Vol. 11 No. 9                                                                                                                  Wednesday February 1, 2012



Lifting IST Saudi Airlines Cargo extends money saving Belly Flex lift to key destinations in its global system.

     As he moves about Air Cargo India (ACI) this week in Mumbai, Peter Scholten, Saudi Arabian Cargo Company (SACC) VP Commercial, is one executive with a lot of ideas.
     Scholten, who climbed onboard the Middle East carrier in October 2010 to shake things up, think outside the box and otherwise turn things around for this fabled legacy carrier, has worked to bring the Saudi Cargo climb to new destinations with an emphasis on innovation, process and services.
     Sure, Saudi Cargo has freighters, but one close look at the airline quickly reveals that the Jeddah-based carrier also fields a fleet of 125 passenger aircraft serving a rapidly expanding global network of 85 destinations, adding up to 75 freighter departures and 400 passenger flights per week (not including a massive domestic network of 25 cities from Kingdom of Saudi Arabia).
     Mr. Scholten thinks he has figured out an immediate and definitive answer to one of the oldest and most basic questions he and others in air cargo are asked every time they are out in search of more air cargo.
     “How about a better rate?”
     If he is right, Mr. Scholten could dramatically bump up the action and maybe even change the landscape and business for Saudi Airlines Cargo.
     “This company has the resources and the will in 2012 to regain its former top position in the region,” Peter said.
     “We are calling our new initiative to extend our reach in air cargo ‘Belly Flex.’
     “The Belly Flex product is a pricing solution for normal sized cargo that can board any Saudi Arabian (SV) passenger plane.
     “Belly Flex delivers dramatic savings, offering an economic solution for non-critical cargo.
     “Our main focus is on destinations from KSA (Kingdom of Saudi Arabia) for origins both served by freighters and our passenger network.
     “Belly Flex rates can be shipment ex HKG or BRU on freighter connecting to CAI from KSA (Kingdom of Saudi Arabia), or on belly from BOM or LHE connecting on pax flight to IAD etc.
     “Of course, we are also offering the rate for local cargo ex KSA.
     “Transit time from KSA starts 24 hours after the actual arrival of a consignment at the hub, meaning on average it is four to eight days from origin to destination.
     “But cargo will be faster as space is available.”
     Mr. Scholten has some 20 years global experience in international aviation and transportation management, including 14 years as regional VP on different continents for Martinair Cargo.
     He has also worked the forwarder side, having spent five years as Managing Director of Road Air Flora, a leading freight forwarding company in the Dutch perishable market.
     So having been on both sides of air cargo, he has had his shares of ups and downs.
     “The year 2011 was a tough year with overcapacity, declining cargo volumes since July and pressure on rates in the major market.
     “The bright spots in 2011 were the emerging markets in Africa, India and South America.
     “Contrary to the global market developments at SACC, we saw an average growth of 30 percent in our scheduled cargo services since June 2011, when we added 2 freighters to our network.
     “Our charter business grew explosively to 75 percent last year, which confirms our definite return in this market segment.
     “SACC will continue to build our charter fleet in order to grow in the market.
     “We have three B747-200s now and number four will arrive soon.
     “Later in the year, a B747-200F from SVs own fleet will come back in service.
     “By the end of December 2011, SACC achieved a major milestone with the implementation of Cargospot.
     “We are also at work improving the major hubs in RUH, JED with investments in equipment, IT and by bringing in international experienced management.
     “Looking ahead in 2012, SACC adds new freighter services, including to DWC thrice weekly with B747 starting in March.
     “In April 2012 we launch freighters to SGN twice weekly (B747); ACC once weekly (B747); VIE twice weekly (MD-11), and FRA four times weekly (B747).
     “With our flexible freighter fleet we foresee further growth in the charter market.”
     Peter Scholten made headlines at a conference last year stating:
     “China Will Make It & The Arabs Will Fly It!”
     We wonder if he still feels that way, especially with the current dip in the action going on with China cargo right now.
     “Absolutely!
     “Besides SV, the likes of EK, QR, EY are in both passenger and air cargo; the Gulf carriers are taking on the old established players in Europe and USA.
     “The Chinese will continue to make the products, partly in China but also outside in other countries in Asia, Africa and South America.
     “Just look at the major investments the Chinese are making in the developing countries.
     “Ten years from now, China will be the most powerful economy in the world.
     “The fact that Europe and to a lesser extent the USA are in a dip doesn't stop the growth and developments in Africa, Asia, the Middle East, and South America.
     “The Chinese have a (long) long term vision.
     “Their horizon is 10-20 years and they invest where they see the future now.
     “The current dip in exports from China to Europe and the USA is due to slow economies, however the exports from China to the developing countries grows significantly, as do the Chinese imports from Europe and the USA.
     “And of course SACC will continue to fly all this,” Scholten laughs.
     Summing up his fast start to 2012, Peter Scholten says:
     “Saudi Arabian Cargo is heading in the right direction.
     “We still have a long way to go, but things are definitely improving.
     “It is very encouraging to see the massive growth in business with the global top 10 forwarders.
     “We have signed up quite a lot commitments for 2012 already.
     “Financially our company is very strong and solid.
     “In a difficult year as 2012 it surely helps us as we are a safe choice for our clients.
     “We are there for the long term.
     “SACC comes from the oldest legacy carrier in the region and is home to the largest economy in the Middle East.
     “The economy of Saudi Arabia is booming and the young population is growing rapidly.
     “Saudi Arabia is a G20 member and very stable during the recent Arab spring.
     “The government will invest some $400 billion in economic developments in the country in the next few years.
     “For Saudi Airlines Cargo Company, our goal is loud and clear; we want to be amongst the top 15 players in the industry in the foreseeable future.
     “We have started our journey and are very determined to reach that goal,” Peter Scholten said.
Geoffrey/Flossie

 

 

     Some penguins (dressed to the nines in their tuxedos, as usual) were overheard aboard an Emirates B777 freighter in flight from JFK to DXB, proclaiming:
     “Hey—It’s snowing in my pants!”
     The penguins, all twenty of them a combination of both Gentoo and King breeds, were purchased by Ski Dubai.
     Ski Dubai, by the way, is that famous, humongous reefer masquerading as an indoor ski resort inside the Dubai Shopping Mall—the one that has an elevation about as high as Hunter Mountain in upper New York State.
     Now along with the schussboomers, Ski Dubai has hot chocolate, penguins and other Alpine idyll, while folks in sandals and shorts peer at the action through triple plate glass windows from inside the shopping mall.
     The penguins were joined on the B777s’ main deck by four racehorses from Godolphin, one of the world’s most successful racing stables.
     “Precious animals require specific care and attention,” said Hiran Perera, Emirates’ Senior Vice President, Cargo Freighters. “We put the penguins on the main freighter deck where three attendants could watch and care for them.”
     “The challenge was welcome and interesting. We packed additional ice and snow, and sprayed the penguins with water to cool them throughout the more than 12-hour flight,” Hiran added.

EK Doubles Down On Dublin
     “A bigger aircraft means good news for the Irish economy,” said Salem Obaidalla, Emirates’ Senior Vice President, Commercial Operations, Europe & Russian Federation, as just three weeks after launching A330-200 flights to Dublin, Ireland on January 9, load factors of 90 percent have moved the carrier to put a B777-300ER on the route starting July 1.
     “We can bring extra visitors to the country and carry additional cargo,” said Mr. Obaidalla.
     “The A330-200 can carry up to 15 tons of cargo in the belly hold—this figure rises to 25 tons with the introduction of the B777.”
Geoffrey/Flossie

 

     LAN reported net income of US$320.2 million for full year 2011 down 23.7% compared to the US$419.7 million in 2010.
     LAN claims impact caused “mainly by the startup of LAN’s operations in Colombia and the volcanic ash cloud that disrupted air traffic throughout the region, as well as higher fuel prices, a portion of which was not recovered via the fuel surcharge mechanism”.
     Air Cargo delivered 27.9% of total revenues, in fourth quarter 2011.

 


      Post mortems are always sad, so we have chosen to include some mood music by Maurice Ravel (click here) as you read the latest about Air India’s cargo unit.
      The passing of an all-cargo aspect to AI was expected, but in true bureaucratese fashion, the death was kept in abeyance.
      In a move that is supposed to help the struggling airline get some breathing space, the carrier’s management has decided to sell six Boeing 737 freighters (converted in 2007).
      The global tender for these 30-year-old planes has been advertised and they are up for sale on an ‘as is, where is’ condition. The Technical Bids will be opened at the beginning of next month. Once owned by Indian Airlines, three of the planes were being used for postal duties with India Post. The plan was to use all the freighters on a pan-India cargo service once the Nagpur hub started operations.
      The winding up of the cargo unit comes at a very crucial moment. While on one hand, almost all the country’s carriers have been going through extremely tough times, on the other, the opportunities in the freight sector are immense. According to forecasts, the country’s air freight sector will see a growth of 8.5 percent annually for the next five years. Despite low export figures over the last few months of 2011, the forecasts are that air cargo tonnages will triple by 2025, according to a survey by Worldwide Independent Network (WIN).
      In fact, Air India had earlier sold four A-310 freighters. Even these B-737s were scheduled to be disposed quite some time ago, but the financial crunch that has gripped the company delayed the process.
      While the decision for the sale of the B-737 freighters was taken before a crucial Group of Ministers (GoM) meeting, it was part of the overall plan to rescue the sinking airline. Along with the freighters, eight aircraft engines, four auxiliary power units, and aircraft seats and spares will be on sale.
      One of the major reasons for bringing down the curtain on Air India’s cargo unit, according to the carrier’s officials, was that the freighters were big for domestic operations but small for the international longhaul flights.       More than the size, however, the airline—over the last few years—lacked a distribution network and warehousing facilities. And, perhaps most importantly, the unit was troubled by mismanagement. Now, with Air India out of the air cargo scene and Kingfisher Airlines in dire financial straits, the way is clear for Jet Airways to ramp up its cargo unit. However, what is important is that with heavyweights like Emirates, the going will be tough. Even so, domestic air cargo levels have been rising continuously and operators like Blue Dart have been quite successful.
Tirthankar Ghosh

 

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     Our regular readers may recognize Geoffrey Arend II, star of the weekly American television series Body of Proof, which airs on ABC every Tuesday evening at 10:00 pm.
     Body of Proof also airs in Germany, Italy, Spain, and elsewhere around the world.
     As the series wrapped its second season Monday, the cast reimagined the show about medical examiners as a musical.
     We encourage our readers to tune in to Body of Proof. The series, while somewhat serious in nature, includes some pretty wonderful people, including one that we have known and loved all his life.
     Please enjoy this comedic musical interlude, with song lyrics written by Geoffrey Arend II himself.
Geoffrey

 

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