Vol. 9 No. 35                                                              WE COVER THE WORLD                                                        Monday March 14, 2010

     Whether they agree with us or not, our readers know that Air Cargo News FlyingTypers always tells it like it is. In our view, it is the only way to stay relevant.
     The stated IATA Air Cargo proposition is this:
     “At WCS the focus remains on delivering on promises to make a difference for the industry.”
     In reality, those words, which seem so positive upon first reading, are like a beautiful lady showing some leg.
     We are reminded of someone many of us knew and respected who once used the analogy of a good speech to a miniskirt:
     “It has to be long enough to cover the essentials but short enough to keep your attention,” said the late Ron Cesana at Cargo 2000, Dateline Toronto 2004.
     Other than enumerating the topics IATA naturally works on, we think everyone in air cargo would welcome particulars concerning what tangible and measurable achievements and milestones have occurred at these IATA-run World Cargo Symposiums that are directly attributable to WCS.
     Alongside any claims IATA might make there should also be some comments and numbers gathered from the airline members’ perspective.
     Specifics in this area would go a long way in demonstrating the value of WCS.
     We have been in this game long enough to see quite a few industry trade shows. After 35 years of covering air cargo, our ability to remember the details of more than a few of them is pretty remarkable.
     A look at the IATA Cargo Week 1994 agenda in Singapore isn’t all that different than what we saw this week at WCS 2010 in Vancouver!
     So much that challenged air cargo 16 years ago has morphed and grown with the changing times; we are living in a different age, so why doesn’t anybody know what the hell is going on?
     What is disappointing, to say the least, is the rise of hype and loss of hope and promise that IATA Cargo was actually building their annual meetings into something new, progressive, open, vital and different.

     Why are these men smiling?
     When an innovative idea has a real chance to become an industry standard the team votes thumbs up as Lufthansa Charter Agency MD Reto Hunziger, Swiss World Cargo MD Oliver Evans, Jade Cargo MD Capt. Kay Kratky celebrate the 40th anniversary since introduction of the ULD to air cargo at World Cargo Symposium this week in Vancouver, Canada.
     Recent announcement that Jettainer and Lufthansa Cargo have tested and approved lightweight containers created from innovative and lighter composites instead of aluminum promise reduced weight, lowered fuel burn and less CO2 emissions across the board a lighter, cleaner, better way to fly air cargo.
     Now that’s a bounce in the right direction.
     Separately Capt. Kratky reports that Jade Cargo which, (believe it or not) celebrates its first half-decade in business, will arrive at the five-year mark come August 2010.
     Maybe just as good news is that the Shenzhen-based carrier according to sources was profitable during 2
009.

      For some years now, we have felt that IATA, with all its power and influence, would be the best venue for a great air cargo trade show.
     We have reasoned that the organization would also be able to create and deliver air cargo industry awards that would ring as true barometers of the shining stars of this international air cargo industry.
     In both cases, based on this week in Vancouver, we were wrong.
     But the feeling here is that there is still some hope that IATA could come through.
     For example, our sources inside a special, highly secret meeting among all the air cargo chieftains, a meeting closed to the public and press at WCS this past Tuesday, report some move toward outreach from IATA for advice and consent on many subjects, including how to proceed to better serve air cargo.
     If IATA is actually listening, that would be a giant step and undoubtedly a positive opportunity for air cargo.
But others are not so sure.
     “IATA continues to perfect the sham of an industry trade association, while just having a thinly disguised front to make money for themselves,” said a former highly placed consultant to IATA who asked not to be identified.
     “IATA managers perpetuate the good lifestyle in Geneva and Montreal.
     “What a disgrace.
     “They take advantage of the fact that the airlines are too busy surviving.”
      We thought it a bit strange that during the opening plenary, speakers entreated delegates of this World Cargo Symposium IV to “seek more ways of supporting each other’s efforts while just across the bay in Seattle the Airports Council International was hosting its annual air cargo conference.
     There was some imbalance with about 17 airports at IATA World Cargo Symposium and 16 at the ACI event.
     So maybe IATA should step up and practice some ‘hands across the water’ and bring ACI together with WCS. Maybe delegates would be better served with having about three dozen airports in the same place instead of having to try and figure out how to be in two locations at the same time.
     At the very least, these two mega organizations could harmonize their schedules.

     A curious wrinkle we noticed this week at WCS in Vancouver: the single biggest group in attendance was IATA people, although Director General Giovanni Bisignani didn’t make the shape for the second year in a row.
Things happen, of course, but we cannot imagine the erstwhile DG dusting such a large gathering of our passenger brethren at the airlines.
     The IATA DG’s absence in Vancouver and his rather tepid canned greeting looked even more out of step when he appeared on the world press stage Thursday March 11 as WCS continued announcing that now IATA thinks losses for 2010 would “ be about half the original estimate or about $2.8 billion.”
     During WCS we saw IATA financial guru Brian “Count de Money” Pearce scurrying from session to session.
     It is not hard to imagine that these new numbers were ready to put out as the WCS Plenary took place two days prior to the DG's press call from Geneva.
     We think that IATA might have brought wider attention to WCS by using the Vancouver venue for this breaking news especially since air cargo (as usual) is leading the way toward piloting commercial aviation into the black.
     In any case, the standout attendance was the aforementioned legions of people from IATA, many of whom seemed, at times, to be pitching something to the attendees.
     Add a few magazine people to the brew and WCS networking interludes that were usurped for the purposes of sales and marketing and it seemed like shooting fish in a barrel.
     For now, let’s come down to the ground and aim for airline cargo information exchange rather than focusing on the lofty supply chain.

     The big hot rumor at WCS that Des Vertannes, Head of Cargo at Etihad is in line to succeed Aleks Popovich as Head of Cargo at IATA apparently was a bag of wind.
     Aleks assured that the process to find his successor was continuing and Des, who speaks in an up front and thoughtful manner that is both reassuring and absolutely delightful, said that his plan is to stay put at Etihad Cargo.
     “Business is better but we are looking for signs that things will continue on a positive path including upcoming financial reports from Europe and elsewhere—connected to mortgages and real estate values and other retail indicators.
     “Air cargo should take a measured approach and work even harder after a bloody rough year in 2009, is my take on 2010.”
     IATA should be so lucky to get this guy.

     We are more than willing to continue this great journey of the IATA WCS as it has been described to us by Head of Cargo Aleks Popovich, but we must be convinced that it is a cause that truly serves the air cargo industry.
     As a business, we understand financial pressures all too well; as a non-profit trade association it must be a very fine line to walk between putting the interests of the members ahead of the Secretariat and meeting the IATA operating budget, particularly when commercial events, activities and publications are needed.
     Our opinion is that IATA is in a position to make WCS credible and we hope at some point they finally rise to the occasion!
     But based on this week in Vancouver, we can’t help but wonder:
     As a Secretariat, what has IATA done to relieve critical shortages in domain expertise at its member airlines and how is this working?
     The airlines have lost many knowledgeable and experienced staff over the years and either they haven’t replaced them or they have hired younger, cheaper, less experienced resources and given them more work to do.
     Efficiency is another no less critical factor; in theory, the position a delegate takes at a meeting should be in concert with the head of cargo or, sometimes, a cargo committee member.
     In the end, only the results of the conference count – while a cargo committee can “direct”, it has no real authority and can’t, for example, pass any resolutions, as much as they might want to do so.
     An oddity, but we are not here to discuss governance.
     What is being done by the IATA Secretariat to ensure that this admittedly mundane internal process works as intended? What must be done to facilitate that dialogue rather than having conference bodies and cargo committees run on parallel tracks?
     Is IATA providing consulting services at competitive or discounted rates to alleviate airline expenditures in this tough global economy?
     IOSA registration as a condition of membership is a good example; it is undoubtedly a good thing.
     Is the service being provided at cost?
     We look forward to a constructive dialogue.
     Thanks IATA Cargo, for the memories and a dream or two at WCS 2010.
     You can depend on us to keep on firing until we run out of bullets.
Geoffrey

As IATA World Cargo Symposium wound down March 11 in Vancouver, the Winter Olympics City prepared to host the 2010 Winter Paralympics. Now security is again heightened for airlines serving both YVR and several seaplane air taxi dockside operations with floatplanes in evidence taking off and landing all day long.

      China Cargo Airlines, China’s first all-cargo carrier, formally launched the maiden commercial flight of its first B777 freighter on the Shanghai- Luxembourg route on March 2, catering to the need of increasing cargo transportation from Europe for the upcoming Shanghai Expo in May.
      Joint-ventured by China Eastern Airlines and China Ocean Shipping Group in 1998, China Cargo is one of the major players in the Shanghai cargo market; and the just-concluded merger of China Eastern Airlines and Shanghai Airlines greatly lifts the vision of China Cargo’s role in the future.
      “This Boeing 777 freighter arrived at Shanghai Pudong International Airport on February 28, and it’s just one of the four B777 freighters we are to introduce in 2010,” Mr. Lu Xueyong, Director of Public Relations of China Cargo Airlines told Air Cargo News FlyingTypers.
      “In March, the second one will join and another two more before August.”
      As the world’s largest two-engine freighter, B777 is capable of loading 103 tons of cargo.
      “Because of its higher efficiency and longer range, B777 has been selected by China Cargo to replace its MD11 all-cargo fleet in the following two years,” Mr. Lu added.
      China Cargo currently operates an all-cargo fleet of six MD11s, two B747s and three A300s.
      “However, adding the B777 will compensate for the retirement of MD11 freighters, thus keeping a constant growth of our transport capability.
      “By the end of 2010, three MD11s will end their service in China Cargo.”
      The combination of China Eastern Airlines and Shanghai Airlines is producing a new picture of China’s aviation industry, especially in the Shanghai market. While there is a clear plan for the passenger business of these two airlines, the arrangement of their two cargo carriers, China Cargo and Shanghai Airlines Cargo, has not been released yet.
      Responding to Air Cargo News FlyingTypers’ query on this point, Mr. Lu said:
      “The relationship between China Cargo and Shanghai Airlines Cargo is still a sensitive topic, and no final plan or decision is ready to be made public now.
      “But China Cargo is now adding the bellyhold capacity of Shanghai Airlines to the already integrated bellyhold capacity of China Eastern Airlines into our system
      “China Cargo now operates the bellyhold of New China Eastern’s 331 passenger aircraft and 27 all-cargo routes, connecting 151 cities in the world.”
      “The joining of B777 will strengthen our competitive advantage in the Shanghai cargo market, and contribute to the building of Shanghai as an international hub,” Mr. Lu added.
      The two airports of Shanghai handled 2.98 million tons of mail and cargo in 2009, almost equal to that in 2008. And Shanghai Pudong International Airport continued to rank third in the world after 2008 in terms of mail.       
     “More than 80 percent of air cargo in Yangtze River Delta Region is now transported through Shanghai Pudong Airport to the world, and cargo shippers in this region almost amount to half of China,” Mr. Lu said.
      “To strengthen China Cargo’s presence in this region, we launched a so-called Capillary Strategy in 2009, collecting air cargo directly from the end client across the region.”
      “Part of the strategy is to hire sale representatives in different cities, and a more important step is to establish a non-local cargo terminal. We have just opened our first non-local cargo terminal in Suzhou on February 10, and this is also the first one for all airports in the Yangtze River Delta Region.
      “By offering more efficient and convenient service to our customers, our competitive advantage in Shanghai and Yangtze River Delta Region will be more solid and sustainable.”
David

Quotes Of The Week From A Pair Of Über-CEOs:

By adding Brazil and Argentina, we can finally say Qatar Airways has become a truly global airline touching all parts of the world – and that only 13 years after we began operations as a small fledgling regional airline.

Qatar Airways CEO Akbar Al Baker as QR readies new service from Doha to both Sao Paulo, Brazil, and Buenos Aires, Argentina via Boeing 777s later this year.


In our prior alliance, we were partners with somebody who wanted to kill us, and it was a lot like being married to a woman who wants to poison your food -- it's just generally not a good idea.


Jeff Smisek, Continental Airlines In Reuters

 

 

     IATA thinks air transport industry will lose $2.8 billion this year — half of what it initially forecast.
     "It is still a loss, so it is too early for a party, but now, we can clearly see from the numbers that the industry situation is improving,” IATA said.

 

     At IATA last week they were still talking about 2010 Olympics, especially folks from Air Canada.
     We had been thinking about that and after talking to some line people from the airline, as we flew back and forth to YVR from LGA, discovered that interest in the sports events on airport television screens repeatedly trumped flying (especially hockey) as some passengers actually refused to board jets causing “Olympic” flight delays.
     That situation may have ended but the memory of a “happy delay,” now getting sweeter lingers on.

 

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