Vol. 9 No. 86                                            WE COVER THE WORLD                                     Tuesday July 20, 2010

AA Cargo Takes Screening Public

     "We've been stepping up the screening that we have been doing in the air freight environment for three years now, so I don't expect life to be that much different August 1 or August 2," said Dave Brooks, President of American Airlines Cargo as the mandated early August 100% screening of all U.S. air cargo carried in the bellies of passenger flights draws near.
     "The only difference will be, if we have freight that has not been screened for whatever reason, we won't be able to fly it."
     American Airlines Cargo taking its story public told the daily press media and some U.S. television networks on Friday July 16 that it has spent millions to screen cargo.
     “Some cargo companies who fly shipments on American Airlines participate in a "Certified Cargo Screening Program (CCSP), prescreening consignments before packages and other lot shipments are dropped off at AA Cargo,” the airline said.
     “That cargo will get an expedited process and have to arrive at the facility 4 hours before the flight.
     “For packages that are not prescreened,” Dave Brooks continued, “those packages must be at the facility 6 hours before a flight so American can screen (additional charge) the cargo.”

Germany Churning Along Nicely

     In a recent report, Deutsche Bank Research headlines that the “German Economy (still) Churning Along Nicely,” punctuating that statement with the following:
     •  Despite adverse weather conditions (read “volcano”) Germany’s economy grew 0.2% again in Q1 compared with the previous quarter.
     •  Latest economic indicators point to strong acceleration of growth in Q2 (in excess of +1%).
     •  Consolidation of public finances almost worldwide will likely mean weaker growth momentum around year-end.
     •  Moreover, the latest crisis surrounding the euro may hurt confidence and thus dampen the private-sector recovery.
     •  In 2011, real GDP will probably grow by little more than 1%, following 2% this year.
     The report goes on to say:
     “This year German exports have benefited strongly from the dynamic recovery in world trade.
     “Real exports of goods and services look set to rise by slightly over 9%. However, the momentum of world trade will probably weaken somewhat in 2011, but the effect will likely be cushioned by a weaker euro.
     “As 43% of Germany's exports go to euro-area countries and 63% to the EU as a whole, weaker demand as a result of the consolidation measures will make itself felt.
     “All in all we (DB) expect German export growth to slow to just over 5% in 2011.”
     About the unfolding European monetary crises, DB says:
     “At this juncture, it is difficult to predict whether the rescue package for the euro countries, which has yet to be ratified by the individual countries, can help overcome the crisis of confidence in the European countries' fiscal policies. Moreover, it remains to be seen to what degree the current proposals by the EU Commission for ex-ante supervision of government budgets and the possibility of more severe sanctions will be implemented and contribute to rectify the institutional shortcomings that have manifested themselves during the Greek crisis.
     “One thing is clear, though, namely that the events of the past few weeks will have repercussions for the both the euro area and the German economy. However, our forecast for German economic growth of 2% this year seems to be reliable even against the backdrop of the expected weakening in H2.
     In fact, growth could be on the upside. But next year, real GDP growth should be limited to a good 1%.“
     DB is also cautioning against expectations for 2011, citing “heightened uncertainty” as a factor in determining the profitability of future markets.
     “Investment decisions are based on sales prospects, cost, as well as taxes and levies. In view of recent developments there is reason to believe that there is now greater uncertainty regarding all three of these factors.”
     DB goes on to say that “uncertainty” can have great effect on the actions and behaviors of consumers and investors, and that according to an analysis reached in a Bundesbank study, “investment falls by 6 percentage points when the volatility of cost and profit rises by a standard deviation.”
     As the European monetary crisis continues and the situation remains touch-and-go, one would be hard pressed to assume anything for the future. Still, it is nice to see that the German economy is plugging through it all.

Boeing News Gets Better

     Boeing, which announced (somewhat discreetly) last week another delay in delivery of its troubled B787 Dreamliner, had better news at the Farnborough UK air show this week as Emirates ordered another 30 of its B777s. Emirates, on its way to maybe becoming the biggest airline in the world, spent $9.1 billion (at list price) on the planes.
    In the picture (l to r) Jim Albaugh, President and CEO, Boeing Commercial Airplanes; H.H. Sheikh Ahmed Bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group; H.H. Sheikh Mohammed bin Rashid Al-Maktoum, Prime Minister and Vice President of the United Arab Emirates and Ruler of Dubai; and David Joyce, President and CEO, GE Aviation.

      Airbus has 234 orders for its super-jumbo A380 from 17 customers and now is talking about a halo effect as analysis of traffic data on various routes before and after the introduction of the aircraft has “operators enthusiastic about their A380 fleets, as Airbus puts it”.
     “Namely there are demonstrated benefits such as higher average load factors and a visible market share shift in favor of the A380.
     “This “A380 effect” is the combined result of the huge popularity of the A380 with the travelling public and the reduction in fuel-burn and other operating costs which lead to superior profitability for A380 operators.”
     Last Friday Singapore Airlines got its 11th A380 and Lufthansa received its second super-jet as A380 deliveries for 2010 now number 10.
     The orders this week from the UK air show include aforementioned Emirates for 30 B777s; Air Lease Corporation (ALC), the recently formed aircraft financing and leasing company, for 20 A321 aircraft and 31 A320 aircraft; Aeroflot for 11 A330- 300 aircraft; GE Capital Aviation Services (GECAS) for 40 B737-800s.
     Amerijet, known as the Florida-based air cargo company that flies small all-cargo jets (B727s), may now become known as a small company flying big jets as it has just leased its second B767F in a seven-year deal with Air Transport Service Group (ATSG). Amerijet holds options on three more aircraft from ATSG.

Tulsi Mirchandaney

Lise Marie Turpin

Lisa Schoppa

Tammy Zwicki &
Monika Lutz

Gabriela Ahrens

     Apparently, Miami-based icon Arrow Air Cargo is no more.
     The carrier, whose lineage traces back to its 1947 founding in Compton, California, came into being when an ex U.S. Army pilot named George Batchelor (left) flew a surplus DC3 from Hawaii and sold it for a profit.
     Batchelor, it should be noted, became famous for both creating Arrow Air and also for buying and selling airplanes at Batch Air, which helped turn Florida’s last aviation legend into a multimillionaire before his death at age 81 in 2002.
     It’s also worth noting that Mr. Batchelor gave away vast sums of his fortune to charity.
     Prognosticators who have counted the carrier down and gone more than punch drunk boxer on it may finally be right.
     At one time, Arrow was the fourth largest cargo airline in the United States, operating 135 flights a week to 29 destinations in the region with hubs in Miami and San Juan, Puerto Rico.
     Arrow 2010 was last seen flying cargo services via a fleet of seven aircraft.
     During the post-Batchelor years, Arrow moved through a series of owners and bankruptcy court, having last emerged from Chapter 11 in 2004.
     On December 12, 1985, an Arrow DC- 8 crashed after takeoff in Gander, Newfoundland, killing 248 soldiers of the 101st Airborne Division and eight of Arrow's flight crew.
     The accident resulted in a great deal of unfavorable media coverage and government scrutiny for the airline.
     Arrow filed for Chapter 11 bankruptcy reorganization for the first time in February 1986.
     On June 30, 2010, the last brief words from Arrow posted on the company website said simply:
     “Like many companies in our industry, Arrow Air has experienced significant operating losses as a result of increasing operating costs and declining revenues.
     The decision to wind down the company’s schedule service operations was a difficult one.
     This decision was not made lightly, and was a last resort after the Company exhaustively searched for other options, including financing or a sale of the business.
     Arrow is now focused on helping to smooth the transition for the company’s hard working, (450) dedicated employees, as well as its customers, suppliers and other stakeholders.”

New Austrian Lufthansa Cargo Combine

     “We intend to expand our position in Austria in the long term, increase our market share and strengthen the Vienna hub.
     “In the future the airport shall become a center of operations between eastern and western Europe," said Lufthansa Cargo Chairman and CEO, Carsten Spohr.
     The new Vienna-based “Austrian Lufthansa Cargo GmbH” subsidiary, which went into business July 1, is now marketing all freight capacities of both airlines in Austria.
     Freight activities in all other countries have been amalgamated under the management of Lufthansa Cargo.
     "Through the successful integration of Austrian Cargo, our joint customers can profit from extensive connections in the eastern Europe growth region as well as have access to the entire product portfolio and electronic booking channels of Lufthansa Cargo,” Mr. Spohr said.

Franz Zöchbauer


Carsten Spohr

Hasso Schmidt

      Managing Directors of Austrian Lufthansa Cargo GmbH are Franz Zöchbauer and Hasso Schmidt.
     Lufthansa Cargo has a 74 percent stake in the new company; Austrian Airlines holds 26 percent.
     The company employs around 120 people.
Heiner Siegmund

Schiphol Still Active

     Active Airline Representatives BV, founded eighteen years ago in 1992, is an independent Dutch GSSA representing leisure Cargo Group in the Netherlands.
     Headquartered at Schiphol Airport and situated in close proximity to the Dutch freight forwarders and handling agents, Active Airline Representatives BV provides a range of services, including cargo sales, marketing/ statistics, etc.
     Active is a founding member of EGSAC (European Cargo General Sales Agency), a consortium of independent cargo GSSA companies.
     “Active operates as a GSSA only and is not involved in any freight forwarding activity,” the company states.
     “We are totally neutral and therefore are able to work with all cargo agents as a true service partner.
     “Our commitment as ‘true partners’ includes providing the airlines we serve with regular market information, including route studies, traffic statistics and market rates & competitors.
     “We are Active 24/7/365.”
     More: info@activeair.nl.

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