Vol. 11 No. 117                                  #INTHEAIREVERYWHERE                                        Thursday December 6, 2012

1975—Founded Air Cargo News. We are the Original.
1986—Responsible for saving the Marine Air Terminal, LaGuardia Airport. Only publication to be honored by the U.S. Department of Transportation for outstanding contribution to transportation and aviation.
1997—Credited with China Airlines Cargo service into the Miami market.
1999—Air Cargo Americas Award for Excellence.
2001—Responsible for saving Building One, Newark International Airport historic first generation administration building.

 

air cargo news December 5, 2012

 

Lufthansa Cargo Frankfurt Cargo Trends

Andreas Otto     In Frankfurt on December 4, Dr. Andreas Otto, Executive Board Member, Product and Sales, Lufthansa Cargo, hosted the 10th annual "Meet the Trends." A media briefing, he has hosted the event for the last several years.
     Dr. Otto is now the longest serving board member. He has been in his position on the Lufthansa Board since April 1, 2000 with a recent announcement of a five year extension on his term.
      Mathias Eberle, Head of Communications, Lufthansa Cargo, introduced Dr. Otto and said that Lufthansa Cargo is doing better today than ten years ago, certainly better than the competition, with the carrier investing for the future.
      Dr. Otto set the stage with the statement that, against the history of presenting figures for the next five years, it is presently extremely difficult to make any predictions—by the time anything is written down, it's no longer valid—a clear sign of the current global economic volatility.
      And indeed, the presentation turned out to be more of an overview than any kind of a forecast.
      This year 2012 ends up being without a real peak season, no air freight growth, and a decreased market!
      Total cargo carried saw erratic seasonal up and downswings with a lower figure of about 10 percent for this year compared to 2010 and 2011.
      Dr. Otto reported the trend was consistent throughout the carrier's top four markets—Europe to Germany was slightly below the rest of the market, and U.S. to Europe and China to Europe were equally slightly above the market. As a result, Lufthansa Cargo reduced capacity by 15 percent.
      An October statistic also reflected this downward trend for a number of major Asian, European, and U.S. airlines, with the share of legacy carriers in decline. Whereas leading cargo carriers such as the well managed SQ showed -2.4 percent over the 2008-2012 period, CV showed -5.1 percent, KE, -2.6 percent; CX, -0.4 percent; and AF/KL, -0.5 percent; LCAG had +2 percent figure according to Investor Relations (CAGR - compound annual growth rate).
      For comparison, "new" players are in expansion mode over the same time frame—Emirates, 10 percent; Air China, +5 percent; AirBridgeCargo, +25.5 percent; and Turkish, +36.7 percent.
      It is worth noting that the recent news of Turkish and LH possibly combining activities are purely for passenger services, and do not extend to cargo.
      It is felt that European airlines in particular are operating under a difficult political environment, with little to no government help and significant challenges in developing operational infrastructure, including aspects such as emmission trading, aviation taxes, subsidies and the "single European sky."
      IATA earning forecasts project rising profits for airlines in other parts of the world.
      According to the previously quoted Investor Relations for the same four airlines—LCAG, AF/KL, SQ and CV—Lufthansa Cargo has been holding its top position in terms of operating results (2012 Q3: LCAG 66 million Euro, AF/KL -197 mio. Euro, SQ -63 mio. Euro, and CV not reported).

Lufthansa MD11 freighter


      Dr. Otto stated that LCAG produces consistent quality, as illustrated by C2K statistics for 2012:

  Flown as planned 90.9 percent and up as compared to 2010 [3.7 percent] and 2011 [0.4 percent] respectively

Notified for delivery 88.4 percent and up as compared to 2010 [4.2 percent] and 2011 [down 0.3$]

Punctuality FRA 78.6 percent and up as compared to 2010 [18.6 percent] and 2011 [3.9 percent].
    

     Customer surveys parallel these results with matching satisfaction index figures of 80 for 2012 (on a scale of -100), up 5 points from 2010 and 2 points from 2011.
      In addition, when it comes to margins and asset management, Lufthansa cargo has held a demonstrable leadership position in the industry at a time when 20 percent of the global freighter fleet is grounded and will likely never come back.
      Looking at 2013 and beyond, Dr. Otto thinks his airline can beat general projections for air freight growth to and from Europe.
      The carrier is well prepared for the coming changes in security regulations, effective March 2012 (EU 185/2010), and its corporate SCORE program is well on track to produce cost reductions.
      The strategy of future success is being secured by the launch of major projects to improve sales—examples include special product, a new service channel, and advanced margin management with increased sales/operations interface to support an improved customer focus throughout the organization.
      The Lufthansa Cago strategy 2020 main pillars are quality, IT modernization (the new system is expected to come online in 2014), FRA as the present and future cargo hub (including the new cargo center), fleet development (taking into account that the MD11F fleet costs are fully written off) and the B777F coming online, cooperation with airline partners, and eCargo, which will finally realize a paper-free cargo environment and a digital end-to-end process to reduce unit costs and improve quality.
      Using social media, LCAG is on to its second air cargo innovation challenge, where anyone can contribute ideas and suggestions, and discussions are held.
      The 2012 contest is closed, with the winner to be announced.
Ted/Flossie

 

Mary Robinson

     The World Bank released a report this week saying that temperatures could rise by four degrees Celsius (seven degrees Fahrenheit) by the end of the century, which would cause devastating food shortages and catastrophic flooding. Also this week at the Doha UN Climate Change Summit, former President of Ireland Mary Robinson declared:
     “The Doha meetings this week are more like a trade negotiation, rather than addressing the urgency of staying below two degrees Celsius.
     “I believe that climate is the biggest human rights issue of the 21st century.
     “A positive from Doha is that women have been accepted in larger numbers as delegates to future meetings of CCC.
     “Creating a better gender balance will most certainly help accelerate finding solutions.”

Climate RoundtableSwiss KPIs

Oliver EvansWhat is Swiss WorldCargo's commitment to the environment?
Oliver Evans, Chief Cargo Officer, lets us know of their commitment right away:

Swiss WorldCargo is well aware of the unavoidable environmental impact of airline and airfreight activities, and is fully committed to reducing it to the absolute minimum through the implementation of innovative technology and processes.
     Swiss WorldCargo’s environmental protection program is an integral part of the airline and the essential elements are openly shared with customers, suppliers, and the public via the website, brochures, and other communication channels.
     In terms of challenges, we realize that all human activity (not just airline) has a significant impact on the environment.
     While this has been known since time immemorial, it is only recently and through enlightened publication from people like Al Gore that the issue has come center stage and become a priority for any responsible enterprise.
     As for ‘stopping the clock’ or even reversing it, it is simply not an option; as we seek to help millions throughout the third world to escape desperate poverty, we are bound to invest all our energy, ingenuity, and appropriate resources into combating the environmental impact.
     The challenge is how to meaningfully measure our activities with transparent and helpful KPIs.
     In our opinion, the industry needs to think in terms of extending quality KPIs (Cargo 2000) to include some environmental impact KPIs, and we have started to lobby our partners in IATA and TIACA accordingly.
     This matter has some urgency as forwarders are forced more and more frequently to report their efforts and achievements to their customers, and are therefore developing scorecards for their suppliers, including airlines: if this is not streamlined across the industry, we will once again be creating a whole lot of extra work for ourselves as well as opaque and mismatching KPIs.
     Look for a moment at our various initiatives and programs toward lowering carbon emissions:
     In terms of fleet, SWISS is investing massively in modern aircraft; today we are proud to operate one of the youngest and most fuel-efficient fleets in the industry. Besides the new Airbus (A320 family, A330, and A340), which have recently joined our fleet, we will soon take delivery of the Bombardier C-Series for short-haul operations, and a replacement for the A340 on long-haul routes.
     In terms of trucks, all our partners are obliged to use modern equipment (e.g. so-called Euro 5 trucks) and efficient route planning. Furthermore, they are expected to continuously invest in renewing their fleets and training their drivers to ensure ecological standards.
     In terms of ULDs, during the next four years, all containers provided by our ULD management partner are being replaced by new lightweight containers. The new units currently entering the fleet each weigh 16 kgs less than the equipment they replace, and advances in material technology will enable even greater savings as the replacement program continues.
     In terms of ground handling, we insist on the use of standard agreements that oblige our ground handling partners to conserve natural resources, avoiding the use of hazardous materials where possible and actively reusing and recycling.
     In terms of waste management, Swiss WorldCargo also wants its partners to have systems in place that ensure the safe handling, movement, storage, recycling, reuse, and management of waste, air emissions, and waste water discharges.

 

Youth Climate Protest Doha

     Chanting “More Action!” a protest march took place in Doha last Saturday as The Arab Youth Climate Movement brought supporters and young people from around the world to the UN Climate Change Conference, taking place in Qatar all this week.
     Not ignorant to the fact that Qatar is the highest polluter per capita in the world in 2012, the youth march was met by the Chairman of the UN Conference, (COP18/CMP8) Abdullah Al-Attiyah, who promised sweeping actions for dealing with the climate in Qatar.
     Marchers also demanded better working conditions for migrant workers, who today account for a staggering 94 percent of the total workforce in Qatar. That number is expected to rise in preparation for the FIFA World Cup in 2022.

 

United Bio Fuels
Robbie AndersonRobbie Anderson, President, United Cargo, makes no bones about it:

We’re very proud of the consistent environmental commitment demonstrated by United Airlines, and at United Cargo we’re supporting and contributing to this vital effort with some of our own innovations.
     United flew the first U.S. passenger biofuel flight, powered with a mixture containing renewable algae-derived jet fuel. We’ve already realized a 32 percent reduction in fuel use through modernizing our fleet, and we expect even greater efficiencies in this area as the 132 technologically-advanced new aircraft we have on order—including 50 Boeing Dreamliner 787s, 57 Boeing 737s and 25 Airbus A350s—are set to soon replace older aircraft in United’s fleet.
     In addition, United continues to invest in zero-emission ground service equipment. More than 3,600 of our ground service equipment vehicles—over a quarter of our fleet—are electric or alternatively-fueled. Of course, we don’t need any outside incentives to motivate us to focus on energy efficiency; since fuel is our biggest expense, what is good for the environment is also a benefit to our bottom line.
     At United Cargo, we lead U.S. network carriers in fuel efficiency on a cargo revenue ton-mile basis. One of Cargo’s most important environmental initiatives is the new warehouse we opened earlier this year at our hometown hub in Chicago O’Hare. This is the model for our ‘green warehouse of the future,’ and it’s environmentally friendly from top to bottom. The vegetative ‘living’ roof measures 109,000 square feet and is one of the largest roofs of this type in North America. The warehouse parking lot and surrounding areas use permeable pavers that reduce storm water pollution. The warehouse features all high-efficiency lighting, plumbing and temperature control systems, and many of the fixtures and components were reused or recycled. Forklifts and other ground equipment are electric-powered to minimize emissions.
     At an industry level, one of the most valuable ways we can all support the environment is to magnify our efforts to expand e-freight. The documents carried with air freight shipments would fill 80 Boeing 747 freighters every year, so our progress toward paperless transport will significantly reduce the environmental impact of air freight.

 

Etihad Anne Tullis Sustainability

Anne Tullis, Head of CSR and Sustainability, Etihad Airways

The comprehensive environment strategy for Etihad Airways covers both passenger and cargo operations.
     Our main focus is around emissions management.
     Since 2006 the airline has reduced overall CO2 emissions by 17 percent.
     This was achieved by having a young, efficient fleet with an average age of 4.5 years, weight saving on the aircraft including removal of technical spare parts, lighter cargo containers and weight reduction in cabin product, and improved flight and fuel planning.
     In recognizing the need for long term planning, Etihad has committed US$2 million to the Sustainable Bioenergy Research Consortium (SBRC) for the research and development of biofuels in Abu Dhabi and is also working with local partners in investigating municipal waste to fuel technologies.
     Etihad is a member of the global Sustainable Aviation Fuel Users Group.
     Specifically relating to cargo operations, Etihad Airways, along with its cargo container partner, Jettainer, embarked on a program in 2011 to replace 3,000 of the original aluminum containers with lightweight, environmentally friendly versions.
     The new lightweight containers are manufactured from a range of composite materials including Kevlar, the material used in making bulletproof jackets.
     This composite is tougher and much lighter, with an average weight saving of 17kg per container, or over 200kgs per average wide-bodied flight.
     This significant weight reduction will lower fuel consumption, costs, and CO2 emissions. It is estimated that the implementation of the new containers will cut emissions by approximately 5,000 tons in 2012.
     Our main challenge continues to be in fuel efficiency and working towards the industry challenges for improving efficiency and decarbonizing the aviation industry.
     As an airline we aim to be as efficient as possible, but we continue to be hindered by aviation infrastructure inefficiencies.
     To tackle this we have embarked on a number of multi-stakeholder initiatives, including the ‘INSPIRE’ program.
     This ‘Indian Ocean Strategic Partnership to Reduce Emissions' investigates aspects of flight and identifies opportunities for fuel saving and emissions reductions.
     The stated aims of INSPIRE partners, which include airports, air navigation service providers, and civil aviation authorities, include accelerating the development and implementation of operational procedures to reduce the aviation industry’s carbon footprint, capitalizing on existing technologies and best practice, and developing shared performance metrics.
     As part of the INSPIRE program, an Etihad Airways flight from Abu Dhabi to Sydney in July 2011 resulted in savings of more than 15 tons of carbon dioxide emissions.
     This is a clear demonstration of the massive savings in emissions that can be achieved if airlines are able to make more effective use of the on-board, computerized systems for calculating the most efficient routes based on current weather conditions, and if there is removal of airspace restrictions, many of which simply require political will.
     Another challenge is waste and materials management.
     We are working throughout the business and looking at opportunities to reuse, recycle, and generally minimize the amount of waste that goes to landfill.
     Etihad produces an annual Corporate Social Responsibility report that communicates our efforts in this area with supporting quantitative data. The latest report can be found here:
     Etihad continues to work on the initiatives above with a focus on fuel and flight management, weight reduction, and investigating opportunities for alternative sustainable fuels. Collaboration and partnerships will continue to be a priority to enable change.”

 

 

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