Air China Becoming Mega Carrier

     State-owned Air China is overseeing the commercial activities of Shenzhen Airlines after Li Zeyuan, (left)the major shareholder of the Shenzhen-based carrier is being investigated by police for alleged economic crimes.
     The carrier has been assigned de-facto control by Beijing’s Civil Aviation Administration of China (CAAC) . It has generated speculations of a possible takeover by Air China of Shenzhen Airlines, the country’s fifth biggest carrier by assets, operating a fleet of more than 80 passenger aircraft and freighters. The Chinese flag carrier has long held a 25 percent stake in competitor Shenzhen Airlines but failed to gain control in 2005 by losing a public bid to Chinese investment partners Huirun Co. and Bright Oceans Corp.
     Both firms offered USD$400 million for 65 percent of Shenzhen Airlines, outbidding Air China. It is said that Li Zeyuan is the grey eminence behind Huirun Investment and allegations are based on the 2005 transaction.
     In the event that Air China is successful in taking over Shenzhen Airlines, the country’s flag carrier would catapult itself in the driver’s seat of Lufthansa Cargo-affiliated Jade Cargo International since Shenzhen Airlines holds 51 percent in Jade. The move could strengthen the market position of Lufthansa Cargo, Jade and Air China on routes between China and Western Europe if the existing capacity agreement will be extended and transport activities combined. This outcome seems likely due to the already strong ties between Lufthansa and Air China in the passenger, cargo and technical field.
However, Air China’s grip at Shenzhen Airlines could also trigger a conflict if Air China would try to sideline Jade by interfering in the airline’s business.
     “At present we don’t possess enough information on what is really cooking,” reacted a leading manager of LH Cargo when asked by Air Cargo News FlyiungTypers to comment on the situation in China. “What we are witnessing, however, is Air China’s ambition to become a mega carrier that is obviously strongly supported by the national authorities,” he added.
     The Beijing-based airline is collecting carriers like some collect stamps. Lately CA (IATA code) invested in a number of airlines, leading to a 80.9% stake in Air Macau, 29.9% in Cathay Pacific, a 22.8% of the share capital of Shandong Airlines and 25% in Shenzhen Airlines now under the command of Air China.
     In addition Air China and partner Cathay announced a cargo joint venture based in Shanghai. Both carriers announced the placing of ten Boeing B747-400 freighters at Pudong International Airport that are scheduled to commence line-haul services in May 2010.
     Analysts expect the consolidation of China’s airline industry to continue leading to three big groups with Air China, China Eastern and China Southern dominating the passenger and air freight market. Although some carriers reported minor profits in recent months, the overall losses of Chinese airlines amounted to more than 4.4 billion U.S. dollars in 2007. Therefore, the ‘big three’ value mergers as a proven remedy to become more competitive at home and in international aviation.
Heiner Siegmund

     They cut the ribbon last Friday< December 11 for that new 61,000 sq. ft. Fresh Air Cargo facility at Houston Intercontinental Airport with airport luminaries including a rather succulent looking bunch of grapes in on the action.
     Nice kick off for what promises to be a faster, cheaper and better road to get perishables on the busy north/south air cargo routes.

Afghan Cargo Gets Dubai Lift

     As troop levels ramp up in Afghanistan so do cargo flights from various gateways.
     Right now Dubai and all other Middle East gateways are moving ever increasing amounts of air cargo brought into the region by carriers from all over the world to Kabul and elsewhere.
     During 2009, buildup activity has been steady but with a recent spike, activity here is expected to go over the top in coming months.
     According to statistics from the U.S. Air Forces Central Command combined air Operations Center in Southwest Asia, cargo and passenger movements for January and February remained fairly steady at the "pre-surge" state for Operation Enduring Freedom.
     In January, mobility aircraft moved 16,450 tons of cargo and 26,600 passengers while 16,720 tons of cargo and 24,200 passengers were moved in February.
     By March however, the Operation Enduring Freedom troop surge pace picked up dramatically with nearly a 75 percent increase in cargo and passenger movement into Afghanistan.
     In March, 22,100 tons of cargo and 32,400 passengers were moved in the Operation Enduring Freedom area of responsibility.
     Since March, that pace has continued to grow and the cargo industry continues to build itself to try and help meet demand.
     Between April and September, more than 137,500 tons of cargo moved for Operation Enduring Freedom.
     With 30,000 additional troops, the demand for airfreight is expected to increase, thus bringing in new challenges for commercial carriers worldwide.
     “Currently, the problematic and time-consuming issues are the landing permissions in the airbases and inadequate offloading (no high loaders) facilities for commercial carriers,” says Lionel Smith, (left) president of Air Cargo Integrators (ACI) based in Dubai.
     “This is already causing a bottleneck situation, whereby military flights are a priority and PPR’s for commercial flights are approved as per the slots available. “Thereafter, the PPR’s must coordinate with the handling agents’ timings due to time constraints.”
     Lionel Smith notes:
     “From Dubai ACI now operates two frequencies per week to Kabul, using B747 or MD-11s.
     “We started utilizing western equipment earlier this year in May 2009, as opposed to the IL-76, the single aircraft we flew for many years into the theatre.
     “But now in addition to our regular Kabul weekly flights, we are also operating four frequencies weekly, two into Bagram AB and two into Kandahar AB either using a A300 or an IL-76.
     "Our SPA partners such as Etihad, Lufthansa, Cargolux and Coyne support us 100% with their loads into Afghanistan.”
     With the Troop surge ACI anticipates additional frequencies in 2010.
     “ACI is 100% committed to the Afghan developmental process,” Lionel Smith says.
     “We have done and delivered our best services since February 2002 right until today and will continue doing so, to support the Afghani’s and the International Community there,” Smith declared.
     Meantime inside Afghanistan itself, air cargo will continue to play a vital role.
     There the roads are too dangerous to convoy supply trucks and in many cases bandits and hostiles make over the road impossible most of the time.
     Apart from attacks on convoys and freight vehicles, individual passengers aren’t even safe – rumor has it, the Taliban has agents at bus stations and in the taxi fleets willing to identify good targets for kidnapping.
     In best-case scenarios during this year 2009- even in good weather it takes an average of three weeks for a truck to move from Bagram Air Field, where cargo flights arrive from the U.S. and Europe to Kandahar, the staging base for allied forces in southern Afghanistan.
     In winter, a road convoy that can get through can take twice that long, and makes an attractive target, both for attacks and shake-downs for protection money.
     A key element of the Afghanistan cargo support strategy is the development of the Northern Distribution Network. This initiative provides additional routes to move material to troops on the ground through the South Caucasus and Central and South-Asian states.
     Still geography, the lack of extensive complementary transportation links (Afghanistan has no railroad infrastructure!) and minimal security on them will continue to be a major challenge looking ahead at the U.S. military effort in Afghanistan.
     Looking at the broader picture, supply chains into Iraq for example are operated from 'safe havens' for the U.S. in Jordan (where Aqaba has been used), Kuwait and Turkey for activities in the North.
     In Afghanistan there is nothing comparable - certainly not on the all-important frontier between Afghanistan & Pakistan.
The staging areas for the run through Pakistan’s FATA region have become both bottlenecks for cargo and magnets for insurgent attacks, including a three-day assault on Peshawar’s logistics terminal in December 2008 that destroyed over 170 vehicles.
     The insecurity in that area has pushed the main route from Karachi further east, exacerbating lag times and putting more pressure on limited road resources.
     In Afghanistan, the expansion of commercial airlines has not been met with a growth in air traffic management capacity, and the Afghan civil system struggles with the volumes it currently carries.
     In Iraq, it is widely felt that there have been some important misjudgments about rehabilitating the Iraq gateway including granting operating concessions there, but at this point at least it looks doubtful that comparable interests are in place at Kabul.
     Moreover, the surface transportation of Afghanistan is not remotely similar—in condition, extent or security, to what exists around Baghdad and Fallujah.
     Even the ring road, the main artery for ground transport in Afghanistan remains unfinished, and the completed sections are constantly degraded by IEDs, insurgent attacks and harsh weather. Outside the ring road, the Afghan road network is even farther from completion.

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     As the Afghan epic unfolds, it is apparent the outcome will depend on some factors not yet guaranteed, but needed.
More and more air cargo will be required for supply but also support factors in country will need to be brought forward.
Geoffrey

Up Close & Personal

Joachim 'Jo' Frigger

CEO

EMO Trans

Gaby Launches Green Voyage

     Lufthansa Cargo’s long time Sales Director South East Asia and Australia, Gabriela Ahrens, has taken on a new assignment by becoming Executive Vice President Sales and Products at Jade Cargo International as of December 1.
     She is taking over from predecessor Reto Hunziker who will move from Shenzhen to Frankfurt beginning of January 2010 to become Managing Director of Lufthansa Cargo Charter Agency thus following Christian Fink in this position.
     “By switching over to Jade, I leave the familiar blue and yellow Lufthansa colors to enter Jade’s green world,” she says. One of her key assignments will be broadening the carrier’s sales efforts including local gsa activities and setting up a dedicated team after minority stakeholder Lufthansa Cargo (25%) pulled out of this job earlier this year.
      “Reto has paved the road well. Now it’s my task to further develop Jade’s sales strategy.” Since the cargo airline is operating under Chinese registration she sees a number of additional business opportunities especially in the country’s hinterland and the East Asian region. In addition there might be possibilities to link the networks of LH Cargo and Jade closer wherever that should make sense.
      Another product she’s eager to develop further is the so called AirShip service both Lufthansa Cargo and Jade together have set up with two shipping lines. It offers European shippers and agents multi-modal transport of their goods via Shenzhen or Hong Kong to different Australian harbours like Sydney, Melbourne, or Brisbane.
     New AirShip Centers in Hong Kong and Shenzhen enable a seamless rapid transit flow of goods from aircraft to boat.      “I believe this product offers additional potential,” she states.
     Born in 1960 in Steinkirchen, a little village in Northern Germany, she was raised and educated in Uelzen, a small city close to Hamburg. She started her career in the travel industry in both London and Hamburg. Then in 1987 Gaby joined Lufthansa and eight years later was appointed Manager Marketing and Sales Eastern China based in Shanghai.
     In 1999 she moved to Lufthansa Cargo and took over the position as Regional Manager Sales Eastern China, still based in Shanghai.
     In 2001 she moved to Hong Kong after being promoted to the position of Regional Manager Sales Hong Kong, Southern China and Taiwan, Lufthansa Cargo. Next came Sydney, Australia, by rejoining Lufthansa Passenger Airlines and taking over the role of General Manager Lufthansa Australia. Finally, in 2007 Gabriela Ahrens returned to Lufthansa Cargo, appointed as Regional Director for Southeast Asia & Australia.
     She’ll stay at Jade at least until 2013. There, she can improve her Chinese if her new job leaves enough time for this task. ”I do speak some Mandarin and I understand the language to the extent that I can tell a cab driver where to go,” she says.
Heiner Siegmund

   Our exclusive series “Women In Air Cargo” asks our readers to send some words and a picture about somebody that you know who is female and has made a difference in air cargo.
  This effort is not limited to just success or failure, it is meant to raise awareness about the legions of unique women who in most cases are unsung heroines in the air cargo industry.
  So write and we will share your story with our readers around the world.

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