Saudia Targets Top Cargo Position
      No, it is not the temperature in Saudi Arabia, where the 2012 summer sends the mercury soaring every day.
      Right now Peter Scholten, VP Commercial, is at work, part of a dedicated and determined team that is building Saudia Cargo, one of the great, pioneering, legacy carriers of the world.
      Saudia Cargo is on the move, and with one of the largest passenger and cargo fleets on the planet, it is well underway to becoming a global force to be reckoned with.
      But first, a bit of background…
      Saudia Cargo headquarters are located in a handsome high-rise building on one of the main roads into downtown Jeddah.
      Jeddah, Saudi Arabia, it should be mentioned, is quite unlike many of the newer cities of the region.
      Where similar destinations are glitz, glamour, and a heavy dose of the go-go lifestyle—characteristics that have made the region a magnet for millions—Jeddah, on the other hand, seems more laid back.
      Of course, Jeddah offers beautiful vistas of the Red Sea, modern high rises, multi-faceted bazaars that are fabulous, an absolutely fascinating old town that dates back thousands of years, and an ample number of historic sites otherwise.
      And Jeddah is also populated with plenty of friendly folks who appear better than just well-off.
      But Jeddah is also quite cerebral.
      You can still imagine, despite the rush of progress and modern life in 2012, that Lawrence of Arabia would feel right at home here.
      Although Sir Lawrence has not been seen in these parts for more than 80 years and today would probably be zipping around in a Maserati filled with petrol (at U.S. 60¢ a gallon) rather than on a camel, Jeddah has somehow held on to its cultural essence.
      Life in Saudi Arabia revolves around the Muslim faith with prayers occurring five times a day; the act itself becomes a time for everything to stop, as shops shut down so the faithful can head for the Mosque.
      Throughout the day we noticed small groups of Muslim worshippers in malls and small enclaves on the streets, even in hallways, where ongoing services could be heard over loudspeakers at prayer time.
      The sight recalled the words in the King James Version of the Christian Bible –Book of Matthew, Chapter 18, Verse 20, which states:
            “For where two or three are gathered together in my name, there am I in the midst of them.”
      For me, the immediate thought was that despite our differences, maybe all of us on this planet are in fact closer as people than we have realized.
      Peter Scholten gets right down to business.
      “One of the strong points for Saudia Cargo in 2012 is that, for example, while everyone is cutting capacity in China, we have actually been growing in that market, adding lift to Hong Kong, Shanghai, and Guangzhou.
      “While the HKIA to EU and USA markets remain soft, our services via Riyadh connecting to EU, Africa, Middle East, and of course the Kingdom and other destinations are strong and growing.
      “We are a big cargo airline into Africa, where in Lagos we fly a daily B747F and are preeminent there.
      “The plan is to further add to our China capacity this autumn, perhaps as early as September.
      “We are also operating flights for DHL into Dubai DWC and those flights are doing quite well in terms of increasing our offering to Africa and elsewhere.
      “In terms of choice we’re one of the players in the global arena with great coverage in the home market, which is sought after by many exporters.
      “We also offer great lift into Europe and elsewhere, but our ambition is to be bigger and better with much emphasis right now on service and better connections all around, and of course competitive rates.
      “Saudia is becoming a much better air cargo resource than we were a couple years ago.
      “Our business is growing and everybody knows it, including Seabury Group, which in 2011 pegged Saudia as “the fastest growing cargo airline in the world.”
      “We are also upgrading our facilities here at Jeddah, which will only act to improve our product capabilities and efficiencies.
      “Recently we had a group of clients here from the Indian Subcontinent and Asia, shippers from a wide spectrum of the freight forwarding community.
      “The reaction is frank and honest; our customers can see we are making progress developing our people and of course as mentioned adding new technologies as we invest in both facilities and also IT, even down to buying new pallets.
      “So in a sense, we are building our offering from the ground up, bringing a new deal top to bottom to the global air cargo community from Saudia Cargo.

     “One of the key indicators for us is the business we also do with the global forwarders who control so much of the market and in that respect, our business is building quite well.
      “As a forwarders’ resource, you must adapt and deliver the same quality across the board to both large and smaller companies.
      “We are delivering the goods better every day, across the board.”
      Peter Scholten is closing in on his second anniversary as Vice President Commercial at Saudia Cargo.
      Mr. Scholten has some 20 years global experience in international aviation and transportation management, including 14 years as regional VP on different continents for Martinair Cargo.
      He has also worked on the forwarder side, having spent five years as Managing Director of Road Air Flora BV, a leading freight forwarding company in the Dutch perishable market.
      He notes that coming to Saudia has been an experience like no other.
      “My entrance here came at a time when management was determined to build the airline as other carriers both from the region and elsewhere in the world had emerged.
      “The airline began privatizing various units in 2009, including cargo, catering, and maintenance.
      “For me, the opportunity was immediately apparent, having known Saudia Cargo from the outside over the years, that not only was there huge potential here, but under the leadership of Fahad Hammad, CEO Saudia Cargo, there was also the dedication to make things happen with a spirited air cargo building program.
      “Arriving here, I found that exciting, and that drives me forward today as we are building and developing new capabilities, destinations, and products as a focused, dedicated air cargo business division of the airline.
      “There is a genuine spirit of dedication and clear focus on goals at Saudia Cargo, with the transparent line of a tight-knit team making things happen.
      “This is an exciting and challenging place to be right now.
      “Looking ahead into 2013, there will be more destinations and also new product offerings, such as the popular ‘Belly Flex’ offering that began earlier this year.
      “Belly Flex delivers dramatic savings, offering an economic solution for non-critical cargo.
      “Our main focus is on destinations from KSA (Kingdom of Saudi Arabia) for origins both served by freighters and our passenger network.
      “Belly Flex rates can be shipment ex HKG or BRU on freighter connecting to CAI from KSA (Kingdom of Saudi Arabia), or on belly from BOM or LHE connecting on pax flight to IAD etc.
      “Of course, we are also offering the rate for local cargo ex KSA.
      “Transit time from KSA starts 24 hours after the actual arrival of a consignment at the hub, meaning on average, it is four to eight days from origin to destination.
      “But cargo will be faster as space is available.”
      “We want to be a major player in this region and a factor across the international trade lanes, but our ambition is not growth simply for the sake of getting bigger.
      “Today our cargo business is profitable and the Kingdom of Saudi Arabia is growing as well, so we see ourselves working in line with all the factors here to be as good as we can be.
      “We are there for the long term.
      “Saudia Cargo comes from the oldest legacy carrier in the region and is home to the largest economy in the Middle East.
      “The economy of Saudi Arabia is booming and the young population is growing rapidly.
      “Saudi Arabia is a G20 member and was very stable during the recent Arab spring.
      “The government will invest some $400 billion in economic developments in the country in the next few years.
      “For Saudia, our goal is loud and clear; we want to be amongst the top 15 players in the industry in the foreseeable future.
      “We continue our journey and are very determined to reach our goals,” Peter Scholten said.
Geoffrey/Flossie

Atlanta AACA Air Cargo Panel Discusses Issues

     As it is said in the south, “we are blessed” in Atlanta, having just made the list of the top five best cities to do business in the U.S. In transportation alone, we have a world class airport, an actively supportive mayor, and, just to make it convenient, the world headquarters location for Delta Air Lines, North America head office for Air France/KLM/Martinair Cargo, IAG Cargo, Lufthansa Cargo and the office of the cargo manager USA for Qatar Airways. A few other major corporate references that put Atlanta on the map include Coca-Cola, UPS, CNN, The Home Depot, and Cox Enterprises (communications). And don’t forget, Hooters!
     The Atlanta Air Cargo Associates holds monthly luncheon meetings that feature keynote speakers from the industry. This June it capitalized on the locale and had a panel comprised of Jan Krems, VP the Americas AF/KL Cargo; Neel Shah, Senior VP and Chief Cargo Officer DL; Joe LeBeau, VP North America IAG Cargo; Carl Unger, Director South U.S. LCAG; and Christel Alaimo, Cargo Manager USA QT, which discussed current issues that affect air cargo. The out-of-town moderator was Brandon Fried, Washington, D.C.-based executive director of the Airforwarders Association.
     The first topic dealt with the role of government vis-a-vis the industry and whether a national airline policy was needed, as recently proposed by the Airlines for America (formerly ATA). Apparently Delta Air Lines chairman Richard Anderson was quoted as being in favor of such an initiative. There is a general consensus regarding the tremendous turmoil the industry has been experiencing. Cited examples include the recent Import/Export Bank practice of making available funding to airlines from countries other than the U.S. at more advantageous rates, which skews the competition against U.S. airlines.
     Joe LeBeau expressed his concerns with what could lead to re-regulation and said that constant government interaction was worrisome in a competitive environment, but there was agreement that some synergy was needed in areas such as security.
     Asked about practices in the Middle East, Christel Alaimo indicated that in Qatar, a country that has abundant natural gas and oil resources, there were fewer regulations, but denied that there were any government subsidies to the airline.

     Carl Unger stated that a level playing field was needed to be fair, but government should let us conduct our business. Neel Shah added that the focus had to be on eliminating policies that put U.S. carriers at a disadvantage in the global market. Airlines are subjected to a constant barrage of knee-jerk "tax the airlines" mentalities that seemed to be across party lines, with little regard to the economic realities that impact the industry.
     Another obstacle was brought up by Christel Alaimo in the form of excessive regulations that prevent the airlines from talking to each other. Jan Krems chimed in to agree, saying that it made it unreasonably hard to cooperate.
     Neel Shah saw the industry as fragmented and said that the airlines and their trading partners have more in common than not and therefore, it was important to do everything to maintain the viability of the industry. Neel emphasized the role of GACAG in supporting the industry agenda and speaking with a single voice to deliver a united message.
     The conversation veered to the shippers, who must realize they have a responsibility and do their share to shoulder the burden in matters such as security. Airlines and shippers have to work together to get the shippers to cooperate and push the responsibility further upstream. ACAS was mentioned as requiring changes in processes in order to provide house waybill level data to CBP and TSA only once; however, much earlier—up to 10 hours prior to flight departure. Input to CBP is needed as it readies itself to put these measures into legislation, which will then be mandated by law. Intelligence-based targeting remains the objective, rather than screening. It was important to understand that ACAS and screening were different issues.
     The language of TSA regulations in particular was raised as a major source of confusion that left too much room for different interpretations, whether by the authorities and/or the industry. It is both resource-intensive and expensive to reconcile divergent views.
     The moderator brought up fuel as an issue and immediately, Delta Air Line's recent acquisition of a refinery near Philadelphia came up as an innovative move to try to control price volatility and its major effect on airline costs. Neel Shah elaborated that the carrier would receive around 65,000 barrels of jet fuel for use at New York area airports, plus supply at ATL, DTW, and LAX, while the refined automotive gasoline will go to BP and Philips 66 for resale. It is interesting to note that Maersk had pioneered this approach for its steamship liners.
     The panelists concluded that the industry needed to improve to do a much better job marketing itself to both the public and legislators alike and promote its positive impact on business and employment. Asked about their forecast for the remainder of 2012 and the near future, Neel Shah said that despite the current volatility, air transport remains a necessity for global supply chains. Jan Krems referenced the economic and financial challenges in Europe, which, if not resolved will be… well, we can't print that.
     Carl Unger had the last word and stated that he was more optimistic, and that although there were ups and downs, there is general growth, especially in the Atlanta market.
     AACA president Warren Jones announced that the keynote speaker at the July luncheon will be Georgia governor Nathan Deal, another nod in recognition of the important role the industry plays in the region.
Ted Braun

RE: The Longest Day

Dear Geoffrey,

      As I looked through this issue and thought about young Geoffrey working with Meryl Streep and the rest of the Arends on the masthead of FT, and think about your visits with Sabiha’s parents, your love and respect of family is so clear and so profound.
      You and Sabiha have done a wonderful job with your children and your nurturing instinct for them is the same instinct seen in how you run FlyingTypers.
      This is a very personal endeavor, keyed always to the people involved, not just the numbers.
      We have all been enriched by your efforts.
      For all of this I commend you at the highest level.
      I feel honored by knowing you, even though we don’t really know each other.
      And, I can now recognize young Geoffrey on TV even without knowing in advance that I should be looking for him.
      Have a wonderful time this evening in the Park.

Best wishes,
Garner
gmcnett@cargodata.com

RE: Sense Of Renewal At American

Geoff,

     Certainly interesting to read the latest propaganda from American renewing their future... all of which is really meaningless babble with the same mindset in management.
     American has one hope to succeed, other than the status quo, and that is if and when USAIR takes it over, it eliminates the deadwood and prevailing attitudes and renames it USAIR, moving HQ to PHX.
     As a former BN employee I watched this crowd up-close and personal and feel their come-uppance long overdue.

(Name Witheld)

Get On Board Air Cargo News FlyingTypers
For A Free Subscription
Click Here To Subscribe

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Click On Image Below To Access

FT061812