State owned carrier Air China (Code CA) will up its stake in Shenzhen Airlines from currently 25% to 51%.      The transaction is supposed to take place in mid-April the airline announced in Beijing. The move comes after former majority owner (65%) Li Zeyuan of Shenzhen Airlines and senior executive Li Kun were under criminal investigation for unspecified economic fraud.
     The upcoming takeover will further consolidate the country’s aviation industry leaving three major state-controlled groups consisting of Air China, China Southern and China Eastern.
     Directly affected by the ownership change is Shenzhen-based Jade Cargo International in which local Shenzhen Airlines holds 51% capital majority, while Lufthansa Cargo (25%), and DEG – Deutsche Investitions- und Entwicklungsgesellschaft (24%) are the other stakeholders. The 2004 established air freight carrier deploys six B747-400ERF jumbo freighters and is managed by Lufthansa Cargo personnel.
     Up to this point it is uncertain what implication the integration of Shenzhen Airlines into Air China might have for Jade. Analysts favor the possibility of an upcoming collaboration between Jade and newly built Air China Cargo (ACC), a Shanghai-based JV between Air China and Cathay Pacific. They point out that Air China in 2007 joined the Star Alliance in which Lufthansa plays a leading role. In addition LH Cargo and Air China Cargo are partnering on routes between Germany and China as a result of a co-loading agreement. At Jade nobody was available for comment.
Heiner Siegmund

Enno Osinga

Senior Vice President Cargo

Schiphol Amsterdam Airport

     Mumbai International Airport or Chhatrapati Shivaji International Airport (CSIA), the country’s top airport – in terms of air cargo since it handled 525,335 tonnes of cargo in financial year 2008-09 – is in the process of enhancing its cargo facilities by 2013. Managed by the GVK Power & Infrastructure, which recently bought a 17 percent stake in the privately-owned Greenfield Bengaluru International Airport Ltd. (BIAL), CSIA wants to enlarge the cargo capacity of the airport to handle a million tonnes per year from the present 525,335 tonnes.
     GVK’s plan to boost capacity has been prompted by the competition from the other privately owned airports in the country at Hyderabad and Bangalore and the development of the multi-modal hub at Nagpur. The Air Cargo Complex at Mumbai has been in operation since 1977 (set up by the state-run Airports Authority of India). It was only in January 2006, that the consortium led by GVK Group and comprising Airports Company South Africa and Bidvest was awarded the mandate to modernize the Chhatrapati Shivaji International Airport (CSIA) at Mumbai. MIAL handles 65 per cent of the international cargo at Mumbai airport for more than 31 international airlines.
     Though the moves for the air cargo facilities are still in the planning stages, one of the major challenges that CSIA faces is land, or rather the lack of it. While the three airports at Hyderabad, Bangalore and Nagpur have access to land, Dharavi, well known as the biggest slum in Asia, hems in Mumbai airport.
      Sanjay Reddy, MD, Mumbai International Airport Pvt Ltd (MIAL), in a recent interaction, mentioned: “CSIA is the most constrained airport in the world due to paucity of land. Since taking over operations of the airport, MIAL has initiated several steps to unlock land which is needed for increasing the airport capacity.” He also pointed out that CSIA had made “considerable progress to free land with the support and cooperation from the Ministry of Civil Aviation and the Government of Maharashtra.”
     Reddy described the upgradation of CSIA—a new terminal is being constructed—as “one of the most complex and unique infrastructure projects ever undertaken in India… the modernization of CSIA has seen its own set of challenges and opportunities in the last four years since MIAL took over operations”. He stated, “the project is unlike any of the other international airports anywhere in the world. To begin with, CSIA finds itself in a unique position in that it is a highly constrained and landlocked airport with under 2,000 acres of land, of which 276 acres is occupied by slums. This is in sharp contrast to airports in India and overseas where space is definitely not a constraint. In fact, major airports around the world which handle lesser traffic have between 5,000 to 10,000 acres of land available for expansion.”
     Despite the constraint, Reddy and his team are devising ways to squeeze out the space. The complex will be quite a large one with storage facilities for perishable goods and pharma products. One option that is open is to establish the cargo complex away from the present airport. But then again, infrastructure has to be provided to link the complex with the airport.
     As of now, five freighter exclusive bays are available in the cargo apron capable of handling wide-bodied aircraft. But with the process of airport modernization firmly underway, MIAL is in the process of implementing a Master Plan. The plan, according to Reddy, will transform the airport and “a key element of the master plan is enhancing the capacity of the airport to handle more passengers and cargo. In line with this objective, a brand new integrated terminal is being constructed at Sahar,” he said. The terminal will cater to both domestic and international passengers and will have a capacity of handing 40 million passengers per annum. In addition, the airside infrastructure would also be upgraded with the introduction of four parallel taxiways and 11 Rapid Exit Taxiways to reduce runway occupancy and increase capacity.
     Meanwhile, encouraged by its recent achievement of being rated as the top airport in the world (in the category of airports handling 5 to 15 million passengers) by the Airport Council International, Hyderabad International Airport’s operator, GMR, has started work on plans to make the international airport as the country’s cargo hub in direct competition to the state-owned Nagpur airport which is being developed as the first multi-modal hub in India. In fact, a part of the Hyderabad airport’s cargo facility is operational but the airport’s management wants to improve and enhance it in the near future.
     The present capacity of the cargo facility at the airport is hub is 60,000 tonnes. That will be increased to 100,000 tonnes by the end of 2011-12. GMR has, in fact, started talks with a number of players in the cargo sector to bring in more facilities once the construction starts.
Tirthankar Ghosh

     Heide Enfield, Lufthansa Cargo Charter Agency’s Head of Global Market Development, is known as an optimistic and forward driving person when it comes to her biz. Although her parent company Lufthansa Cargo had just announced record losses of €171 million euros in fiscal 2009, Heide was in a good mood during the carrier’s annual press conference last Thursday. Understandable since her Charter managed to double the profit last year despite a minus of 30 percent in revenues. “In contrast to 2008 we didn’t have any monetary losses in 2009.”
     Even brighter seems to be the future with international charter activities gaining momentum once again. There is the uplift shortage in some markets due to growing demand. Secondly the industries are beginning to fill up the crisis emptied inventory stocks with components and production supplies at their regional distribution centers and warehouses. Third reason that triggered additional charter traffic recently was the big quakes in Haiti and Chile. All led to a surpassing of the business targets in January and February set by LH Charter, Heide confirms. And more is to come since numerous transport accords have already been signed.
     Jade Cargo International, another member of the Lufthansa Cargo group and so far a problem child for the German air freight carrier surprisingly also presented a positive result. “For the first time ever Jade posted black figures last year,” announced a proud Carsten Spohr, Lufthansa Cargo’s CEO.

     The Chinese capacity provider managed by executives of minority stakeholder LH Cargo had reacted very flexibly to market demands during the recent downturn by fast adapting the network to the customer’s changed needs. At the same time Jade started collaborating with local general sales agents instead of having the flights marketed by Lufthansa Cargo personnel. A strategic move that has turned out to be quite successful so far.
     Spohr confirmed plans for a capital increase of €50,000 Euros to strengthen the Chinese carrier’s financial situation. This amount will be split among the owners, with 51 percent holder Shenzhen Airlines paying roughly €25 million Euros and LH Cargo as well as DEG-Deutsche Investitions- und Entwicklungsgesellschaft each about 12.5 million. The cash injection becomes necessary because of changes in Jade’s fleet policy, Spohr explained.
      While originally Airbus freighters were supposed to be acquired, these had to be given up in favor of Boeing jumbos B747-400ERF because of new directives for charter equipment by the Chinese civil aviation authority. Bigger aircraft understandably need a broader capital platform.
     Third in the German air freight carrier’s group of airlines is AeroLogic GmbH, a mutual DHL Express and LH Cargo joint venture (50/50%) that first took to the air last summer. The commercial and operational performance is above target, said Spohr. Currently, the Leipzig/Halle-based carrier deploys four leased B777 freighters with four more joining the fleet by December this year, making AeroLogic the biggest triple Seven freighter operator worldwide.
     AUA Cargo, number four in LH Cargo’s group list, will soon be part of an upcoming Austrian-Lufthansa Cargo joint venture based in Vienna. The integration of AUA Cargo in LH Cargo will streamline international traffic flows and lead to savings of annually €10 million Euros at minimum, Spohr predicted. According to the manager the AUA-LH Cargo JV might also be a model for Lufthansa’s subsidiaries British BMI and Belgian Brussels Airlines Cargo. This however, is a topic that needs careful evaluation before any decision is taken.
Heiner Siegmund

     Aeronautical Engineers, Inc., Miami said it has has modified its existing B737-400SF to accommodate ten full height AAA containers plus one AEP/AEH container.
     MNG Airlines is the launch customer for what will become the new standard for B737-400SF getting the first “eleven position” aircraft later this year.

Remembering March 24

     Special Note: March 24. As ACN FT begins our 35th year of publishing we mark the date we lost our spiritual leader and advisor, our dear father Muzzafer Khan. We mark the date of his passing in 2009 and recall his gentle manner, wisdom and keen mind but most of all his downright humanity to all of us.
     Muzaffer is buried in a cradle of evergreen trees in a gently sloping field of a local cemetery near the once home of baseball player Derek Jeter in Kalamazoo, Michigan.
     The promise of Springtime was fleeting as shadows and cold winds moved in as the sun set yesterday.
     We thought of some words Ernest Hemingway wrote at the close of his novel “For Whom The Bell Tolls”:
     “He was completely integrated now and he took a good long look at everything. Then he looked up at the sky.
     “He touched the palm of his hand against the pine needles where he lay and he touched the bark of the pine trunk that he lay behind.”
Geoffrey

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