KL Off The Floor

     The air freight trio comprised of Air France-KLM Cargo and their affiliate Martinair Cargo has returned to operational profitability, earning 11 million euros in the first quarter of 2010 (1. April-30. June). This comes after a loss of 63 million euros in the fourth quarter of fiscal year 2009/2010.
     Said Chairman Michael Wisbrun of the joint cargo committee: “Being the largest global cargo carrier, we were highly exposed to the crisis. However, we reacted early by reducing capacity and implementing a stiff costs-cutting program. Now our performance is bouncing back in terms of revenue and tonnage, but the returns we are getting are still too thin.”
     Concerning the market outlook, the manager spoke of a “highly volatile and uncertain situation.” Because of this uncertainty “we look only two to three months ahead.”
     During the Paris meeting held by the three air freight carriers, Wisbrun announced concentrating on high quality revenues in order to improve the yields. The manager further said that the 16 units encompassing freighter fleet would be capped.
     “As soon as we get a new aircraft, we’ll take an older plane out of the fleet, thereby replacing the equipment one to one.”
      Five of these freighters belong to Air France Cargo, sixteen to Martinair Cargo, although the Amsterdam-based KLM subsidiary operates only nine of them as line-haul equipment, keeping the remaining two craft as spares for charter missions or as replacements for one of the network freighters in case of maintenance or technical checks.
     He emphasized that the majority of the tonnage will be carried in the belly-hold compartments of the AF-KLM passenger fleet and the 16 Combi aircraft operated by KLM. Statistics underline this shift from freighter freight to belly carriage with currently only 34 percent of all goods being transported by the joint freighter fleet. Two years ago it was still 46 percent.
     To widen the cargo trio’s global influence, the carriers put all their eggs into the consolidation basket. Close partnerships and trans-national joint ventures are the names of AF-KLM-Martinair Cargo’s future air freight game. The model for further global coverage is the collaboration with Delta on routes across the North Atlantic, with participation from Alitalia as well. There, the carriers act virtually as one airline by combining their routes and offering the market similar rates due to the antitrust immunity granted by the authorities.
     “Similarly, we intend to proceed in the Far East,” announced Wisbrun, namely with China Southern, China Eastern and Taiwanese China Airlines. Each of the tree carriers will join the Skyteam alliance next year. In Asia however, “we still have a long way to go,” the manager said, putting on the brakes.
     In the meantime, KLM subsidiary (100 percent) Martinair announced stepping out of the passenger business at the end of 2011. Thus a 53-year period ends, which began when Dutch air force pilot Martin Schoeder established the airline in Amsterdam, offering it as a leisure carrier.
     According to spokesperson Suzanne van de Velde, there was no alternative, since all efforts failed to turn the division into profitability. The four B767s will return to the lessors next year. Then approximately 600 of Martinair’s total 1,800 staff will be laid off. “KLM and KLM daughter, Transavia, will offer them new jobs,” said van de Velde.
     The passenger business accounted for 30 percent of the carrier’s turnover, with 70 percent contributed by the cargo arm. The air freight division is profitable, says Martinair.
Heiner Siegmund /Flossie

October Takes Off
Fest At Lufthansa

     Lufthansa Cargo just recalled the last two MD-11Fs from Victorville, California where they were parked during the world financial meltdown. Both are flying to Ximen, China for a thorough inspection before pressing back into service.
     Lufthansa held a gala mitarbeitfest (company family day) for more than 3,000 employees and their families at it’s Frankfurt hub on September 22, as cargo chief Carsten Spohr, who was appointed Executive Board of the Lufthansa Group and CEO and Chairman of the Lufthansa Passenger Airlines Board, said both hello and goodbye.
     Carsten Spohr:
     "The entire executive board would like to thank you all with this party for your engagement, your solidarity and your passion for Lufthansa Cargo – especially during the last year.”
     “Overall,” he said, Lufthansa Cargo had “regained its momentum.”
     Karl Ulrich Garnadt is new Chairman and CEO at Lufthansa Cargo AG.
     When addressing the possibility that Frankfurt International may have to impose a night ban on flights, Dr. Andreas Otto, Vice-president Product and Sales at Lufthansa Cargo, made it clear just how serious the consequences of an absolute ban on night flights at German airports would be for globally-operating manufacturing companies.
     Speaking at a two-day meeting between The Logistics Circle of the Association of the Automobile Industry (VDA) and Lufthansa Cargo, Herr Spohr declared:
     "The complexity of the worldwide logistic processes has increased enormously.
     “An exporting nation like Germany cannot afford to allow the country to be decoupled from the international flow of goods for several hours daily.”
     There was support for this position from the VDA. As the first association of manufacturing industry, last summer the VDA became a member of the initiative "Cargo Needs The Night.”
     Founded by the logistics industry, the initiative campaigns for competitive operating times at commercial German airports.
     Finally, after Lufthansa Cargo sent two relief flights to Pakistan in September, free of charge to UNICEF, the carrier also noted ramping up scheduled service between Frankfurt and Los Angeles with twice-weekly service via an Aerologic B777F.
     The switch to the 777F will bring further change with it. Coming from Frankfurt, Los Angeles will still be approached over Chicago; on the return flight, however, it will be a direct flight from L.A. to Frankfurt.
      Veli Polat, Regional Director USA West, Mexico & Central America of Lufthansa Cargo, sees this as a very positive change: "The integration of the 777F in our route network offers our customers new possibilities. For example, we can now also fly horses directly from Los Angeles, because the 777F will fly without a stopover to Frankfurt.”
(Geoffrey/Flossie)

What No Air India Cargo Means

     Strange are the ways of Air India.
     Just when things seemed to be going right, the management did an about face—and this time around, it will be air cargo to take the hardest hit.
     Barely ten days ago, there was news that the flailing carrier would receive financial help from the government. Air Cargo News FlyingTypers also reported that the high-level Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Dr. Manmohan Singh, would give the green signal for commencement of the airline’s six Strategic Business Units (SBUs) comprising cargo: Maintenance, Repair and Overhaul (MRO); ground handling; engineering; low cost airline; and related business.
     When Air India and Indian (Airlines) merged in 2007 and the National Aviation Company of India Ltd (NACIL) was set up, it was then decided that the six SBUs generate their own incomes and turn into separate profit centers.
     Now we hear that Air India has decided to sell its six Boeing freighters.
     That move would certainly see an end to the Cargo SBU.
     According to reports emanating from the Air India headquarters in Mumbai, management had planned the sale of the carrier’s six Boeing 737-200 freighters since the dedicated cargo business was unlikely to take off in the near future.
     These six planes are in addition to four A-310 freighters that were converted at a cost of $40 million, which Air India has already put up for sale.
     The Boeings were all converted to freighters in 2007 and originally belonged to Indian (Airlines). Another reason given for the sale was that the planes needed to be phased out.
     The freighters would have been used by Air India for the launch of its domestic cargo services, with Nagpur’s Dr. Babasaheb Ambedkar International Airport serving as the hub.
     Way back in 2005, when Dr. Manmohan Singh’s government completed a year in office, the government took a number of important initiatives, especially in Indian civil aviation. One of them was cargo operations for the two airlines: Indian Airlines and Air India. At that time, Indian Airlines was in the final stages of converting five B737s for retail courier services with Nagpur as the hub.
     Air India was also planning to expand its cargo operations in a phased manner over 2006 and 2007. It planned to dry lease one A310 dedicated freighter and one B747 dedicated freighter and convert two A310s.
     Later, after the Air India-Indian merger, Air India launched its great plan of cargo services connecting six major domestic destinations through Nagpur, which, incidentally, is on hold for the moment.
Tirthankar Ghosh

Morch Of Time

     Andrew Morch, newly named General Manager The Americas-Lufthansa Cargo Charter Agency, is relocating from Montreal back to Chicago in order to take up this new challenge. He has been around the industry for quite a few years, having worked for Swiss Air, KLM, AirBridge Cargo and most recently, Air Canada. He has proven to be very flexible in the past and present.
     “For all the ideas he already has, he will certainly need a lot of this and we are happy to have him on board,” says Reto Hunziker, MD of Lufthansa Cargo Charter.
     Morch, together with his team, has a big focus for the months to come.
     “The Americas team of Lufthansa Cargo Charter is charged with one clear objective, and that is to establish a sustained turnaround. Driving this objective will be the renewed focus on our already available distribution channels: Lufthansa Cargo, Swiss World Cargo and the rest of the Lufthansa Cargo Group. The relationship with our operators will be strengthened, as will those with our existing customers.
     “A new focal point will be placed on the small- to medium-sized forwarders who spotlight project business. To that end, we are adding resources to the office, which is located in Chicago.
     “In addition to Blake Merriam, Senior Sales Manager, Alexander Schmidt will join from our Frankfurt office, also as Senior Sales Manager. Rounding out this team we will bring on one more individual whose expertise and languages will support the Latin American region of the area.
     “With the above in place, a new and improved Lufthansa Cargo Charter team for the Americas looks forward to achieving it's objective,” explains Andrew Morch.
Geoffrey/Flossie

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