#INTHEAIREVERYWHERE 
THE AIR CARGO NEWS THOUGHT LEADER  

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fter a tough first three quarters, inventory renewals in Europe and the U.S.—allied to a return to a traditional peak-season spike in demand—saw Asia’s air freight sector finish the year strongly and with ample cause to expect a more prosperous 2014, albeit one marked by small gains rather than a return to the good times of yore.
Certainly, various freight statistics took a sharp turn upwards in the fourth quarter in Asia after a couple of years of drudgery, although IATA was correct to warn that the freight recovery since mid-year was “fragile.”
     Cathay Pacific was typical, having notched up robust 8.1 percent year-on-year growth in November in terms of ton kilometers flown, building on the increase in volumes noted in late October.
     “The surge in traffic was driven by hi-tech consumer goods being shipped out of Mainland China and other major manufacturing centers in Asia,” said Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch. “Demand was especially robust on transpacific routes and the momentum was maintained through to the Thanksgiving holiday at the end of the month.”
     Cathay’s upturn was matched at Hong Kong International Airport (HKIA), which signaled the return of a traditional peak season by setting a new monthly record for cargo tonnage, which rose 6.6 percent year-on-year to almost 400,000 tons, driven by exports and transshipment traffic. Such was the spike in demand that a number of forwarders reported backlogs at the hub in November.
     After 12 months of largely non-plussed market commentary, even Stanley Hui Hon-chung was moved to enthuse that “fuelled by burgeoning demand from the traditional Christmas peak season, we expect this promising growth in cargo to continue throughout the rest of the year.” Those are strong words indeed from the phlegmatic Chief Executive Officer of Airport Authority Hong Kong.
     The news from Shanghai was also encouraging. Shanghai Pudong International Airport Cargo Terminal, a joint venture between Shanghai Airport, Lufthansa Cargo, and JHJ Logistics Management, said its tonnage rose 10.96 percent year-on-year to 129,363 tons in November, its best ever monthly result. This echoed gains for the airport overall which, having seen just 1 percent year-on-year growth in the first three quarters of the year, then saw 10 percent and 11 percent y-o-y gains in October and November, respectively.
     A spokesman for Lufthansa Cargo welcomed the return of a traditional end of year peak season. “This is very important as demand development for the entire air cargo market was very disappointing this year,” he told FlyingTypers. “Many routes are performing well, especially strong is China and Hong Kong. This is driven by consumer electronics. However, other typical air cargo products are doing well, too, such as pharma, automotives, etc.”
     Rates also rose in the second half of the year, according to Drewry’s East-West Air Freight Price Index, a weighted average of air freight rates across 21 East-West trades. This climbed for its third consecutive month in October and was also expected to show further gains in November.
     After two years in which there was no discernible pre-Christmas rush, its return this year bodes well for 2014, although previous false dawns mean nothing is assured.
     Martin Dixon, Research Manager, Freight Rate Benchmarking at Drewry, was upbeat on 2014 but also issued some words of warning lest the market become burdened with misplaced over-confidence. He said while the airfreight market was improving, growth was expected to be “very slow” while capacity remains an issue.
     “Continued capacity management will be critical for airlines to improve yields in cargo operations and there are clear signs that this is happening as several carriers, including Taiwan's EVA and Air France-KLM, have announced plans to reduce freighter capacity,” he told FlyingTypers. “Some other low cost carriers are expected to exit the freighter market.”
     However, the wild card remains belly capacity, which IATA estimates has grown 7 percent year on year through 2013, and is likely to continue to expand as long-haul passenger demand continues to rise. “We do not expect much in the way of net tightening in capacity in 2014, despite anticipated cuts to the freighter fleet,” said Dixon.
     The Lufthansa spokesman said 2013 had proven how difficult forecasting the air freight market had now become. “Nevertheless,” he added, “we expect a better development next year than in 2013 and we hope that the good trend from the last couple of weeks continues.
     “We will, however, stay very flexible and adopt our capacity according to the demand.”
     Sensibly said!
SkyKing

o doubt about it, when Issa Baluch stepped down and quit the Board of TIACA in protest late in 2013, the impact was felt throughout the air cargo industry and continues to reverberate into early 2014.
Issa almost single handedly invented the Sea Air business in Dubai as CEO of Swift Air.
Issa raising a ruckus in protest to TIACA cannot and should not be taken lightly.
     This is not about choosing sides either. After making his fortune and departing Swift, Issa Baluch has continued in air cargo teaching logistics as a visiting Professor at Harvard University in Boston, and was also keeping up as a long time member of the TIACA Board and many other volunteer posts.
     In other words, all of this easily profiles Mr. Baluch as the ultimate inside guy.
     Last week FT included the remarks of Oliver Evans, TIACA Chairman, who succinctly laid out his plan for the organization for 2014 and beyond.
     Here we revisit with Issa, wondering what in the world comes next.


     “In 2011, I was accepted by Harvard University to become a Fellow in their newly set up program called Advanced Leadership Initiative (ALI).
     “The following year, I became a senior Fellow and Associate of Science, Technology, and Globalization at Harvard Kennedy School. At present, I am considered as a visiting Senior Fellow.
     “Harvard encourages all ALI Fellows to initiate a social impact project and so, as one of the investors in a 10,000 hectare farm (Africa Atlantic Farms) on the Afram plains alongside Lave Volta (the world’s largest water reservoir) in Ghana, West Africa, we studied the prospects of planting a Knowledge Canter as a depository of skills and experiences gained from the commercial farm.”


     “This project,” Issa explains, “now in its 3rd year, picked up momentum and we formally launched the Africa Agribusiness Knowledge Centres (AAKC), where I was appointed Chairman.
     “The effort is one of a kind and is supported by Harvard Kennedy School's Science, Technology, and Globalization Project department, MIT, Masdar Institute of Abu Dhabi, and most recently, the DC-based Corporate Council on Africa (CCA).”


     “A master plan developed via a charrette has just been completed by MIT in October of last year.
     “The complete project design includes an airport, logistics and cool chain centers, and the AAKC facility, among others. A 27-course curriculum is also being drawn up to offer youth, farm workers, and all participants up-to-the-minute technology to improve farm production.
     “Phase One of AAKC is set to launch on the first quarter of 2014.
     “My own contribution will be logistics and work experience in Africa, particularly in distribution, as the entire project is driven from a demand angle and food security is a big ticket item locally, regionally, and internationally.
     “The stakeholders of this project are committed to a vision of scaling this model across the continent of Africa.
     "In 2014 AAKC will have a presence in 3 countries and in 5 years we anticipate managing a total of 100,000 hectares.


     It is now about 3 months since Issa resigned from the TIACA board saying that in his view, these days the objectives of a few outweigh the needs of the many in that industry organization. As for regrets…
     “None whatsoever,” Mr. Baluch says emphatically.
     “I only hope the underlying reasons of my departure will help this organization move forward.
     “One of the commentators stated that I should have not come out in public with dirty linen about TIACA.
     “Sorry, I spent the last 5 years working from within and it appeared I was making progress.
     “In actual fact, the contributions I made seemed fully acceptable but when it came to implementation, it was entirely something else.
     “I gave this process the benefit of the doubt for many years until it reached a point when I could not take it anymore.
     “A number of current board members are my personal friends and fully agree with me.
     “I respect their positions that they decided to keep quiet and not come out in public.
     “Everyone has their own reasons and while I do not like what I see, I still respect their position.
     “One thing I am very certain about is that my departure will continue to have an impact since the last chapter has yet to be written.
     “TIACA belongs to its members.
     “Elected officers are there to deliver value to the membership and if they fail then there will be repercussions.
     “Elected officers should bear in mind what has been handed to them and it is one simple item called ‘legacy.’
     “I firmly believe this leadership has got these things mixed up and, if they are honest, they will ask themselves if all the changes they have authored are really worth it.”
     As for the admission of WCA into the TIACA board, Issa has some thoughts on that as well.
     “I suppose you mean the induction of David Yokeum as TIACA's board member?
     “If anything great has happened in 2013, this is great news for TIACA.
     “I know David and he is an excellent leader and a true entrepreneur who has done wonders for SME's.
     “Will the powers that be allow David Yokeum to perform?
     “Will he have enough oxygen to do what needs to be done?
     “These are key questions. The reason I raise them is because SME's have had no room in TIACA.
     “And remember, for a long time now, TIACA has been dubbed a club for Airlines and Airports.
     “I was the only freight forwarder on the board for a long time.
     “And there are split objectives with the various segments.
     “Multinationals would like to focus on lobbying and policies in Washington, D.C., and Brussels.
     “SME's want to focus on business networking and alliances.
     “How do you marry these objectives to give results to each?
     “For a long time SME's shied away from TIACA because they saw no value to them. This will remain TIACA's huge problem, particularly now when the leadership is showing preference to pursue a membership drive and less emphasis on the Air Cargo Forum.
     “What value does David Yokeum bring to the table?
     “The stuff I have outlined earlier, and not knowing the actual deal, I hope he will entice at least 10 percent of WCA's membership (equivalent to 500 members) to participate at the ACF 2014 in Korea.
     “This will be a game changer for TIACA.”
     As for what Issa thinks about the new board and the direction of TIACA: “The jury is out on them.
     “Two items brew in my mind right now: How many members will renew their membership in view of the commotion that has been created?
     “The second refers to the shift in strategy and importance of the ACF.
     “I hope that this new TIACA Board is committed to doing the right things and to working hard to achieve the required results to give TIACA enough money to survive. More important than the board is the experience, maturity, and morale of the TIACA staff.
     “Are they getting the leadership support to do what it takes to deliver results?
     “Time will tell.
     Mr. Baluch even has further advice for TIACA members.
     “Each member should carefully weigh the usual business considerations when joining any association, such as if it is producing the desired value to its business; or if the goals set meet the company's interests.
     “Also, members should be careful of associations that undergo drastic changes, particularly if those changes were driven for the benefit of only a few in its leadership.
     “Ultimately, the decision lies with the member; and I would hope that the enlightened decision is carefully considered before signing on the dotted line of the 2014 membership renewal cheque.”
Geoffrey

   San Francisco International Airport (SFO) tops all airports January 14, 2014 as the final topping out beam festooned with an evergreen tree and an American Flag are hoisted in place. The new air traffic tower is under construction aiming for a scheduled opening in November 2014 .
   The 220-foot tower includes all the most modern bells & whistles functions—rising out of a three-story, 44,000-square-foot base building, which will house the FAA’s administrative offices and other support operations.
   The existing tower no longer meets the current seismic design safety standards. Located only 2.5 miles east of the Northern San Andreas Fault, the new tower is designed to withstand a magnitude 8.0 earthquake.

     People sending bread & butter gifts for holiday hosting this Christmas past might consider an oversized coffee table book titled AirCraft-The Airplane as Art.
     Created by Jeffrey Milstein with a forward by the great Walter Boyne, ex-National Air & Space Museum (NASM) Director, and published by Abrams in 2007, AirCraft (available on Amazon) is an extravaganza of pictures taken almost entirely of the undercarriages of big jets, an angle rarely if ever featured in a book about aviation.
     The book is neatly laid out with an appendix that describes all the pictures, but the impact is found in those big belly shots.
     Although Milstein says his favorite spot for photographing aircraft is runway 24R at Los Angeles, you can just imagine the photographer laying in the saw grass at some runway somewhere waiting for the next big jet to final while the camera clicks away.
     The book has a stark white Bauhaus feel to it that brings out the detail of these giant flying birds’ undersides: stark detail, minus any distraction.
     The illustrations here and feel of the work remind us (minus the words) of the landmark series of books about airlines and airplanes created by the late Ron Davies, the greatest aviation curator of all time, who sat in the Lindbergh Chair at NASM for nearly 40 years.
     Ron Davies’ books detailing all the aircraft of Delta, Lufthansa, Pan Am, and many others, created with illustrator Mike Machat, are worth the search to own and cherish.

     The point can be made that most often when pictures of undersides of airplanes appear it is in a news story about another group protesting airport noise.
     For someone to find that angle of an airplane beautiful, even as art, is a positive statement, and hopeful for aviation.
     One stunning picture taken by AP that captures the feel of “Airplanes” demonstrates the Emirates A380 undercarriage.
     EK pioneered the modern airline billboarding its brand on the bottom side of an airplane, but was not the first in aviation history to do that.
     During the early years of aviation, promoters regularly attached messages to the undersides of aircraft to sell products and services via biplanes that cruised aloft at 60 mph.
     The great pioneer pilot Clarence Chamberlin (who flew a passenger to Berlin from New York aboard a Bellanca monoplane in June 1927) operated a sightseeing service at air shows during the 1920s that invited passengers aloft with these words spread across on the bottom of his aircraft wings:
“$1 And Up.”
     So at this time of year, as wishes continue all around for health and prosperity in 2014, we add our voice to the hopeful din as we lift a glass and a book with thanks, declaring “bottoms up” to all!
Geoffrey/Flossie

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