-8F scheduled flight from the Russian capital to Schiphol Airport to take part in a competition in the Netherlands. During loading and the entire journey, the animals were looked after by AirBridgeCargo’s dedicated ‘abc care’ team. In a release, the carrier points out that “one of the crucial contributors to successful transportation is the minimization of the waiting period – within warehousing premises, on the apron, before and after loading/offloading.”
The ‘abc care’ squad did their utmost to shorten before-the-flight standard procedures and set the required environmental conditions during the flight, reads the release. 
‘Equine transportation stands apart from other animal transportations as we are dealing with precious animals whose well-being and comfort influence sports success,” highlighted Fedor Novikov, Deputy General Director, Special Products and Services, AirBridgeCargo Airlines.
“Air transportation is the most preferable way of journey, as we cover greater distances within short times. After several adaptation days we were able to take part in the tournament winning the second place,” commented Tatyana Kosterina, the horse rider of 11-year-old Diavolessa VA.

Turkish Cargo continues growth trend

The Istanbul-based cargo arm of Turkish Airlines, Turkish Cargo is continuing with its growth pattern and says that figures for May have been very satisfying for the carrier. Expansion in the USA has been particularly good with an almost 35 percent increase in tonnage generated compared to the previous year.
This pattern was also obvious in the Far East with 19.3 percent growth and a 12.2 percent rise in tonnage sold in the Middle East & South East Asia regions. The airline maintains that due to the increases, they have managed to maintain the position as the 7th largest cargo carrier with regards to tonnages flown. Turkish Cargo operates a fleet of 10 A330Fs, 5 B777Fs and 4 B747Fs on routes across the globe. In addition, the airline offers plenty of belly capacity in their long-haul passenger fleet.

IBS Software upgrades to Cargo Data Management

Cargo iQ member, IBS Software has after successfully setting up their Cargo Data Management Platform (CDMP) has passed the Cargo iQ audit programme for the same.
The audit in order to gain CDMP certification began with a predatory phase which was then followed by a pre-assessment and a final assent which resulted in a successful certification. IBS Software are specialists in creating IT solutions for the logistics, transport and travel industry. On the cargo side, this means that IBS clients can carry out direct reporting to Cargo iQ by means of their end-to-end air cargo management platform, iCargo.

Eastern Air Logistics goes for an IPO

Eastern Air Logistics which is the Shanghai, China-based China Eastern Airlines cargo arm, has made it known that they are to file for an Initial Public Offering (IPO) in order to gather sufficient funds to expand the fleet of their subsidiary, China Cargo Airlines.
The carrier operates six leased B777Fs and China Cargo would like to extend the leases for a further six years. They also have need of a further two B777Fs in the future. Apart from the present six 777Fs, China Cargo operates three elderly B747-400 freighters. The additional funds generated by a successful IPO would also be used to purchase spare GE90 engines for the B777 fleet.

Ron King passed away

U.S.-cargo veteran Ron King suddenly died on 19 July, only three days before celebrating his 77th birthday. He has been in logistics for almost half of a century and has left an immense imprint on the air cargo sector in the USA in general and on Volga-Dnepr’s development in particular, the Russian carrier states in an obituary.
King joined Volga-Dnepr in 2001 as a Commercial Director in the USA and during almost 14 years was building the image of Volga-Dnepr in the USA, gaining new projects, attracting new customers, strengthening Volga-Dnepr’s market position and sharing his tremendous knowledge with colleagues.
“During his time with Volga-Dnepr, not only has he reinforced the company’s position, but has also been a tutor to the whole team members who engrossed his knowledge, experience and personal approach to business development,” notes the carrier.
Ron King will be sadly missed as “he was a true personality who possessed the unique knowledge of air freight. His contribution to Volga-Dnepr will always be highly appreciated,” commented Konstantin Vekshin, Executive President of Charter Cargo Operation at V-D.

Road infrastructure can’t take it anymore
Are we facing an even greater traffic collapse than the one we presently are experiencing in many European cities and motorways?
When one compares the commercial traffic on German motorways for example, then it’s easy see that traffic comes to a long standstill more often. This is more apparent since the wall came down thirty years ago and traffic to and from the old Eastern European countries have multiplied at an enormous rate.
Commercial traffic, or better said, truck transports, have grown a thousand-fold whereas the road infrastructure has not kept pace. On the contrary, it has stagnated, with governments in most countries not having seen what would happen and not being interested in redesigning motorway or city roads.
The German government for example, should have concentrated already back in the sixties and seventies in getting goods traffic off the roads and onto the rails. It never happened, and the result is easy to see these days. Truck quest in the right-hand lanes, stretching more miles on end. Frustrated and tired drivers, late deliveries, and ever-increasing pollution problems.

Online orders require fast delivery
The population of any European country relies heavily on consumer goods being delivered fast to their tables. This demand has increased since the start-up of supermarket chains in Europe many years ago. Compared to the fifties and the early sixties, where “Mom & Pop” shops were the norm, today the countryside is littered with large supermarket chains, competing heavily with each other and having to offer a massive range of consumables to the public.
All of this has to be transported in some way or another. Mainly by road.
Since some years we have the Amazon’s of this world offering us a wonderful online opportunity to order consumer goods with an almost 24-hour delivery time slot. They are now being joined by the Chinese Alibaba group which is busy setting up distribution complexes within Europe.
Then we have DHL, DPD, UPS, FedEx and many others who are there to ensure that the 24-hour delivery schedule is kept. They operate with large fleets of delivery trucks, some their own and many franchised out to smaller operators. Their presence in towns and cities cannot be overlooked and because of the worsening road infrastructure, they more often than not, cannot deliver on time.

Are Drones and Flying Taxis the future solution?
Something will have to happen for sure!
As e-commerce takes over the world - our present traffic infrastructure will collapse even further. That may well end up with the likes of DHL and FedEx having to back out of towns and cities and only supply customers by means of “collection centres” situated outside rural areas. Will customers like that?
No, is the answer.
Drones will have to become a future means of cargo delivery. Many laugh at the idea, but the fact is that the development in this area is being pushed faster than politicians, road and town planners are even considering moving.
Freight agents and truckers are suffering under the stress being encountered with the problem. Large European trucking companies are finding it increasingly hard to attract employees to man their trucks. Long hours, traffic jams, no overnight parking spaces and relatively low salaries - all these factors put off many would-be applicants.
In an interview at the end of last year, the owner of Dachser, Bernhard Simon, one of Europe’s largest freight agents and trucking companies, was quoted as saying that he would never purchase anything through Amazon. He stated that the expansion of the same-day-delivery system is a deciding factor in Europe having to face closed motorways and city streets. Trucks carrying day-to-day consumer goods also have to deliver to the many supermarkets situated in town and city centres.
The problem gets worse and the solutions remain far away.

John Mc Donagh

More to be sold off?
Ryanair operates a fleet of 431 B737-800s, many of which are reaching old-age and will be replaced by the 737 MAX.
However, in due time the entire -800 fleet will have to be renewed. The Ryanair fleet is said to be well maintained and it should be easy enough to attract buyers from the P2F conversion market to take them over at a sale price which would make Ryanair’s CEO Michael O’Leary, very happy.
The demand for the 737-800 conversion continues unabated. This applies especially for the Chinese express parcel carriers, but also for European operators.
One future candidate for a large B737 conversion programme could well be Amazon prime, who are steadily putting their footprint into the European market.
It was reported that Ryanair admits that once the first ten 737s are gone, that they will then introduce moves to sell off smaller batches of their -800 fleet in the coming years.
Not a bad business for the conversion companies.
Things are not going so well at the moment for the Dublin based carrier as their COO who recently resigned is now joining their arch-competitor, easyJet. On top of this the carrier has been forced to cut growth for 2020 due to the extended delay in getting Boeing 737 MAX jets back in the air and an upcoming strike by the UK-based pilots.

John Mc Donagh

Plans for additional B777 freighters
The alleged fast MD-11F exit was triggered by indications made by Lufthansa Group CEO Carsten Spohr at an Investor Day event on 24 June. Among the many tables and diagrams presented by the executive was a single chart showing various aircraft types to be withdrawn from the fleet of Lufthansa, including the MD-11 freighters. In this context the executive mentioned that Lufthansa Cargo might get additional B777 freighters in 2020, depending on their business results.
Following Mr Spohr’s presentation, rumors were spread by some media, insinuating Lufthansa Cargo’s imminent MD-11F exit.  
 
B777Fs reduce greenhouse gas footprint
With that said, Jacqueline Casini, LH Cargo’s Communication and Marketing Chief pointed out that the fleet issue depends on the firm decision by relevant Lufthansa bodies, finally also from the Lufthansa supervisory board to give the green light for the additional 777Fs indicated by Herr Spohr.
However, the controllers haven’t given their thumbs-up yet. Should they refuse, LH Cargo will most likely continue operating some units of their aging workhorse MD-11F until 2025 – at the latest. By then, the “youngest” MD-11 freighter, acquired in 2000 and operated by the freight airline since then, will have reached the age of 25 years. Time to say goodbye, because Lufthansa automatically disposes of all aircraft older than a quarter of a century.
 
However, it can be assumed that keeping some of the MD-11Fs in the fleet until the mid-20ies, is not exactly the option preferred by LH Cargo CEO Peter Gerber and his management. This is confirmed by Mrs Casini: “A quick fleet rollover is desirable for both economic and environmental reasons, because operating B777Fs reduce our carbon footprint significantly compared to the MD-11F.”

 Intermediate stop wanted
This cemented track policy project manager Sybille Rehse of the Investor Center Ostbrandenburg GmbH in East Germany is eager to break up. Her and her agency’s task is attracting entrepreneurs and fresh capital for creating new jobs. Chinese cargo trains making an intermediate stop at Brandenburg or in Berlin for uploading shipments bound to consignees living in the German capital, the western parts of Poland or northeast Germany – totalling more than 8 million - would be a blessing, provided “we can add value to the goods,” states Mrs Rehse. 
This would also benefit Berlin Airports because a great part of the goods that need to be transited to their buyers spread across Europe could be flown off right there.
 
Highly subsidized cargo trains
Fact is that the number of cargo trains crossing the huge land bridge between China and Europe is growing steadily. So is the quality of goods transported by cargo trains across the new Silk Road. According to Jonathan Hillman of the Center for Strategic and International Studies (CSIS) in Washington, in the first half of 2018 the value of shipments railed between China and Europe rose by more than 140 percent. This upswing is triggered by a combination of steadily increasing market demand and financial support granted by Chinese municipalities. It’s both, confirms expert Ellen Liang of Euroway International Logistics, a Hamburg-based provider of integrated logistics services. Asked about the level of subsidies she speaks of a little transparent situation since each Chinese city interested in becoming part of the transcontinental rail network has its own guidelines.
 
Beijing nods in agreement
Their doing, however, is fully in line with Beijing’s One Belt, One Road policy aimed at establishing close links between China and countries located along the vast Eurasian rail track.
Recent surveys prove that the financial support often exceeds US$ 3,000 per TEU granted from day one. In his survey, Hillmann speaks of even up to US$7,000 per steel box railed from China to the West. But no matter how high the subsidies amount to, the payments are reduced by 20 percent each consecutive year, thus ending after five years, says Mrs Liang.
And she adds another interesting aspect to this: While in the past goods transported from China to Europe exceeded loads traveling in the opposite direction at a ratio of 60 to 40 or even 65 to 35 at times, this has changed drastically. “Now the volumes are balanced with even a slightly higher number of TEUs railing eastwards.”
 
Heiner Siegmund

Cargo customers can participate
It was at this year’s Air Cargo Europe show in Munich last June that Finnair Cargo first announced that in the coming months they will launch a new service for cargo customers - called ‘Push for Change.’
The service, with the same name, was started in early 2019 by Finnair’s passenger section, after many of the carrier’s customers are said to have shown an interest in minimizing the environmental impacts of flying. The carrier was it seems quite surprised with the number of passengers who indicated they would take part in the scheme.
Finnair Cargo clients can also now take part by financially supporting ’emission reduction projects,’ which give customers the choice of either offsetting CO2 emissions by supporting a carbon dioxide reduction project, or further cut emissions down by contributing to the purchase of biofuel. It works in a way that clients have the choice buying into the service whilst booking their shipments, whilst the cargo is on the way to its final destination, or even after their cargo has arrived.
Finnair Cargo will shortly open their Push for Change website and clients only have to note the weight of the shipment and its destination. It is up to the individual customer to decide whether to invest in either the emissions reduction programme or the biofuel investment. The carrier has given the following cost guidelines.
Emissions Reduction Project:
Europe - €0.01/kg, Intercontinental - €0.03/kg, or Europe+Intercontinental - €0.04/kg
Biofuel Investment Project:
Europe - €0.09/kg, Intercontinental - €0.32/kg, or Europe+Intercontinental - €0.40/kg
It will be interesting to see how this project develops and how many customers will actually be willing to add the few extra cents to their shipment charges in order to make the skies greener.

New cargo chief started in August
It has been known for some time that Janne Tarvainen, MD of Finnair Cargo would leave the carrier in order to take up the position of MD for Nordic Regional Airlines.
His successor, Mikko Tainio, who was until now the MD of Finnair Kitchen and who has also held other key positions with the airline for some years, took up the reins at Finnair Cargo on 1. August.
Under Mr Tarvainen’s leadership, Finnair Cargo has successfully positioned itself as a leader in so called COOL terminal Operations with the opening in Helsinki of their COOL Nordic Hub which boasts the most up-to-date handling equipment for both general cargo and temperature sensitive shipments. The hub, equipped with Loedige technology, was officially opened in 2018 and cost the carrier a total of around 80 million euros. Finnair is busy restructuring their long-haul fleet by adding more Airbus A350 aircraft which offer more belly hold capacity to destinations in Asia and North America.

John Mc Donagh

In an op-ed in trade publication Air Transport World, Emirates president Tim Clark welcomed the decision and accused the Big Three of pursuing "their four-and-a-half-year, multi-million dollar lobbying campaign to try to limit consumer choice and marketplace competition, instead of following an established 180-day process (through IATFCPA).”
“They even went so far as publicly refusing to file an IATFCPA complaint."

Air Italy triggered latest dispute
The meeting in the Oval Office last month had been sought by the Partnership for Open & Fair Skies the lobbying coalition that represents the three U.S. airlines, to seek support from Trump to halt what was described as "illegal fifth freedom” flights to the U.S. by Milan-based Air Italy in which Qatar Airways holds a 49% stake.
Apart from American CEO Doug Parker and United CEO Oscar Munoz and a representative of Delta Air Lines - because the CEO Ed Bastian of Delta couldn't attend - the meeting was also attended by CEO's of FedEx, Atlas Air, JetBlue and the CEO of Qatar Airways Akbar Al Baker.

Commercial harm suffered remains speculative
Other attendees included acting White House chief of staff Mick Mulvaney, Sen. James Risch (R-Idaho), White House press secretary Stephanie Grisham, national security adviser John Bolton, National Economic Council Director Larry Kudlow and trade adviser Peter Navarro.
In his op-ed, the Emirates President noted that "after more than 1,600 days and tens of millions of shareholder dollars wasted, they are where they didn’t want to be. President Trump’s message was clear: the big three need finally to begin the customary IATFCPA review, which they have been desperately avoiding."
Clark also suggested that the Big Three had been averse to using IATFCPA because in order to prevail, "they must show they have suffered commercial harm as a result of the alleged unfair competitive conduct. Having collectively earned more than US$40 billion in profits since starting their campaign in January 2015, it is extremely difficult to do so."

Many new jobs created
"Similarly," Clark continued, "U.S. DOT Bureau of Transportation Statistics (BTS) data directly contradicts the other Big Three claim that Gulf carrier competition is an existential threat to U.S. airline jobs. BTS data shows the employee count at Delta, American and United has grown 9,516 (11.8%), 9,347 (9.5%) and 6,582 (7.8%), respectively, between 2015 and 2019."
Clark concluded that, as a result of these data, "the Big Three know an IATFCPA complaint will most likely be dismissed."
Clark ended his op-ed by saying that he hoped this episode "ends an unfortunate chapter in international aviation and ushers in a new era of sustained competition and consumer choice."

Nol van Fenema

Being in the air freight business for 40 years, Guenter has experienced a number of good but also bad times in cargo. Therefore, a dip, such as the current one, doesn’t bring beads of sweat on his forehead. “Back in 2008 the industry went through its latest crisis; conversely this means that we enjoyed a decade-long upswing. It’s the longest growth phase in air cargo that I can remember,” he recalls.
His main argument for an impending revival of the business in IGLU’s home market: The mechanical engineering industry, Germany’s second largest sector, next to automotive and followed by chemistry, is still on track, despite suffering a decline in order volumes lately.
Automotive however, he admits, is a problem child, not because of quality shortcomings, but primarily because of the tariff and trade dispute between the U.S. and China. This has sent Chinese orders for Europe produced cars south, especially German luxury brands such as Mercedes Benz, Audi, BMW but also Volkswagen.
 
VW back to old strength…
The good news is, however, that at least VW seems to be back on track again, following the disastrous diesel exhaust fume manipulation that led to penalty payments of US$ 25 billion in the USA, including legal expenses. In Germany, VW and its daughter Porsche were sentenced to pay 1.53 billion euros for the same “Dieselgate” offence.
In an analyst call last Thursday, the car maker’s management anticipated sales growth of 5 percent in 2019, with EBIT climbing in a corridor between 6.5 and 7.5 percent. Promising figures after several years marked by privation. This also applies to Peugeot that just reported promising half-year figures.
In contrast to VW and Peugeot, most of their European competitors, including suppliers, issued profit warnings because sales figures for the first half year 2019 remain clearly behind last year’s results.

…but trade war looms
Germany's flagship sector accounts for 8 percent of the total economic output, directly employs 820,000 and indirectly even 1.8 million people.
“The European automotive sector is currently our biggest problem child, causing negative impacts on the air freight business,” states Herr Gasthuber. Only exceptions are VW, Porsche and Peugeot, he adds.
The downward trend could be aggravated should Trump impose punitive tariffs on the German car producers in his attempt to penalize the industry for their export successes, cementing an unbalanced import/export ratio with the USA. If so, this would trigger a fully-fledged trade war between Europe and the USA with significant effects on the transatlantic air freight business, EU officials keep warning. 

Small and medium-sized firms ensure IGLU’s daily business
However, in contrast to automotive other industries still run well, spurring the freight business. This accounts predominantly for many of Germany’s small and medium-sized companies, IGLU’s by far largest group of shippers, that are still in good shape, Gasthuber says.  
The 2000 incepted consolidator manages part of the freight exports of 24 affiliated firms, depending on trade lanes and available cargo capacity. It’s a two-prong business model because the club members can individually decide if they hand over their exports to IGLU for consolidation purposes, benefitting from favorable rates, or – alternatively – fly the goods on their own account, but mostly to less attractive prices. “It’s up to each associated firm; there is no contribution obligation,” emphasizes Herr Gasthuber. 
 
The higher the volume, the better the rates
Among the members are some globally well-known names such as EMO-Trans, QCS-Quick Cargo Service, both based in Frankfurt, or Hamburg-headquartered Ipsen Air Logistics, currently IGLU’s largest contributor of cargo volumes. The association’s business model is based on bundling air freight on key trade lanes with volumes contributed by different member companies. Higher tonnage achieved this way enable better rates, benefitting the contributors. 
An obviously attractive model evidenced by the fact that small or medium-sized forwarders are regularly knocking on IGLU’s door to join the club. “But we do not want to exceed a certain size in order to keep the amount of administrative work at low level,” he says.
For the second half of 2019 Mr Gasthuber is cautiously optimistic. “The demand for high-quality products marketed by the German medium-size industries will increase rather than stagnate in the months ahead, this way also spurring our IGLU business.”
 
Heiner Siegmund

EC opens Amazon investigation
The European Commission watchdogs are to investigate whether Amazon’s use of data supplied to them from so called independent retailers, is in breach of current EU competition rulings.
The move was initiated by the European Competition Commissioner Margrethe Vestager who would like to have more clarity as to how and to what purpose Amazon might use such data in the future. Therefore, she will open an inquiry into Amazon’s business practices and its retailer role to ensure that there is compliance with EU competition rules. Part of this inquiry will be to look into agreements between retailers and Amazon, whereby Amazon is said to be able to use such data in a sense that this might be seen as unfair competition.

U.S. worried about China’s Polar Silk Road
America’s Department of Defense (DoD) issued a report the U.S. congress a couple of months ago in which they (DoD) expressed their concern at China’s increased activities in the Arctic region. The report terms this as China’s new Polar Silk Road whereby China is going access to many natural resources in the region as well as opening up new lines of communication through the Arctic seas. This, the DoD states, has been happening since China got an observer seat status on the Arctic Council.
The Arctic States is made up from eight countries - The United States, Denmark, Norway, Canada, Finland, Iceland, Russia and Sweden. They are all said to have concerns about Chinese inroads into the area and the possible plan to open a Polar Silk Road through the region by gaining access to natural resources, which the eight claim are not available for Chinese investment.

Budapest Airport: Schnitzler to follow Lammers as CEO
Dr Rolf Schnitzler has been appointed as new CEO of Budapest Airport with immediate effect. The doctorate in Law has a wealth of experience in aviation and airport matters. He has been more than fourteen years in leading corporate management positions at AviAlliance, Budapest Airport’s majority stakeholder (55%). As member and Chairman of Budapest’s Supervisory Board, he is very familiar with the Hungarian Airport through the provision of support and legal advice on numerous key projects.
Schnitzler takes the BUD chair from Jost Lammers who has headed the Hungarian Airport “Ferihegy” since 2007 and has now been appointed CEO of Munich Airport. His tenure begins next January.
At MUC he follows long-time Chairman and CEO Michael Kerkloh (66) who heads the Bavarian airport since 2002 and retires in December for age reasons. Under Kerkloh’s leadership, Munich developed into a best-in-class passenger and cargo gateway. MUC has been awarded the title “Five Star European Airport” nine out of eleven times by the independent, London-based Skytrax Institute.

time:matters adds Africa to its global network
The Frankfurt-based expert for time critical and high-speed logistics solutions offers the market rapid transports to 16 African stations. The step follows the company’s recently announced expansion in China. Cornerstone of the advance is a transport arrangement with Brussels Airlines followed by the decision to establish a time:matters hub in the Belgian capital. 
With immediate effect, the company offers its customers tailored transport solution for spare parts, express goods and other urgently required items on 81 weekly direct flights between Brussels and the African destinations served by the airline. These are Abidjan (ABJ), Accra (ACC), Banjul (BJL), Bujumbura (BJM), Conakry (CKY), Cotonou (COO), Douala (DLA), Dakar (DSS), Entebbe (EBB), Freetown (FNA), Kigali (KGL), Luanda (LAD), Lomé (LFW), Yaoundé (NSI), Ouagadougou (OUA) and Monrovia (ROB).
In Brussels, time:matters customers enjoy services such as individual pick-up and delivery of shipments upon request, prioritized loading and the usual customer service support around the clock. Furthermore, there is no weight limit in respect of shipments ex Brussels – everything can be accommodated, from a few kilograms to several tons.

Silkway West Airlines appoints Jenny Zhao
Jenny Zhao has become new VP Asia-Pacific (APAC) effective 1 August 2019, announced the Baku, Azerbaijan- based airline. In her new role, she will be responsible for providing strategic and tactical direction for further enhancing of business operations in APAC. She took over from Nurid Aliyev, who has stepped down for personal reasons.
Mrs. Zhao comes along with a vast experience in the air cargo industry, holding senior management positions at various freight airlines during the last couple of years. For the past two years, she was Silkway West Airlines’ CCO APAC and Head of SWW Rep Office in Shanghai.
Wolfgang Meier, President/CEO of Silk Way West Airlines, expresses his confidence in this decision: “Thanks to her long experience in the air cargo industry, Mrs. Zhao will be able to give a new impulse to the activities of Silkway West Airlines in the Asia-Pacific region, which operates in a highly competitive environment. Her expertise and capability in the sector would further increase customer satisfaction.”

John Mc Donagh  /  Heiner Siegmund

Is this a decisive turning point in the history of the ground handling agent?
So it seems. Otherwise CEO Eric Born would hardly have taken a U-turn, revoking his decision to leave, opting for prolonging his tenure as President and CEO of Swissport International for another year. The executive’s decision to extend his contract followed the company’s announcement of their successful completion of the debt refinancing.
 
Strong signal of continuity
In a release, Swissport points out that Mr Born’s contract extension and the refinancing will “ensure strategic continuity and financial stability, enabling Swissport to further consolidate its leading market position.” After a successful 2018 business year, this is a signal of continuity for Swissport’s customers, its employees, partners and investors, reads the statement.
Swissport's outstanding debt will be refinanced with new senior credit facilities and new notes. The anticipated proceeds are expected to be used to repay and redeem existing debt and some of Swissport's currently outstanding notes, respectively, states the company.

Restructuring of debts
The refinancing is comprised of a new €75 million revolving credit facility, a new €50 million delayed draw loan facility, an aggregate principal amount of €1,2 billion across a new term loan B facility and an offering of new euro-denominated senior secured notes, along with an offering of  280 million of new euro-denominated senior notes. The consummation and actual terms of the refinancing, including the notes offering, are subject to a number of factors, including market conditions, negotiation and execution of definitive documents and satisfaction of customary closing conditions.
 
Encouraging business results
Concurrently, the ground handler published its half-year results 2019 with revenues totaling €1,525 million, up €88 million y-o-y. The service provider’s operating EBITDA increased to €121.9 million, compared to €113.7 million for the same period in 2018.
Swissport holds that the financial results were driven by organic growth, the acquisition of Australian handler Aerocare in spring of 2018, strong de-icing of aircraft during the first quarter 2019 and continued growth particularly in the Middle East. In addition to this, exits from loss-making businesses contributed to the satisfying EBITDA as well, holds the Swiss ground handler.
Following the announcement of the encouraging financial figures, formerly indicated plans by owner Hainan Airlines to sell Swissport to a financial investor or competitor seem to be off the table for now.

Heiner Siegmund

A Bloomberg report quoted Md Farid Md Rafik, a deputy minister in Mahathir Mohamad's department as saying that the Malaysian government is willing to become a minority shareholder in the carrier, implying a stake sale is among options under consideration.
Suitors for Malaysia Airlines must have expertise in the industry with strong financial standing, Md Farid said. The government will not compromise on the carrier's branding and won't allow any layoffs among its 14,000 local employees, he said.

Four proposals under consideration
While Malaysia's prime minister Mahathir Mohamad has said the carrier still faces the possibility of being shut down as the government seeks to save money, he has also emphasised that he wants the airline to recover and keep "Malaysia" in its name. The government is studying four proposals it received for the airline, most of them from local investors, the prime minister said earlier last month.
MAS - along with its smaller subsidiaries MASWings and Firefly - carried 16.1 million passengers in 2018. The company currently has 113 planes in service, made up mostly of single-aisle Boeing 737s and turboprop jets to serve domestic and regional routes.

Fernandes turns down role as white knight
In a related development, Tony Fernandes, group chief executive officer of Air Asia, Southeast Asia’s largest budget carrier, has ruled out any involvement with MAS, saying the profitable budget airline he co-founded is focused on growing organically and speeding up its push to become a digital enterprise.
The South China Morning Post quoted Fernandes as saying: “I am not sure how many languages I have to say it in. I am on this big journey of transforming AirAsia. AirAsia is focused on AirAsia.” He welcomed, however, MAS’ recent move to expand its cooperation with Singapore Airlines (SIA), saying the expanded partnership would in turn improve AirAsia.
“As long as the competition is fair competition then I have got to be better,” Fernandes explained. “Competition is what makes us better. I don’t want anyone or anything to be blocked from doing a decent business, saving jobs or creating jobs.”
The AirAsia Group includes airlines in Thailand, India, Japan, Indonesia, the Philippines as well as its low-cost long-haul unit AirAsia X. The airline flies exclusively Airbus planes and was flying 226 planes at the end of 2018, mainly across the Asia-Pacific. In the 2018 financial year, it posted a net profit of US$409 million.

Nol van Fenema

Various factors play varying roles
One has to bear in mind that 2018 was a bumper year for air cargo and we did not have most of the political and economic upheavals which have so far been faced in the first half of this year.
However, trend is trend - and whether the present downturn will result in a long-term air freight depression - remains to be seen.
At the moment the negative factors far outweigh the positive ones.
Fuel prices - a major cost factor for airlines - still remain relatively high and show no indication for dropping. Capacity (cargo) has increased with new wide-body passenger aircraft pushed into the market. This has been one of the major effects on the yield decrease.
The political unrest in almost all corners of the globe is very worrying although some of our global leaders seem to be turning a blind eye to the upcoming economic consequences when things get totally out-of-hand. The main issue for the rest of this year and the next, will be whether there actually will be an economic downturn. So far, despite a lot of loud rhetoric and the threat of a trade war, the general economic situation can be seen as being still somewhat stable.
If this changes during the second half of this year, then air freight will indeed be the loser. Many carriers are now seriously looking at which capacity will be needed as of 2020 and fleet restructuring may well be the order of the day. Lufthansa Cargo for example is reported to be now looking at phasing out their MD-11 freighters even faster than they had planned.
The passenger business continues to boom, and this means more wide-body capacity which is filled upstairs, but in many cases leaves empty belly holds. 

New sources of income?
The above question arose lately at one of the cargo conferences.
Generating additional cargo revenues as other sources of income is not an easy task. The airlines are lucky that high-yield cargo such as pharma and hi-tech equipment is still there, but so far it’s not enough to compensate for the general cargo downfall.
On the contrary, shipping pharma by air is under extreme pressure due to the fact that there seems to be a distinct move by the shippers back to ocean transport. Pharma shippers are still complaining about the holes in the air freight supply chain which in their view lead to too many disruptions or damaged cargo.
New sources of income are hard to come by and will carriers therefore themselves put the price pressure down the line to their handlers by demanding lower prices?
Hopefully not - but we’ve seen that scenario too often in the past.

John Mc Donagh

The seven-year agreement valued at over A$1 billion will give Australia Post customers access to Qantas Freight’s dedicated freighter aircraft and priority access to the cargo space on up to 1,500 Qantas and Jetstar passenger flights to over 110 destinations each day, in addition to space on partner airlines globally.
The partnership will also introduce up to three Airbus A321P2Fs freighters to the cargo network used for Australia Post. Qantas will be the first airline in the world to operate the A321 as a freighter aircraft.

The agreement will “take the e-Commerce business to new heights,” Holgate
Each A321P2F will add nearly 50% more capacity - or an additional nine tonnes - compared to the existing Boeing 737 freighters, with the first A321P2F due to enter the fleet in October 2020.
“Australia Post plays a critical role connecting Australian businesses and communities to each other and the rest of the world, and with the continued growth in online shopping, we can now take it to new heights,” Christine Holgate, CEO and Managing Director, Australia Post, said, adding that “This agreement will further boost our dedicated air freighter network with newer aircraft and more capacity right up until the opening of the new Western Sydney airport in 2026."

Vote of confidence
Australia Post last year flew more than 400 tonnes of mail on its busiest night, and more than 40 million parcels during December. Ms Holgate said she expects to exceed both those targets this year.”
Qantas Group CEO, Alan Joyce, said the seven-year agreement was a vote of confidence in the future growth in eCommerce and will support the rising demand for next-day delivery.
“Consumer preferences and expectations are rapidly changing and together with Australia Post we are responding by growing our dedicated freighter fleet to provide a better experience for consumers and businesses,” Mr Joyce said.

China Post opens new routes from its Nanjing gateway
The partnership between Australia Post and Qantas dates back to when the national carrier first started flying airmail for the postal service in 1922.
In another development, China Postal last week took delivery of its first 737-800BCF on lease from BBAM. It is the first of ten 737-800BCF conversions the air arm of China Post has committed to as part of an agreement with Boeing which was signed in 2015.
In a statement, China Post said the longer range and greater capacity of the aircraft, compared to its 737-300Fs and -400Fs, will enable it to open new routes from its Nanjing hub.

Nol van Fenema

Two additional B777-300ERs will complement the long-haul fleet
Other U.S. destinations standing on the carrier’s itinerary are JFK (21/7), EWR, LAX, SFO, ORD, BOS (all 7/7) and MIA (7/7) and seasonally 2nd daily flight. Seasonally operated flights conducted by Swiss daughter Edelweiss to Orlando, Tampa and San Diego round off the lower deck capacity offered to and from the USA.
In early 2020, two new Boeing 777-300ERs will be added to the Swiss carrier’s fleet, upping their number to twelve altogether. They will be operated daily from Zurich to Tokyo and Miami respectively, increasing the cargo capacity on both routes by roughly 20 percent. 

Focus on special cargo protects against slump in business
Like many other freight carriers, SWC is currently facing the overall global downturn within the air freight industry. However, “our focus and leadership in the special cargo segment does insulate us from industry-wide developments to a certain degree,” states an SWC spokesperson. He reminded that 2018 was an extraordinary year for the entire air cargo industry, making it difficult to use as a benchmark for the business. In spite of the market development we continue to focus on delivering the projects on hand and on generating value for our customers,” the manager emphasized.

Cargo-friendly passenger fleet
Exact tonnage for every intercont flight can fluctuate based on seasonal operations and of course, aircraft type. Swiss WorldCargo’s Airbus A330-300 flights offer, on average, 19 tons, both to the U.S. and Asia. Airbus A340-300 flights offer 22 tons. Boeing 777-300ER flights, to both the U.S. and the Far East, are capable of transporting up to 24.5 tons per takeoff.

Flights operated by Edelweiss but marketed by Swiss WorldCargo tend to offer slightly reduced tonnage, given that these are often seasonally operated routes with higher demand for passenger baggage.

Heiner Siegmund

Cargolux agrees new CWA with unions
It has taken almost a year of tough negotiations before Luxembourg-based all cargo airline Cargolux has been able to reach a new binding Collective Work Agreement with the unions.
It seems however that the last round of negotiations was held in a positive spirit and this has resulted in the signing of two new CWA’s with the Luxembourg union representatives of the LCGB and OGBL. The first agreement is backdated to 1. December 2018 and runs until 31. December 2019. The second, commences as of 1. January 2020 and is valid until 31. December 2022.
There will be a 6% salary increase for ground staff and a 4% increase for the carrier’s pilots over the four-year duration of the contracts. The agreements also forsee that all staff will now be brought to the same level as far as vacation and off-day benefits are concerned.
CV’s management and the LCGB, OGBL representatives have stated that collectively they have managed to bring together an agreement which is good for future employee benefit as well as continuing to protect the company’s stability for the future.
Cargolux CEO, Richard Forson stated: “I am pleased that we have managed to reach an agreement with our social partners. This agreement cements job security within our company while contributing to Cargolux’s sustainability on both social and economic fronts.”

Silk Way Airlines appoints Fadi Nahas as new VP Americas
Silk Way Airlines USA (SWA USA) has announced that Fadi Nahas will take up the position of Vice President, The Americas for the carrier. In his new role Mr Nahas will be responsible for all business development issues for SWA USA as well as for the company’s Azerbaijan affiliated airlines, Silk Way Airlines and Silk Way West Airlines activities in the Americas.
Fadi Nahas has been active in the air cargo and logistics branch for more than 30 years and brings a valued management experience into SWA USA’s team. He will also take the leading role in cementing the relationship with Global Feeder Services Holding (GFS) which was recently appointed as exclusive GSA for SWA USA.
Silk Way Airlines USA uses the capacity of Silk Way’s eleven wide-body freighters as well as belly capacity on Azerbaijan Airlines flights.

Antonov Airlines flies a Satellite
Carrying heavy and outsized cargo is nothing new for Antonov Airlines with their fleet of AN-124 freighters. The airline gets many requests for such transport and at the beginning of August they flew a satellite from Munich, Germany to Cayenne on behalf of the German satellite manufacturer OHB Systems.
The satellite and supporting equipment weighed in at around 70 tons. The satellite itself is a very sensitive piece of equipment and during the flight special data sensors were installed to constantly monitor temperature, pressure and humidity in the special container in which it was packed.
The trip went well and the satellite which is dubbed EDRS-C was rocketed into orbit on August 6th as part of the European Space Agency’s low Earth orbiting satellite programme. Transport to Munich Airport was undertaken by the German freight transport specialist, Kübler Spedition.
Antonov Airlines continues to support the Oil Spill Response (OSRL) programme which in the meantime has acquired a second transport skid to accommodate oil capping stacks. Antonov Airlines has confirmed that the skids can be loaded on both AN-124 variants they operate as well as their massive AN-225 aircraft.

FEDAGSA sets up global venture with MetroJets
The Federation of Airlines General Sales Agents (FEDAGSA) has announced the launch of a global venture with the USA-based carrier MetroJets for the exclusive promotion of its new Master Air Waybill, which carries the well known James Bond prefix  007!
FEDAGSA and MetroJets say that they have chosen one of the industry’s most easy to use, modern and up-to-date Cloud based solutions supplied by e-CARGOWARE. They claim that this flexible solution gives MetroJets and FEDAGSA members far better visibility to track and trace consignments by using a more effective accounting package. When using the e-CARGOWARE platform, FEDAGSA’s clients have access to high quality, reliable and precise information designed especially to boost sales and operational management, they state.

IAG cargo Q2 results drop
IAG Cargo’s second quarter results seem to be more or less in line with many of the world’s other air freight carriers.
April to June tonnages dropped by 1.1 percent and IAG cargo also reports a drop in yield of almost 3 percent for the period. Although capacity offered between April and June rose by 2.6 percent, actual volumes flown decreased by 0.4 percent resulting in a total revenue of €281 million - a 3.2 percent decrease over the same period last year.
IAG Cargo CEO, Lynne Embleton stated that: “the Global Purchasing Manager Index shows a month-by-month contraction in new export orders. As our business is linked to global trade, our reported revenue reflects the difficult market conditions.” She added however that: “going into the second half of 2019, we remain focused on investing in the future of our business to enhance how we deliver for our customers.”

TIACA shaping up for the future
At this year’s TIACA General Assembly get together in Budapest a series of executive working sessions will be held in order that TIACA can set the path for future innovations and challenges aimed at improving so called ‘cross-discipline’ collaboration.
TIACA, which will be steered by a new management under Steven Polman’s guidance, is working hard to determine the future of the association in order to become more effective for the industry and to install confidence in its members.
In a recent statement TIACA made it clear that there are members who are only active in one part of the logistical chain, but are often not aware of the issues and problems being faced by other stakeholders. The aim of one of the workshops at the TIACA conference is to try and bring different players from each section of the supply chain together in order for them to exchange views and ideas and explore new opportunities. Not an easy task - and one which will only be fruitful if all members play a role - no matter how small or large.
TIACA’s Secretary General, Vladimir Zubkov stated that: “it is important for individual members who are active in the same area to innovate the way they collaborate, to discuss and solve industry specific topics - that’s why we organize these specialized sessions.”

The ATR 72-500 is equipped with a Large Cargo Door (LCD), allowing a load of up to seven LD3 containers, or five pallets. The freighter has capacity to carry as much as eight tonnes of cargo.
The conversion was carried out by Sabena Technics' facility in Dinard, France. The freighter, the first of two passenger aircraft that Cebu Pacific is converting for full cargo use, will be operated by the carrier's cargo subsidiary Cebgo. The second ATR 72-500 freighter is expected to be delivered in late-2019.
Both aircraft will operate on inter-Philippine routes carrying time sensitive and marine related products.

Growing fleet
In June, Cebu Pacific placed an US$6.8 billion order for 31 next generation aircraft from Airbus, comprising of 16 A330neo and 15 A320neo family aircraft. The aircraft are scheduled for delivery between 2021 and 2026. The latest order is in addition to the 32 A321neo aircraft ordered in 2011, for delivery until 2022.
Asia's oldest low-cost airline currently operates to 36 domestic destinations and 27 international destinations in 17 countries across Asia and Oceania, including Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Qatar, Saudi Arabia, Singapore, South Korea, Taiwan, Thailand, UAE, Vietnam and the U.S.

Nol van Fenema