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Vol. 18 No. 78	Wednesay December 11, 2019

Hong Kong British Consulate demonstrators

Hong Kong Pro-democracy protesters hold placards and British flags as they gather for a rally outside of the British Consulate in Hong Kong, Wednesday, Dec. 11, 2019.
Meantime, Hong Kong International Airport is rolling out discounts to cargo exporters as freight shipments nosedive during the continuing U.S.-China trade war.
Airport Authority Hong Kong (AAHK) opened up the checkbook saying, it will offer concessions for export cargo charges that will kick in effective April 1, 2020. Under the plan, AAHK will pony up 20% of the terminal charge concession.
Cathay Pacific, said that customers will get about a 20% discount of 30 HK cents per kilogram on general and special cargo.

The United State of Health Care Logistics

     We are on a grand tour of the United Cargo headquarters inside Willis Tower in Chicago.
Just down the hall, as a gentle rain begins to fall outside, inside the bright smile of Kate Harbin lights up the room.
     Kate carries an impressive resume, including working as a Public Diplomacy Officer for the U.S. State Department in Hong Kong from 2015-2017 before joining United Cargo just over a year ago.
     “I consider Asia my second home, and I enjoy and feel comfortable travelling anywhere on the continent,” Kate says.
     Kate’s sense of purpose as Product Development Manager, Temp Control is in clear focus these days. She is quite excited, even wonderfully animated, as she talks about it.
     With a broad smile and a sense of self-assurance, Kate gets right down to business.
     “While United Cargo has been transporting temperature-sensitive cargo for a long time, cell and gene therapies have changed everything – including our perception of the pharma and health care market at United,” Kate said.
     “What’s most gratifying is that every shipment using a Savsu or SkyCell container, or another of the advanced technology units we carry, has a personal story connected to it: from life-saving personalized medicines to organs for immediate transplant.
     “These innovative units and United’s vast network are combining to bring life-saving therapies to airports and cities beyond major markets worldwide, even to smaller cities served only by United Express regional jets,” Kate Harbin assures us.

The Game Has Changed

Sansu Container      “The entire pharma and health care cold chain market is evolving quickly. Creativity, new strategies and relentless attention to detail are required. Innovation is key as old doors close and new ones open on endless opportunities. It’s a whole new ballgame!”
     Then Kate lets it all hang out, confessing:
     “I have learned to love the air freight business. First-hand experience during my time at Kraft Foods taught me about the demands and expectations of a shipper – and I keep those lessons in mind.
     “I think one of the keys to building a rewarding and successful career is learning something from every job you have, and applying those insights to the next business and challenge.
     “I never thought too much about air cargo before joining United, but I quickly recognized our industry’s potential for making a positive impact on people’s lives. This deepens my desire to extend and optimize every aspect of the service we provide.”

Waitress Diplomacy

     Kate notes that her first memorable job was part-time waitressing while attending college. Believe it or not, she recalls the experience with a certain fondness:
     “Serving meals, I learned a lot about meeting people’s expectations and the art of diplomacy,” she chuckles.
     “That’s when I began using the process steps: “listen, think, and then react.” I carried that formula into my professional life at Kraft Foods, the U.S. State Department and now at United Cargo.
     “While consistent methods are valuable,” Kate said, “different tasks require a modified approach.
     “At the corporate level you follow a vision, and in the field it’s all about action and reaction to various situations. The best strategy in all circumstances is to remain proactive and to never stop learning.
     “Most of my expanded knowledge now comes from attending pharma conferences, and connecting with customers and colleagues. I’m taking every opportunity to educate myself on all aspects of United Cargo’s life sciences service offering as we extend these advanced handling processes to every corner of our network.”

UnitedTempControl In Action
United TempControl In Action

Kate Collaborates

     “The logistical landscape for United’s TempControl, LifeGuard and QuickPak small package services has completely changed,” Kate explains.
     “Our QuickPak service began with a completely different objective. It was about carrying cancelled checks, hand-signed contracts, and other material that needed to move quickly when business was tied to paper documents.
     “Now United Cargo, with our service partners, has started to make joint sales calls to TempControl and health care customers. The goal is to apply what we learn from these diverse sources to rethink our services and custom-tailor our SOPs. It’s never been truer that ‘One size doesn’t fit all.’
     “It’s rewarding to bring the message to United people throughout our system, especially in smaller stations new to handling biotech shipments and live cell therapies, that in many cases what we are moving can be live-saving for the patient.
     “It’s a new mindset, challenging no doubt, but exciting and motivational at the same time,” Kate said.

Gender is Irrelevant

     Kate doesn’t dismiss questions about being a woman in air cargo, but the issue doesn’t impact how she approaches her daily tasks or long-term goals.
     “Business challenges, and even personal ones, are less gender-specific today. People’s attitudes and approaches operate across a continuum, so generalizing about how they will react or how they want to do business is counter-productive.
     “My approach is that, in every country or industry, it’s vital to develop, foster and nurture relationships with as many people as possible.
     “And to build this rapport, it’s important to cut through the blizzard of email and interact with people ‘up close and personal.’ No matter how much technology develops, there’s still no substitute for a face-to-face connection,” Kate Harbin said.
Geoffrey

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Sir Richard Branson, the British billionaire entrepreneur who launched Virgin Atlantic, summed up his experience in the airline business with a pithy quote – “How do you change a billionaire into a millionaire? Make him buy an airline.” His observation speaks to a real puzzle:
Why is the airline industry, even for someone with the experience and business chops of Sir Richard, such an underperforming sector?

Thirty-Year Cycle

Despite alleged subsidies and actual government programs, studies indicate that U.S. commercial aviation as a whole has run at a loss for the last 20-30 years, its stock price lagging other mature industries.
What is it about this business that keeps it in the financial doghouse?

The Questions

If you ask airline executives, they blame their low margins and inconsistent results on a host of outside factors, anything from general economic conditions to unfair competition; trade disputes to currency valuations; terrorism, Boeing, government regulations, unions, pilot shortage, fuel prices . . . anything but their own leadership.
Setting aside those excuses, any quick analysis will show that airline profits are fundamentally cyclical, rising to heady peaks before crashing down into negative territory, and any slightly deeper analysis demonstrates that behind this cyclicality lie poor management decisions motivated by an obsession with two success metrics – market share (you grow or you die) and peak period profitability (making the most of the good times).

Some Answers

We all know that airlines are extreme fixed-cost, perishable businesses, and in Econ 101 we were all taught that you don’t grow a business based on cyclical peaks. So why do airlines continually flout this common sense to build their fleets and facilities in the run up to peak profitability?
The answer rests in their success metrics – market share and revenue maximization in the peak cycle. While outside factors can take a financial bite, most of airline underperformance arises from chasing these metrics at the cost of long-term vision.

The Chase

     Trying to time investment and expansion to capture business on the upswing may goose profit projections short-term, but it sets airlines up for a nasty situation once the lean times hit, as they always do. Forced to meet high fixed costs that can’t be quickly shed, they are forced to cut back on the one thing that the public cares about, quality of service.
     They chase nickels through any cut they can think of, including cutting personnel costs (through layoffs and pay cuts), cramming in more seats (which they then overbook), lowering the quality of their meal service, and making frequent flyer point redemption into a hassle of restrictions and forms.
     Then they chase dimes by introducing charges for everything – meals, checked bags, boarding preference, seat selection, you name it – EasyJet and Ryan Air even considered putting in coin-operated toilets. They do this to survive because they made the wrong decisions in the peak times, and passengers pay the price in a degraded and degrading flying experience.
     This opens the door for new airlines with lower costs to enter the market, triggering price wars which bankrupt weaker carriers, ground aircraft, eliminate low-profit and shrink the industry overall.

The Alternative

Is there an alternative? In my view, a better airline strategy begins with changing success metrics from market share and peak period profit to consistent performance and steady, sustainable growth.
A few major passenger airlines, as well as UPS and FedEx, have managed to survive and overperform thanks to this mentality.
Bill Boesch

     In Miami, a place historically known for all types of aircraft repurposed for air cargo, lives Florida Air Cargo with a fleet of ancient DC3s flying consignments out of nearby Opa-Locka Executive Airport.
     The vintage Doug’s have found new life carrying relief supplies like water and other emergency supplies to hurricane-wracked islands of the Caribbean.
     But they are also in use for some regular duties as well.
     Considering that the youngest aircraft in the Florida Air Cargo fleet was built in 1945 or 75 years ago, the fact that these ancient birds can still take wing, and can also be efficient in 2019 can be looked at as nothing less than a modern marvel of brilliance. These aircraft are from once upon a time, that is still alive and well in our world of tomorrow.
Sergio Alen

     The fact that Florida Air Cargo has experienced growth and success can be directly related to the high quality of leadership that starts with Sergio R Alen (right).
     Sergio has lived and breathed aviation from the time he was a child and started working professionally as a certified Airframe and Power plant mechanic at Miami Aviation Corporation in 1978.
     He started with annual Inspections, 100-hour Inspections, repairs and alterations of mostly general aviation aircraft.
     Since then he has done everything in aviation from modifications on Boeing 707’s, performing A, B and C checks, to Quality control, General management, Progressive Inspection Programs and acting as Director of Maintenance for several companies for more than 12 years.
     “Right now, for Christmas,” Sergio confides, “we’re making the magic happen, as Florida Air Cargo is flying toys to Nassau.
     “That's right,” he smiles, “toys”!
     “We loaded one DC-3 so full of toys the flight crew could barely reach the cockpit.
     It was one of those cases where cargo volume, not cargo weight, cubed out the airplane.
     “Likewise, our Cessna Caravan was pressed into service with similar results,” Sergio said.
     “December brings a rush of freight to The Bahamas.
     “The Christmas season wouldn’t be Christmas without recognizing the dreams and wishes of youngsters waiting, with fingers crossed.”

     At Air Cargo Americas this past October we came upon Roland Little, pictured in the Florida Air Cargo Booth.
     Roland and I go way back, to his days at Pan Am Clipper Cargo.
     Roland also reminded me of a bout we had at the Oyster Bar, a favorite watering hole below the Pan Am Building, inside Grand Central Station in Manhattan.
     That was a lot of fun.
     But as you think about it, so still are the DC3s that continue in daily use at both extremes of North America—all the way up in Canada, operating from Yellow Knife and Hay River where Buffalo Airways Cargo DC3s and even a couple of C46 piston pounders move everything from toilet paper to televisions, (under contract with the Canadian Government) to remote, small native Canadian viliages up in the Arctic Circle.
     Meantime, down in Miami, where the next stop south is Cuba, these Florida Air Cargo DC3s in all-cargo form are niche lifters where a bird that can move up to ten thousand pounds, and is also able to land on anything from a whisp of a grass strip to a rudimentary paved runway, is needed.
     Apparently, as we learned earlier this summer when more than 40 DC3s flew across the pond to recall the Berlin Airlift in Germany, there are hundreds of operating DC3s left in the world and enough parts to ‘keep ’em flying’.
     Something about this airplane stirs the heart of anyone that loves aviation.
     It feels good to fly in one, if you can hitch a ride.
     Looking out the window of your DC3 as example on a Sunday, no one has to tell you what day it is as you fly along at 150 mph.
     Down below, from a mile high, the cars that you will see parked around churches that dot the landscape in towns across USA say it’s Sunday.
     Florida Air Cargo says that it is up for charters.
     Give them a call: 4360 NW 145 St. Bay 4, Opa Locka, FL. 33054 (305) 687-5880.
www.floridaaircargo.com
Geoffrey

If You Missed Any Of The Previous 3 Issues Of FlyingTypers Access complete issue by clicking on issue icon or Access specific articles by clicking on article title
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