KLM-Air France Cargo will incorporate controversial fuel surcharges partly into air freight rates September 1.
     Air Cargo News FlyingTypers has obtained information from sources at a big media pow-wow being held later today to announce the new deal for cargo in Paris.
     "By doing so we wanted to be a forerunner of the air cargo community," revealed a source of the Dutch/Franco carrier in an exclusive interview with ACNFT.
     "We have been asked by a growing number of shippers and forwarders to change the current system and bring the rate and surcharge structure to higher market transparency," the source stated.
     The new model is based on three different flying distances: long haul, medium and short haul flights.
     While the basic parameters for long distance transport will not be amended, by entirely splitting rates and surcharges as before, the other flights will see some fundamental changes with parts of the fuel surcharge integrated in the rate.
     According to information obtained by ACNFT, the new rate structure will be 20 percent for the kerosene surcharge of presently €1.25 euros on medium haul flights and 50 percent on short distance routes.
     A shipment from Paris to medium haul destination Beirut illustrates how the new deal will work
     On that route KLM /AF Cargo charges an average rate of €0.50 euros per kilogram, plus €1.25 euros fuel surcharge adding €0.14 euros for security, making the total rate per kilo €1.89 euros total.
     The new rate structure will demand the same final amount from the clients, but the invoice breakdown will be comprised of €0.75 euros as rate plus €1.00 euro fuel and €0.14 for security.
     The source said reasoning here is that 20% of €1.25 euros surcharge accounts for €0.25 euros.
     From September 1, this difference of €0.25 euros will be added to the carrier's rate bringing it up to €0.75 euros (0.50 + 0.25) per kilogram instead of 0.50 euros as before.
     "By introducing three levels of distance zones we take into account different fuel burning patterns of our fleet," the source said.
     "Our new mechanism will therefore, not lead to a fundamental change but will change the relative proportion of air freight rate and fuel surcharge.
     “The new deal should thrill the forwarders since they get commissions on the rates, not the surcharges, though.
     “This new arrangement allows for forwarder participation in the entire air cargo revenue stream process.”
Heiner Siegmund

ATC Success Takes Long View

     For years a tendency in air cargo has been for airlines to either get rid of their cargo business completely – or to reduce staff to a minimum and employ a General Sales and Service Agent (GSSA).
     Actually today in 2008 only a handful of carriers dedicate their own staff and facilities to cargo.
     But as cargo continues to grow in importance against runaway fuel and security costs almost everywhere else, this view may change.
     What most of air cargo already knows is that matching the production cost of moving the goods versus net income has made service agents winners as well.
     Ingo Zimmer, Chief Operating Officer ATC Aviation Services is among an elite breed of GSSA’s seem to be able to think local and act globally at the same time.
     Based in Frankfurt, Ingo says one aspect of ATC’s success has been to offer some or all of the services on his GSSA menu as key to unlocking new opportunities all around.
     “Our group offers any combination of options to airlines including just sales in Austria and that’s it, or all European coverage including service disciplines such as ground handling supervision, road feeder services etc.
     “In fact our portfolio (www.atc-aviation.com) is testimony that carriers from all over the world find utilizing our services in any number of varieties makes good sense.
     “But all of our service partners have one basic priority in common; to realize the highest possible contribution from carrying cargo – and the least possible headache.”
     While most mention that favorite four-letter word, fuel when the subject of challenges comes up today, Mr. Zimmer also says that rising fees and handling charges at major airports are always a critical component of concern along with fuel.
     “We can always create a package as part of our agreements offering carriers some refuge and one less thing to worry about.
     “ATC is, in reality a company that has emerged in the service quarter serving up a mix of airlines, long haul and short haul.
     “We note, all of our carriers are remarkably more cost-conscious than they were, say a year ago.
     “In 2008, every single all cargo flight is carefully scrutinized.
     “That means that in almost every case, freighters and even companies that are less efficient are disappearing.”
     We wonder how ATC Aviation Services that represents airlines from different continents understands what is going on in each of the trade lanes it serves?
     “At ATC, five service teams apply their knowledge and market know how to supply specialized expertise across our five main markets.
     “Our global results from this approach have proven to be much more rewarding all around especially as compared to a ‘one size fits all,’ or everyone must conduct business by our set of rules approach.
     “ATC people who specialize in Russia and Central Asia for example combine thorough market knowledge of the airlines serving these markets and local obstacles with a working understanding of local language.
     “Our approach is simple, but a major benefit for ATC customers.
     “I learned a long time ago as a cargo agent, that basic to the business of serving and keeping customers is hands on local knowledge and total communication between the parties all around.
     “Everybody needs to know what to expect every step of the way.
     As example, ATC moves consignments from Vatry in France into destinations in Africa.
     “Believe me, you got to have both hardball knowledge and support but also a feeling of how things work in shipping cargo to Africa.
     “Our people know it.
     “It is this geographical dedication I think that makes us a leader in the market.”
     Today ATC operates from 19 offices for more than fifty carriers in Germany, Switzerland, Spain, Belgium, Netherlands, Australia, France and India.
     It’s worth mentioning that the India package includes GSSA activities in New Delhi, Mumbai, Bangalore and Chennai.
     ATC’s roots date back to the early seventies when ATC Air Transport Consultants Ltd. was established in Switzerland as a charter broker.
     ATC was founded in 1979 is a pioneer in the field of cargo GSA for scheduled carriers, a concept which was then introduced successfully in other European countries.
     In fact during the 1980's ATC Group was the first GSA organization to provide coverage with dedicated offices across several European countries.
     In 1995 ATC was taken over by key management and ATC Aviation Services Ltd. was born. New strategies were introduced based on the corporate slogan: ATC Always Takes Care.
     In 2004 ATC Aviation Services Ltd became a member of the World Freight Company Group – creating a worldwide network of GSSAs.
     Last year (2007) Amsterdam and Brussels became full members of the ATC Aviation Group in the Benelux
     This year (2008) EC Cargo Barcelona and Madrid joined the ATC Aviation Group as full members in Spain.
     In total ATC company revenue for the year is forecast at €150million.
     Ingo Zimmer took the classic German apprenticeship as a freight forwarder at Danzas GmbH.
     He joined Swiss ATC and later guided Germany to top position in the group.
     Today at 45, Ingo Zimmer has risen to his current position as one of two company directors, but he remains a hands-on customer centric individual, available and ready for business around the clock based in Frankfurt.
     Ingo is a dynamic leader alright but also a caring father for a very international family.
     “The most important aspect of our service as mentioned, is our people.
     “Certainly ATC brings the full menu with all the bells and whistles to the table offering complete end to end capability in all the IT and specific to air cargo disciplines to get the job done.
     “But our growth into new markets and continued success is driven by our employees.
     “ATC will be as big as it wants to be but along the way we will never lose touch with our customers who drive everything we do.” zimmer@atc-aviation.com
Guenter Mosler

Hanging On To Dear Life

     Just in the first half of this year, losses from the soaring oil prices have eaten Air Macau 200 million Patacas (USD 24.9 Million), half of the airlines’ total capital, making the company on the edge of bankruptcy.
     As the flag carrier of Macau SAR, the airline earns more than 70% of its revenue from transporting passengers across the Taiwan Strait to Macau.
     And for 14 years since its foundation in 1994, it has expanded from one aircraft to the current 15 without asking any capital inflows from its shareholders.
     However, like many other small and medium airlines in China, Air Macau is more fragile than its larger competitors in the face of the ever rising oil prices.
     On Wednesday (July 9), Zhao Xiaohang, Chairman of Air Macau, sent out a letter to the company's shareholders, announcing that "since April 30, 2008 the net worth of the company had fallen below half of the value of the company's capital," leaving the company in the situation described in Article 206 of the Macau Commercial Code.”
     Read an airline in very deep trouble into that.
     According to Article 206, if a company loses up to half of its capital, the body must propose to be dissolved or the capital reduced – unless shareholders put up cash to replenish the assets equal to the value of the company capital.
     Expectation of the market to the attitude of Air Macau’s controlling shareholder, Air China, has been quite positive these days, believing that Air China will give its hand.
     With little surprise, in a statement sent to Air Cargo News FlyingTypers on July 10, Air Macau said the company is "very pleased to announce that our major shareholder – Air China International – as well as the Civil Aviation Authority of China have committed their support to Air Macau to ensure that Air Macau will be sustained through this critical period."
     Also, the company said that it is planning "major strategic moves,” promising “an announcement very shortly."
David