Vol. 7 No. 32                                                  WE COVER THE WORLD                                                  Thursday March 27, 2008

     Brazilian air freight carrier VarigLog ceased all intercontinental flights because of severe financial problems.
     According to executives the Miami account of the carrier was closed due to judicial decision, making the transfer of funds impossible.
     As a consequence of this lack of cash the carrier is unable to pay for leased freighters, kerosene bills and airport fees.
     In fact, aircraft are being held by airport authorities or have been given back to lessors.
     The turbulence arose with the majority owner of VarigLog, U.S. holding Matlin Paterson, charging their partner and minority stakeholder Volo do Brasil group of having misused and abused VarigLog funds.
     The case is now pending at the court of Sao Paulo which has announced a decision this Friday.
     Depending on the outcome the carrier might either get the chance for a second start or else vanish from the international cargo scene altogether.
     VarigLog started in 2000 as the freight division of Brazil's then number one passenger airline Varig.
     However, with budget carriers pushing aggressively into the domestic and Latin American market, Varig went bankrupt and was purchased in 2005 together with their cargo subsidiary VarigLog by the Volo group and investor Matlin Patterson.
     While Varig was sold to low cost carrier GOL, VarigLog managed to become an independent air freight carrier with a fleet of several B757Fs, MD-11Fs and DC-10Fs.
     Until ceasing the intercontinental flights recently, the airline offered scheduled cargo services within Latin America as well as to Europe and North America.
     Presently VarigLog only deploys some B727 freighters on domestic Brazilian routes between Sao Paulo and Manaus at the Amazonas River.
Heiner Siegmund

Lufthansa Tops Cargo
Public Relations

Above and beyond . . . air cargo public relations par excellence, and our choice as best in the world. Lufthansa Cargo’s Nils Haupt, Head of Corporate Communications is pictured in Frankfurt with Mathias Uhlig, Nicole Siriluck Gruel, Stefan Hartung, Alexander Schaub, Carolin Biebrach and Felix Schmidt-Hidding.

     There is a picture, currently in circulation, of some media writers who are covering aspiring U.S. Presidential candidate Hillary Clinton.
     The reporters are all hunched over their laptops pushing deadlines, their writing desks arranged in a men’s room somewhere along the campaign trail.
     The picture serves notice as to what can happen when press and host don't get along very well.
     Today in air cargo the airline or forwarder or, for that matter, truckers, brokers and the rest of this giant world industry have never been involved (as far as we know) in such a contentious relationship with the press.
     But even if some of the aforementioned do have issues with journalists, we think most of those incidents play out in private.
     Today the vast majority of air cargo and logistics companies have trashed their dedicated public relations consul, choosing rather to either serve the press with simple news releases or to hold occasional press sessions at trade shows.
     It is fair to say that 2008 is a far cry from just a few years ago, when new gateway openings and service additions could be two and three-day events attended by media from all around the world.
     There are still a few companies that operate dedicated public relations, providing a regular stream of news to the media. In our opinion, the very best in the world is Frankfurt-based Lufthansa Cargo.

Commemorative plaque to be presented to Lufthansa Cargo Public Relations.

     Headed up by Nils Haupt, Lufthansa Cargo Public Relations in 2008 is seemingly always on top of things, providing a steady stream of press support stories and graphics as well as easy access to various executives—sometimes on very short notice.
     Just recently, a sampling of the care, dedication and professionalism of Lufthansa Cargo P/R was on display for scores of members of the Fourth Estate as the airline revealed their final numbers for 2007.
     Rather than a simple sheet of paper, journalists arriving from around the world were hosted in "up close and personal" fashion in an old German castle that now serves as a dining and meeting destination.
     Then bright and early the next morning there was a well-organized and attended press conference where numbers and questions flowed easily with quick answers and follow ups that you, dear reader, are no doubt seeing in air cargo media around the world this month.
     The Lufthansa success here raises the question: why isn't this effort replicated elsewhere?
     Very few other air cargo companies pay much attention anymore to the vital importance of cargo public relations, missing the important fact that organized press gatherings not only help to inform us by delivering a wide message, but also offer some measure of immortality to current events and times as they are saved in various media files and records.
     For the history of air cargo to accurately reflect our time and the future beyond pure academic or personal recall, the press must be empowered by the industry as its subject.
     If they don't, the landscape will continue to be over run by media platforms filled with advertorial content delivered by a small army of independent reporters and stringers.
     Lufthansa Cargo press relations' effort isn't by itself the answer to all the challenges the press faces in air cargo as 2008 continues.
     But the effort to create dialogue and the bravery to face questions of all shapes and forms by sending out executives to meet the press in open session is absolutely unique in this business.
     "We have no illusion that reporters will be disposed to be less insistent on getting answers in a well prepared, cordial atmosphere," Nils Haupt says.
     "We just believe in the tradition of press relations and the give and take atmosphere that we choose to support and continue."
     Good for Lufthansa Cargo.
     Good for air cargo all around.
Geoffrey

Fuel Fear Dominates Conference

The question of whether or not soaring fuel prices have the airlines worried or just plain scared in 2008, was settled once and for all last week in New York City at the sixth annual JP Morgan Aviation & Transportation Conference March 18-19 at The Waldorf Astoria.
     U.S. airlines according to some observers and an article in USA Today, are scared.
     To set the table, the JP Morgan conference aside from being an analysts and investors dog and pony show where some 60 transportation companies in all disciplines show up and PowerPoint attendees almost into dust, also provides a real treasure of information and conversation about the financials of transportation at one place for two days.
     Most of these people are top financial executives in their respective companies.
     That means when someone during the Burlington Northern Santa Fe railroad presentation flashes a big USA map picture of where coal must be delivered (in various shades depending on volume), and explains why BNSF outlook is good because its rails ride just past where the black gold is needed, you can gaze at all the colors in wonder.
     Of course Boeing appeared here predicting that the future world will need upwards of so many thousands of airplanes it could make your head spin.
     What Boeing predicts will fuel these aircraft is probably another presentation.
     Air Tran had a graphic that explained why their costs are lower than anybody else.
All the USA airlines showed up explaining why their balance sheets should hold them in good stead no matter what happens during 2008.
     But the dark cloud that hung over all of this was the cost of fuel.
     Although it was expected that oil would average about $95 a barrel in 2008, already those numbers (which may yet achieve earlier predictions) have hit a record $110.
     So now JetBlue and others are selling new airplanes while industry wide capacity is dropping as fares rise.
     Southwest's chief financial officer Laura Wright said that the airline remains concerned about recession, and that demand in March has been strong.
     Ms. Wright noted that $110 a barrel crude oil fuel prices mean "we as well as every airline in the U.S. are evaluating our growth plans."
Geoffrey