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   Vol. 16 No. 69
Tuesday August 29, 2017

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Into The Eye Of The Storm

Jan Krems      Hurricane Harvey delivered record rain in Houston, Texas, making the going there and elsewhere very tough.
      But as the saying says, “when the going gets tough, the tough get going.”
      To witness what people are doing for each other in the face of the most miserable storm in recent history underscores that the human spirit not only endures but also assumes command.
      Houston is a United Airlines address. Beyond that, George Bush International Airport (IAH) counts UA as moving the majority of its daily flights.
      “Since Houston is such a crucial part of our network, and so many essential members of our team and our valued customers live and work in and around our IAH hub, we are all tremendously concerned and eager to do whatever we can to help in this crisis,” United Cargo President Jan Krems told FlyingTypers.

Operated Four Emergency Flights

      “While the airport is now closed to all but relief flights, United coordinated with the FAA to operate four widebody flights into IAH Sunday and Monday to bring in critical consignments, including medical supplies, bottled water, shelf-stable food, and United amenity kits, and of course the Cargo Team played a big role in making that happen. We’re working with local companies and charitable organizations to obtain additional items we will send throughout the crisis.

Encouraging Wider Help

      “United is providing up to three million bonus miles to customers who contribute to designated relief organizations through our CrowdRise page. https://www.crowdrise.com/UAHarveyRelief
      “United is also matching the first $200,000 in donations raised to support those in need. We’re grateful to be able to use the many resources of United to bring relief to the communities affected by this catastrophe,” said Jan.

Rick EliesonGet In On American

      “American Airlines has been working to care for customers and team members who were impacted by the devastating storm that struck Texas this weekend,” reports AA Cargo President Rick Elieson.
      “In addition to our partnership with the American Red Cross, we are matching all donations made to the American Airlines Family Fund, where 100 percent of our employee donations help team members, retirees, and their immediate families in times of unexpected crisis,” Mr. Elieson said.

You Can Help

      Here are several organizations and coordinated efforts coming to the aid of people affected by the catastrophic events in Texas.
      The American Red Cross is encouraging people to donate money on its website or to text 90999 to donate $10. The organization is also asking for volunteers.
      After the unspeakable, Salvation Army speaks hope. Salvation Army provides updates on their activities in Texas relief efforts here.
Donate: https://give.salvationarmyusa.org

Chuckles for August 29, 2017

USACIA Goes Inside Politcs & Policy

      Paul Lettow is joining leading advocates for air cargo at the second US Air Cargo Industry Affairs Summit (USACIA) being held in Washington, D.C., on September 6. Paul is a partner in the Washington office of Jones Day, the pioneering U.S. firm that is also serving as host to this year’s gathering.
      Jones Day has a robust government regulation practice with a focus on cross-border commerce. 
      Jones Day lawyers regularly represent clients before government agencies such as FAA and EASA. 
      “Currently,” Mr. Letow said, “Jones Day is advising on compliance with the new ICAO carbon emissions standard, which has great significance to the air cargo industry. 
      “Jones Day also reports on the constantly changing worldwide regulations relating to drones, including the European Union's proposed regulations relating to commercial use of drones, a drone airspace plan, and management of low-level airspace used by drone operators,” Paul said.  

Inside Politics and Policy

      “The Trump Administration is poised to make significant changes in areas affecting the air cargo industry,” Mr. Lettow declared.
      Mr. Lettow will chair a Political & Policy Overview panel that will focus on the current political and policy environment at USACIA. 
      Among the issues it will address are:

Night Flight To Chicago

  An aerial view of Chicago, Lake Michigan, and Soldier Field are seen on final at sunrise from a United Airlines window in this Instagram-filtered picture

Up Against The Wall

  From left Pablo Lluch (Alfilpack), David Olmos (Milestone Logistics), Nacho Pascual (Gesprolog), Vicente Soriano (Mulem) and Germán Monedero (Aza Logistics) In Spain Milestone Logistics leads an alliance with four other companies to offer full services in the supply chain.
  The group dubbed “The 360 Alliance” has a combined turnover of €17.5 million and a total of 112 employees and is the first Spanish collaborative logistics alliance created to offer logistics consulting services, international transport, warehouse logistics and packaging solutions.

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Front Foot For ANA Cargo

     Talk about an advantageous position. Japanese carrier ANA reports a strong start to the year and predicts air freight markets will stay positive as it gears up for major expansion in the coming years.
      A spokesman for ANA Cargo told FlyingTypers that export cargo demand from Japan had seen stable growth for many months. He also said China-bound semi-conductors and automobile related shipments were “expected to show strong demand”during 2017, while exports from Japan on Transpacific lanes and to Europe had also seen vigorous growth.

Long Term Plans Revealed

      ANA’s parent, ANA Holdings, recently laid out its long-term strategy, not least via its commitment to achieving a full year operating profit of Y200 billion ($1.8 billion) by FY2020.
      The target would represent a huge improvement on the operating income of Y146 billion reported in FY2016 ending March 31 this year and meeting it will require boosting cargo revenue by some 40 percent over the period.

Belly Adds Up Cargo

      The plan will involve increasing international passenger traffic by some 30 percent by 2020 as more slots become available in Tokyo.
      As pax capacity rises, so will the bellyhold space available to ANA Cargo’s sales teams. “We will be receiving state of the art aircraft like B787-10 and B777-9X, with enhanced cargo space in the coming years until 2020,” he added. “This will allow us to maximize the synergy effect by combining our freighter flights with the expanding passenger network using the best mix, and by closely watching each route’s demand trend.”

Reorganizes Freighters

      ANA currently operates 12 freighters (eight B767-300BCF and four B767-300F) that supplement its passenger fleet of 256 aircraft. The spokesman said the carrier intended to “maintain and utilize the current fleet” of freighters, adapting its deployment based on customer service requirements.                         
      “We will flexibly reorganize our freighter network to cope in a timely manner with the potential for unstable market trends and/or demand,” he added.
      “In addition, adaptability to the cargo market’s volatility will be enhanced to meet the changing needs of both customers and ANA Cargo, by reinforcing with freighter flights markets where the passenger belly network needs more capacity.”

Profits In Forecast

      For 2017 and the coming years, ANA Cargo aims to achieve profitability by constantly reviewing and optimizing its freighter network.
      “In other words,” he added, “with very high flexibility, adding frequencies on routes with high demand and suspending unprofitable ones.
      “For example, at the end of March 2017, with the start of the summer schedule, ANA started six one-way flights per week from Tokyo Narita to Tianjin, and added two one-way flights per week from Osaka Kansai to Shanghai Pudong, resulting in six one-way flights per week and two one-way flights per week from Shanghai Pudong to Tokyo Narita, resulting in 13 weekly flights.
      “By adding frequencies on China-bound flights, ANA Cargo is responding to the market trend, which shows a rising demand.
      “At the same time, four one-way flights from Tokyo Narita to Osaka Kansai, six one way flights from Osaka Kansai to Tianjin, and two round trip flights from Tokyo Narita via Bangkok to Jakarta and back to Tokyo Narita were suspended.”

Okinawa Hub & Spoke

      ANA Cargo is also leveraging its Okinawa hub and making best use of the Hub and Spoke concept to balance supply and demand by cancelling frequencies on slow demand days and adding direct flights when higher demand is expected. “In cases where regular belly cargo space is not able to cover the high demand on certain routes, ANA Cargo adds charter flights to high demand destinations,” said the spokesman.

Changes In The Wind

      To help manage its business expansion, ANA has now made organizational changes to its sales and marketing operation and each division now has its own Executive Vice President. “The ‘Global Sales Department’ will literally focus on sales, while the ‘Global Marketing Department’ will look after the freighter network, including the belly space of passenger aircraft, and the new development of products and solutions as well as managing joint ventures and alliances,” said the spokesman.

Venture In The Joint

      The key joint venture for ANA was the deal signed with Lufthansa Cargo in 2014, which the spokesman said “was the world’s first Joint Venture in the cargo field.”
      At first it was limited to cargo traffic between four European countries—Germany, France, Belgium, and UK—and Japan.
      But now the scope has been expanded to 43 countries after adding 38 European countries to the arrangement.
      “The Joint Venture with Lufthansa Cargo enabled us to access the inventory of each other under the harmonized pricing structure,” said the spokesman.
      “Customers and cargo forwarders may purchase both Lufthansa and ANA’s cargo space through Lufthansa and ANA’s sales agencies.
      “All benefits of the Joint Venture are available through both carriers’ booking channels.”
      As a result, he said, greater network options and enhanced uplift capacity were now being offered to forwarders and shippers and both airlines had gained enlarged market access, improved load factors, and increased shipment volumes.
      “The outcome of the agreement has proved to be beneficial for both parties,” he said. “The load factor of both carriers went up by three percentage points on routes linking Europe and Japan last year.
      “Over 6 percent of the entire tonnage flown under a Lufthansa or ANA Airway bill from Europe to Japan is transported on the partners’ aircraft.”
      One of the targets as the JV is expanded seems likely to be the fast-growing market for international e-commerce shipments. “Since FY2016, and for the coming months of FY2017 starting from April, we at ANA Cargo are continuously pushing for cross-border ecommerce sales and more sales in the automobile industry and healthcare businesses, by collecting and analyzing market intelligence essential for generating further business,” said the spokesman.
      “We expect e-commerce to become a promising future business, so we will most likely put high priority on this to capture such demand.”
      ANA Cargo has also established a new marketing team, which focuses on research and analysis of four key industries—automobile, electronics, cross-border e-commerce, and healthcare—as well as the development of tailor-made products and solutions to enhance customer service. “This marketing team is incorporated in the ‘Global Sales Department’ in order to work in close coordination with the front line sales team and to be reactive to the constantly changing economical and geopolitical circumstances,” said the spokesman.

E-Freight Conversions Slow

      Multiple authorities have recently noted that the air freight industry’s failure to adopt e-freight common standards and technology was reducing supply chain transparency and reducing competitiveness, with Japanese stakeholders proving surprisingly slow at changing their business practices.
      ANA, however, is optimistic that progress can be made in the near future.
      “We are working closely with forwarders, ground handlers, and our Joint Venture partners to promote and facilitate e-freight and overcome possible hurdles so that we can provide harmonized ‘make it easy’ products to our customers,” he added.
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