Vol. 10 No. 57                          THE GLOBAL AIR CARGO PUBLICATION OF RECORD SINCE 2001           Wednesday June 15, 2011

Evans And Steen
Will Change Air Cargo

     Throughout history there are many outstanding combinations that have gone on to achieve great things.
     In that regard, Anthony & Cleopatra loved and destroyed; Stanley & Livingston explored and discovered, Hillary and Tenzing climbed and reach new heights, and Don Quixote and Sancho Panza proved that windmills could be conquered.
     Even peas and carrots seem to work well together.
     Which brings us to an interesting and new combination dynamic in air cargo: Evans & Steen.

     Right now both are on the board of directors at The International Air Cargo Association (TIACA) and if their vision and energy level is any indication, these two could be driving change for the better as TIACA gets new leadership and maybe even a new lease on life.
     Michael Steen is Executive Vice President and Chief Commercial Officer at Atlas Air, the biggest, most important ACMI operator on the planet.
     Oliver Evans is the chief cargo officer of Swiss World Cargo and a frequent knowledgeable voice for ACN FT.
     On any given day, either one of these leaders could fill a reporter’s notebook with volumes about their own dynamic businesses.
     This day, both took up the sword for a better-organized air cargo industry.
     We caught up with the dynamic duo at Air Cargo Europe and it was upbeat, with indications of some innovative and inventive things to come.
     Building TIACA seems a cornerstone of both Evans’ & Steen’s extracurricular activity, but both take nothing for granted.
MS:   “Timing is critical.
     “While the industry has been begging for a platform to be developed for quite some time, now we have come to that point with TIACA being the administrative structure to the Global Air Cargo Advisory Group (GACAG).
     “TIACA is really helping to pull the group together around important subjects such as security, customs and freight facilitation and lastly also the image of the air cargo industry itself.
     “The truth is that air cargo is a leading trendsetter, if you look at global trade and the world economy.
     “We think air cargo has a lot to do as an industry to get our message across.
     “TIACA has done much in the past couple of years to transform itself from just setting up trade shows (and effective shows at that) to becoming a global voice on various panels and committees for air cargo.
     “Today, with a strong new board including Oliver Evans who joins us as new TIACA vice-chairman, we expect to develop our global impact as an organization even more.”
OE:   “The air cargo industry is maturing-and these are words that I use with great purpose.
     “We have all seen great entrepreneurs driving companies forward; Michael Chowdry building Atlas for example, and others, but now we realize that there is only so far that we can go within our own sphere of influence, within our own company, partners, customers and suppliers.
     “For example, when an ash cloud from a volcano in Iceland sets off various governments in Europe on separate courses as to what to regulate, and other actions that impact air cargo, they need guidance and some help. Indications we are getting are that they would welcome some expert input.
     “People question TSA, but the fact remains that TSA is reaching out to the industry so air cargo has to be a better partner all around.
     “TIACA and the unfortunately titled GACAC (Global Air Cargo Advisory Group) formed last year at TIACA AMS can bring better understanding and cooperation between air cargo and governments and agencies around the world.”
MS:  “TIACA has representative membership from every aspect of the air cargo business, including integrators, airports, freight forwarders and airlines, plus representation from the entire complex supply chain that makes the industry go.
     “What we have done at TIACA is to create sub-committees amongst our membership with each led by a TIACA board member charged with addressing various issues.
     “Reception from governments and officials charged with oversight and regulation has been just fantastic."
     You sit and listen to these air cargo executives and can only wonder what has taken air cargo so long to get this kind of wake up call.
     Thinking back to the opening here, Evans & Steen could be Don Quixote & Sancho Panza although we would not want to ascribe which role either would assume or if either, even on their worse day, could be considered to be leading a charge against windmills, real or imagined.
     Still, these two executives find themselves in 2011 putting much of their well-deserved reputations on the line in a sincere attempt to institute change for air cargo, and brothers and sisters, that kind of lofty goal is no cakewalk.
MS:  “We are not doing this alone. The step change has come from TIACA aligning itself and joining forces with IATA and FIATA and also from an industry showing real signs that it understands collaboration is the way forward and that with cooperation and better understanding everyone will benefit.
     “We don’t set the rules nor do we impose them. What we want to do is help drive the development with regulators so that when some new rules come into play everyone has been heard and the way forward benefits the industry.
     “The hope is that we have finally got the platform here that can drive real change.
     “Membership interest in joining TIACA has risen tremendously since the Amsterdam ACF last November—an indication that our initiatives toward change are gaining traction.”
OE:   “As an industry, we need to be more self-critical as well.
     “Our world is quite complex, with airlines & forwarders, handlers, truckers, brokers you name it involved in the selling and routing of air cargo.
     “The regulation that we have to deal with – acts of God like weather and volcanoes that befall our business, acts of terror, etc., add up to huge complexities that we all have to deal with in our business.
     “But there is a way to simplify communication and clear lines between all aspects of our business.
     “It is both an opportunity and our responsibility to get things right in the future.
     “I think we will see momentum in all aspects of our business because of the steps that we are taking.
     “In a session at Air Cargo Europe someone wondered who is going to pay for all the expensive security and other procedures required to move air cargo today and in the future.
     “The simple answer is you and me, so we need to make sure that our procedures and systems are top quality, streamlined and focused through close collaboration between every aspect of the industry and regulators.”
     Finally, we wonder about GACAG.
     The wunder organization with a name that could also be a town in Finland, or perhaps the sound of a baby eagle asking for more ground-up worm, has gotten lots of buzz.
     We wonder, with all the other things the duo need worry about, how did a group with the simple mission of getting people to work together come to such a tongue-twister of a name with letters that don’t even seem to work together?
MS:  “Everything we do is evolutionary. Now as the World Customs Organization and others are showing some interest in joining our effort, I think eventually as the structure of GACAG changes that could have an effect on the name.”
     We also wonder, in this world that is so hell-bent on instant gratification and results, what goals have been set for GACAG and when can air cargo expect to feel the impact of the new organization?
FT:   “You guys are in a honeymoon period, as we say-When can we see some results?”
OE:   “I think you will see some results in a very short period of time.
     “And why do I say that?
     “It’s because right now as the U.S. and other countries draw closer toward recognizing each others security requirements, GACAG is already playing a key role.”
MS:  “I think we have seen positive results already; for example, at the last CNS Partnership we heard a presentation mentioning GACAC as a road map toward the future.
     “I think that is a result in itself – recognizing GACAC as a template for the future whilst saying let’s all get onboard and build our future together.
     “Look, as an industry we have been so incredibly fragmented through the years and were never really pulling in the same direction.
     “This is a complex industry with many issues and many decision makers from all over the world with opinions and special needs.
     “There will be noted successes with GACAC. Helping to implement IATA, e-freight will feel its impact, but this is a long-term commitment to work toward bettering transportation on a global scale.”
     Questions about TIACA ACF 2012 in Atlanta, Georgia get a firm and supportive answer from Michael Steen.
MS:  “We are very excited about ACF 2012 in Atlanta.
     “There are great companies based in Atlanta, such as Delta Airlines, Home Depot, Coca Cola and others, and they will be involved in the Air Cargo Forum.
     “TIACA feels that a very high level of participation of company leaders in Atlanta 2012 will set the stage for what air cargo needs to build its global business.
     “TIACA will also work to drive up the image of air cargo at the ACF 2012 event.”
     And as for the challenge of DOJ activity, wherein fear of security and fuel price-fixing indictments might impact attendance of this USA event?
MS:  “We expect no major impact or loss of attendance at ACF 2012 because of DOJ activity.
     “Attendance set a record in Amsterdam.
     “Atlanta will be substantially better – that’s the view right now.”

Swiss Efficient Oliver

     So why did Oliver Evans with all he has to do get involved with TIACA?
     “The most driving issues for the industry are security, e-commerce and sustainability. “
     What Oliver find most exciting is the alignment of common agendas, especially “with the formation of the Global Air Cargo Advisory Group (GACAG), we now have a powerful group of people representing all the stakeholders in the industry who are really going to help bring us forward.”
     The announcement of the formation of GACAG was made in Amsterdam at TIACA. Since then as mentioned at the top, Mr. Evans has become more active both in TIACA and in GACAG.
     Many wonder how long it will take for GACAG to form positions that will affect real change in the industry.
     Mr. Evans believes the organizations faces “different stages of progress for the different working groups.”
     Now that GACAG has been created, it has gone through the process of appointing representatives from each stakeholder group into subcommittees (e-commerce, security, sustainability) in order to meet and set agendas for all focus areas.
     “All of them will set out milestones and work towards them. Now that we have everybody committing to the goal, the progress will be substantial and visible very soon.”
     Mr. Evans’ reasons for stepping up his commitment and activity with TIACA are twofold: with IATA perhaps biting off more than it could chew, there was a real need for the various stakeholder groups to work together in a way that made sense and provided effective results, while also involving both shippers and forwarders.
     “TIACA was the natural group to do the coordination for that platform. “That was one reason for my getting behind that and accepting the invitation to join the Board and to become Vice Chairman of the Group in Bangkok.”
     The other motivator reflects the reason why many of us are involved in this great industry we call air cargo:
     “It’s the caliber of the people involved: Uli Oggierman in the last couple of years has done a great job; Michael Steen as the Vice Chairman has been extremely active, dedicating a lot of time and energy to this.
     “When you have people of that caliber involved and driving the agenda, you achieve results.
     “I want to be part of this. I think it’s a unique opportunity for the industry.
     “I’m happy that I’m running an airline that is achieving some very good results.
     "I have a team behind me and with me that takes care of the day-to-day business, which allows me to devote my personal time and energy to the industry cause.
     “We spend too much time in backwaters, rather than working together – forwarders, airlines and shippers – and this is a real opportunity we have now,” said Mr. Evans.
     Swiss WorldCargo has “a story to tell” about the belly capacity of airlines and how valuable it is to the success of an airline. Looking forward, Mr. Evans concludes that for Swiss the important thing is to maintain their successful strategy of focusing on the same care intensive markets.
     There has been a gradual expansion of the Swiss network with the addition of San Francisco this year, which was, “a very encouraging start for us,” said Mr. Evans.
     “During the course of 2011, we will be starting up Beijing as well as Capetown, South Africa.
     “In the course of 2012 we will be introducing a couple of new long-haul aircraft, which for a mid-size airline like ourselves represents a significant step forward.
     “We will continue to focus on the needs of the customers and on providing the best quality in the industry.”



     Finnair Cargo adds a weekly MD-11F freighter from New York (JFK) to Shanghai (PVG) June 15.
     This will complement AY’s existing freighter operating now from New York to Helsinki every Friday.
     Both flights are operated by MD-11 freighter with cargo capacity around 80,000 kilos and 500 cubic meters.
     “Growing cargo demand in the Asian and U.S. markets gives us the opportunity to expand capacity and allows us to provide fast service to our U.S. customers,” Finnair Cargo VP Pertti Mero told FlyingTypers.
     More contact:
     USA Midwest: The Dick Augustine Group 1-847-233 4087
     Florida & Texas: Southern International 1-305-978 5779
     New York & Elsewhere Finnair Cargo Sales and Service at JFK 1-718-656 7570.

     The Airbus Freighter Conversion GmbH (AFC), a German-Russian joint venture (50/50) for converting A320s and A321s from passenger to cargo planes, will be dissolved.
     Parties involved claimed economic reasons for dropping the project, which started four years ago with expectations of converting as many as 40 smaller and medium-sized Airbus variants each year from 2012 onwards.
     Half of these conversions were to be done in Dresden, Germany by the EADS subsidiary Elbe Flugzeugwerke (EFW), a local industrial provider for maintaining, repairing and overhauling aircraft.
     The other twenty were supposed to be converted by Russian manufacturers UAC und IRKUT at a plant two hours driving distance out of Moscow.
     Now those plans have come to a halt simply because there are not enough passenger A320s and A321s available for conversion into freighters.
     Since the number of travelers worldwide is steadily increasing, most airlines and leasing companies are holding on to their assets.
     An EADS manager explained that there is a very strong market demand for Airbus variants of twelve years or older, so operators are not willing to sell them to the AFC.
     With little or no passenger aircraft available for conversion, the partners in the German-Russian JV decided to shut down the conversion operation and dissolve their arrangement. Unaffected by this decision is the collaboration between Airbus and Russian suppliers for the various other aircraft programs of the European plane maker.
     These ties have steadily been intensified during recent years as major spillover of the AFC efforts.
Heiner Siegmund/Flossie


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RE:  An Aerotropolis Too Far

Dear Geoffrey,

     My kudos to you for publishing Michael Webber’s excellent editorial on the situation in St. Louis, these days the hype is all about talking up the Aerotropolis concept and how that’s the model of the future, so publishing this critical article was bold and courageous on your part.
     Of course, the article itself was beautiful journalism – revealing, challenging, and well written so the reader could gain a full appreciation of how the Aerotropolis concept has now spun off local derivatives of Dr. Kasarda, who act with equal self-serving greed in pursuit of rich consulting fees for selling hot air to naïve politicians and bureaucrats.
     The situation in St. Louis is a sad state of affairs and hopefully the article will prompt a real leader to take action and at least put a stop to this foolishness, although I like Michael’s idea of reimbursement even better.
     Of course, that would only win us one battle but not the war, as there are dozens of second and third tier airports around the world latching on to this Aerotropolis concept as if the mere adoption of this cutely coined term will trigger spontaneous growth and prosperity.
     Nothing could be further from the truth, none of these second or third tier airports will ever evolve into an “Aerotropolis” unless the catchment area fuels the airport’s growth.
     Of course, there will be many large metropolitan areas around the world with ever-expanding airports.
     See, what grows airports is a prospering city and catchment area in terms of population growth and economic activity and expansion and not vice versa.
     I am not worried, in the end all fads die sooner or later and Michael will one day be rightfully recognized for having had the foresight to call “nonsense” when he saw it.
     Again, my sincere compliments for publishing this excellent article.

Best regards,
Robert Althuis
Lynxs Group LLC
106 E.6th St. Suite 550
Austin Tx.78701
United States

Good afternoon Mr. Arend,

     In the Flying Typers article “An Aerotropolis Too Far?”, you laid out a case where the decision made by regional political leaders are wrong and wasteful.
     In general I agree with your conclusion.
     However, I do not see a way out of the political process we are mired in: i.e. where States champion local initiatives and ask for block grants, where centralized decision making with greater efficiency is attacked and erstwhile decision making and award process is marginalized (for example, our departing Defense Secretary Robert Gates mentioned this about the Pentagon procurement process where the political concerns are protected above and beyond our real national security needs).
     And where people are not always judged/rewarded based on results, but on pre-defined markers negotiated prior to the inception of a long-term project.
     I'd like to hear from other readers, with your solicitation, on what we can do as trade to prevent these types of predictable tragedies from taking place.

David Lin
Air New Zealand Cargo

Editor's Note:

      Thank you for your excellent and thoughtful letters.
      We too invite readers to share responses to the effort in St. Louis, as well as their ideas to encourage better public policy for infrastructure development.
      In the case of St. Louis, the critical failing was not an individual process but rather in the ability to avoid processes altogether.
      U.S. airports are subject to a participatory master planning process that requires oversight and input from federal regulators and tenant committees.
      Had airport management been compelled to defend its vision to the FAA and tenants such as FedEx and UPS, unrealistic projections would have been corrected.
      U.S. airports are largely funded in a closed loop, in which revenues stay on-airport to fund capital projects and operations with the caveat that airports should be self-sufficient.
      Consequently, capital projects and marketing efforts are subject to at least some version of a bottom line.
      An airport with a 20% decline in cargo during the last decade would not typically initiate an aggressive cargo facilities expansion, but would have the prerogative of using its own resources or bonding capacity, or alternatively could seek proposals in a competitive bidding process from private developers.
      The ability to attract private partners or to sell bonds would provide a market referendum on worthiness.
      The courageous article by Michael Webber that appeared here yesterday reveals that the St. Louis effort attempts an end-run on all checks & balances.
      It avoids local obligations and spreads the burden for incentives statewide to tax payers who gain nothing on behalf of a small local cadre of wealthy landowners and developers even as the State of Missouri faces extraordinary challenges in rebuilding from ongoing floods and the recent Joplin tornado.
      The failing illuminated by St. Louis is not about airport master plans or FAA oversight.
      Procedures exist to guide disciplined development, but the St. Louis effort turned all accountability on its head.
      That the effort, as Michael Webber points out, involves powerful former and current U.S. senators and former staffers, as well as more localized cronyism is symptomatic of problems that extend far beyond airports.
      Unfortunately we can offer no silver bullet but share your concern that unless such obvious wastes of public dollars are prevented, insufficient support will be available for more justified, and properly vetted efforts.



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