Aeroflot Cargo Rolls Over Fleet

     Splendid weather, lots of cameras ready for getting to work and two fire engines squirting water into the sky.
     It was a moment out of the norm a couple weeks ago when Aeroflot Cargo's MD-11F taxied at Frankfurt-Hahn.
     Soon as the doors of the craft swung open the plane was given a warm welcome by local notables such as Rhineland-Palatinate's Minister of Transport Hendrik Hering, Hahn General Manager Joerg Schumacher and other big shots.
     In the middle of all this with a broad grin on his face stood Oleg Korolev, Aeroflot Cargo's Director General and CEO.
     Oleg Korolev was born in the City of Rybinsk of the Yaroslavl Oblast on June 4, 1963.
     He graduated the Leningrad Institute of Aviation Instrument Engineering as an Engineer-Mathematician.
     Later Mr. Korolev worked at NIIOKB “Orbita” in the “Alak” aviation company.
     In 1994 Oleg joined Aeroflot Cargo where from 1996 through 2003 he served as the assistant representative of the Company in Japan (Tokyo), and as the chief of commercial support of cargo operations in the central management of the company.
     From 2003 until 2007 when he was named to his current post, Mr. Korolev was regional representative of Aeroflot Cargo in charge of cargo operations in Europe.
     After the hype and hoopla had slowed down a bit he offered Air Cargo News FlyingTypers an exclusive interview.
FT: Oleg, you started deploying MD-11F on intercontinental routes between
Hahn and Far east via Moscow or Almaty.
How many of these aircraft do you want to add to your fleet?
OK: We leased three from Boeing Capital for a timeframe of eight years. Two of these freighters are already in service, the third will follow soon. They'll be utilized on international routes. So will the three additional MD-11F that we purchased and that are scheduled to arrive next year.
FT: What's the fate of your three DC-10Fs?
OK: We'll get rid of them by replacing them with the MD-11s. They are aging, need a lot of maintenance and consume quite some fuel. By December the DC-10Fs will be gone.
FT: That's good news for your clients and airports like Frankfurt-Hahn because the MD-11Fs can carry around 90 tons per flight whereas the DC-10Fs are only able to lift 62 tons.
OK: By bringing in the MD-11Fs we will indeed increase our capacity by around 23 tons per flight compared to the older Douglas aircraft.
That's quite a push for Hahn because the first three MD-11Fs will be based at this airport.
FT: Do you also intend to offer your clients new destinations?
OK: Presently we offer ten frequencies to and from Frankfurt-Hahn, our European gateway. With peak time coming we will gradually increase those services up to sixteen weekly frequencies. Consequently Hahn will see more tonnage, soon.

Hahn “Bunkers” Live… The only threat these days is from too much friendly aircraft traffic, still these concrete “bunkers” that once housed fighter aircraft still serve the former U.S. Air Force base known today as Hahn Airport.
To be certain many of the cold war bunkers are gone, but several remain, and are filled with all types of commercial goods and storage.

FT: Any other routes you got in your drawer?
OK: We plan to fly from Moscow to Saragossa in Spain, more often to Finland's capital Helsinki and we are looking at places like India and the
United Arab Emirates as well.
FT: What about the brand new Ilyushin IL-96-400T? When will these freighters arrive?
OK: The first craft comes at the end of August, the second by end of September and number three in December. At the beginning we intend to deploy them on domestic routes and will add them to our intercontinental network after having gained sufficient experiences.
FT: According to rumors launch customer Atlant Soyuz Airlines refused acceptance of the freighters because of their poor performance. What's your position on this?
OK: We expect them to perform as guaranteed by producer Ilyushin. If not, they will have to pay the difference in costs to us, be it because of higher fuel consumption or other causes. This has been agreed to very clearly in our purchase contract with Ilyushin. Therefore, the financial risk is not on our side.
FT: Originally you intended to deploy the MD-11Fs in 2006.
What caused this huge time delay?
OK: They formerly belonged to Brazilian carrier Varig.They had to be converted, a lot of documentation, paperwork etc. was necessary, which was time consuming. But the biggest obstacle was the Russian authorities who demanded a complete new licensing process, which we refused. Their view was that the MD-11F is a new aircraft that needed to pass the test and registration process from A to Z.
We finally convinced them that we were only the first Russian operator of this freighter type and that it did not need to go through all the flight tests that normally are required for newly produced aircraft.
FT: You must have lost a lot of money since you had the aircraft but could not utilize them.
OK: Absolutely. The leasing contract commenced last January, now it's July. Ever since we had to pay big money to lessor Boeing without having any commercial benefits from the aircraft.
FT: In other words you will have to announce quite some losses at year's end.
OK: Unfortunately yes. Although we expect an increase in tonnage we will not be able to compensate the cost we had.
FT: How much tonnage do you expect to end up with this year?
OK: Roughly 150,000 tons as compared to 135,000 tons in 2007. Although the fuel price is exploding and the competition is getting stiff and stiffer we are quite confident to increase our market share in the years to come.
First because of the fleet-rollover that we just started, secondly because of our Russian home market that is growing very rapidly and last but not least, due to a steady enlargement of our international network that we've got plans for in the drawer.
FT: Are there also ambitions to get bigger freighters like Boeing's B777F for instance.
OK:: Yes, we consider enlarging our fleet with bigger cargo aircraft that are able to fly on long hauls routes nonstop. But nothing definite has been decided yet.
FT:: You are a member of the SkyTeam Cargo alliance.
But you still don't offer the typical product range of that club. Why?
OK: We are considering that and I think by 2010 will implement their offerings.
Heiner Siegmund

BCIA Gets Olympic Lift

     Beijing Capital International Airport (BCIA) is seeing record flights and passenger numbers during this Olympic month, as numbers given by Civil Aviation Administration of China (CAAC) estimate action at the gateway with only two days until the big sports show opens to be 1,500 flights and 260,000 passengers per day.
     However, before anybody dances in the streets from this new record activity, BCIA needs to come to terms with the sharp decline in airport business during the first half year operation in 2008.
     On July 31, ten days before the Olympics, BCIA issued a profit warning for its 2008 interim results on falling demand and rising costs.
     Net profits for the six months of 2008, may fall significantly from the RMB567 million (USD$83.4 Million) in the first half of 2007.
     “From August 2007 to March 2008, out of security concern for the Olympic Games, CAAC imposed limitation on flight throughput of the airport, from 1,100 flights per day to 1,000 flights, resulting in a less than expected passenger volume.”
     Mr. Shuying, Board Secretary of BCIA explained to Air Cargo News FlyingTypers.
     “The introduction of the Third Terminal drove operating costs upward, but the profits of this new terminal are incomparable with the existing ones, as parallel increase in passenger volume takes time.”
     BCIA also said that the airport has also been impacted by the slowdown of global economy, which has weakened international aviation transportation demand.
     Of course high jet fuel price has also dented some domestic Chinese airlines causing cancelled flights and postponement of plans to add aircraft.
     For the second half of 2008, Mr. Shu projects better performance as compared to the same period last year, “because the limitation on flight throughput is lifted.”
     And then there are those Olympic numbers in the count…
David

India CONCOR Goes Air Cargo

     From a company which only ran container specials from Indian port cities to different destination in the country – freight trains with containers – CONCOR (Container Corporation of India) has plans to go global and its first venture in that field would be the setting up of airfreight stations.
     For a conservative organization like CONCOR, which is owned by the government, the move will see a major diversification by the company.
     First, it will see the company entering into the air cargo sector and second, it will be the first step to its becoming a multimodal logistics services provider.
     An upbeat Rakesh Mehrotra, Managing Director, outlined the growth plans. CONCOR, he pointed out, provides customs clearance and other related facilities at most of its inland container depots (ICDs). So, the foray into the aircargo segment would be a natural extension. In fact, CONCOR has air cargo complexes in Bangalore and Nasik (in western India) airports. "We want to set up air freight stations at 15-20 of our ICDs. These would provide a whole range of services: from bonded warehousing, palletization as well as custom clearance and other formalities that are usual for the air cargo business."
     CONCOR started scouting around for an alliance partner sometime ago. The alliance, Mr. Mehrotra informed, would later be converted into a joint venture. The timing, of course, would depend on how fast the business picked up. "We have invited expressions of interest from a number of people and we have developed business plans with three of them. We are now evaluating which partners we should go with," he said.
     Work on transforming the ICDs to airfreight stations would begin by the end of this year. Mr Mehrotra also said that these stations would be smaller than the setups in Nasik and Bangalore airports. CONCOR would not be investing too much since the basic infrastructure exists at these ICDs. All it has to do is ramp up its services. As the business grows, Mr. Mehrotra said, CONCOR would even "set up greenfield air-freight stations". CONCOR has ambitious plans for its global foray. Mr Mehrotra said: "We will start a terminal at Nepal." This will be in addition to the one which is scheduled to start in Bangladesh and Pakistan soon.
     The CONCOR story started in 1988 with its container trains service. As a government organization, it was one of the first to promote exports from the country with its terminals at different destinations. It started its operations by taking over seven ICDs from the Indian Railways and has now grown to a network of 57 terminals. As Mr. Mehrotra put it, CONCOR has "brought the ports to the hinterlands. We hope that whatever the growth in the logistics business, we would still be the dominant player providing infrastructure and trade support to the exim (export and import) and domestic markets.”
     Over the last few years, the organization has diversified with the air freight station business as its latest move. Its first step was in the port sector, where it took the joint venture route. It now has two operating ports and is on the lookout for more such opportunities.
     Unfazed by the competition, CONCOR achieved a growth rate of 16 percent in export-import and 21 percent in the domestic business.
     Last year it handled 2.5 million TEUs (twenty feet equivalent units) and this year it expects to cross three million TEUs.
Tirthankar Ghosh