Security Top Priority At Lufthansa

     How well is the air freight industry prepared to meet the requirements of Washington’s Transportation Security Administration (TSA) for a 100% screening of shipments flying on passenger aircraft beginning next August?
     “We are,” claim Lufthansa Cargo’s security experts in photo Harald Zielinski (left) and Jim (James) LoBello (right) simultaneously. All seventeen U.S. airports the airline is landing at are equipped with self-owned trace detection devices or x-ray screening machines. The choice between explosive ‘sniffers’ or x-ray machines is optional and is contingent on a number of factors.      
     TSA’s Certified Cargo Screening Program (CCSP) and related air carrier security programs accept both techniques, emphasizes New York-based Jim LoBello, Head of Security, the Americas at Lufthansa Cargo.
      “We are actively planning for August by building up resources, applying increased training, redesigning processes, conducting industry outreach and integrating additional equipment into the operation at our stations.”
      The German carrier’s Chief Security Manager and Head of Risk Prevention Management Harald Zielinski complemented his statement.
     “Despite any cost cutting programs we keep spending heavily for enhancing the security at our numerous stations worldwide. This adds up to a “high, double-digit million euros sum per year,” states Harald.
      The consequences are twofold: First, thanks to the many cameras installed within Lufthansa Cargo’s warehouses, the fencing in of facilities, access limitations for truckers and non-authorized and unregistered personnel as well as intense controls of the ground handling staff, fraud of shipments is hardly a topic any longer. Secondly the offering of utmost security to agents and shippers becomes a major selling point that promotes the carrier’s positive image further of being a secure and reliable airline—investments that could pay off at the end of the day.
     Presently LH Cargo charges dollars 0.05 per kilogram for all screening services in the U.S. However, Harald and Jim are highly convinced that air freight security will gradually become more expensive for the clients because of the growing efforts demanded by the national authorities from the carriers. Take one big x-ray machine that costs well over one hundred thousand euros. For operating it 24 hours, 7 days a week it needs at least fourteen well trained and skilled staff that work in three or more shifts.
     “Regulations increase. So security is getting more important and costly,” says Harald.
     In the U.S. all intercontinental freighter gateways LH Cargo is serving – JFK, ORD, ATL, DFW and LAX, meanwhile will be equipped with big x-ray machines that have the capability to screen entire air freight LD 3 containers, under certain conditions, for lower deck transports on passenger aircraft.
     “When it comes to baseline security and screening or sniffing practices we don’t make any difference between shipments that are flown on board of passenger aircraft or freighters,” emphasizes Jim. He questions TSA’s position that mandates 100% screening only for cargo transported in the belly-hold compartments of passenger aircraft beginning this August.
     Worldwide, LH Cargo is integrating a growing number of airports in its net of so called ‘premium security stations’. Presently included are Frankfurt’s two cargo cities north and south, further Munich, Shanghai, New York (JFK), Chicago, Dallas, Los Angeles, Mexico City, Johannesburg, Milan, Amsterdam, and Istanbul.
     In the current year five more airports will be added, announces Herr Zielinski, namely Toronto and Shenzhen with the other three still having to be selected. When it comes to security “we are very pro-active, informing shippers and agents in local meetings about the latest requirements, organize awareness programs and coach our staff to sharpen their understanding,” claims Harald.      This includes yearly security conferences in either New York or Frankfurt with high ranking security experts delivering newest insights. Next meeting will be held February 2, at Lufthansa Corporate headquarters in East Meadow, Long Island. There, thrilling topics like “Risk Faced by the Aviation Industry, Threats that will continue to evolve,” or “Changing dynamics of security in the supply chain, the threat of HME & advanced explosives” are standing on the agenda.
     Frankfurt is to follow March 4, featuring mainly European topics and discussing how to best bring security regulations and expectations between Brussels and Washington in line. The Lufthansa Cargo security meetings are free of charge, but can be attended by invitation only.
     “As global market leader in air freight security matters we feel obliged to bring hand-picked experts from academies, the industry, authorities and the media together to deliver facts and better the participant’s knowledge,” states Herr Zielinski. His airline is the only cargo carrier that offers these insights to a selected public.
Heiner Siegmund

Lufthansa Cargo Lifts
Hope For Haiti

     They held a fundraiser last Friday that played all over America on nearly every television station and elsewhere around the world to raise funds for Haiti with people like George Clooney and Julia Roberts answering the phones. The telethon raised USD$58 million
     While that show was playing, there also was a similar effort up in Canada that included the PM pleading to his countrymen for help while matching funds donated.
     Meantime, one of the six targeted charities during the fund raiser on TV—Boston-based Partners In Health, which right now has 12 operating hospitals on the ground in Haiti, is sending out an SOS to air cargo operators worldwide:
     Said PIH regional outreach manager Samantha Ender: “We currently have no cargo planes lined up for next week and are in dire need of cargo lift able to depart from Miami and deliver essential medical supplies and equipment to Port-au-Prince.
     “Ultimately we would like to have regularly-scheduled, twice-weekly cargo flights from Miami, where we have recently secured a large warehouse space, to Port au Prince.
     “Having regularly scheduled flights will allow us to consistently meet the needs of the people on the ground in Haiti.
      “While we’ve been very fortunate to have had cargo planes donated in the 11 days since the earthquake struck, without a regular schedule for delivery of critical supplies, our medical teams on the ground will be forced to face the threat of stock-outs of supplies, which severely impair their ability to save the lives of the patients we serve.”
    Contact: Kathryn Kempton, Director of Procurement, at kkempton@pih.org or airplanes@pih.org.
     Meantime Lufthansa sent an MD 11F from FRA to SDQ Monday in cooperation with the German Federal Agency for Technical Relief (THW), filled with supplies to help the forlorn victims of the earthquake in Haiti.
     Lufthansa Cargo provided an MD-11freighter free of charge for the relief mission.
     The shipment included drinking water treatment plant, water analysis laboratories, generators,
medications, food, tools and emergency accommodation equipment, all donated by various organizations and aid groups in Germany.
     Despite challenging weather conditions in Germany the freighter departed FRA today at 1405 hrs with 75 tons aboard enroute to SDQ.
     Once it arrives in the Dominican Republic the supplies will be moved by truck overland to Port-au-Prince.
     Carsten Spohr, CEO LH Cargo told ACN/FT:
     “Today we put our focus and our company’s entire efforts on this humanitarian mission for helping the people of Haiti and not an event to think primarily about our own Lufthansa Cargo concerns.
     “We do not exclude sponsoring a second relief flight in short time especially since our partner THW, being responsible for the organization as well as logistics of this mission is able to provide sufficient and much needed relief goods for another transport.
     “Right after the outbreak of the catastrophe we contacted the Foreign Ministry in Berlin to offer our fast and non-bureaucratic help.
     “This was appreciated followed by the immediate support of the government for enabling this flight.
     “This collaboration once again demonstrates the close partnership between Lufthansa Cargo and the German government.
     “This was the case when we were denied crossing Siberian airspace by the Russian government when the German Foreign Ministry intervened immediately supporting our needs.
     “It was also demonstrated in the aftermaths of the quakes in Peru 2007 and Sichuan 2008 and the hurricane Katrina that inundated New Orleans in August 2005.
     “During all these natural disasters LH Cargo in close contact with our government transported equipment, supplies, food and beverages to the people who needed immediate help.”
     Werner Hoyer, Minister of State at the German Foreign Ministry added:
     “We are extremely proud that the German people donated 100 million euros up to this day for supporting Haiti.
     “This is an extraordinary gesture of sympathy and humanity with a nation hit by one of the worst natural catastrophes in recent times.
     “However, this help and the interest of the media must be sustainable since the task, to rebuild housing, the infrastructure and reestablish Haiti as a nation is a long lasting challenge that has to be funded.”
In addition the politician thanked both LH Cargo and THW for their extraordinary support of this flight.
     The German Foreign Ministry entrusted THW with responsibility for handling the logistics and coordination of the flight selecting crew and aircraft from Lufthansa Cargo.
     Aside from the THW, the Johanniter, the Order of Malta, Welthungerhilfe, Cap Anamur, Caritas, ADRA, Arche Nova, Don Bosco Youth Third World, Help e.V./Action Medeor, the Samaritans and the Federal Office of Civil Protection and Disaster Assistance (BBK) all cooperated to get the relief goods to Haiti.
     Werner Vogt who heads up THW in the States of Hesse, Rhineland-Palatinate and the Saarland told Air Cargo News FlyingTypers.
     “Lufthansa Cargo’s capacity offer is a very generous humanitarian gesture that some other carriers should take as example.
     “Normally in case of a natural disaster, the prices for chartering aircraft to bring experts, relief goods, or medicines as fast as possible to the local places where needed, are increasing rapidly.
     “In other words some capacity providers are making good cash when disasters like now in Haiti happen.
     “Some days ago we chartered an AN-12 freighter for bringing two machines for water purification of together 12 tons from Luxembourg to Santo Domingo. “Hiring the aircraft cost us €120,000 euros which indeed is a lot of money.
     “But air lifts are indispensable in case urgent help is needed because it’s the fastest means to transport equipment or foodstuff to the places that have been badly hit by a natural catastrophe. In case of a possible second Lufthansa Cargo flight to Santo Domingo indicated by their CEO Carsten Spohr today, I can confirm that we have enough equipment and relief goods on stock, to fill another big freighter.
     “Therefore, we and the other humanitarian organizations here in Germany that contributed to today’s mission would very much welcome another flight.”
     Air Cargo News FlyingTypers has learned that DHL Aviation right now has access at MIA to several B76F-200, B75F-200 and B72F-200 airframes and is running charter flights into SDQ.
     Reports are that PAP has become too difficult to fly into and due to runway deterioration may no longer accept or handle larger then B72F operations.
     The DHL DRT team is operating a 33,000 sq ft warehouse at SDQ and is assisting in offloading while offering up to two-day storage of goods all for free.
      “This is the best means of connecting into PAP in a timely manner,” Ulf Janzen, DHL Commercial Director International Americas told ACNFT.
     “Right now PAP slots are filled up to two weeks ahead of time.
     “The trucking SDQ to PAP runs about 15 hours and we dispatched over 16 trucks yesterday.
     “We are operating 40-foot trucks SDQ/PAP on a regular basis and all is working well.
     “To speed up delivery of relief supplies we are suggesting operating flights into SDQ, although even SDQ is now slot operated!”
Geoffrey

U.S. Transportation Outlook 2010

     Is it reasonable to expect a move towards stability for the U.S. transportation sector?
    Perhaps even a rebound in performance and credit quality?
    During 2008 and the first half of 2009, the major performance indicators of the U.S. transportation system (vehicle miles traveled (VMT), twenty-foot equivalent units (TEUs), and enplanements) were down significantly.
    Investors and analysts have had a negative view of the throughput and financial performance of toll facilities, seaports and airports.
    In fact, since August of 2008, U.S. transportation companies saw a credit downgrade on approximately 10% of the universe of companies, which were rated—and many facilities saw throughput drop to levels seen in the early part of the decade, and in some cases the mid to late nineties.
    As we head into 2010 with a glimmer of stability, the question remains: what will 2010 bring in terms of performance and credit quality?
    Transportation credits should see more stability in 2010, with airports likely to experience the most pressure due to consistent high unemployment in the U.S. and travel demand far from pre-recession levels.
    Credit quality of toll roads and seaports will rely heavily on management of leverage and operating costs.
    On the toll road side, some data collectors and analysts have started to see growth in monthly VMT, which should ultimately drive volume on toll facilities to improve as well since free roads operate much closer to capacity than do toll roads. In fact, a number of toll facilities do appear to have experienced relative stability in the third quarter, compared to the same period in 2008, with one or two months actually above levels in 2008.
    As the economy comes out of the downturn, some still expect volumes to trend between stability and very modest growth over the course of 2010 and into 2011.
    During this period credit quality will be driven in large part by management decisions. For some companies which receive credit ratings, a move to rating stability could occur by the end of 2010—if the recent stability that is developing holds and financial margins show improvement. For others, additional borrowing based on optimistic assumptions will likely be the primary reason for any negative credit action rather than actual performance.
    In all, it is reasonable to expect traffic and credit performance for toll roads to exhibit stability for 2010, with the potential for small improvements.
    For U.S. seaports, the stress started later in 2008 given longer lead times but the declines were much larger than what toll roads or airports experienced.
    To date, there has been some indication that waterborne trade has also started to stabilize, but growth still remains elusive.

    As consumer confidence begins to stimulate industrial output and inventory build-up, there will likely be a jump in port throughput.
    The bounce in throughput driven by a return to economic growth will likely be followed by much slower growth over the next few years as previous growth was tied to robust consumer spending and construction, two areas of the economy that will take longer to return to pre-recession strength.
    As a result, operating ports will need to focus on managing expenses and net revenue for rating stability while ports that generate the bulk of their income from terminal leases will need to renew terminal leases with favorable terms including minimum annual guarantees that provide downside protection.
    Given consumer trends and economic expectations, favorable lease terms could be hard to come by. Both types of ports will need to carefully manage leverage over the next one to five years.
    The expansion of the Panama Canal and competition by rail will result in changes in goods movement.
    Ports that borrow in hopes of gaining market share before the impact of the changes are fully understood could be left with debt and facilities beyond what they can actually capture.
    U.S. airports have experienced one of the longest and deepest passenger declines in the last two decades as passengers and airlines have been hit by a confluence of events.
    To date, most airports have responded to this stress through cost cutting measures, utilizing the balance sheet to ease the growth in airline use and lease payments and deferring capital spending.
    While the large reduction in volume has not translated into a one-for one decline in net revenue, net margins and debt service coverage have narrowed in many cases.
    Management actions have mitigated the impact of the downturn but business and leisure travelers still remain sensitive to price increases and industry consolidation remains a risk.
    While the decline in passenger volume appears to be bottoming out, the impact of price increases and/or consolidation could spell further changes for some airports.
    The U.S. airport industry, and thus credit quality remains in a state of flux.
    Across the three sectors, toll roads have thus far demonstrated the least impact of the recession, with seaports and airports demonstrating more volatility.
    This is reflective of the purpose of the asset type, with most toll roads having a revenue stream with less discretionary attributes than ports which are more dependent upon consumption, and airports which can have a fairly high percentage of revenue derived from leisure travel.
Gordon Feller

Clipper Young America Debuted B747

     When the Pan Am B747-121 Clipper Young America (N736PA) pushed back from JFK Airport in New York bound for London January 22,1969—40 years ago last Friday, the date marked the first scheduled service of the aircraft that changed long distance flying forever.
     An aircraft builder (Boeing) and an airline (Pan Am) both had bet their companies on a brilliant and daring new aircraft and the result was Clipper Young America, the first of maybe 1,500 of that type that have been flying schedules ever since.
     Maybe it’s just me—40 years older now, but once upon a time as a young American I jumped on board this industry and my sense of excitement and adventure filled with anticipation and pride in the airline business was palpable.
     But now, although airlines that fired my imagination like Pan Am and TWA and Northwest are gone, the thrill of the moment when a new aircraft is added and the sense of adventure when a new route is launched remains.
     Anyway been thinking about how we might celebrate 40 years of B747 and the airline that co-invented it, Pan American World Airways.
     Today Boeing apparently has a grip on getting another airplane they bet the company on—B787 into service, so they are OK.
     But alas since 1991 Pan Am has been gone and now as part of Delta across the Atlantic and United across the Pacific, what was once called “the world’s most experienced airline,” is the invisible, albeit best part of two otherwise rather dreary carriers.
     Right now the only glimpse of the glory days of Pan Am with any kind of distribution in the 21st Century are some nifty recreations of PAA classic flight bags for sale at www.panambrands.com
     Otherwise almost everything else Pan Am, has disappeared and 20 years later is recalled like some kind of smoke dream.
     So for the 40th anniversary of scheduled B747 flights we found a video (to view click image below) on YouTube of Clipper Ocean Pearl a B747-121 (N740PA) over Florida.

     The video was created during the mid 80's and today is a bit flinty to watch and lasts for seven plus minutes (stick with it as the last two minutes are a real grabber) with some dreamy ambient music.
     The Clipper Ocean Pearl (what a great name for an airplane) served PAA from 1970 until 1990 plying the airways once created by Clippers named China and Yankee.
     Even when its days were numbered, Clipper Ocean Pearl and scores of other PAA aircraft that held many firsts in the history of commerical aviation, managed to score just one more, when PAA bill-boarded airplanes using the aircraft tube as an airborne dominator for the carrier’s name—a marketing practice common today.
     So climb aboard a late January flight through the lens about what once was and certainly should not be forgot.
     Pitchers and catchers go to work in Florida February 17.
Geoffrey

Air Cargo News FlyingTypers learned that all cargo pro Ingo Roessler ended his term of service at Royal Jordanian and is winging his way back to Hamburg, Germany as you read this.
Ingo is pictured (left) with RJ's CEO Hussein Dabbas at a farewell party in Amman January 14.

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