Vol. 10 No. 46                          THE GLOBAL AIR CARGO PUBLICATION OF RECORD SINCE 2001                    Monday May 16, 2011

Lufthansa Charter And Platinum Ink Pact

 From left to right—Volker Dunkake, Lufthansa Cargo Charter Agency, Timothy Pfeil, Platinum Air Cargo Vice President of Sales and Airline Relations, Don Cochran, President, Platinum Cargo and Andrew Morch, General Manager the Americas  Lufthansa Cargo Charter Agency.

     “I would not call it a core part of our business, but charter work has certainly been a major activity for a long time.
     “Now this just concluded agreement to represent Lufthansa Charter affords Platinum Air Cargo the opportunity to go back out into the market with the power of Lufthansa behind us, not only with the forwarding community but also with the shippers directly on the charter side, which we believe will open some new doors,” said Don Cochran, President of Platinum Cargo.
     Platinum, a GSA with head offices in Houston, and Lufthansa Charter just concluded what is a first for both companies and what could be considered a landmark agreement. They announced their news at Air Cargo Europe.
     Platinum at Lufthansa Charter inked a one-year pact wherein Platinum will field a dedicated individual to market the charter services for Lufthansa.
     Texas, Louisiana and Oklahoma, USA will from this point forward be sold and marketed for Lufthansa Charter by Platinum and, according to both parties, that means a new power to service the oil patch.
     “The Platinum Cargo agreement is another step forward into a new direction for Lufthansa Charter,” said Reto Hunziker, Managing Director LCCA.
     “This new agreement and other steps yet to be taken will position our offering in the best way possible in an expanding number of markets.
     “We look forward to our new association with Platinum Air Cargo.”
     “We have been looking for additional sales partners,” added Lufthansa Charter Cargo’s Volker Dunkake.
     Andrew Morch, Lufthansa Charter General Manager the Americas, who is directly responsible for this arrangement, was ebullient:
     “This agreement captures two of my top priorities for 2011m to get better access to the oil patch and also to get Lufthansa Charter a better footprint in the USA.
     “So now from a base in Chicago that will only enlarge as Lufthansa Charter readies the opening of a new office in Miami this year, we are also extending our reach into Texas, Louisiana and Oklahoma.”
     Timothy Pfeil, Platinum Air Cargo Vice President of Sales and Airline Relations, added:
     “The way this new arrangement will be conducted is through Platinum addition of a dedicated full time charter specialist to market this product.
     “Herb Winters, a long time industry pro with vast experience and 45 years of service in the Houston market, has joined our company and will head up our effort.
     “Herb moves over to Platinum from Chapman Freeborn where he was marketing and selling air charters.
     “Herb brings tremendous customer relationships with forwarders and shippers as well.
     “Herb will take the Lufthansa Cargo branding and the power of the system directly out into the oil patch and other markets, including the high tech industry that make Houston a leader in charter creation and utilization opportunities.
     “Part of my business plan coming into Lufthansa Charter in the Americas eight months ago was to grow our business by getting closer to the customer, and that means new partnerships and, as mentioned, new offices in Miami,” said Andrew Morch.
Geoffrey/Flossie Arend

Obrigado Brazil Says TAP   

     Brazil's government may finance the acquisition of a stake in Portugal's troubled state airline TAP, by domestic air carrier TAM, a government source said.
     TAP and several other state companies are scheduled for privatization this year as part of Portugal's financial recovery plan.
     Portugal signed up to a EUR€78 billion international bailout on Thursday.
     "TAM approached the government to see if it could obtain financing to participate in the privatization of TAP," a source close to the talks said. He requested anonymity because he was not authorized to discuss the issue.
     The source did not know the size of the stake or the amount of financing involved.
     The government was in principle interested in backing TAM but financial support could depend on the outcome of TAM's proposed merger with Chile's LAN.
     "The government would welcome the acquisition (of TAP) and could finance it, depending on the resulting shareholder structure of the LAN merger," the source said.
     The government would be more inclined to finance a Brazilian company than a Chilean one, the source said.
TAP operates more flights between Brazil and Europe than any other airline and is seen as strategic in promoting trade and tourism in Brazil.
     In a statement, TAM said it was open to possible mergers but did not specifically comment on TAP.
     "TAM always follows the evolution of the aviation market, including mergers and acquisitions," the company said. "Today, the focus of the company is the creation of the LATAM group, product of the merger between TAM and LAN Airlines".
     LAN Airlines would control the new parent company and its CEO, Enrique Cueto, would be the head of LATAM. But TAM would still be controlled by its current majority shareholders, the Brazilian Amaro family, both companies have said.
     Under Brazilian law foreigners cannot hold more than 20 percent of a domestic airline.
     Chilean anti-trust authorities have said that they could rule on the TAM-LAN merger in coming weeks.
     TAM faces increased competition in Brazil's booming air travel market and in March announced talks to take a minority stake in the domestic regional carrier Trip.
     In February TAM for the first time lost the top spot in Brazil's aviation market to competitor Gol but recovered it in March.
     Brazil has been seeking ways to help Portugal, including the possible acquisition of debt.
     "One of the possibilities is to buy part of Portugal's sovereign debt. We're also looking at other alternatives, such as an early repurchase of Brazilian bonds held by the Portuguese government," Brazilian President Dilma Rousseff said during a visit to Portugal in March.


Transport Logistik Munich

Not Easy Being Green

     A world without air cargo is unthinkable and would not work.
     This is Munich-held Transport Logistik Air Cargo Europe’s key message according to CEO Karl Ulrich Garnadt of Lufthansa Cargo. He pointed out that there is no transport mode without environmental impact. He recommends that the industry must consequently reach into its pocket and invest in modern equipment. This, however, is only possible if carriers earn sufficient money to finance modern fleet and programs to reduce fuel burn and thus greenhouse gas emissions.
      Since Lufthansa Cargo is part of a very powerful and cost-driven enterprise, "we were enabled to order five B777 freighters that consume 20 percent less kerosene compared to our current fleet of MD-11 freighters."      This helps in "achieving our goal of reducing our CO2 emissions by 25 percent in 2020."
     The German public is especially aware of ecological topics. "They expect us to do our utmost to save the environment." Although costly at the beginning, financing green projects, together with quality programs, pays off at the end because they are a door opener for numerous savings and provide competitive advantages. This finally harmonizes economy and economy, stated Lufthansa Cargo's helm.
     His carrier just posted the best first quarter ever in the history of the enterprise, with tonnage up 20 percent year-on-year and revenues reaching 742 million euros (+32 percent). What is also remarkable is the Q1 operating profit of 64 million euros, which is an increase of more than 80 percent to 2010's first three months.
     Regarding his proposed cargo collaboration between some member airlines of the Star Alliance, he said that plans are still in an initial phase. "We are currently conducting a number of studies concentrating mainly on technical issues like how to ensure the seamless flow of data between the partnering airlines prior to any practical steps." Garnadt confirmed that next to his Lufthansa Cargo, a number of other Star carriers are basically interested in an air freight pact. On a previous occasion he had mentioned United and Air Canada.
Heiner Siegmund/Flossie

Three Amigos . . .

     It is not all heavy thoughts and pretzels as Air Cargo Europe meets this week in Munich, Germany. Once in a while folks just go for a walk to see what’s up and that leads to some interesting combinations.
     Here (l to r) Emirates SkyCargo’s Ram Menen, Atlas Worldwide Holdings’ Michael Steen and Swiss WorldCargo’s Oliver Evans share a moment.
     Air Cargo Europe, played to big crowds last week closing out on Friday May 13.

     Meet Martina Vollbrecht, director product management, express and standard at Lufthansa Cargo.
     Martina is one of six women in upper management (she is one of only two that are mothers) at Lufthansa Cargo.
     “When I started out in 1995 as Lufthansa Cargo was formed and we all sat down in a meeting room someone said to me:
     “Why don’t you go get the coffee?
     “I replied, ‘Why should I ?’”
     What’s next for Martina?
     Stay tuned . . .


Awards Less Rewarding

     Air Air Cargo Europe closed with a gala awards party, the red carpet was rolled out at the Cannes Film Festival. Speaking of awards, film director Billy Wilder, who created the movies, "Lost Weekend", "Sunset Boulevard," "Some Like It Hot" and "123" said,
     "Awards are like hemorrhoids.
     "Once in a while, every asshole gets one."

Worldwide Flight Services
India Outlook

     Worldwide Flight Services (WFS) has been present in Asia for some 12 years but has yet to get into the air cargo business in India. Way back in September 2009, it was reported that WFS had tied up with a consortium of the Bird Group for the construction of a second cargo terminal at Delhi’s Indira Gandhi International Airport. The contract was supposedly for a concession period of 25 years but it did not work out. Indeed, it would have been a big name in WFS’ portfolio: the airport is the largest airport in the country and in terms of cargo traffic, has been witnessing a compound annual growth rate of 10 per cent over the last four years.
     That, however, was a missed opportunity. But WFS is in India along with Bird Group at Delhi and Cochin airports with their ground handling operations. In fact, WFS India launched operations at Delhi on July 1, 2009 and at Cochin on June 10, 2009, providing ramp and passenger handling services for a number of international carriers.
     As Barry D Nassberg, Executive Vice President and Chief Operating Officer, WFS based at Hong Kong, pointed out, “Our entry has been Bangkok for cargo handling …It’s been a huge success for us. We operate at 121 airports around the world and Bangkok, in terms of its cargo handling, is our second largest. So, for an airport that has only now been in terms of the volume it represents, this year it will be close to 10 per cent of our total annual cargo handling volumes. I mean we do about 31⁄2 million tonnes a year globally and this year Bangkok will come close to being 10 per cent. As Asia is prominent and growing; we have a lot of aspirations for development in Asia.”
     WFS has its eyes set on India. Nassberg acknowledged the fact that the company was operating in India, “but not for cargo. We are on the ramp and the passenger side. We are active in India, yes. Now, cargo is next and we are going in with intent into cargo,” he emphasized.
     To put the record straight, the WFS management is bullish about India. Nassberg pointed out that handling cargo in India was absolutely on the horizon. “We are very optimistic.” Looking ahead five years from now, WFS “will be in more than one airport in India in cargo handling. Right now we are watching the developments in Mumbai very carefully both in terms of the existing airport as well as in terms of Navi Mumbai and we are keen to participate in that. I’m sure that we will… there are other opportunities in India.”
     These “opportunities” would mean “being allowed to develop cargo facilities in airports,” in Tier-II cities.
     The presence of WFS in Asia – in Hong Kong and Thailand – was a bit of a gamble but the move has paid off. WFS did not believe it would do so well. As Nassberg confessed, “We didn’t think so when we started because we opened our Hong Kong office in late ’96 and then shortly afterwards in early ’97 came the big crash in Thailand and things started to deteriorate.” But, in hindsight, it was a well thought-out move. “We had some misgivings,” said Nassberg, “but then in retrospect, we were in the right place and the right time. We came in at the bottom of the market at a time when many of our competitors were scared away and we were resilient and we remained committed and it has paid off for us. And the fact is that if we look at the global airport services companies, we feel that our presence in Asia has surpassed the others. We have done better than anyone else has and certainly have better potential. We are very well placed and it’s because we are committed to it during the downtimes.”
     The commitment comes from the unique blend of experience that WFS has. Nassberg ascribes it to the dual origins of the company: Europe and North America. “We’ve taken bits from both sides.” The cargo handling experience has come from Europe “where we have most of the cargo handling experience and we are one of the largest players in Europe. That has served us very well: not only the experience but the relationships with airlines.” The WFS CEO came out with the example of the major Chinese airlines—Air China, China Eastern and China Southern – that have, for many years, been amongst WFS’ biggest customers in Europe and in North America. “Long before we were planning to do anything in Asia, they were with us,” commented Nassberg.
     The wealth of experience has helped WFS to move into China. “We have a very well developed relationship (with China),” said Nassberg. “In fact we maintain an office in Beijing… even though we’re not doing any activity on the ground in China, we maintain an office in Beijing just to manage the relationships with our Chinese airline customers and that has served us very, very well. It shows our commitment to them and to the region and to the kind of support that they would not normally find,” he said. “You would not normally find the representative of an international airline’s key global ground handler right next door? That has worked very well and that will serve us well as we develop in the region.”
     The success in China has prompted WFS to look closely at India and enhance its portfolio. “When we look at economic growth in Asia,” said Nassberg, “we look at production and the tremendous potential. “We also look at airport infrastructure and development which tends to predict where economies are going. We think the best years are very much still ahead,” he predicted.
     As for India, the time had come and despite the infrastructure problems, things have to move. “It’s going to take years,” Nassberg agreed, “but you have to start. A journey of a thousand miles starts with one step and that step’s got to be taken. We can sit here and talk about it as long as we want; the problem is not going to go away. So we have got to address it.” Infrastructure in India is a challenge and Nassberg was somewhat familiar with the situation as well as the challenge. Even so, “we look forward to being there in cargo as well,” he said.
Tirthankar Ghosh/Flossie

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