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   Vol. 14  No. 54
Wednesday July 1, 2015

Samways Star Is Bright

Roger Samways     Deep in the Heart of Texas, American Airlines Cargo declares its focus is on “meeting our customers’ needs by effectively utilizing our growing network.”
     “We’re striving to ensure that we are engaged with our customers as we work on continuously improving our performance and optimizing their experience.”
     Nobody has to tell Roger Samways, managing director of Global Accounts and Sales Strategy for American Airlines Cargo that the future has arrived.
     He insists that by integrating the best of both cargo operations of American and US Airways, “we took on the goal of delivering an even larger network, broader opportunities, and new, creative solutions to our global customer base.
     “Not only can we now fly shipments to more locations than ever before, including 154 stations and 300 weekly departures between the U.S. and Europe, but we have had the opportunity to make important investments in our infrastructure and people,” Roger insists.
     The erstwhile executive has broken down fences and forged new alliances for the world’s largest air carrier. He continues at a torrid pace even as Summer 2015 takes firm hold, showing absolutely no let up.


Old Philadelphia Has AA Pharma

     “One of our most recent accomplishments includes the development of our newest pharmaceutical facility in Philadelphia (PHL).
     “This 25,000 square-foot dedicated facility includes 9,000 square feet of temperature-controlled storage for our cold chain and pharmaceutical products at the optimal temperatures to maintain highest product quality.
     “The continued expansion of our temperature-controlled facilities is a critical element in ensuring we meet and exceed the expectations of our customers throughout the world.”


The Year So Far


     “Thus far, 2015 has been moving along pretty well.
     “Highlights include increased APAC demand, which we saw in Q1 as a result of the West Coast Port Strike, and our growing cold chain business that has shown significant growth so far this year. Overall, we’re continuing to work on making effective use of our growing network. Along with the integration of the US Airways and American networks, we recently added a new Frankfurt (FRA)-Miami (MIA) service in May, which gives us over 40 departures a week from Germany. In our expanding Asia network, we now serve five destinations with 11 daily departures—including the launch of our new Boeing 787 route between Dallas/Fort Worth (DFW) and Beijing (PEK) on June 2. This will increase further when we add a daily LAX/SYD in December 2015.
     “Outside of Europe and Asia, we continue to reinforce our position as the strongest carrier to Latin America, now serving over 50 destinations in the region.”


Fleet Renewal

     “In addition to our growing international footprint, we have many completed/planned aircraft deliveries to be celebrated.
     “In fact, we took delivery of an incredible 134 airplanes in 2014 and are scheduled to receive 128 this year.
     “Just focusing on our widebody orders, we have 42 firm orders and 58 options for the 787 (a mix of -8s and -9s), 22 A350s and three more Boeing 777-300s (taking our 777-300 fleet to 20).
     “When doing the math, it works out to around one new widebody per month for the next five-plus years.
     “Our new, modern fleet allows for greater opportunities for our customers’ cargo needs—it’s a really exciting time to be at American Airlines.”


What Is Moving?

     “We see many unique shipments every day. In particular, strong growth opportunities in the pharmaceutical sector, which helps to explain the important investments made to support our cold chain solutions.
     “Most recently as mentioned, this includes the opening of our new pharma facility in PHL, home to many major global pharmaceutical customers, as well as the certification of the CSafe container.
     “Many of the commodities we see come through our facilities are lifesaving and/or highly valuable healthcare products and perishable goods.
     “With the introduction of the new high-tech, fuel-efficient 787, it’s now possible to offer quick, high-quality shipping services to and from some of the farther-flung parts of our network, including Asia and Latin America.
     American has daily departures planned for 2015 that will include service between DFW and PEK, DFW and Buenos Aires (EZE), DFW and Shanghai, and Chicago (ORD) and Narita (NRT); also included is the recently announced service between Los Angeles (LAX) and Sydney (SYD), that commences in December of this year (2015).”


GLN & Other Alliances

     “Alliances have delivered benefits all around.
     “We have adopted a multi-layered customer relationship strategy at American Airlines as we seek to become an even more important supplier to customers of all sizes.
     “Relationships like this are a great way of engaging with a different segment of customers, getting access to their key decision makers, and hopefully providing them with some key relationships at a senior level within American Airlines.
     “The relationship with groups like GLN also help to provide a really good source of feedback regarding our product offering and how effectively it meets our evolving customer needs.
     “Broadly speaking, we welcome the opportunity of having new ways of engaging with current and new customers and this can include working closely with industry organizations and forwarder groups.”


Forwarders & American Cargo

     Ask Roger Samways how important forwarders are and there is barely a pause before a resounding “Very!” escapes his lips.
     “Forwarders are key partners, providing complementary services such as infrastructure and expertise that we simply don’t provide (for example warehousing for long-term storage, customs brokerage, service to door, and in some cases more deeply embedded 4PL services).
     “The relationship with our forwarders ultimately needs to be strong in order to enable us to effectively meet shippers’ needs.
     “Our success comes down to our customer focus.
     “Customers are our partners and ensuring we stay ahead of the curve to continuously meet their needs means we’re doing our jobs right.
     “We stay well attuned to those needs and collaborate with our customers on an ongoing basis to provide the most reliable, enhanced service possible.
     “After almost 70 years in the air freight business, American continues to evolve with the industry by offering innovative ideas and solutions as the need arises.”

AA Then And Now
     Connections . . . Although change is the constant, some things remain the same . . .
     Here in 1938, a trailblazing AA Douglas DC3 loads high-value consignments via special handling.
     Today, even as highly developed IT-driven cargo loads via a variety of containers & pallets, an AA Boeing B787 finds room for some last minute, special handling “must ride” cargo.


Where Business As Usual Is Unusual

      “I’m not sure there is such a thing as a typical week, which is one of the reasons that I love my job, and the Cargo industry, so much!
     “It will involve a lot of customer-focused work, either meeting with customers across our global network or engaging with them via conference calls during those weeks when I’m based in the office.
     “This could include any combination of meeting with my team to discuss our Global and Key account strategy and performance and reviewing our interline relationships (around 10 percent of American’s total Cargo business comes from Interline and so this is an important focus for us as an organization).
     “Part of these discussions also involve finding ways in which we can further leverage these relationships to benefit our customers, and speaking with our sales team, including GSAs, in order to gauge the current market conditions.
     “My team and I work closely with cross departmental groups as we discuss short and longer term strategies aimed at meeting our evolving customer needs… the list goes on!”


How Roger Gets Over

     “Typically my travel is a reasonable 175,000+ miles a year, primarily to Europe, Asia, and Latin America, but with some domestic travel thrown in for good measure. I aim to spend around 40 percent of my time out there, somewhere, mostly visiting our customers and sales team across our network.
     “I love the opportunity this gives me to meet people face to face and always find it easier to understand specific market issues if one has first-hand experience.”


Major Hurdles Facing Air Cargo

     “There are a myriad [number of hurdles], some positive and some less so, facing the future of the air cargo business.
     “As an industry we need to deal with economic uncertainty in some areas of the world and the potential impact that this might have upon our business, as well as how best to address overcapacity in some markets, the changing needs of our customers, the need for greater visibility of information through the supply chain, the demand for faster end-to-end solutions, competition from other modes of transportation, and the need to embrace technology at a much faster rate than the industry.
     “The fact is, our cargo industry is constantly changing—and American Airlines has done a great job at adapting and evolving as needed.
     “As we implement needed changes, we strive to keep our customers and their needs top of mind, always asking how each change might impact them and their businesses.”


The Importance of Roger

     Roger Samways says he has enjoyed himself immensely during a 22-year career in air cargo that somehow began by accident after a brief encounter whilst attending a cricket match with his sister at home in the UK.
     “I love the variety that each day brings and the opportunity to build meaningful, long-term relationships.
     “I definitely would endorse a career in air cargo, as it provides a great opportunity for stimulating, productive work, so many diverse roles, plus the opportunity to travel.”
     Roger said he and wife Lucy “enjoy travel anywhere with great beaches and/or the opportunity for adventure.”
     Recent holidays have included the Caribbean and Costa Rica, “and we’re spending some time in Nicaragua this summer.”
     Roger said picking a favorite city is “really tough … but I’d have to say London (what else) . . . closely followed by Rome and Tokyo.”
     Places to visit and things yet to do include:
     “Definitely Australia and New Zealand . . . preferably watching an England Cricket Tour,” Roger said.
     As for his favorite foods and hobbies, Roger replied: “Does beer count as food?
     “If not, I’d have to say, curry!
     “For the other part, anything sports related and I love exercising. My favorite sport to watch is football.
     “By this, I mean proper football, not the American version.
     “An actual fact: My football team (a little known team called “Watford” based northwest of London) has recently been promoted to the Premier League in the UK.
     “It’s tough to get back to see them play very often (although I have been known to make the odd trip) so one of the great things about their promotion is that their games next season will be televised a lot more frequently . . . which will also help the indoctrination process that I’ve started with my son, Dylan!”


What Air Cargo Can Do Better


     “We can always work harder to build and improve relationships with our customers.
     “Remaining engaged with them will help us to enhance our products and services to align best with their needs.
     “Secondly, we are constantly focused on guaranteeing the highest quality, reliable service possible.
     “By continuously focusing on our service levels, we can ensure a safe and compliant operation our customers can trust.”


An Immediate Personal Goal


     “It’s pretty unrealistic, but I’d love to beat Doug Brittin (The International Air Cargo Association, TIACA) at table tennis, just once!”


Greatest Accomplishment

     “I’m not sure how to answer this question so I asked my wife, Lucy.
     “She thought long and hard and suggested the time earlier this year that I changed a radiator hose on her car . . . which might have been a subtle dig at my DIY skills (or lack of).
     “The car is still working, by the way,” Roger Samways smiled.
Geoffrey/Flossie



   They say great pictures are worth 1,000 words . . . EMO Trans Frankfurt, working with their colleagues in New York City, provided the logistics for the fast delivery of white asparagus from the fields of Germany to the tables of the United Nations (UN) dining room in New York City, where the German American Chamber of Commerce held another successful and memorable “Spargel Fest” dinner.
   Not to be outdone, EMO San Francisco provided the same logistics for their local Chamber of Commerce and was recognized at the dinner for their excellent service.
   Although all of this happened during mid May, the smiles for miles from the EMO crew and some of their customers left little doubt, Der Lenz ist da . . .

 

Numbers Tracking Up
Asian and Middle Eastern carriers and airports are leading global volume growth, although capacity additions are hindering yield and rates gains.
     The Association of Asia Pacific Airlines revealed member airlines saw a year-on-year increase of 2.9 percent in freight ton kilometer (FTK) terms in May, although this was offset by a 5.1 percent increase in offered capacity. AAPA said that although expansion vis-à-vis 2014 volumes was slowing, 2015 had so far been positive for carriers. Cathay Pacific, for example, saw a 6.2 percent year-on-year increase in cargo and mail uplift in May, with tonnage over the first five months up 9.6 percent.
     “International air cargo markets recorded further growth in May, albeit at a moderate pace compared to the preceding months when demand was boosted by congestion in U.S. West Coast maritime ports,” said Andrew Herdman, AAPA Director General. “Overall, Asian airlines registered a 6.3 percent increase in international air freight demand for the first five months of the year."
     IATA also verifies the strong start to the year for Asian carriers, with its latest analysis concluding that Asia Pacific and Middle Eastern carriers saw demand growth of 4.5 percent and 14.1 percent in April, respectively.
     The performance of Asia Pacific and Middle East airports so far in 2015 has been equally strong, with growth of 9.3 percent recorded in April in the former, and 8 percent in the latter. Within those figures there has also been some standout performers with Shanghai Pudong (PVG) +19.9 percent, Incheon (ICN) +18.9 percent, Mumbai (BOM) +20.7 percent, and Doha (DOH) and Abu Dhabi (AUH)—both 15 percent—leading the way.
     Early airport figures for May suggest the strength of the market remains robust, although there are also signs of slowdown in growth in some areas. After its record-breaking 2014, Hong Kong International Airport (HKIA) has seen only low, single figure growth so far this year, and year-on-year expansion was marginally negative last month due to slowing exports.
     Yet Shanghai Pudong International Airport Cargo Terminal Ltd saw 10.7 percent growth in May compared to a year earlier on the back of healthy export demand. This followed the operator’s strongest ever quarter in January-March and record throughput in 2014.
Lutz Grzegorz     “Import cargo volumes increased by 14.30 percent year-on-year to a total figure of 262,189 tonnes during the first five months of this year,” the operator told FlyingTypers this week.
      “International imports rose by 14.64 percent, domestic imports increased by 10.49 percent, and export cargo volumes grew by 9.88 percent to a figure of 369,978 tons.”"We were able to continue the strong performance we achieved in 2014 throughout the first half of this year. With respect to this trend, I expect a positive development for the coming months as well,” added Lutz Grzegorz, VP of PACTL.
     But although volumes have started strongly in 2015, the influx of new capacity and continued sluggish growth into Europe allied to slowing demand on the Transpacific, where ports have now returned to normal operations after disruptive union action, has impacted pricing.
     Drewry’s East-West Air Freight Price Index fell to $3.22 per kg in May, down from a 12-month high of $3.92 per kg in November 2014. Indeed, the index, a weighted average of all-in air freight "buy rates" paid by forwarders to airlines for standard deferred airport-to-airport air freight services on 21 major East-West routes for cargoes above 1,000 kgs, has consistently declined month-on-month since November.
     Herdman remains cautiously upbeat about the market in the coming months. “The demand environment for air cargo markets remains positive, although the pace of expansion appears to be moderating,” he concluded.
Sky King

 

Chuckles For July 1, 2015

ICAO Slaps Thai Aviation

     The International Civil Aviation Organization (ICAO) downgraded the Thai Department of Civil Aviation (DCA) to Category 1 effective June 18th, after a Universal Safety Oversight Audit Program (USOAP) audit red flagged a number of safety concerns in January.
     The shortcomings were addressed with DCA after compliance deadlines were set by ICAO, which apparently were not met by DCA.
     DCA operates the 28 domestic airports in Thailand and also provides regulatory oversight over the entire Thai aviation industry; this dual role of the DCA as airport operator and regulator ICAO is considered a possible conflict of interest.
     The ICAO Audit discovered that at some Thai LCCs certain basic ICAO requirements had not been met: Mandatory manuals were not on hand; licensing of staff was not in order, and there was a shortage of qualified aviation inspectors as well as serious deficiencies in the enforcement of the regulations pertaining to the transport of dangerous goods/hazardous materials by air.
     A safety plan submitted by the Thai DCA intended to ward off the downgrade was rejected by ICAO in March 2015.
     ICAO concerns center on low-cost carriers operating in Thailand.
     While ICAO does not have any powers of enforcement, downgrading to Category 1 usually prompts US FAA IASA (International Aviation Safety Assessments) audits for those airlines who operate services to or through the U.S.
     Likewise, the European Aviation Safety Agency EASA would put a Cat. 1 country under scrutiny and, depending on the outcome of investigations, might ban airlines registered from a Cat. 1 country from operating in and out of the EC altogether.
     “The downgrade could create a ripple effect and prompt global aviation agencies to reevaluate the safety of Thai aviation facilities,” said the Economic Intelligence Center of Thailand's Siam Commercial Bank in a press release.
     Kasikornbank’s market analyst Nattariya Wittayatanaseth echoed: "This could dampen the prospects for the tourism sector, which has been the only bright spot for Thailand's economy so far."      The Tourism Council of Thailand (TCT) simply called the impact of the ICAO downgrade “colossal.”
     Elsewhere, Japan and South Korea took immediate measures in March 2015 by suspending Thai-registered aircraft from operating charter flights and new routes.
     “Thai Airways (TG) had just suspended its all-cargo operations with its two existing 747-400BCFs, citing ‘lack of demand,’ but outlined that those aircraft would be put to charter and ad-hoc work.
     “The route and fleet plans of TG and other carriers are now in shambles,” a source told FlyingTypers.


Thai Switcheroo

Prajin Juntong      Thai Minister for Transport Prajin Juntong put DCA boss Somchai Phiphutthawat on the sidelines in all of this, ordering the beleaguered Somchai to trade jobs with Thailand Inspector-General Parichart Khotcharat.
     Whether this measure will speed up the fixing of the shortcomings in the Thai aviation system remains to be seen.
     Minister Juntong explained that “the change is for the sake of suitability” while Ms. Parichart commented that “she did not know in advance about the transfer but that she is prepared to do her best in the job,” reported the Bangkok Post.
     So far, TG has been able to minimize the impact of the ICAO downgrade by utilizing outside, ICAO-endorsed inspection procedures in order to avoid its aircraft being subjected to restrictions in foreign airspace.
     “Thai Airways has had to rely on other states’ civil aviation authorities to provide oversight for where Thai Airways operates,” TG said in a subsequent press release.
Jens

Vital ViewsVital Views 1975-2015  

    The year 2015 marks our 40th year in the world of air cargo news reporting—first as Air Cargo News and now as FlyingTypers.
   In 2015 we are fortunate to present the writings of the 102-year-old Richard Malkin, who remains the first air cargo reporter in history (circa 1942) and now serves as FlyingTypers' Senior Editor.
     Here Richard recalls the views of executives over the four decades.

   

1997

Francois BacheletFrancois Bachelet, executive vice president and chief operating officer, Air France Cargo, in a display of candor, wrote: “Airlines and forwarders, in my opinion, have one inherent weakness: a lack of mutual trust, and as a direct consequence, a failure to communicate in an honest and open way. This is our Achilles heel. We regard each other with suspicion, reacting violently each time one or the other of us crosses a well-defined line. There is outrage at the notion of an airline approaching a shipper directly. I fail to understand why.”


1996

Alan Chambers, managing director, Virgin Atlantic Cargo, stated: “The problems facing the air cargo industry are many, an they require some dramatic and innovative solutions if it is to prosper in the new millennium. We all know the old joke about air cargo taking six hours to cross the Atlantic and then another six days to cross town, and we all know that it isn’t a joke, it is all so often a fact. Carriers have to become leaner and meaner.”

On March 12, 1998 at the opening of Virgin Atlantic’s Newark International Airport air cargo facility pictured are left to right—Alan Chambers, managing director, Virgin Cargo UK, Angelo Pusateri president cargo, the Americas, Richard Branson, chairman and founder of the airline and the Virgin Group and John Ryan, senior vice president marketing and sales.


1987
Henry KluckHenry W. Kluck, U.S. Cargo manager for KLM Royal Dutch Airlines, had this to say about the airline-cargo agent relationship: “Thinking back over my many years’ association with the international air cargo industry, it strikes me that there was always someone around to refer to an airline-agent relationship as a partnership. It has been reiterated so many times, even during periods of disagreement and dispute between direct and indirect air carrier, that perhaps the use of the word has become somewhat trite like an old familiar melody.
     “Still, what else is it but a partnership? How else can one describe the commingling of separate energies to create a seamless service that stretches thousands of miles? Only a partnership can make it work.”

2004
Isaac Njankin, former cargo director – North America/Asia for Brazil’s Varig, argues that the world was moving faster than ever before, and you can feel and see it. The air cargo industry is not what it was only a few years ago, and he predicted that in a few years it will not be what it is today.

 

Hemingway and Castro   “Have you heard? Eastern Airlines is flying again in 2015, doing charters for Havana Air Charters?”
   A mural of author Ernest “Papa” Hemingway and Fidel Castro shaking hands appears on a wall at a downtown parking lot in Havana, Cuba.
   Cuba is gathering thousands of photos, books, and letters to and from Hemingway to be preserved and presented to the public.
   Eastern Airlines is back in the air with Havana on the menu . . .

   When pioneering USA flag carrier Eastern Airlines dropped dead in 1991, after having been part of the landscape in America from the dawn of commercial aviation and carrying traditions from Eddie Rickenbacker to Frank Borman, many thought that the last of it was the demolition of the carrier's old headquarters office tower at Miami International Airport.
   But if there is one certainty in this world it is that someone will start up another airline.
Eastern 737    So while Pan Am, which also disappeared in 1991, was resurrected in New Hampshire (of all places) but never seems to get much bigger than a repainted B727, here comes the reborn (sort of), Miami-based Eastern Airlines as a sub-contract charter carrier with one bright and shining B737-800.
   The new airline says it will have five such aircraft by the end of 2015, and while that news may quicken the heartbeat of the “never say die” types, we think you shouldn’t hold your breath.
   The B737, dubbed “Spirit of Eddie Rickenbacker,” looks for all the world like the old EA, and the welcome afforded the aircraft late last year when it landed in Miami was sweet.
   But that is about all there is—the old look, bolstered by renewed hope and driven by the unending money of people who want to bring back an airline that once was and might be again.
   It’s good to balance all of this with a current ad running for Emirates that harkens back to the opulent days of early jet travel aboard Pan Am.
   Emirates’ ad point is that “Today is Tomorrow.” Well, apparently aboard EK aircraft “Yesterday is Today”!
   The truth is that in 2015 the world belongs to American, Delta, United, Finnair, Lufthansa, Saudia, SWISS, Turkish, and of course those ever rising Middle Eastern carriers and other airlines around the world who have somehow navigated the pitfalls of post-deregulation, open skies, world conflicts, and natural disasters by having smarts, money, time, and good luck.
TWAA Sky Cargo 1947 Ad Pan Am Video   Building and maintaining a quality product during the past four-plus decades of constant change and upheaval cannot be described as an easy trick.
   Eastern, Pan Am, and TWA are now recalled as “once upon a time” airlines; smoke dreams that may somehow find a niche role in today’s world, where it is never over ‘til it’s over.
   Here is an early “Summer Journey” aboard Youtube with some old airline ads, including a great one-minute dish served up by Pan Am in 1968 . . .
   Happy landings, and “Keep ‘em Flying,” we say.
Geoffrey


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