Cargo B Bites The Dust

     Belgian air freight carrier Cargo B has ceased all operations this Wednesday due to lack of capital.
     A high-ranking manager of the carrier’s general sales agent European Cargo Services (ECS) confirmed this to ACNFT.
     The insolvency became unavoidable after minority stakeholder Japanese Nippon Cargo Airlines (NCA) rejected plans for an immediate capital injection to channel badly needed cash into Cargo B’s empty coffers.
     “Obviously they were so short of money that they couldn’t pay their bills any more and consequently had to stop their entire activities,” commented a person close to the case.
     Cargo B is the latest victim of the ongoing financial and economic crisis after a number of North American and Asian air freight carriers went broke before.
     The Brussels-based airline first took to the skies in October 2007 with B747-200F’s that had been utilized by Russian Air Bridge Cargo. Confronted with high rising fuel prices Brussels B got rid of the old and kerosene consuming equipment to lease a modern B747-400F from Japanese NCA.
     A second brand new freighter of this Boeing variant followed in mid-May this year.
     Both aircraft were deployed on a number of routes between Belgium and Latin America and Africa.
     In addition to scheduled services, Cargo B also offered full- and part-charters.
     At Munich-held Transport Logistik exhibition the airline revealed plans to move operations from Brussels to Liege Airport due to night flight restrictions at their home-base, Zaventem Airport. These plans can be buried now unless the management attracts new investors out that are willing to inject substantial funds in the airline to guarantee Brussel B’s survival.
Heiner Siegmund

Telling It Like It Is
As Summer '09 Begins

     We all know now that the global aviation industry is clearly in a state of deep crisis.
     It suffers from falling passenger and cargo demand, excess capacity, rising fuel bill, and a host of other problems. Rising fuel prices in the first half of 2008 plus a global recession in the second half of 2008 wrecked havoc.
     Data released by International Air Transport Association (IATA) shows that revenue passenger kilometer (RPK) declined by 7.5%; available seat kilometer declined by 3.7%; and passenger load factor (PLF) was 72.3% during the period Jan-Apr, 2009—as compared to same period of previous year. Similarly, freight tonne kilometer (FTK) fell by a huge 22.2%; the available tonne kilometer fell by 7% during the same period.
     Regional performance data indicates that Asia/ pacific suffered a decline of 11.2% in terms of RPK, and 7.2% decline in ASK in both Africa and Asia/pacific region during the same period. Africa plant load factor was very low at 70.4%, closely followed by the Middle East (70.9%).
      Interestingly, the Middle East was the only region that recorded any positive growth in terms of passenger traffic. However, freight traffic performance data indicated that all the regions recorded declines. The Asia/Pacific region again led with a 24.70% decline in terms of FTK and a 12.2% decline of ATK during the same period.
      In India, the effect has been quite severe on passenger traffic; in the global aviation industry the impact has been most prominently felt in air cargo traffic. Passenger traffic has declined from 116.89 million in 2007-08 to 108.88 in 2008-09, which translates into a decline of 6.9%, according to Airport Authority of India (AAI). Cargo traffic declined by 1%: from 1.71 million tonnes in 2007-08, to 1.70 million tonnes in 2008-09.
      India‘s airport passenger traffic data indicates that major airports saw declines in passenger traffic and cargo traffic during 2008-09 as compared to 2007-08. Airports recording a negative trend in passenger traffic include: Chennai (7.7%), Kolkata (6.3%), Ahmedabad (10.6%), Trivandrum (7%), Mumbai (9.4%), Delhi (4.7%), etc. Other airports —like Jodhpur (49.9%), Port Blair (38.2%), Jammu (26.5%), Rajkot (16.7%), Amritsar (15.55), and Goa (13.9%) —have also registered declines during this period. Among the factors contributing to declining air travel was the number one cause: recession dampening air travel demand, which depressed the numbers of international and domestic tourists. A decline in air passenger traffic was seen in tourist centers like Port Blair, Goa, Jodhpur and Amritsar etc. The decline in international passenger traffic in Goa was 10.3%, Amritsar 2036%, and Gaya 10.7%. Domestic passenger traffic declined for almost all airports.
      India’s major airports such as Mumbai (0.7%), Delhi (1.5%), Kolkata (3.1%), Trivandrum (1.6%), Ahmedabad (2.3%) and Bangalore (11.3%) registered a decline in cargo traffic during 2008-09, compared with 2007-08. This can perhaps be attributed to the generalized slow down in international trade.
      IATA forecasts that the cumulative loss of airlines will be US$9 billion in 2009. Total industry revenue of US$448 billion is projected for 2009—as compared with US$528 billion recorded in 2008, which means a decline of 15%. Another risk underlined by IATA is rising fuel prices, which could undermine any possible recovery in the industry.                   According to IATA estimates, the industry needs US$6 trillion to recapitalize. IATA has however, cautioned that banks are not able to finance the industry. IATA also points out that changing business habits, reductions in corporate travel budgets, increased use of video conferencing —all are dampening industry recovery.
      India’s aviation industry is likely to face a 6.8% fall in demand and 4% fall in capacity in 2009. This will mainly be due to the rapid deterioration of global economic conditions. India's international air services, which have increased three-fold between 2000-08, are now expected to witness 2-3% fall in demand, while capacity may increase 0.7% in 2009.
      A wide variety of steps have been undertaken by airlines to address their problems:
     •   Cutting capacity, laying off staff, deferring plane deliveries, offering special schemes to lure the customers: these are commonly practiced by airlines. For instance, Jet Airways cut capacity by 12% in 2008. The CEO of Southwest Airlines, Gary Kelly, voluntarily cut his 2009 base salary by 10%. Kingfisher Airlines has also cut 20% in the salaries of its pilots.
     •   Airlines are working to use new technologies that change the way planes fly. For instance, the global positioning information enables shorter, more direct routes to destination. Special landing procedures—such as continuous descent approaches —reduce fuel to the engines. Recently, Southwest Airlines conducted a test flight using these technologies. They found that it could reduce fuel consumption by 6%.
     •   Aircraft manufacturers are trying to develop new engines and lighter weight jetliners, both of which will help save fuel. The plane‘s design and weight significantly affects the fuel consumption. This is why the new jetliners—like the C-Series, the Boeing 787 and the Airbus A350 – are all being manufactured using lighter-than-metal composite materials.
     
     Although the negative impacts of the current global recession seem to be unavoidable, the aviation industry is trying to reduce the severity of the impact. The industry is in survival mode now, trying to do its best to manage through the current crisis. However, global economic revival is what will finally hold the key for industry recovery.
Gordon Feller

     In the picture are around 70 of the Leisure Cargo sales force around the world.
     The virtual cargo airline has recently gained considerable weight with Condor – and Air Europa now being under the umbrella.
     Notwithstanding the tough market, Managing Director, Ralf-Rainer Auslaender takes a smooth, positive approach to the near future.
     “We have recently welcomed two airlines in our alliance of now 18, that count in their respective markets.
     “We strongly believe that Latin America and Africa have a better than average potential, and we will shift our sales and service attention to these new horizons for a while.
     “Cuba, Venezuela, Northern Brazil, Argentina – just to mention a few of the countries that we are going to feature at reasonable rates and at top quality to the European, Middle-East, African and Asian market from now on.”
     This year’s International Sales Conference took place in Bad Neuenahr near Bonn and the famous formula one track “Nuerburgring”.
     For the first time the global sales force chose Summer for the event and a location not far from the home office in Duesseldorf.
     You can feel, how proud and dedicated the many delegates are to be part of this unique global family in the airfreight industry.
     As two days of working, networking and also socializing together wound down, a reenergized group moves forward dedicated to increasing in house connectivity in order to improve mutual understanding of a customer’s need at both ends – to deliver the service required and to – stay friends and assist each other.
     The benefit for shippers, consignees and agents is obvious.
GFM

Majali Takes Reins Of Gulf Air

     Royal Jordanian’s long-time CEO Samer Majali moving from Jordan to Bahrain to become new Chief Executive Officer of local carrier Gulf Air.
     People close to the case confirmed this to ACNFT.
     Majali will succeed Swiss-native Bjoern Naef who took the driver’s seat at Gulf Air in January 2008, following his Swiss fellow countryman André Dosé who stepped down from Gulf’s helm after only four months in office. Before that James Hogan was responsible but left in 2006 to become head of Gulf Air’s direct rival Etihad Airways in Abu Dhabi.
     With Amman-born 52 year old Majali soon in charge, Bahrain’s national carrier expects a manager taking over responsibility who guarantees consistency at the airline’s top deck. This is badly needed due to mounting competition by fast growing neighboring airlines that are highly subsidized by their local governments.
     Gulf Air’s history reaches back to 1950 when the carrier was established. Originally founded as airline for the entire Arabian Gulf region including the Emirates Dubai and Abu Dhabi, Gulf Air managers were forced to scale back their carrier’s fleet and network due to upcoming regional competitors like Emirates, Etihad and Qatar.
      Today Gulf’s fleet comprises 33 aircraft of which 19 different Airbus and Boeing variants are deployed on long haul routes. The carrier has placed orders for 62 new aircraft that will be delivered in the years ahead. Presently 5,400 staff are on Gulf Air’s payroll.
      The airline does not belong to any international alliance like Star, SkyTeam or Oneworld. This might change eventually with Majali taking over responsibility because the manager already maneuvered one carrier into a global pact: Royal Jordanian to join the Oneworld club.
Heiner

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GeoPost In New Tie Up

     GeoPost, the express parcel arm of French Groupe La Poste, and Continental Air Express Pvt. Ltd, an associate company of the Vohra family-owned Continental Carriers Group, has announced the setting up of a joint venture company.
     The new company is called DPD Continental Pvt. Ltd. and offers inbound and outbound express parcel services under the DPD brand to customers in India.
     The Foreign Investment Promotions Board, Government of India, recently approved an application of GeoPost Intercontinental SAS and Continental Air Express Pvt. Ltd. to establish the joint venture. GeoPost Intercontinental, the international expansion vehicle of GeoPost, will hold 60 percent shares in the Joint Venture, while the balance the Vohra family will hold 40 percent.

     Gautam Nath has been appointed to the position of CEO at DPD Continental Pvt. Ltd. The joint venture company will be headquartered in New Delhi. In the initial phase, DPD Continental Pvt. Ltd. will offer its services in New Delhi and Mumbai. The second phase will see operations being rolled out across several major cities in the country including Bangalore, Chennai and Kolkata by the end of 2009.
     Talking to ACNFT, Wolfgang Lehmacher, President and CEO of GeoPost Intercontinental SAS, said that the setting up of DPD Continental Pvt. Ltd. was a significant step in the realization of “our global strategy to strengthen our position as the world’s domestic express parcel specialist. The joint venture is the result of a successful cooperation with our partner Continental Air Express. It provides European customers with deep reach into India and Indian customers with deep reach into Europe and into other important regions in the world.”
     GeoPost, the No. 2 provider on the European Express Parcel market, has built a flexible global network by combining owned infrastructure in selected locations and partnerships with premium players in express parcel distribution. DPD Continental Pvt. Ltd. will offer value for money, reliable and efficient solutions for worldwide and domestic distribution to help customers optimize their supply chain.
      DPD Continental Pvt. Ltd. will offer an efficient collaborative solution with the intellectual, financial and organizational backing of both the joint venture partners.
     Vipin Vohra, Chairman and Managing Director of Continental Carriers Group pointed out that the “partnership with GeoPost in our associate company Continental Air Express Pvt. Ltd” was a major step for Indian express companies.      “After successfully establishing a footprint in the areas of air/ocean freight, consolidation, project handling, logistics and customs clearance, we look forward to offering world-class express parcel services to the Indian customers through DPD Continental Pvt. Ltd. and set a benchmark for quality standards in the Indian express parcel market.”
T.Ghosh