Vol. 11 No. 25                            #INTHEAIREVERYWHERE                              Thursday March 14, 2013


air cargo news March 14, 2013

Dateline Doha—It’s good, when trying to get a sense of Emirates SkyCargo in 2013, to have a conversation with “Gentleman” Pradeep Kumar, Emirates SkyCargo Senior Vice President, Cargo Revenue Optimization & Systems.
     When you catch up with Pradeep (who is usually out of the spotlight and is among the kindest, gentlest people we have met on this beat), you find yourself front row and center with a founding member of the cargo division of Emirates Airline when it was formed in 1985.
     For all the years at EK as a think tank member of the cargo organization, Pradeep has been a factor in business development, designing new product ranges and short/long term business strategies to achieve set revenue objectives.
     Pradeep is usually somewhere with senior management and directors for strategic decision-making in order to achieve the corporate vision and departmental business objectives.
     But he is also decent, soft spoken, and effective and once again we sit down with this most gracious and interesting air cargo executive to ask our questions.
     At the top, we wonder about the feelings swirling around EK as iconic Ram Menen, Emirates SkyCargo DVSP and top executive, announced his retirement from the airline on June 5, 2013.
     Pradeep, who has stood with Ram since Day One, says:
     “Ram’s departure is painful for all of us, but good for him, as he made a decision based on a personal, quality of life issue.
     “We all congratulated him in making such a bold decision.
     “The manner by which Ram has shaped up his team both in Dubai and across the network is something I would say is a role model.
     “We have a great team and good structure in place.
     Emirates SkyCargo has many hard-core, passionate cargo people working for us and we will continue from where Ram is leaving.
     Since last year, Emirates has gone through a period of expansion with its fleet and network.
     “We operate a total widebody, fleet which results in significant increase in capacity year on year.”


     “The world economic downturn and decline in air freight is a matter of serious concern.
     “Therefore, the priority for us is to be creative in finding the right mix to arrest the downward pressure on yields and improve load factor, along with the focus on variable costs.
     But with world economies going through turbulent times, and consumer confidence weakened, there are no signs of an immediate recovery.
     “Oil prices are still at an unsustainable level. All of it adds up to both a puzzle and setting a course that must be carefully navigated by all of us.”


     “Thinking has necessarily changed as the volatility in world markets has severely impacted air freight traffic patterns.
     “Over the past years we have witnessed a modal shift from the traditional traffic flow along with transportation modes.
     “Geographical positioning along with distribution capability of carriers based in Middle East and Africa is being looked at as a successful business model for the years to come.
     “But as long as oil prices remain at the level where they are now, we do not expect significant changes.
     “However, we are thinking that a moderate improvement can be expected from the last quarter of 2013.”


     “We have now completed the design and development of an in-house developed cargo revenue optimization system.
     “Unlike other optimization systems, apart from focusing on theoretical optimization based on available data from customers, we have added ‘Load Optimization’ as an integral component of the system.
     “Load Optimization allows for our planners and the team loading cargo into units to get a precise view of optimum loadability per unit and per aircraft.
     “The system is under testing and the first phase will be implemented in September 2013.”


     “IATA has done a great job in bringing people at different businesses together and taking a collaborative approach to tackling industry concerns.
     “The steps taken in the field of eCommerce focussing on eFreight, creating awareness, and engaging with various security regimes towards compliances are indeed commendable.
     “Important and not to be undervalued is the endorsement of that multilateral agreement as catalyst for increase in participation for eAWB and attainment of the 100 percent target,” Gentleman Pradeep said.
Geoffrey/Flossie




     Among the heavy traffic of top global air cargo executives at IATA WCS this week in Doha, Qatar, Neel Jones Shah has marked a long and distinguished career at United Cargo and as the top executive at Delta Cargo before moving into his own business at JS Aviation Consulting.
     A top driver of air cargo business development and industry cooperation, today Neel brings a considerate, aggressive, and unbiased thought process to some of the major issues confronting air cargo.
     “WCS is a great place to reconnect with longtime colleagues and a wonderful networking opportunity, and every air cargo and forwarding executive should make an attempt to attend.
     “I believe that since Tony Tyler has taken over the reins at IATA we have a real chance to make cargo a priority and there is no one better suited to take advantage of this opportunity than Des Vertannes.
     “Once again the agenda is broad, but I am really hoping we can begin to streamline the bureaucratic process and get some real progress against a few of the top priorities.”


     “Unfortunately, in spite of best intentions, we just aren't moving the ball down the field fast enough.
     “As an industry we just need to focus our agenda on 2 to 3 priorities and make some progress.
     “It has always been my experience that the broader the list, the less likely anything will ever get done.
     “Over the past few years there has been a proliferation of ‘cargo events’ and if you want to you could tour the world just hitting one event after another, but we all know this is completely impractical and probably a huge waste of time.
     “I have always made it a point to attend one event in each part of the world and believe that the following events really offer the best opportunity for the industry to gather and get some real work done:
     “Air Cargo Africa, IATA WCS, CNS, Air Cargo Europe, TIACA, and then one event in Asia (but I still haven't found anything that has adequately replaced the old style Payload Asia conference).”


     “I believe that the industry body, GACAG, really needs to organize its meetings and updates to the community around these conferences so we maintain momentum throughout the year and hold folks accountable for action items.
     “Let’s not throw all of the other events under the bus because there are many of them that may appeal to a niche audience, but the events above really have the broad attendance and agenda to appeal to all the industry stakeholders.”


     “I believe that 2013 has started out just like most folks had prognosticated it would. Slow but steady out of the gates, with the outlook for the balance of the year turning a bit more positive.
     “It’s been a pleasant surprise that the U.S. economy continues to make some good strides as the employment picture improves. Europe is still a mess, but what's new?
     “Asia continues to be steady.
     “There is still rampant overcapacity, which is depressing yields and making life difficult for everyone but the shippers.
     “Capacity discipline is getting better as evidenced by Cathay's recent decision to cancel its 777F order, but I am not sure this will improve yields in the near term even as demand picks up.
     “I’m certain that further capacity cuts will be coming as airline CEOs turn their attention to the cargo business after making some tremendous progress on the passenger side of the business.
     “U.S. airline stocks are at levels not seen in years and there is a great deal of optimism that the industry has found a way to sustained profitability even in the face of macro uncertainty and high fuel prices.
     “The key has been capacity rationalization and we will see more of that with the AA/US merger.
     “Hopefully, similar progress will be made in Europe over the coming year.”
Geoffrey




     “Brotherhood of Man, Fatherhood of God” or BOMFOG is an old newspaper expression that describes a politician’s stump speech; a mostly non-news talk that appears as news, but says very little, couched in words that offend no one.
     Delivering his second annual blessing at IATA WCS in Doha this week, IATA Secretary General Tony Tyler was specific on many subjects, including heaping praise on some stakeholders in air cargo, but in fact there was little to nothing in his speech that was news.
     A nice guy and overly big audience as WCS continues to build (thanks to Des Vertannes, IATA Head of Cargo) for a 35-minute talk that was, at its core, BOMFOG.
     It should be noted that Tyler’s speeches are in marked contrast to the former IATA DG Giovanni Bisigniani, who was always confrontational and right between the eyes about almost everything, to the point that the blowback was quite severe from many quarters, including some of the troops at IATA.
    For example, in the e-freight part of the talk, Tyler stressed the need for greater, industry-wide penetration, revealing that air cargo involvement is at about 6.8 percent nearly a decade after e-freight began.
    Bisigniani would have blown his stack over that paltry number.
    During his talk Tyler rolled out some e-freight rationale, but interestingly mentioned GACAG in a way that appeared to prop up the IATA effort, which, as mentioned, has achieved implementation bupkus in about a decade.
    It is yet to be determined whether GACAG is a beard to cover IATA’s inability to get e-freight done.
    In any case, Tyler said that the IATA goal for 2013 is to raise that 6.8 percent to above 20 percent, so stay tuned.
    It’s not that IATA has to do these things all by itself, but for many, Doha is a long way to go to listen to this kind of stuff.
    One area that Tyler seemed to square up and hit the ball out of the park were his words about the environment.
    Delivered in Qatar, a place that has been listed as home to the worst environmental carbon impact per capita on the planet, Tyler’s words could even be considered courageous.
    Here are some highlights from Tyler’s presentation:
    “We first launched e-freight in June 2004—nearly a decade ago.
    “And we still have not realized the paperless air freight system that I believe we all know is needed.
    “There have been some false starts and dead ends.
    “But I believe that we are on the cusp of taking some major steps forward.
    “Most importantly, the supply chain is aligned. The Global Air Cargo Advisory Group (GACAG) endorsed an e-freight roadmap that reflects agreement on roles and responsibilities for pushing this critical project forward.
    “IATA is committed to implementing the e-Air Waybill (e-AWB).
    “We are targeting 20 percent penetration by the end of this year and 100 percent by the end of 2015.
    “Sunday’s endorsement by the Cargo Services Conference of Resolution 672 on a ‘Multilateral e-AWB Agreement’ will certainly help the process. In parallel to these efforts, the International Federation of Freight Forwarders (FIATA) and the Global Shippers Forum have agreed to push forward with the digitalization of the rest of the document pouch as the e-AWB comes into force.
    “Our targets are ambitious considering that e-AWB penetration was 6.8 percent at the end of 2012.”


     “Air cargo is a global network, so the greatest benefit of security initiatives will be derived when states mutually recognize their security regimes.
     “That is why progress on the U.S. Air Cargo Advanced Screening (ACAS) program, the EU’s Air Cargo or Mail Carrier operating into the Union from a Third Country Airport (ACC3) security directive, and the e-Cargo Security Declaration are particularly important developments.
     “Alongside security, safety is also a top priority. 2012 was a great year for safety. Overall, there was an average of one Western-built jet hull loss for every 5 million flights.
     “When it comes to cargo, the focus is on dangerous goods.
     “We have well-developed dangerous goods regulations.
     “Of course, most things can be safely shipped by air—provided the regulations are followed.
     “And the industry has a good track record of compliance.
     “But over the last year we have had two reminders that we cannot take our eye off the ball.
     “We are tracking dangerous goods incidents and sharing this with the industry and regulators to identify trends and develop mitigation actions. And one early conclusion is that we must adapt training and improve communication, particularly with respect to the new and larger community of shippers."


      “Environmental sustainability is one of the major themes of this conference, for good reason. The ability to manage our carbon emissions is our license to grow.
     “That is why we are committed to improving fuel efficiency by 1.5 percent annually to 2020, capping emissions from 2020 with carbon-neutral growth (CNG2020), and cutting net emissions in half by 2050 compared to 2005.
     On all of these issues, we are more successful when we are aligned and speaking with one voice and a common goal. The basic cargo agenda of efficiency and business sustainability is one shared across the whole freight value chain. That’s why GACAG was created. From the challenges of e-cargo, to our approach on improving safety, securing the industry, or ensuring sustainability, we are stronger if we stand together.
     “I believe that 2013 will see improvements in the industry’s prospects—including for cargo. But it will also present challenges.”
Geoffrey/Flossie



     Saudi Airlines Cargo Co. renewed a pact with Fast Forward Cargo in the UAE for frequencies to West Africa from Dubai World Central.
     Described as a “new partnership,” the duo will operate what is equivalent to 175 combined B747 flights between the UAE and West Africa, connecting mainly to Lagos in Nigeria and N'Djamena in Chad via Saudia Cargo’s Riyadh and Jeddah hubs.
     “The renewal of the contract with Fast Forward adds strength to our offering to shippers from the UAE to Africa,” Peter Scholten, VP Commercial at Saudia Cargo said.
     “The weekly commitment from Fast Forward is an important driver for our two weekly freighter flights to N’Djamena and a large contributor to our daily freighter flights to Lagos.”


     The “old boys club” of airline top air cargo management gets a distinctive female voice and a different point of view this week in Doha as (L) Lise-Marie Turpin, Vice President, Air Canada Cargo and Lisa Brock, Executive Manager Qantas Freight are on equal footing with the men as part of the Cargo Week top management meetings and deliberations.
     “We are just two here but every bit an essential part of the fabric and future success of air cargo,” Lise Marie said.
     “More women need to be encouraged to an air cargo career,” Lisa Brock confirmed.
     As tall Lisa spoke, we thought:
     Finally—somebody to stand up next to Oliver Evans . . .

 



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     Longtime airline stalwart and all around good guy Jack "John" Michalek died on March 7, 2013.
     He was 72 years old.
     Jack is survived by his wife Diane, daughter Karen, son Joe, grandsons Evan and David, brother Michael and mother-in-law Esther.
     Jack was born in Camden, New Jersey, on August 7, 1940, to Loretta and Walter Michalek. He was the first of four boys.
     After much discussion between his Irish mother and Polish father, a compromise was reached and he was named John Julian, forever to be called Jack.
     Jack began his airline career at Continental Airlines.
     When Continental went bankrupt in 1981, Jack left and started a new division of an existing company called Airline Services, taking advantage of new federal deregulation for performing ground services for airlines.
     In 1983, he started his (and Diane’s) own business, Aviation West. The company provided ground services for many airlines, both domestic and international, including Cargolux.
     The national cargo airline of Luxembourg, Cargolux, promoted by Jack’s sales talents, saw their operation increase to the point that Jack was knighted in 1990 by Luxembourg’s Crown Prince Henri (now the Grand Duke) for “his contributions to Luxembourg’s economic development.” He became “Sir Jack.”
     In Doha this week, former Cargolux CEO and current Chief Cargo Officer at Qatar Airways, Uli Ogiermann told FlyingTypers:
     “News of Jack’s passing is deeply saddening.
     “Jack was a well-respected friend and colleague who was often referred to with the highest praise and affection at Cargolux and throughout the transport business in Luxembourg.”
     Funeral services will be held Sunday March 17th at 4:00 pm at the All Nations Seventh-Day Adventist Church, 810 South 312th Street in Federal Way, Washington State, USA.


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