Vol. 11 No. 116                                  #INTHEAIREVERYWHERE                                        Monday December 3, 2012

1975—Founded Air Cargo News. We are the Original.
1986—Responsible for saving the Marine Air Terminal, LaGuardia Airport. Only publication to be honored by the U.S. Department of Transportation for outstanding contribution to transportation and aviation.
1997—Credited with China Airlines Cargo service into the Miami market.
1999—Air Cargo Americas Award for Excellence.
2001—Responsible for saving Building One, Newark International Airport historic first generation administration building.

 

Straight talk With Des Vertannes

     “You know who matters now?
     “Des Vertannes, because he is changing the 'cargo-face' of IATA positively and is able to get the dialogue moving forward on many of the important challenges that we face in the cargo industry,” said Ram Menen, SVP Cargo, Emirates.
     When Des Vertannes traded in a lifetime of working his way up the management pole (where he attained top billing at Etihad Cargo) for the very public and at times thankless role of fronting for IATA as Head of Cargo, there may have been more than a few people who wondered why he took the job.
     Des is a real air cargo professional and was certainly a rising star at Etihad.
     We can all be grateful for whatever keeps this grounded and very likeable guy pushing the envelope for air cargo at IATA.
     And to paraphrase author Maurice Sendak, now that a genuine airline cargo guy is in IATA Cargo, IATA Cargo is in all of us.
     Here, Des speaks up as FlyingTypers continues our exclusive series:
     “Where Do We Go From Here?”

     “For air cargo, 2012 will go on record as being a year of low or no growth.
     "A positive start to the year brought early optimism, but that faded away.
      “Excitement around the new iPhone and similar new generation consumer products will bring a welcome boost but the general consensus seems to be that there was no significant peak season this year. Economies in Asia, the U.S., and Europe continue to struggle with recovery; therefore businesses will need to be very agile if they are to capitalize on opportunities that will emerge in 2013.
     “Our recent quarterly forecast shows that globally, the world’s airlines will make a profit of just $4.1 billion this year. That’s slightly up on our forecast in June, but it still equates to a margin of just 0.6 percent. In particular, profits for Asian carriers are being held back because with 40 percent of the global cargo market, the region’s carriers are the most exposed to weak cargo demand. In general, cargo yields will fall by 2 percent this year.
     “We’re going to see further consolidation across the supply chain, greater use of multimodality to achieve distribution efficiencies, and governments increasingly embracing data transmission to control and monitor security and borders. Thanks to campaigns being waged by IATA, individual carriers, and other organisations representing shippers and forwarders (and hopefully with the help of the media!), the Air Cargo Industry will gain significant recognition in its capacity to stimulate economic activity and enhance carrier bottom lines. Finally, industry coalitions such as GACAG will play an increasing role in driving necessary change.

Des Vertannes in a conversation with Geoffrey Arend at TIACA Atlanta in October


          “I see three key things for the industry: First, invest in emerging and niche markets. Second, ensure you offer great customer service. And third, develop highly cost-efficient operational processes. These elements are likely to be the common traits for successful companies in 2013.
     “Having come over from the private sector, I was surprised by how seemingly fragmented supply chain is. Also, the time taken to achieve consensus on issues of importance has been longer than I thought – though the end result has been worth it.
     “The most important thing has been to unite the supply chain. You could say that there is still work to be done, but the emergence of GACAG has been a very positive step. Its two specific achievements so far have been to address the enormous security challenges that emerged after 10/10, and gain traction towards realization of a paperless air cargo industry.
     “Having worked in both the private and public sector, I can say that it takes teamwork to succeed, partnerships and collaborative entities to commit to similar timescales, and that all industry priorities must have full ‘Board’ support.
     “Airlines—in fact the entire industry—are experiencing deeply challenging times, so it’s vital IATA is seen delivering solutions and initiatives that bring true benefits. We need to do it quickly, too. The e-AWB has proven to deliver productivity gains of up to 19 percent, so we are fully energized in encouraging rapid adoption around the world and advocate aggressively where necessary to remove regulatory roadblocks."
     Air cargo issues get aired and discussed at the World Cargo Symposium, which has become an important event. We ask Des how he sees WCS shaping the agenda for 2013.
     “For me it’s important the industry considers the WCS its event. IATA may organize the event, but it belongs to the whole industry. So we absolutely need to continue to push for a more balanced attendance from all sectors of the supply chain. They need to be heard, to establish priorities, review progress, and agree about plans on how to achieve quicker results and help the sustainability of the industry.
     “If I could change one thing, it would be for governments and airport authorities to appreciate the value of the industry, and reverse their detrimental policies that have impacted our competitiveness. These actions would help strengthen profitability as well as help attract the talent the industry desperately needs.
      “IATA has and continues to play an incredibly important role for the aviation industry. It has ensured we have safe and secure skies, and standards that enable global trade and travel to be facilitated through multi and diverse channels. It has brought discipline in protecting the industry’s money despite unprecedented global financial and economic strains, and alongside industry partners, has engineered initiatives and projects that have delivered huge efficiencies. Our partners should understand that IATA is there to cooperate and collaborate and certainly to serve our industry. Part of that is of course advocacy, both with governments and to the general public, such as with the ‘Air Cargo Makes It Happen’ campaign.
     As we leave Des, we ask him about the people who have shaped this path that he has taken in air cargo. He says, “there are people I admire enormously but one stood out for me, and that was Geoff Bridges, for very personal reasons. The others know who they are!
Geoffrey


Luis de la Reguera Iberia fernando Tavera Viasa Buz Whalen Japan Airlines Norman Jeppeson British Airways Richard Haberly Flying Tigers Geoffrey Arend Air Cargo News Dick Logan William Clarke TWA Peter Diefenbach Pan AmDecember 8, 1980—Seated under a photograph of Amelia Earhart, at the Wings Club, in the old Biltmore Hotel in New York City—the first Air Cargo News Roundtable discussed industry issues. (Left to right) are Luis de la Reguera, Iberia; Fernando Tavera, Viasa; Eugene ‘Buz’ Whalen, Japan Airlines; Norman Jeppeson, British Airways; Richard Haberly, Flying Tigers; Geoffrey Arend, Air Cargo News; Dick Logan, Air Cargo News; William Clarke, TWA; and Peter Diefenbach, Pan Am.

Today we continue a tradition pioneered nearly 33 years ago, as FlyingTypers Virtual Roundtable Part 11 (Part 1 appeared last Friday) discusses air cargo’s impact on the environment.

Air Cargo Talks Up The Environment

     Last Friday, FlyingTypers began an exclusive series that continues today. Leaders of the air cargo business are speaking up about what their companies are doing to create a better footprint, as concerns mount about global warming.
     Today we speak to a diverse group including Cathay Pacific Cargo, Aeromexico Cargo, Air Canada Cargo, and also a seasoned top air cargo executive and industry leader, Neel Shah.
      What emerges is well worth reading and considering, as that big United Nations Global Climate Change Conference continues in Doha all this week, finishing up this Friday, December 6 (and everyone is hopeful for more than just hot air, like some kind of concrete accord on auctioning the 1997 Kyoto Protocol).
     So far, the news out of Doha centers on a major showdown between the U.S. and China.
     Speaking for a coalition of developed nations known as the G77, China's delegate, Su Wei, said rich nations should become party to an extended Kyoto Protocol—an emissions deal for some industrialized countries that the Americans long ago rejected—or at least make "comparable mitigation commitments."
     The United States rejected Kyoto because it didn't impose any binding commitments on major developing countries such as India and China, which is now the world's number one carbon emitter.
     Countries are hoping to build on the momentum of last year's talks in Durban, South Africa, where nearly 200 nations agreed to restart stalled negotiations, with a deadline of 2015 to adopt a new treaty and extend Kyoto between five and eight years. The problem is that only the European Union and a handful of other nations—which together account for less than 15 percent of global emissions—are willing to commit to that.
     We encourage our readers to join in the dialogue as the story continues to unfold this week.
Geoffrey

Emirates A380

     As an airline, Emirates is committed to the highest standards of environmental responsibility, and our vision is to become a leader in the aviation and travel industries.
     We have a clear environmental policy that outlines the goals we want to achieve, including investment in the most modern, eco-efficient technology available, from aircraft to engines and ground equipment.
     Emirates has one of the most modern, quietest, low-emissions fleets in the world—with an average age of just over six years, well below the global average.
     Investing billions of dollars in low-emissions aircraft, and flying them in the most efficient way possible, is one of the biggest contributions we can make to reducing our carbon footprint, and our impact on the environment.
     For example, the A380 burns up to 20 percent less fuel per seat than its nearest competitor.
     The development of the A380 is the most significant advancement in reducing fuel consumption and emissions over the last few decades.
     Lower fuel burn mean lower CO2 emissions.
     Emirates currently operates 27 A380s and have a further 63 on order.
     In terms of freighters, the 747-8F and B777F are the new, high capacity aircraft of Boeing; they represent a new benchmark in fuel efficiency and noise reduction, and have lower CO2 emissions.
     Emirates has 5 B777F already flying, with 6 more of these freighters on order for SkyCargo.
     At Group level, we have a host of other initiatives, including on-ground energy and water efficiency projects, recycling and waste-minimization initiatives, and our ongoing investment in conservation-based tourism developments such as the Dubai Desert Conservation Reserve in the UAE and the Wolgan Valley Resort in Australia.


Air CanadaAir Canada aspires to be an environmental leader within the global airline industry, because we recognize the importance of caring for the environment while conducting our operations on the ground and in the air. Air Canada Cargo operates within the Air Canada Environmental Management System to continuously improve its operations and environmental performance.
     At Air Canada Cargo we understand the business imperative for its operations to be environmentally sustainable, and the importance of improving environmental performance. Air Canada Cargo actively engages with its customers to understand their unique expectations and concerns around cargo environmental issues.
    The challenges for aviation to reduce emissions requires further investment and collaboration with industry partners and government, to invest in technology, advancement of sustainable aviation biofuels, and infrastructure and operational measures that allow substantial CO2 emission reductions to be met.
     Since 1990, Air Canada has reduced the emission intensity of our flight operations by 31 percent, and we continue to focus on continuously improving our emission reduction initiatives:
     In the air, we are:
Adopting industry goals to improve fuel efficiency by 1.5 percent by 2020, to cap aviation CO2 emissions from 2020, and to reduce CO2 emissions by 50 percent by 2050 compared to 2005 levels.
Investing in a modern, fuel-efficient fleet. The new Boeing 787 aircraft, set to arrive in 2014, will be 20 percent more CO2 efficient than the aircraft they replace.
Actively supporting development and commercialization of sustainable alternative jet fuels, integral to future reductions in CO2 emissions. In 2012, Air Canada conducted its first two-biofuel flights
Fine-tuning our operations. Our Fuel Efficiency Program alone has achieved CO2 emission reductions of over 318,000 tonnes from 2006-2011.
Invested in flight planning software and we work with government authorities to make the airspace more efficient and therefore reduce the emissions associated with international flights.
     
     On the ground, we are:
Adopting lower carbon fuels in our ground handling fleet. For example, conversion to propane has resulted in a 33 percent reduction in CO2 emissions.
Improving how we maintain and operate our buildings through equipment upgrades, employee awareness campaigns, and energy audits.

      Cargo specific programs include:
The introduction of Kevlar Light Weight cargo containers on board (Air Canada Cargo was one of the first airlines to do this). Their lighter weight (20 to 23 kg lighter than conventional containers) eliminates unnecessary weight that adds to fuel burn, and has the environmental benefit of reducing the amount of jet fuel burned by an estimated 2.8 million liters.
e-freight, which eliminates the bulk of paperwork in domestic and international shipments. If adopted by the industry it would eliminate an average of 7,800 tonnes of paper each year—enough to fill 80 Boeing 747 freighters.
     We are also reducing our overall environmental footprint by reducing noise through quieter technology, noise-abatement procedures, and participation on aeronautical noise committees; reducing waste and increasing recycling within our facilities and onboard our aircraft; and greening our supply chain through purchasing policies requiring suppliers demonstrate respect for the environment.”

 

Cathay Pacific

FlyingTypers spoke to Mark Watson, Cathay Pacific Head of Environment Affairs, who is extremely passionate about Cathay's commitment to the environment. He along with his staff, keeps Cathay at the forefront of this issue.

Cathay Pacific Cargo takes its commitment to the environment very seriously. As part of our overall, company-wide Sustainable Development Strategy, which has been in place since 2010 and aims to embed sustainable development into every aspect of our operations, we have been taking steps to address our impact on the environment, both in the air and on the ground, as part of a long term commitment to the sustainable growth of our cargo business.
     In November last year, we took delivery of our first Boeing 747-8 freighter, an aircraft designed with the environment in mind, with a raft of new features including composite materials to reduce weight of the airframe, all new GEnx-2B engines that offer a 17 percent improvement on fuel burn (vs the 747-400F) and lower CO2 emissions. The new engines are also quieter, with a 30 percent smaller noise footprint than the 747-400Fs they replace. We currently have 8 of these aircraft in the cargo fleet, with two more slated for 2013 deliveries.
     On the ground, we are on track to open our new state-of-the-art Cathay Pacific Cargo Terminal at Hong Kong International Airport, which features a host of sustainability-led design considerations including ultra-efficient chillers, heat recovery, LED lighting, solar powered hot water, rooftop PV panels, and a condensation recycling system for water conservation. We’re also moving to ultra-lightweight ULDs in our cargo operations, which we calculate will save around 5.7 million gallons of fuel, equating to 54,000 tonnes of CO2 per annum—an initiative pioneered by members of our cargo team. As part of IATA’s goal of achieving e-freight worldwide, we have successfully adopted electronic airway bills (e-AWB) for all cargo flights from Hong Kong and are sharing our experience with other airlines.

Mark Watson Cathay Pacific

     In short we’re doing a lot, but we’re constantly looking for new areas that we can reduce our environmental impact. It’s also increasingly clear that our customers are asking questions about our commitment to sustainability in what is a very competitive area of the aviation industry.
     We’ve been undertaking considerable work to examine the viability of sustainable biofuels, both as an airline and in collaboration with our parent company, The Swire Group, and we are actively looking at potential investment opportunities in this area.
     We’ve also been very active on the international stage (e.g at UNFCCC and ICAO) and have been calling for aviation emissions to be addressed through a UN ICAO led-global solution since 2008. This work is now at a critical stage and ICAO is currently examining the options for market-based measures to tackle our emissions as a sector. CX sits on the IATA Climate Change Task Force, which is leading industry efforts in this space.”


Katja Wichmann
Ingrid Sidiadinoto
Meta Ullings
     

 

The Mexican Plan

Eric HartmannEric Hartmann, VP South America & Europe, Aeromexico Cargo:
We at Aeromexico Cargo are committed to environmental issues, and social responsibly is part of our mission. Because of the nature of our industry we create carbon emissions, but we are constantly looking to lower these; in the past few years our fleet has become more efficient with incorporation of B737NG and B777-200ER aircraft. In August of 2011 we were the first operator to fly a Commercial Trans Atlantic flight with BioFuel from Mexico City to Madrid. This year we announced the intent to purchase 100 next-generation aircraft from Boeing, ten 787 “Dreamliners,” and ninety 737-8 & 737-9 MAX.
      On the cargo side we are constantly striving to make our operation more efficient, and we are working with the Mexican Authorities on issues regarding eFreight and eAWB.
     I feel that our industry, as a whole, has taken environmental issues very seriously.


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Neel Takes The Long View

Neel Shah JonesNeel Shah Jones, President, JS Aviation Consulting and Chief Commercial Officer, Able Freight Services:
I don't think that anyone doubts that our planet is beginning to change as a result of how we are treating the environment. You just have to see the impact of superstorms like Sandy to know that things aren't normal and we can expect these events to become even more frequent and catastrophic in the years ahead if we don't address the problem.
     However, I really hope that the folks that gather in Doha begin to focus on the true problem and not continue the attack on the aviation industry because we are such as easy target. Just because our industry hasn't figured out how to truly come together to defend itself isn't an excuse for politicians to regulate us to death. The facts are pretty clear and data from the EPA and IPCC tell us that the aviation industry contributes approximately 2 percent of total greenhouse gases in the world. Granted the industry continues to grow at a pretty rapid pace, but at the same time companies are investing billions of dollars in new aircraft, engines, clean burning ground service equipment, and hundreds of other initiatives that continue to drive down our carbon footprint.
     My previous company, Delta, was able to lower its carbon production by 30 percent in the past 10 years through a number of initiatives that included such diverse actions as installing winglets on the majority of the fleet to cut fuel consumption, to partnering with the Nature Conservancy to plant millions of new trees. You can imagine that the numbers are equally impressive at airlines like Emirates and Cathay Pacific and eventually at airlines like American and United, who have hundreds of very carbon-friendly aircraft on order.
     I believe that our industry must fully adapt a Sustainability Strategy in order to get the regulators off our backs. This is a cornerstone of GACAG and progress is certainly being made, but more must be done and more companies must become involved. The aviation and air cargo industries are so critically important for ongoing global economic vitality. We just need to look back at the impact from the Ash Cloud to know that this world can hardly do without the aviation industry for a few days, let alone a major structural cutback in the amount of flying that is done.      We need to continue down the path we started a few years ago get greater buy in and involvement from around the world. I believe every company in our industry should commit to publishing an annual Corporate Responsibility report that highlights progress being made towards becoming a better Global Citizen.
     Our story is a very powerful one, but unfortunately not enough people are hearing it.

 

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