Vol. 12 No. 99                                                                                                                                     Wednesday November 20, 2013
#INTHEAIREVERYWHERE 
THE AIR CARGO NEWS THOUGHT LEADER  


     The big hangar at Frankfurt was packed with about 1,800 people, including staff, customers, press, and guests . . .
     Then slowly, slowly, the giant doors opened to reveal the big, beautiful, newly created airplane, which Lufthansa Cargo has named “Good Day, USA,” as it began moving silently into the building.
     The B777F advanced to the cadence of drummers, adding richness and drama as Lufthansa Cargo ushered in a new era in grand style.
     For those who wonder, after such a big entrance, what the airplane can do for an encore, Lufthansa Cargo CEO Karl Ulrich Garnadt added to the epic debut, declaring:
     “The Boeing 777F is not only the most powerful, efficient, and ecological freighter in the world, but also a highly visible symbol of our ‘Lufthansa Cargo 2020’ future program,” he declared.
     Lufthansa Cargo's second Boeing 777F will be delivered at the end of November.
     Two further jets will follow in the first half of 2014 and a fifth in 2015.
     As you read this, while Europe is sleeping, Lufthansa’s B777F is winging its way across the Atlantic Ocean on its first regular service flight into Atlanta, where it will be greeted by yet another welcoming celebratory group.

    Much more pomp and circumstance perhaps than after April 19, 1972, when Siegfried Köhler, (in photo right) the father of Lufthansa’s trailblazing B747 freighter, sat down with pioneer cargo journalist Siegfried Zantke (See Story below) when the very first B747F made history linking an all-cargo service between Frankfurt and New York City (JFK).
     Memories and deeds come full circle for Lufthansa, as another page is added to the distinguished, rich, and colorful tradition of air cargo excellence in Germany.
     Fly on, and Say Hello, USA.
     You are welcome, delivering the goods of peace and friendship from around the world.
     Say Hello, USA, to places yet discovered.
Geoffrey/Flossie


Accompanying an early shipment of German cuckoo clocks in 1960 to Chicago, at the delivery from left to right: Mr. Morgan Nickel, United Airlines Cargo district manager; Mr. Frederick Gonzales, Secretary Traffic Club of Chicago & Export Manager Bell & Howell Co; Siegfried Zantke and Mr. Helmut Scherret, Chief of Cargo Operations Freight-Air France, Frankfurt.

t has been some twenty years now since the passing of one of the great pioneers of air cargo journalism—the very great, Germany-based Siegfried Zantke.
Zantke was born on August 18, 1911, in Eisenach, Germany.

     He studied journalism, and learned how to fly.
     Flying during the lifetime of Siegfrid was a many splendored thing, but also a matter of survival—he served during World War II in the German Luftwaffe, which suffered huge losses and almost total annihilation during the conflict.
     Siegfried survived World War II serving as a navigator, despite being shot down twice over Russia.
     Back in Germany post-war, Siegfried Zantke went on to make his career as one of the outstanding journalists in aviation during the second half of the 20th century.
     “All his life, Siegfried would spend much time traveling and exploring the world, and the stories of his experiences came out to the world from the keys of his typewriter,” Siegfried’s son Hardy Zantke told FlyingTypers.
     “Whether as young man on the Bagdad Railroad, on a slow Volga River barge, or crossing the Kyber Pass on camel-back; or later in life on commercial airlines to the cargo hubs of the world, or jeeps through the deserts exploring historical sites, it was always about discovery for my father.
     “His life was aviation, travel, adventure, politics, history, and geography,” Hardy Zantke recalled.
     But it was in air cargo journalism that he made his mark in history as a true expert.



     Siegfried Zantke worked as journalist for DVZ (Deutsche Verkehrs Zeitung, the German traffic newspaper), where he quickly found his calling in air transportation.
     It was Zantke who established the DLZ (Deutsche Luftverkehrs Zeitung, translated to German Air Transportation News) within the DVZ.
     “At DLZ for the next quarter century, Dad interviewed all the top air cargo people in Europe and beyond,” Hardy said.
     “After his official retirement in 1976 he still continued to contribute regular articles to the DVZ as well as some other transportation and trade papers.
     “In fact, my father wrote about aviation almost everyday of his life right until the day he died on February 15, 1993.
     “His last articles—‘Structural Change in Air Cargo’ and ‘Profitability of All-Cargo-Aircraft’—were completed in late 1992.
     “Reading both articles today, one can still uncover some relevance,” Hardy said.
     “Here were some of the first studies underscoring decreased profitability of air carriers as a result of deregulation.
     “The article about freighters details some pressing questions over twenty years ago that continue yet today,” Hardy declared.
     During his 41 years as air transportation journalist for the DVZ, Siegfried Zantke did not just write about air cargo; he made it his business to experience every aspect of it.


     Whether flying with a shipment of German Cuckoo clocks in the early 1960’s to Chicago, or discussing the merits and pitfalls of fully computerized cargo handling terminals in the 1990’s, he always stayed on the leading edge of the development of air cargo, and his knowledge, wisdom, and foresight were appreciated by many.
     Herr Zantke was also a pragmatist.
     Early on he predicted against all odds that supersonic civil aviation would not be successful in the 20th century. How right he was.
     Among the works he left us to recall his life is the German air transportation encyclopedias, ABC des Luftverkehrs (ABC of Airtraffic), a 500-page book explaining air traffic abbreviations and insider terms.
     The sixth and last ABC edition was published in 1990 and is fascinating to look at if you can find a copy.
     We are happy and honored to salute a life well lived and a great pioneer air cargo journalist, Siegfried Zantke.
Geoffrey Arend/Flossie


ahn Airport (HHN) has been attempting to position itself as a viable alternative to Germany’s Mega-Hub Frankfurt Rhein-Main for years; now, it’s in a business free-fall, as it struggles to remain attractive for cargo, legacy, and LCC carriers alike.
Hahn looked like it would have a breakout chance after the German Federal Administrative Court edict of April 4th, 2012, which imposed a night curfew between 11pm and 5am at FRA Cargo.
     Hahn offered to handle flights for Lufthansa Cargo & the forwarder community—an offer that was firmly and politely rejected by both sides.
     In 2013 Hahn Airport (ICAO: EDFH, IATA: HHN) celebrates 20 years since the former US military airfield went commercial.
     The airport has travelled a rocky road.
     Located about 125 km/78 miles from Frankfurt Rhein-Main, and without direct highway access, road feeder services operations are a time consuming and costly ordeal.
     The owners of “The Hahn” include shareholders, the state of Rhineland-Palatine (82.5 percent), and the state of Hesse (17.5 percent).


     In 2009 former major shareholder FRA (65 percent) disputed the viability of continuous subsidies for LCC operations such as Ryanair and sold off its 65 percent share to the state of Rhineland-Palatine—for one symbolic Euro.
     Apparently, the number crunchers at FRAPORT considered it cheaper and less of a business risk to write off their investment in HHN instead of acquiescing to the demands of former Rhineland-Palatine MP Kurt      Beck, who personally intervened on behalf of Ryanair and stopped a proposed hike in handling charges.
     Indeed, HHN’s limited success was based on two pillars: LCC operations by Ryanair and all-cargo operations of carriers who either could not get slots at congested FRA or felt that they could do without the interconnectivity at FRA.


     Aeroflot Cargo used HHN as their HUB for Europe, calling initially with DC10-30Fs, which were replaced with MD11Fs; at times, it accounted for as much as 60 percent of the airport’s cargo business.
     Effective July 16th, 2013, all SU operations at HHN ceased due to all-cargo operations considered unviable by the SU board.
     Since then SU MD11Fs have been parked in the Mojave Desert.


     Aeroflot Cargo came as quite a blow to HHN, which had just seen the sharp demise of its only home carrier, Air Cargo Germany.
     As FT has reported, ACG went out of business on April 19th, 2013, after the German CAA suspended ACG’s AOC.
     Although ACG had already transferred the larger part of its operations to FRA in order to explore synergies with 49 percent shareholder Air Bridge Cargo, HHN airport still converted a 5 million handling fee debt owed by ACG into an unsecured loan to ACG (which has since been written off entirely).


     Backing up a bit to December 2012, Etihad Cargo, who served HHN with four weekly A301F flights, had moved operations to FRA, citing better interconnectivity, better infrastructure, and concentration of business.
     Likewise, Qatar Airways just recently announced on October 27th, 2013, they will suspend their thrice-weekly A330-220F operations at HHN and move the entire cargo business to FRA, effective with the winter schedule, while “substantially increasing” the number of cargo flights from there, as far as slot restrictions will allow.
     Another HHN cargo customer since the early days, Air France Cargo has never operated flights into HHN but merely uses HHN as a less expensive transit and consolidation hub to avoid the higher handling charges in FRA.
     A picture used in HHN’s marketing brochure (available online) is quite revealing.
     Out of the six freighters pictured in “a typical handling day,” one operator (ACG) no longer exists, two (Aeroflot and Qatar) have left HHN, and Evergreen (also now gone), National, and Atlas Air do not operate scheduled services.
     Sadly, statistics available on HHN’s cargo website touting ongoing success and business expansion ended in 2011, a year when HHN handled 296.416t.
     Last year HHN experienced a 28 percent decline in cargo business, with 207.520t handled.


     Ryanair, the LCC operator who had at times based up to 11 aircraft at HHN and was wooed by the HHN management with substantial incentives, marketing subsidies, and specifically tailored handling charges, cut back its services from HHN by 30 percent in 2011, following the introduction of the German Federal Air Passenger Tax.
     While HHN handled 4,015,155 passengers at its peak in 2007 and 3,493,629 passengers in 2010 prior to Ryanair’s reduction of services, in 2011 HHN could attract no more than 2,894,363 passengers and 2012 reduced this number even more to 2,791,185.


     Given the fact that applicable EC directives forbid the practice of subsidizing regional airports by provincial and federal governments and that HHN is continuously turning out losses, its future remains quite unclear.
     While one would assume that the airport’s management would focus on the not trivial issue of weathering these storms, it seems that handling internal struggles prevail:
     On September 2nd, 2013, chairman of the HHN board Hans Endler released one of the two Managing Directors, Heinz Rethage, (left) from all responsibilities as part of an investigation group tasked with clarifying accusations of mismanagement and possible bribery in the airport’s past.
     When German daily “Rhein-Zeitung” asked for the background of this decision, HHN spokeswoman Bianca Waters said that she did not have any background information.
     In the meantime, the second MD, Wolfgang Pollety, was released from all duties and will apparently take over a position at Hamburg Airport.
     The turnaround and savings plan envisioned by MD Rethage obviously failed to get approval from the board, which is not surprising given that the shareholders certainly have no interest in investigating the recent and not-so-recent meddling of provincial politics with the airport’s management.
     Hans-Josef Bracht, Conservative Rhineland-Palatine MP and member of the HHN supervisory board surprisingly announced his resignation on September 3rd, alleging a “serious breach of trust” on the side of the political stakeholders.
     When speaking to German daily Mainzer Allgemeine Zeitung Bracht claimed the state of Rhineland-Palatine has made managerial decisions without prior consultations with the supervisory board.
     He went on to say, “since FRAPORT has dropped out in 2009, no notable achievements have been made.”
     While these allegations prompted the conservative CDU to request a special meeting of the Rhineland-Palatine commission for interior, trade, commerce, and financial matters, the Rhineland-Palatine Minister for Trade and Commerce, Eveline Lemke called for imposing stricter rules in regard to airport operators’ corruption.
     She called it “totally incomprehensive” that no such measures have yet been implemented; “(those mandatory measures) must receive priority in order to secure the future of (Hahn) airport.”
     One may however doubt the sincerity of the political stakeholder’s lip service paid to clarifying allegations of graft and corruption.
     The Taxpayer’s Association of Rhineland-Palatine has sued HHN airport management to provide background information about ACG’s handling fee debts being converted into an unsecured loan, which MP Heinz Rethage has refused in the past.
     Related inquiries from FT on that topic also went unanswered by HHN management, contrary to the applicable Rhineland-Palatine freedom of press act.


     In the meantime, the Rhineland-Palatine 2014-2015 budget draft calls for additional subsidies of 9.5 million Euros and an additional “declaration of commitment”— basically a state-backed loan guarantee—of 47 million Euros for the timeframe 2016 to 2018.
     It seems that low-cost operations in Germany will continue at steep prices to the taxpayer.
Jens



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     DHL’s air freight forwarding department will continue to expand its Asian footprint as it seeks further growth, according to the ever-genial Charles Kaufmann, Head of Air Freight and Valued-Added Services in the Asia Pacific at DHL Global Forwarding.
     As the focus of consumer demand, growth and manufacturing moves inland, DHL, like other integrators, is building up its network in Tier 2 and 3 cities to support its already substantial links to international destinations, Kaufmann told FlyingTypers over a coffee last month.
     “Everyone knows about Go West in China,” said Kaufmann. “So we offer solutions from cities such as Chengdu, Chongqing, and Wuhan and work with airlines on this. China is like Europe in some ways; we have major hubs linked by truck so we can offer more frequent uplift. If there’s a peak in demand we then route an aircraft through that city.”
     The expansion is part of DHL’s strategy to increase its Asia Pacific revenue from a fifth to around a third over the next five years. Much of this will come from air freight, despite the recent downturn suffered by the sector.
     Kaufmann expects imports to China and other parts of Asia to gradually start balancing air freight lanes, making more trade lanes viable in the future. “China is becoming a consumer market. Volume in from Europe and the U.S. is very good and lots comes by air,” he said. “Before it was capital goods, but now it is high-end consumer goods and auto parts as well. Over time there will be a more balanced situation, which is a big positive.
     “We can hub imports for China at places such as Hong Kong and, by consolidating, this gives us good opportunities with carriers.”
     As the cost of production in China or other parts of Asia increases, and lower fuel costs and better productivity reduces costs in Europe and the U.S., he believes there will be an element of re-shoring and near-shoring by OEMs and their suppliers to save on transport and improve supply chain security.
     However, this will not automatically mean a major loss of manufacturing in China and other parts of Asia, which will remain major growth markets for most manufacturers. Instead, a more complex picture will emerge in which producers manage more local supply chains in tandem with inter-continental and intra-regional movements.
     “As well as more factories in the U.S., Mexico, or Eastern Europe, there also will be diversification of production even within Asia so companies have second legs and not everything is in China,” he said. “Korean and Japanese companies do a lot in China but many are looking at diversifying into Thailand, Malaysia and other places. This will increase volumes.
     “But this doesn’t mean factories in China will close. They’ll keep them and use them to feed Asia.
     “At DHL we do focus on intercontinental lanes, but intra-Asia is very interesting for DHL Global Forwarding overall due to its growing population and more people with more money to spend. This will mean more air freight movements.
     “We are already doing a lot of this, but we are also offering multi-modal options with rail ferry and truck as well as ocean. For example, we link Shanghai and Japan using rail and ferry and Japanese railway containers with daily ferry departures.”
     Kaufmann also said he expected rapid growth in air freight demand in the years ahead from Indonesia, Vietnam, and Myanmar. But the greater use of wide-bodied planes by many carriers could result in more trucking to hubs in South East Asia as well as China.
     “There could be constraints like in Europe, where there are more smaller planes flying than ten years ago, so more goes by road,” he said. “This makes it harder for forwarders, so we can truck the cargo to hubs, which will be easier as infrastructure gets better.”
Sky King


All About The Man Who Invented Air Cargo Journalism
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RE: FlyingTypers FIATA Coverage

Glattbrugg, 15 November 2013

Dear Mr Geoffrey Arend,

     On behalf of FIATA, representing globally over 40,000 enterprises in 156 countries, we would like to thank you and all your colleagues at Flying Typers for your recent media coverage efforts at the 2013 FIATA World Congress in Singapore.
    FIATA was created in 1926 and is today the largest transport related interest representative organisation in the world. The annual FIATA World Congress is one of the key instruments we use to achieve the dissemination of information and best practices to the industry at large, in the hope of improving industry results worldwide. It also helps ensure the relevance and commitment of our advocacy work all over the world, and is an integral part of the FIATA mechanism.
    Media coverage is an essential part of such an event and serves a greater purpose of keeping the public at large informed and engaged. For the exceptional and ample media coverage you provided on event proceedings and for the valued contribution which you and your colleagues have helped make possible for our organisation, we sincerely thank you.

Best regards,
FIATA
International Federation of
Freight Forwarders Associations
Francesco S. Parisi
President of FIATA


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