After a strong end to 2014, air cargo demand is again building in the run-up to Chinese New Year and forecasts are now suggesting that 2015 could see the sector further improve from where it was a year ago.

     Managing Director, TNT Asia, Middle East, & Africa Michael Drake (left) said he expects to see an increase in demand in the run to Chinese New Year. “This is traditionally what occurs and we believe this year will deliver the same,” he told FlyingTypers. “However, this increase will not be as large as the run up we experienced prior to Christmas, but it will provide some impetus to the market.
     “This would be welcomed, as the single largest market to impact demand will be Mainland China and we have seen their manufacturing index weaken over the last 3 months of 2014, which suggests a less than buoyant start to the year.”
     China’s official Lunar New Year celebrations run February 18-24 this year, but many workers leave coastal factories to visit villages in the interior long before the holidays begin, so they can undertake journeys that sometimes last 3-4 days.
     Many also return late, forcing most major export factories to shut down or reduce production for a number of weeks. As a result, shippers traditionally rush to get cargo out of China before output slows, giving both air and ocean a demand spike before the lull that follows.
     Sou Ping Chee, (right) Panalpina regional head of air freight for the Asia Pacific, expects uplift demand to be particularly strong from Hong Kong and key Chinese airports in the next few weeks due to disruption to transpacific ocean supply chains.
     “Traditionally, the time leading up to Chinese New Year has always been busy for the air freight market in the Asia Pacific, especially in China and Hong Kong, so we expect 2015 to be no different,” he said. “However, given the exceptionally strong 2014 peak season and the still unresolved U.S. West Coast port congestion, the pre-CNY peak could potentially be stronger this year, particularly on the transpacific trade lane.”
     Gary Phelps, (left) senior vice president, Global Air Freight, BDP International, also forecasts continuing tightness in the market from Asia Pacific to the U.S. in the absence of a labor/management contract agreement at U.S. West Coast seaports.
     “In addition, we see continued growth from U.S.A. to Asia Pacific for airfreight, with an emphasis on Shanghai seeing the most growth,” he added. “We have also seen additional U.S. spikes in airfreight to South East Asia.”
     He said that on top of the impact of West Coast port congestion, air freight capacity generally tends to tighten between 10 and 14 days prior to Chinese New Year, as ocean shipments stop becoming an option.
     “Shippers are expediting shipments before China goes quiet in observance of the Lunar New Year,” he said. “Pricing, true to form, will definitely spike up due to the high demand, especially for the trade lanes between Shanghai and Los Angeles, and on the Shanghai-Chicago trade lanes.”
     The bright start to the year that Chinese New Year provides could also give the whole of 2015 some early momentum, according to IATA. In a recent letter to FlyingTypers, Chris Goater, manager, Corporate Communications, defended the organization’s downbeat forecasts during 2014, when IATA’s forecast of FTK growth of 2.1 percent was short of the mark—it in fact expanded by 4.3 percent.
     But he was far more bullish on 2015, although he insisted positivity should be put into a more general context.
     “Our December 2014 outlook suggests that FTKs could grow 4.5 percent this year, and nothing would please us more than if this also turns out to be an underestimation.
     “[But] it remains the case, however, that air cargo revenues are $5 billion lower than in 2011 and that yields are set to fall for the fourth year running. So there is still a ‘way to go’ before the industry can truly be said to be back where it belongs.”
SkyKing

     Talk about a tropical paradise of a different kind: Cambodia (or Pre_h Réachéanachâk Kâmp_chéa, as its official name goes) or most notably its capital, Phnom Penh is certainly a horse of a different color.
     When thinking of a tropical paradise, places such as Hawaii or maybe the resorts in Southern Thailand come to mind—warm, breezy, and clean getaway places for those who can afford air travel.
Phnom Penh is a tropical paradise, too, but one seen through the eyes of Charles Bukowski, whose L.A. underground newspaper column, “ Notes of a dirty old man” earned him a reputation as an “American primitive” writer as well as an FBI file.
     It would probably require the masterful, down-to-the roots language of a Donald Ray Pollock (“Knockemstiff”) to describe what Phnom Penh truly is.
     But Phnom Penh is more than the filthy back alleys and sunny Sisowath Quai Promenade, with its abundance of awesome restaurants (including the PP Foreign Correspondents Club, where the history of the Vietnam War was written up to a large degree) and its neocolonial Phsar Thmey (Central Market).
     The ancient Khmer culture, one of the world’s oldest, which managed the construction of Angor Wat 1,000 years ago, had a good run of bad luck in modern times: the atrocities committed by the Red Khmer under its leader Pol Pot (brother number one) in their attempt to create a totally agrarian form of communism, in which they evicted the cities and slaughtered almost one third of its population, is still present these days; that era was never closed for good.
     Many of today's leaders, including Head of State Hun Sen, came to power under the Red Khmer.
      With left-leaning politicians in Europe, the term “predator capitalism” is popular, a convenient scapegoat for the more complex misgivings of an unbalanced society.
     If such predator capitalism exists, it does in Cambodia, with a total negligence for the wellbeing of the average Cambodian citizen.
     There is no governmental health care system and even in the outskirts of Phnom Penh, more than a third of the population does not have access to sanitation, electricity, or running water. Interesting enough is that after the reign of the Red Khmer ended in 1979 and the constitutional monarchy was reestablished, the de facto power was held by the ruling Communist CPP (Cambodian People’s Party) under its leader Hun Sen, in power now for 25 years.
     Subsequently, do-gooding is good business in Cambodia—until recently, its streets were dominated by Toyota Landcruisers, Mercedes G, and Range Rovers of NGO’s of all kinds, and many 4 and 5-star hotels were booked solid with NGO personnel.
     Tourism started to boom in the “wild 2000’s,” as they are called there.
     Airlines such as Asiana, Korean Air, EVA Air and Condor started to add flights in order to meet growing demand. Also in regard to cargo:
     While Bangladesh is a known hotspot of cheap, cheaper, and cheapest garment production, Cambodia is even more so—and conditions in the factories are even worse, if such a thing were possible.
     Although Cambodia of course has its own currency, the Riel, any business transactions take place in USD, and ATMs in Cambodia dispense dollars.
     One will encounter Riel only when paying a bill and getting change—fractions of USD are made in Riel, one USD being 4000 Riel. And since the “liberalization” in 2009, brand stores have opened in abundance, something formerly unthinkable, with conditions for the average citizen having actually worsened.
     A burger and a coke at Burger King come at the expense of a whole day’s salary for a garment or construction worker.
     Cambodia is rated one of the most corrupt states of the world (ranked 156 out of 175 states as evaluated by Transparency International).
     The airline business has had a long stretch of bad luck as well.
     For decades, Cambodia had no flag carrier to speak of: Air Dream, Angkor Airways, Cambodia Airlines, First Cambodia Airlines, Kampuchea Airlines, Mekong Air, PMT Air, President Airlines, Royal Air Cambodge, Royal Khmer Airlines, and Royal Phnom Penh Airlines—all of them had a half-life of a few years at best, sprouting up and going under.
     A notable exception was Siem Reap Airways, which actually delivered a superior product and was managed well.
     However, Siem Reap Airways was an offshoot of Thailand-based Bangkok Airways and Bangkok Airways operated its aircraft.
     The maintenance as well as crew were Thai. Following the Thai-Cambodian tensions over the Pre_h Vihear temple, the Cambodian government revoked Siem Reap Airways AOC.
     The Cambodian Airspace used to be one of the most dangerous worldwide until the Cambodian State Secretariat of Civil Aviation (SSCA) entered into an agreement with the Thai Samart Corporation in January 2001, awarding Samart a 22-year license to operate the Cambodian ATC.
     Samart established a new firm; Cambodia Air Traffic Services Co., which initially took over responsibility for the PNH Flight Information Region, or FIR, followed by Aerodrome Control and Approach Control services at both Phnom Penh and Siem Reap international airports, as well as Aerodrome Control service at all other domestic airports in Cambodia.
     An Area Control Unit is operated in collaboration with Bangkok FIR.
     Likewise, the three international Cambodian airports—the capital airport Phnom Penh Pochentong International (PNH), Siem Reap International (REP), and Sihanoukville Kaong Kang (KOS)—are operated by CAMS–Cambodia Airport Management Services Ltd, which is a joint venture held 70 percent by the French VINCI group and 30 percent by Muhibbah Masteron Cambodia, a Malaysian-Cambodian joint venture.
     And the new Cambodian flag carrier, Cambodia Angor Air (K6), which started operations in July 2009, seems to do well—since it is also not managed locally but by Vietnam Airlines (VN) which is holding only a 49 percent minority stake while 51 percent is held by the Cambodian government. Its fleet of seven aircraft—four Airbus 321-200 (with two more on order) and three ATR72-500—is leased from Vietnam Airways.
     With three domestic destinations served (PNH, KOS, and REP) and seven International destinations (Thailand, China, and Vietnam with India, Singapore, Hong Kong, Japan, and Korea to be added in the foreseeable future) and load factors well above 79 percent, K6 will likely continue to be a success—unless the Cambodian government exercises too much influence, or fierce competition starts a price war.
     Although Cambodia Angkor Air currently enjoys a comfortable domestic monopoly in Cambodia, this will change soon. Cambodia Bayon Airlines (B9) is about to take to the skies, initially providing domestic services between PNH, KOS, and REP. And B9 is thinking big: China-based Joy Airlines (JR), which in turn is a joint venture of China Eastern Airlines (MU) and Chinese aircraft manufacturer AVIC, is backed by Xi’an; B9 has proposed a shuttle service between PNH and REP every 45 minutes with flights running between PNH and KOS twice daily. Starting with two AVIC Ark-60 before the end of 2014, the number is going to rise to five in 2015 with an additional 25 of the AVIC aircraft on order.
     While the improvements to the Cambodian Air transport sector made since 2001 are notable and thorough, the fact still remains that no Cambodian-managed enterprise has been successful so far, and that air transport as well as air transported products are not accessible to the vast majority of Cambodians.
     The Cambodian government is likely not a fan of the aforementioned Charles Bukowski (1920-1994), the German born American underground writer who used his poetry and prose to depict the depravity of urban life and the downtrodden, else they’d realize that, as Buk put it:
     “The shortest distance between two points is often unbearable.”
     The message here is that commerce and business should in its broadest means serve the needs of a nation’s citizens.
Jens

Editor's Note: All year long we faithfully report the news with much fondness for this industry we love. We originated the name Air Cargo News in 1975, when our publication was founded in New York City 40 years ago.
     In fact, we were the very first industry media to carry the title Air Cargo News.
     Our publication has existed for and about people, created by an ever involved and connected group of writers.
     We asked our editors to search around and write about something that personally has touched them, which they would like to share “in their own write.”
     First we traveled to Bali, Indonesia, where SkyKing wrote of the plight of the Manta Ray population that lives and shares the waters of that beautiful part of the world.
     Next we arrived in New York City and remember a favorite watering hole and some of the unforgettable characters, who populated the famed White Horse Tavern.
    Here, Jens takes a long and detailed look at Cambodia, a place where he spent his Christmas break 2014-15.

   A media giant here in New York and a good friend for many years, Joe Franklin died on January 24 at age 88.
   Joe was a broadcast pioneer and hosted shows on the old WOR TV Channel 9 in Manhattan, and also WOR AM Radio.
   He was still at it most recently on Bloomberg Radio.
   Joe loved nostalgia in the media—he titled his gig “Memory Lane.”
   He was among the very first talk shows on TV and he invented the art of conversation in media, talking to everyone from Bing Crosby to an unknown Barbra Streisand and hundreds of others.
   We got to know Joe and his wife Lois when Franklin occupied a closet-sized set of offices on 42 street. The space was crammed to the ceiling with show business memorabilia, including vintage photographs and movie lobby posters from the 1930s onward.
   At the time we were trying to save Building One at Newark Airport, and later The Marine Air Terminal at LaGuardia Airport.

Geoffrey Arend and Bob Allen of the Hal Kemp Orchestra (far left) on the Joe Franklin Show.

   Joe had us on his TV and radio shows at least a dozen times during that era, and we never considered it a coincidence that both buildings were saved from the Port Authority wrecking ball.
   Later, when we created a 27-hour radio broadcast of the life and times of the Hal Kemp Orchestra of the 1930s, going into the studio with Dick Hyman, Keith Ingham, and others to record tracks with Bob Allen, the band’s wonderful “Boy Singer,” Joe encouraged us and invited us on his all-night radio show, where we played almost ever recording in the Kemp catalogue, including the new ones with Bob.
   Late one evening after a TV taping, Joe, Bob and I and our wives all went over to the Oyster Bar in Grand Central Station. We joked and sang and laughed and ate until we choked, all night long into the wee small hours of the morning.
   I recall both Joe and Bob remarking that “The Oyster” had been a regular haunt for both “since the 1930s.”
   It was an unforgettable evening for me, and I have had many great moments throughout my life in transportation terminals.

Flossie Arend with Joe Franklin in 1986.

   Joe lived in a giant, rambling West Side Manhattan apartment, and one summer when his wife Lois took the cook and went away to the country, my wife prepared a dinner for Joe and our two kids, Flossie & Guffy, which we enjoyed in Joe’s dining room during what was, for us, a work session on a book we were creating.
   Joe had begun his career as a writer for the great pioneering comedian Eddie Cantor and had collected all there was to know about Eddie and other greats including WC Fields, Jack Benny, Burns & Allen, Milton Berle, Morty Gunty, and others.
   Joe had taped a few episodes of The Joe Franklin Show and had also spent some hours sifting through thousands of pictures for our book.
   At some point during the meal Joe fell asleep at the table while the rest of us were still eating.
We always had a laugh telling that story.
   Joe Franklin was wonderful, unflappable, easygoing, kind, and exceedingly decent; he not only knew everybody, but he never let stardom or big media types affect him very much.
   The last time we saw him was at our friend Pete Castellotti’s John’s Pizza Restaurant on 44 Street and 8th Avenue in Manhattan.
   It was Christmastime and Joe was sharing the spotlight with our mutual friend, the great Danny Styles at Styles’ Big Band Dance Party, which Pete hosted every year.
   Danny and Joe took turns introducing the music of the 13-piece big band “Vince Giordano and the Nighthawks,” who played as we danced all night long.
   Now beloved Danny and Joe are both gone, and the song has ended.
   But the memories and the beautiful melody of a life well lived lingers on.
Geoffrey

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