#INTHEAIREVERYWHERE

      A slew of factors helped elongate last year’s peak season and could bring further prosperity in 2017, according to one of Europe’s leading cargo airlines.
      As reported in FlyingTypers in several past issues, freight rates surged during the fourth quarter of 2016 after a poor first half year. According to a spokesperson for Air France KLM Martinair Cargo (AFKLMP), multiple factors combined to produce the resurgence after almost a decade of weak or short peak seasons.
      “What we experienced in 2016 is an outlying or non-traditional peak that has lasted much longer than in the recent past, and has belied most expectations.
      “This better than expected peak demand” resulted from the staggered launches of electronics products, most notably the Apple iPhone 7 in September and MacBook Air/Pro in October.

Charters Down But Business Up

      There was also less charter activities last year in key Asian markets such as Hong Kong due to a new air traffic control system that saw the Hong Kong Civil Aviation department reduce its granting of ad hoc charters, and in Shanghai where, in echoes of the last few ‘peak’ seasons, air traffic congestion saw supply reduced and some services were transferred to second tier cities such as Zhengzhou.

Hanjin Impact

      The spokesperson also said the impact of the bankruptcy of Korean container line Hanjin Shipping in August had prompted some ocean cargo to be shifted to air, while the devaluation of the Chinese Yuan also boosted exports.

Year 2017 Off To A Good Start

      Moving ahead to 2017, AFKLMP’s flights from Europe were “currently showing good load factors all across the board.”
      “Service from Europe, North America, Latin America and India has generated our biggest growth” and Asia services benefitted from increased load factors, although margin improvements were restricted due to excess capacity.
      The spokesperson noted that surging demand for e-commerce services, which “should sustain and increase” through 2017, helped the rise in volumes since summer 2016.

Flower Power 2017

      For example, in a five-week period (February - March 2017), around 5,000 tons of flowers originating from well-known leading production and export countries like Kenya, Ecuador, and Colombia were flown to Europe.
      In fact, these movements by AF/KL/MP represent the biggest share of the market.
      Amsterdam remains Europe’s logistics center for the flower market, with Schiphol clinging to its claim as ‘Preferred Flower Hub.’
      “Royal FloraHolland, located in Aalsmeer, the Netherlands, is the largest trading combine for flowers in the world and plays a crucial role in onward distribution,” AFKLMP said.

Love In Bloom

      In 2016, AFKLMP Cargo shipped more than 60,000 tons of flowers from Kenya, Zimbabwe, Ecuador, and Colombia to Schiphol, proclaimed Marcel de Nooijer, Executive Vice President AF/KL/MP Cargo.
      “With one extra full-charter freight flight, upgrading aircraft capacity and making full use of our extensive wide-body belly passenger network, AFKLMP Cargo is proud to show our ongoing commitment and dedication to the flower business,” he said.

Marcel Works Well

      It’s worth noting that Marcel de Nooijer (48) was appointed Executive Vice President of Air France-KLM Cargo on December 16, 2016. Marcel has been with KLM since 1995 and has been EVP of KLM Cargo since 2013. He previously held various commercial and operational posts, including that of managing director at Martinair Holland.

Holland Flower Alliance

      “Last year AFKLMP Cargo was a driver that together with Amsterdam Airport Schiphol and Royal FloraHolland helped form the ‘Holland Flower Alliance,’” Mr. Marcel said, adding:
      “Our view is that we can be positively optimistic about 2017 overall, as quite a few new product launches are in the pipeline in the virtual reality sphere and in the world of remote controlled, reconnaissance, and surveillance vehicles—for example, drones.”

Final Word

      “While volumes will outshine 2016 numbers, the pressure on prices will continue and will further pressurize the declining airline yields.”
Geoffrey