Delta Cargo Ad

EMO 50th Anniversary Ad
FlyingTypers Logo
#INTHEAIREVERYWHERE
Geoffrey FIATA Fellow
   Vol. 15  No. 54
Tuesday July 19, 2016

FlyingTypers Ad

CNS Field Of Dreams

      Here is Part Two of our year-long series focusing on airports. The following are some suggestions about what airports can do to better serve the industry, specifically directed to airport operators worldwide.
      Yes, FlyingTypers is presenting a series that goes beyond the norm for editorial about airports. We’re asking airport operators to talk about what they are doing in 2016 to advance their business.
      While highlighting the airports, our motivation is to open the conversation to involve everyone.
      If you are an airport, what are you doing about it?
      If you are an airline or forwarder, what can airports do to better serve the need?
      Write to me and have your voice heard.
      Here is a link to the first story in our series.
      We hope to hear from you soon.

If Unique Is What You Seek

      An airport’s never-ending quest to remain a self-sustaining enterprise has driven their owners and operators to seek unique ways to enhance both aviation and non-aviation revenues.
      During the past few decades, many commercial airports have modified agreements with their airline partners in order to claim a more substantial portion of revenues generated. In turn, airports have gone beyond traditional sources to leverage lucrative food and beverage, retail, car rental, ground transportation, communication and technology services, fuel sales and flowage fees, and parking and advertising agreements with their business partners.
      Others have found assets unique to their situation or geography, such as underground petroleum, natural gas deposits, or simply the decision to offer in-house ground handling or FBO services, all of which offer the financial flexibility and independence an airport needs to be financially sound.

No Two Airports Are Alike

      Airport business models can vary, given available resources, political climate, and the need for diversified revenue streams, but one constant for airports of all sizes is to provide the infrastructure for air transport to connect people and goods to the world’s resources and markets.
      For that very reason, airports play a critical role in the area’s transportation system. Most, if not all, act as multi-modal facilities, connecting air transport to ground-based road, rail, and/or marine facilities. Many connect to major transportation arteries, providing unique opportunities in support of moving people and products worldwide.

Definitions Matter

      Logistics is defined as the planning, implementation, and coordination of the details of a business or other operation.
      Although some may see this as an overly simplistic way to explain a complex operation, it is evident airports play a major role in helping entities plan and complete their logistical process(es).
      Not every corner of the earth can produce major quantities of goods sought worldwide, nor can every airport be a major air cargo center.
However, in our global economy, most people and businesses are consumers of things that originate elsewhere and, in many cases, are somewhere far away. Airports are the means of bringing those goods to locations near us, whether that means they arrive on hundreds of flights a day or, in more remote regions, by one piston-powered aircraft a month.

Major To Minor Note Cargo

      So your airport isn’t a major or even a moderate air cargo center… now what? Start by thinking about what your airport provides for your community and where it is located in relation to other modes of transportation, infrastructure, population centers, or even other countries and continents.
      Air cargo operators are unique businesses, but have similar needs like any other company.
      It is in this arena where your airport might be able to help support the industry beyond moving tons of product on multiple wide-body airplanes.       In fact, you may already be supporting air cargo in ways you don’t even realize.
      Land leases, both aviation and non-aviation, are just another way airports have been able to add revenue to their bottom line and, given the large air cargo industry worldwide, there are many opportunities to offer something more than just traditional air freight facilities.

Build-To-Suit

      Airports with substantial non-aviation lands can offer space for build-to-suit warehousing and sort facilities, often with room to grow such operations as the business matures.
      Given the multi-modal nature of airports, proximity to county, state, and interstate highways, rail lines and seaports make many airports a perfect location for unique facilities.
      Some airports have existing infrastructure, such as buildings that can be repurposed, as well roadways, utility corridors, parking lots, etc., to keep development costs low. Other airports have also invested in available parcels, making them “pad-ready”, which allows for faster and less complicated development timelines with much of the zoning and permitting in place.
      The lease-versus-buy nature of airport land allows potential tenants the ability to lock in lengthy terms without having to outlay money for land acquisition, which is another consideration for companies watching their cash flow.
      Concurrently, airports with aviation land available or land connected to the airfield, e.g., taxiways and runways, in-house or third-party maintenance, and repair and overhaul (MRO) facilities for aircraft operators of all sizes can be accommodated.

Southwest Florida Success

      For example, Southwest Florida International Airport successfully partners with an air cargo operator by allowing pre-service aircraft staging of their wide-body freighters on a former terminal apron, which offers ease of access at pre-negotiated rates.
      Along these same lines, aircraft conversion centers specializing in converting passenger aircraft to cargo aircraft need aviation facilities to perform their work.
      Given the mobile nature of airplanes, these types of facilities can be anywhere in the world and often end up in areas not driven by cargo tons, but by a specially trained and skilled workforce.

Recognizing Opportunities

      Air cargo companies also need headquarters and regional support space to conduct their “behind-the- scenes” administrative work.
      Once again, airports with non-aviation lands or repurposed facilities can provide low-cost alternatives for these functions. From finance, sales and marketing, communications, business development, governmental affairs, information systems, human resources and contract management to crew scheduling, dispatch, training, flight ops, etc., people in traditional office settings need a home.
      A commercial airport with adequate, nonstop flights to major national and worldwide destinations might be the perfect spot for an air cargo company on the move.

Adaptive Reuse Accompanies Change

      At Southwest Florida International Airport, a 2005 move to a new terminal complex opened up more than 1,200 acres of aviation and non-aviation land for development.
      Branded as Skyplex and equipped with roadways, parking, and utilities, this is the type of opportunity an airport can turn into a long-term investment for a cargo corporate office.

The Imaginative Way Ahead

       As you can see, there are numerous ways to support air cargo at your airport.
      Cargo facilities that include air freight buildings and aircraft ramps are important and should be part of any airport master plan; however, don’t sell yourself or your airport short when considering the different ways you can support the air cargo industry and all it has to offer. Concentrate on the key strengths of your airport and your community and design a plan to capitalize on those assets.
      Set your sights beyond the number of air cargo flights and tons being transported through your airport.
      You might be surprised to find out you are already supporting air cargo in ways you never envisioned!
Geoffrey

To Read Part I Of This Series Click Below
Airport Truck Queues Thwart Cargo Growth
Click To Read More
Atlanta Activates Truck Staging
Click To Read More

CNS Field Of Dreams

      Japanese carrier All Nippon Airways (ANA) is bullish on freight out of Asia this year, despite reporting declining revenues on international services last month in its annual report, and admitting that a subdued Japanese economy was dampening the domestic outlook.
      An ANA spokesperson told FlyingTypers the airline expected export cargo from Japan to remain weak this year, but “for FY2016, we see the cargo demand departing Asia will be strong.”
      But the spokesperson said demand growth this year had been patchy and ANA would be “setting flexible fares to address the supply-demand balance as well as cancelling some freighter flights when demand is low.”
      Not that this cautious approach is seeing ANA—which currently operates some 250 aircraft, including 12 freighters—adjust its ambitious objectives, which are focused on becoming a regional and global player rather than a Japan-centric carrier. Indeed, at the start of this year the carrier unveiled its new five year plan for FY2016-2020, during which it aims to increase both international passenger and cargo revenues by 40 percent and achieve an operating profit of ¥200 billion in FY2020.
      ANA also aims to achieve profitability in the air freighter business by FY2017 and become one of the world’s top five carriers in terms of freight handled by FY2020, up from 8th place last year. “By the end of FY 2020, ANA plans to achieve capacity on a tons-kilo basis of 138 percent compared to FY 2015,” the airline wrote in a mission statement.

      “While maintaining profitability in its core full-service domestic passenger business, ANA will actively expand its full-service international passenger business, LCC business, and cargo business. In addition, ANA will continue to improve the profitability of its non-airline businesses, working to build an optimum portfolio for the maximization of overall profitability.”
      To this end, ANA will further develop a logistics service that covers all of Asia, where growth is rapid, while the spokesperson added that ANA had also been building up its OCS arm, which offers end-to-end supply chain services and which the carrier is using to increase its exposure to growing e-commerce markets.
      “Based on the largest and fastest growing market, Asia, we aim to develop an integrated logistic service across the region by harnessing freighters and infrastructure via our Okinawa cargo hub,” said the spokesperson. “E-commerce is expected to grow, especially for destinations in China. We continue to expand our Business to Consumer business, together with OCS, and expect to increase revenue by JPY1.0 billion annually.”
      ANA Cargo’s joint venture agreement with Germany’s Lufthansa Cargo has been up and running for more than a year on Asia-Europe routes and this is expected to be a key revenue driver. A similar agreement is in place with United Airlines covering Transpacific markets and is due to start operations before the end of June on routes from Japan to the U.S., and in the second half of the year in the opposite direction.
      “The JV with LH has started both ways since last summer,” said the spokesperson. “The planned target increased revenue will be, including our JV with UA, JPY1.5 billion for FY2016.
      “JVs allow both carriers to best utilize our space, provide customers with a wider option of flights, and therefore improve flexibility.”
Geoffrey


CNS Field Of Dreams

Panalpina Airflo Accelerates Perishables

     In an air freight industry characterized by overcapacity and struggles to cope with macro headwinds and technological trends such as miniaturization, 3D printing, and the commoditization of technologies, which has reduced surges in demand for ‘must-have’ products, finding verticals that offer stable and profitable sources of cargo has become increasingly difficult. But, according to Panalpina, one such source of succor is the perishables business, defined as products that are time and temperature sensitive.
      Last November, the Swiss forwarding giant expanded its perishables logistics business with the acquisition of a majority stake in Airflo, Kenya’s second largest airfreight forwarder and a specialist in the worldwide export of perishables such as fresh flowers and vegetables flown from Africa into key European markets, most often via Amsterdam Airport Schiphol.
     Airflo employs over 150 staff in Nairobi and the Netherlands, organizing up to 1,500 temperature-controlled shipments each week and more than 40,000 tons of flowers each year, so its addition to Panalpina’s air freight forwarding division was something of a coup. Indeed, it is one of the reasons why Lucas Kuehner, global head of airfreight, believes Panalpina will continue to grow its air freight volumes by around 5 percent this year in line with Q1 performance, even as global air freight markets remain flat.
Panalpina Perishables

     Explaining the rationale behind Panalpina’s decision to focus more closely on the perishables trade, Kuehner said fresh products were in demand around the globe all year long, and successfully forwarding them required a logistics provider to ensure products such as flowers, fruits, and fish were safely and efficiently steered through the cool chain to their final destination.
     “As consumer behavior changes, markets shift, and global demand grows, Panalpina’s specialists provide ‘field-to-shelf’ services to make sure shipments arrive in the right place, at the right time, in peak condition,” he said.
     “It requires a lot of experience, which suits us. This is one of the reasons why perishables as a market is so attractive and why we’re diversifying into it.
     “It is also a growing market. Along with the purchase of Airflo, focusing on perishables was one of the wise decisions we made last year when the oil and gas sector cut projects, which was tough for us.
     “The consumption of more perishables is a macro trend that will continue. It is mixed in with urbanization and more people globally moving into the middle class. They are demanding more from food and other products that require careful temperature control.”
     Panalpina transports perishables for a wide range of customers, from large- and medium-sized companies that work across borders in global and regional markets to small local businesses. Customers include retailers, export and import traders, producers, florists, food chains, and restaurants. Globally, fish is the top commodity moved by air, closely followed by fruits, flowers, and vegetables.
     The perishables trade is also attractive because of the nature of the trade’s flows. Although it is complex and global, most of the perishables trade moves from south to north, with South America and Africa standing as two key export regions, especially for flowers. Fish is also a major cargo on intra-Asia lanes and from Europe to Asia. Important trade lanes for Panalpina are Columbia and Ecuador to the U.S. as well as Kenya to the Netherlands and the UK for flowers.
     “We have a global footprint so we can offer end-to-end solutions,” said Kuehner. “Because perishables are often flown from places like South America and Africa, which are predominantly import markets, filling planes with them for the backhaul makes a lot of sense.“Generally, margins are lower within the perishables sector, however this is offset by the critical mass, meaning the size of shipments, as well as lean and efficient operations and value-added services on our part. And I think as e-commerce retailers look to sell more perishables, it will grow even faster.”
SkyKing


Subscription Ad


nce upon a time, long before FlyingTypers, I worked at KXEO Radio in Mexico, Missouri, running specialized programming at KWWR- FM.
The best part of my job was creating original studio productions and scheduling block programming of old-time radio shows of the 1930s & 1940s, including The Lone Ranger, Gangbusters, The Shadow, and others.
From programming and sales at a radio station, I moved to New York City, where I worked as a club reviewer and music critic for The Hollywood Reporter while also starting up a monthly tabloid at JFK International Airport called Airport Times, The Cargo Paper.
     While working for The Hollywood Reporter, I interviewed Elvis, The Doors, The Rolling Stones, and many others.
     During the early years of publishing Air Cargo News, my passion for music and programming continued, as Air Cargo News created a 27-hour anthology of music and interviews with survivors of The Hal Kemp Orchestra, an anthology featured on public radio stations in New York and elsewhere.
     The music was recorded and transcribed from two hundred 78 rpm phonograph records that Kemp created from 1928 until 1940, when he died tragically and the band went out of business.
     Today one way I enjoy relaxing is by creating playlists that are shared with family and friends, although I listen to mostly classical music on a daily basis.
     This playlist was created after looking at a wonderful picture of a full moon and a United Airlines airplane.
Summer Reruns     Our “Summer Sun & Moon Playlist” is taken from YouTube so we can be assured it will play for everyone, all around the world.
     In some cases, an advertisement may pop up, but stick with it.
     You will note that some songs are repeated by different artists.
     Audrey Hepburn’s reading of “Moon River,” for example, is entirely different from Henry Mancini’s full orchestra treatment (Johnnie Mercer wrote the lyrics). Mancini’s full orchestra version of “Moon River” topped the hit parade charts in the Americas when “Breakfast At Tiffany’s” played in the movies, although I have always felt the Hepburn reading is better, more personal, and quite sweet.
     Likewise, “Fly Me To The Moon” takes on vast colors in two different versions here. A soft, lilting bossa nova treatment by Astrud Gilberto is played against lush strings, while the great Big Band crooner, Perry Como, performs a melted butter vocal against a big orchestra set piece for a more upbeat take.
     My view of music is less about style and generation, and has always been informed by something Duke Ellington said:
     “If it sounds good, it is good;” that’s what the great “Edward A” proclaimed.
     The idea here is to loop and listen to the music via your computer.
     Sure, you can watch the videos, but the music is the thing, and some of the videos are fuzzy and unnecessary.
     You can fast-forward the ads, and after a first play the ads should not repeat.
     Also, if you only have time for one song, fast-forward to Willie & Brian and the Boys for “The Warmth of the Sun.”
     For me, every time I hear “Turn Off The Moon,” the closer, I wind up listening to the entire set again.
     Would love to hear your comments, and would certainly not have to be pushed too hard or encouraged very much to share another playlist for Christmastide that would include another from Tracy Tracy & The Primitives.
     Sun & Moon works nicely from track to track, but for me the most enjoyable listening happens when you can hit “random” and allow the playlist to change every cycle—if you own a Spotify account, the link to open Sun & Moon in your own music library, where you can randomize and resort the list, is here:
Geoffrey


If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
FT061516
Vol 15. No. 51
The Forgotten Man
SmartKargo South Of The Border Down Mexico Way
Chuckles For July 5, 2016

Who Is In The Picture

Does New Panama Canal Work?

Family Time
FT061516
Vol 15. No. 52
Tough Numbers; Long, Hot Summer
Ullrich Met The Challenge
Chuckles For July 11, 2016

A Little Morning Music In Milano

Oshkosh By Gosh Helluva Air Show

FT061516
Vol 15. No. 53
Cargo Powerhouse Easy as ABC
Main Deck Cargo
Chuckles For July 14, 2016

From Russia With Love

CNS Field Of Dreams
Feeling Brendan Gill

Publisher-Geoffrey Arend Managing Editor-Flossie Arend
Film Editor-Ralph Arend Special Assignments-Sabiha Arend, Emily Arend Advertising Sales-Judy Miller

Send comments and news to geoffrey@aircargonews.com
Opinions and comments expressed herein do not necessarily reflect the views of the publisher but remain solely those of the author(s).
Air Cargo News FlyingTypers reserves the right to edit all submissions for length and content. All photos and written material submitted to this publication become the property of All Cargo Media.
All Cargo Media, Publishers of Air Cargo News Digital and FlyingTypers. Copyright 2016 ACM, Inc. All Rights Reserved.
More@ www.aircargonews.com

100% Green