Vol. 10  No. 35                    WORLD'S MOST LOVED AIR CARGO PUBLICATION SINCE 2001                                   Tuesday April 12, 2011

QR Buys Into Cargolux

      Qatar Airways will buy into Cargolux with purchase of 33 percent of the Luxembourg air freight carrier.
      Sources close to the case told ACNFT the buyout has been confirmed and will be finalized very shortly.
      The arrangement also precludes a financial investor from acquiring a major capital portion of Luxembourg’s air freight carrier.
      The deal is the first time that an airline from the Middle East will have acquired shares of a European carrier.
      Aviation experts rate this upcoming step as a win-win situation since it extends the geographical reach for both partners and enables them to mutually utilize their transport capacity.
      Accordingly, Qatar Airways Cargo will feed their North- and Latin America destined shipments into Luxembourg’s Findel airport where Cargolux will take over to fly them across the Atlantic.
      Vice versa Cargolux is expected to increase their presence in Doha by transferring some of their African- or Southeast Asian-bound shipments to Qatar Airways Cargo.
      The accord, which has been under evaluation for more than a year was finalized some weeks ago when Luxembourg’s Finance Minister Luc Frieden together with Prince Guillaume of Luxembourg’s Grand Ducal family visited the Emir of Qatar.
      The total value of the intended transaction is undisclosed.
      Analysts, however, estimate the worth of the 33% stake at roughly €300 million Euros.

     John Johnston, CEO of IT company Champ Cargosystems, is sitting inside a big company display placed in the center of the action at an air cargo show
     CHAMP Cargosystems, is a partnership between the former IT Division of Cargolux Airlines and SITA Cargo, but today stands alone to offer IT support from PC maintenance to complete system design and development. CHAMP is one of the largest ASP providers to the global air cargo industry.
     John Johnston wastes very little time getting down to business.
     "When was the Bar Code invented?" he asks FlyingTypers.
     We say 1960—Johnston smiles and says, "1947."
     "So when do you think air cargo embraced this technology?"
     This time he follows the question with an immediate answer:
     "Air cargo adopted the Bar Code in 1995 with IATA Resolution, 606," says Johnston.
     What Mr. Johnston, the Bard of Bar Code, leaves up in the air is that a resolution has a long way to travel from saying to doing.
     But his question and recent actions give rise to the belief that this is one executive who is out there to change things.
     He wants every part of air cargo, down to the smallest mom & pop company, to embrace IT as matter of good business and survival.
     "But back to my original question; we can wonder endlessly why Bar Code has taken over 50 years to finally come into the spotlight, however, no one can deny that, with globalization and airline financial crises, everyone needs better processes, cost reduction, better customer service and the ability to compete on a global level.
     “With globalization has also come movement of the goods creation process with greater component based manufacturing and assembly. That has led to volatility in the life cycle of manufacturing facilities and a huge demand for efficient logistics,” Johnston observed.
     "Of particular interest right now is the EU ICS—it seems perfect timing to bring more and more countries into the electronic process.
     “We are fortunate to have been able to amass a rather large customer base.
     “Community solutions are our business.
     “What we are hearing goes something like this:
     “‘We need an ICS solution –and know yours works so here we are!’
     “Our experience in operating community systems makes CHAMP a logical choice.
     “Community solutions are our business.
     “We started doing only airline solutions, but now do handling (Swissport WFS) as well.
     “Today, airlines (90) and handlers (200 companies) that utilize the CHAMP solution are talking to each other.
     “The idea ito deliver wide-based IT solutions while driving cost out of transportation lies at the core of what we do.”
     John Johnston arrived in Luxembourg in 1991 on a three-month contract to work for legendary company chief, Sten Grotenfelt, at Cargolux.
     “I was taken up straight away with the great entrepreneurial spirit at Cargolux; it is an honest company with a successful business model, and it remained successful by sticking to that.
     “After some years, I left Cargolux, moved on and did some consulting work, and even tried later to purchase the Cargolux IT system.
     “I returned in 2000 and was part of the team that formed a separate CHAMP Division in 2004, where I have served ever since as CEO.
     “Beginning in 2004, CHAMP set off on a colossal adventure. We had just 40 people on staff in Luxembourg equipped with experience gained from Cargolux of what works (and doesn’t) in the global air cargo industry.
     “Today, CHAMP has offices in London, Zurich, Atlanta, and a new office just opened in 2009 in Manila.
     “We will open in China next year (2011) where Air China is one of our biggest customers.
     “CHAMP is consistently successful and profitable because we understand what is important and always follow the money.
     “I guess looking back from where we are now as market leader, to where we were when we started, the greatest surprise is the rather short period of time it took to build CHAMP into a global force, especially since just a few years ago we were on almost no one’s radar.”
     Looking ahead, John Johnston shares some thoughts:
     “The tech-tonic plates of air cargo have fundamentally shifted; in fact, the movement started way back when the dotcom bubble burst, followed by the huge financial upheaval of 2008.
     “Today, the power base for air cargo has shifted with the rise of important and new carriers serving Asia, India and the Middle East.”

Champ On TAP

     CHAMP Cargosystems is now powering TAP Portugal Cargo, which has reported a 24% increase in cargo volumes for 2010.
     Driven in part by growth in Brazilian imports and exports as cargo and mail transported reached 94,000 tons in 2010, TAP says that the company is expecting further growth this year following agreement with CHAMP Cargosystems on long-term use of the Cargospot suite of cargo management solutions.
     The airline is adopting Cargospot Airline, Handling, Revenue Accounting, Business Intelligence and ULD Management modules in an effort to provide an integrated end-to-end portfolio for immediate efficiencies while creating revenue opportunities and meeting global compliancy requirements.
     TAP Cargo is also subscribing to Global Customs Gateway (GCG), which provides customs authorities with advance information on shipments. CargoWEB, CHAMP’s web booking, distribution and tracking solution, will also be provided as a hosted ASP (application service provider) service.

Hong Kong Airlines Champ

     CHAMP Cargosystems revealed a five-year multi-million dollar deal with HNA Group and for its full suite of Cargo IT services to be deployed at two of the HNA Group’s airlines, Hong Kong Airlines and Hong Kong Express as the first Hong Kong-based airlines to migrate completely to the integrated Cargospot suite including: Airline and Revenue Accounting.

      Johnston also thinks about a career well spent in air cargo and what might lie ahead for the industry.
     “The ongoing investigations and prosecutions in air cargo strike at the heart of a collegial spirit that has helped the industry work and grow over the years, a spirit that is unique to the airline business.
     “The air cargo industry has always been driven by a certain ‘tough love, unique spirit’ of its employees.
     Air cargo hangars were always on the dark, less glamorous side of the airport; offices got second hand furniture and aircraft while the princes and princesses of the passenger business had the best of everything.
     “I remember once upon a time working in a building that flooded out every time there was a heavy downpour, working at my desk with my shoes and socks off and pant legs rolled up against the rising water table in the hangar.
     “But across the board, the one thing about this industry is that its spirit has always been tremendous.
     “Looking ahead, the ongoing challenge for us at CHAMP is to continue our development and growth.
     “We did not stop development during the financial crises, although our important transaction business flattened out.
     “CHAMP compensated for that decline by adding new products that, among other virtues, could demonstrate direct cost savings to our customers.
     “It comes back to always following the money—in the case of a downturn, if you are able to manage your assets better, then money saved is money earned.
     “You don’t have to get rid of people or change processes, you have to manage assets,” John Johnston said.
     As we conclude our brief encounter we imagine this dedicated, likeable and fascinating guy rolling up his sleeves (and thankfully no longer his pants) whilst thinking about the limitless possibilities for CHAMP to reduce the time it will take for air cargo to travel farther, faster.


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Robbie Anderson

President United Cargo



India To Brazil Obrigado

Indian Minister for Overseas Indian Affairs and Civil Aviation, Vayalar Ravi, and the Minister of Foreign Affairs of Brazil, Antonio de Aguiar Patriota signing the Air Service Agreement between India and Brazil in New Delhi

     A recent move by India and Brazil will ensure air connectivity between the two countries. Recently in New Delhi the Minister of Overseas Indian Affairs and Civil Aviation, Vayalar Ravi, and the Brazilian Minister of Foreign Affairs, Antonio de Aguiar Patriota, signed a bilateral Air Services Agreement (ASA). In fact, the agreement was in addition to the ‘open sky’ arrangement for all cargo operations that exists between the two governments. Simply put, cargo carriers can have any number of flights carrying air freight.
     The new ASA has the potential to spur greater trade, promote investment in addition to tourism and strengthen the cultural exchange between the two countries, besides bringing it in tune with the developments in the international civil aviation scenario.
     The agreement is based on the liberal ICAO template and paves the way for increased air connectivity between both countries. It supersedes the agreement that had been signed between the two countries on September 12, 2006 in Rio De Janeiro, Brazil.
     According to the new agreement, the two countries will be entitled to designate any number of airlines—with a limit of 21 services/week in each direction with any type of aircraft not exceeding the capacity of B-747 aircraft—that will operate to any point in each other’s territory. Earlier, only one airline from each country was allowed to operate.
     The air ties will enhance the growing trade relations between India and Brazil. During a meeting between the Indian Commerce and Industry Minister Anand Sharma and Brazilian Minister Patriota, it was decided to enhance bilateral trade to reach the $10 billion mark from the $7.73 billion in 2010. According to the Indian minister, the economic complementarities between the two countries would cement the trade and economic relations further and help in the inclusive growth of both the countries. Both sides agreed to set up a CEO’s Forum and identified the priority sectors—energy, oil, tourism, pharma, value-added manufacturing, mining, agro-processing, etc.
     India, in fact, organized an “India Show” in Sao Paulo in March 2011. The occasion served as an ideal platform for a number of Indian and Latin American entrepreneurs/companies to explore and discuss business opportunities and tie-ups in trade and investment. India’s main exports to Brazil are equipment related to wind energy, coke of coal, lignite, naphtha, cotton and polyester yarns, medicines and chemicals, vaccines for human medicines and aviation fuel while India's main imports from Brazil are crude oil, copper sulfates, soya oil, asbestos, valves, motor pumps, airplanes, wheat, precious and semi-precious stones, etc.
Tirthankar Ghosh


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