Big new “must fly into” destination is Baghdad International Airport. Possible sticking point are the uncounted number of mobile, shoulder-mounted surface-to-air missiles that could be launched by rebels against an incoming or outbound passenger airliner. Although many have applied for scheduled service, KLM starts up flights this September 1st. The first round-trip KLM flight between Amsterdam and Baghdad will cost about $1,140, in economy class or about $3,320, in business class, a hot meal, a movie, and troop patrols on the ground around the airport included. Now that the USA rules Iraq, The U.S. Department of Transportation (DOT) rules the heavens above the besieged nation, handing out permissions to three airlines in the United States—Northwest, which is a partner of KLM, and two charter companies to fly to Iraq, though they still need to get approval from other U.S. federal agencies including the Federal Aviation Administration and the Provisional Occupation Authority in Iraq. The provisional authority also put out a formal call for applications from airlines around the world and received more than two dozen responses from North America, Europe and the Middle East. Airlines were also asked whether they would be interested in opening commercial service to Basra. BA said “jolly good,” naturally. Now that Basra, the ancient city of Iraq, is the latest colonial conquest of the Brits (didn’t they just get kicked out of Hong Kong?), a new BA station in a quiet out of the way place might also serve as the perfect venue to test new agent work rules. At Basra, BA boss “Hot” Rod Eddington could insist upon enhanced swipe card use during tea breaks, trips to the lav, between flights and during missile attacks. Why not? BA tried the same thing last week at Heathrow and managed to almost put itself out of business. All of this plays against regular reports of one or two Americans, or other coalition forces, and scores of Iraqis, innocent and otherwise, being maimed and killed daily in that unfortunate country. Two weeks ago, a C-130 military cargo plane was shot down (July 16) by insurgents using a surface-to-air missile. General John Abizaid, commander of American forces in Iraq, told reporters he was “terrified” as he flew in aboard a C-130 recently. But what makes the destination so attractive despite the ominous danger, are the scores of specialists and hundreds of tons of air cargo that will swarm into Iraq now that the oil is flowing again. Put in airline terms, Iraq in the near and even distant future will be “high yield” traffic all the way. Delta Airlines with no freighters has flown all-cargo flights with mail and express to Bahrain in overhead bins, strapped to seats, and up and down the aisles, as well as jammed in below decks. Delta discovers that it can fly the consignments and offer even less attention to creature comforts than it does to passengers. (That’s an old air cargo maxim—sorry DL). One DL flight, aboard an aircraft that might have been mothballed without the work, reportedly carried record tonnage for an airline that saw its last freighter almost forty years ago and has no plans to add all-cargo lift soon. Delta whose partner in the world air cargo enterprise is Air France, can only damn its bad luck. Although the AF Pelican (the single neatest symbol of air cargo ever adopted by any airline in the history of our business) is alive and well, and all-cargo, with a huge fleet of AF B747Fs, the last airline that you will see carrying anything connected to the American military into the Iraq war zone is Air France, especially after France made it a matter of state policy to not support the Iraq War. Pakistan International Airlines, an ardent supporter of the war, was one of the first carriers to fly into Kabul. PIA, is one of the forgotten heroes of Middle East aviation. Always on the spot and occasionally brilliant, PIA is a top air cargo operator. Look for PIA to deepen its presence in post war Iraq, serving as an important air resource as the country and region rebuilds . . . British Midland wants a transatlantic code-sharing deal with United Airlines from London’s Heathrow. BMI wants approval to put its code on United’s flights from Heathrow to Chicago, Los Angeles, New York, San Francisco and Washington, as well as U.S. domestic flights. United’s code already appears on selected domestic services in Britain and to the rest of the Europe from Heathrow. The move will have to be approved by both the UK and the U.S., which is seen as no walk in the park. The existing Anglo-American bilateral air transport treaty restricts services between Heathrow and selected U.S. cities to two British and two U.S. airlines, despite more than a decade of talks to resolve the matter . . .

Boeing may be the world’s largest aircraft maker, but it is up its ying-yang in problems right now, having reported its second consecutive quarterly loss, while saying it’s certain there will be no recovery in demand from airlines until 2005. Estimates for commercial jet deliveries in 2004 are now put at 275 to 290, from a previous forecast of 275 to 300. Boeing said it had booked firm orders for 90 per cent of 2004 deliveries, or about 248 aircraft, and was on track to deliver 280 jets this year. But B757 orders are over. With only an 18 order backlog unless something happens soon, that airplane series will come to an end in about 18 months. Boeing workforce will be at about 60% of the 95,000 people that worked for the planemaker on September 10, 2001 when another 5,000 people are slashed next month. That will be right after a day of atonement, or whatever Boeing CEO Phil Condit is peddling as Boeing’s remorse for being caught doing some dirty tricks against competitor Lockheed Martin over the Delta USAF missile project. Turns out, the allegations say, that a Boeing engineering big shot hired away a Lockheed Martin engineering whiz to come to Boeing for big bucks and bring along as many Lockheed secrets as possible to Boeing. The USAF found out, went nuts, and now has cancelled any further Boeing military contracts for the missiles, including taking some contracts away from Boeing and handing them over to Lockheed Martin. Air Force says that Boeing is toast until it shows remorse and promises never to do that again.Thus the Condit led en-masse “stand down,” for all 78,000 employees left at Boring, er Boeing, for a day of ethics training this past Wednesday (July 30). Maybe they’ll all sing some Mr. Rogers songs? Are these people serious ? Are the lunatics running the asylum at Boeing? The workers were not the problem here, it was the bosses, stupid. Maybe the Air Force should find some other contractor to build its stuff? We put up with the lousy business climate and uneasy, uncertain future. But if there is one thing that we are sick and tired of right now, it’s one more story about crooked bosses, and half-assed cosmetic“fixes.” . . .

Middle East air carriers are the hot new aircraft market right now with sales expected at around $50 billion in the next 15 years, according to Airbus. An estimated 620 planes will be delivered to the Middle East alone in the next 15 years . . . It’s kind of like the elite amongst the partners, this GFX deal announced recently between Air France and Delta. Nowhere is mentioned the other Sky Team members which may mean either they are choosing up new sides, or Alitalia Cargo and Korean Air Cargo, can play one “team,” but not the other? Air France Cargo and Delta Air Logistics, SkyTeam Cargo member airline are utilizing Global Freight Exchange, (GF-X), for a whole new menu of some 10 destination on three continents. The point is, you almost need a score card these days to keep track of who has which deal, with what airline, or IT provider. Lufthansa Cargo partners WOW Cargo with several Star Alliance partners but not United Cargo. KLM is seeking another alliance partner that may not suit its biggest alliance partner Northwest. You get the picture. One oft repeated line one way or another, has finally come true in 2003: “Now everybody flies everywhere” . . . A three-day Air Cargo Symposium, hosted by Los Angeles World Airports was attended by more than 170 representatives from various other North American airports, airlines, freight forwarders, and government that gathered to discuss the future of the air cargo in today’s economy and heightened security. By the end of the encounter, you might imagine attendees having run out of different people and subjects to talk to and about, were either drinking heavily or were exchanging pictures of their kids. Actually the last day discussed the future regional air cargo business with new air cargo security and the dramatically increasing air cargo traffic trends over the next 12 years. What emerged was a case study of problems and a sales pitch to possibly quell challenges facing air cargo in Southern California. The need of finding alternative airports to LAX to handle air cargo traffic demands has been raised because of capacity and limitations restrictions. Delegates were told: “Although it has excellent cargo facilities, LAX will not be able to handle the forecasted growth.” The so-called “Inland Empire” airports are one answer to future demands according to the March GlobalPort, created where the old March U.S. Air Force base once was. Thus one more former military site gets lots of money as the locals get all juiced up at the prospect of getting an air carrier to raise local communities. Located 60 minutes from LAX and 10 minutes from Riverside, March GlobalPort told the symposium that it is capable and ready to handle anticipated demands. Said a representative: “Both the City of El Segundo and The El Toro Reuse Planning Authority support March GlobalPort as one of the best possible alternatives.” Phil Rizzo, the Executive Director of March Joint Powers Authority, pointed out that March GlobalPort is ideal for handling Southern California’s increasing air cargo trends. March does not have any operating restrictions, is one of the only joint-use military/commercial airports, allowing for lower landing fees and fueling prices, and has a runway stretching over 13,000 ft, enabling it to handle any size aircraft. Mr. Rizzo discussed further how March GlobalPort avoids the congestion that surrounds Los Angeles and Ontario and is served by four major freeways and rail service making it well- suited for transporting shipments throughout the Western U.S. But international airlines just beginning to show a pulse may be reluctant to move their passenger-driven business that also carries vast amounts of air cargo aboard brilliant combo aircraft such as the B777 (which can move twice the amount of air cargo as the yet to be built A380 the biggest airplane in the world), will fight tooth and nail to not fly anywhere else but LAX. The best candidate for March GlobalPort right away would be an integrator. FedEx, that utilizes everything that Flying Tigers ever was at LAX and a lot more, could certainly fill the bill. In any case the movement has begun to “sell” anywhere else but LAX to a dubious air cargo community by Inland Empire gateways, their agents, politicians and other air-minded Southern Californians . . . Singapore Airlines, on the floor kicking and screaming as it faces an unprecedented quarterly loss from what happened to every other airline in the world, has launched a second round of job cuts. Asia’s largest airline based on a market value other operators can only dream about, said it would cut 156 cabin crew - about two per cent of the total - and more than two dozen pilots, after axing 414 ground staff last month. The bad financial news is not over either for SQ according to sources. Expect the airline’s second quarter to also produce another loss. Are we witnessing another Swissair here? “Not likely” one analyst said. “Different markets and circumstances. Swissair got cut off from government funds as part of the privatization surge in the EU. What happened to Swissair was bad business decisions such as Sabena and some other business ventures that went south. SQ, which paid Richard Branson a lot of money for 49% of Virgin Atlantic, is still well heeled as airlines go. Singapore Airlines which drives attention, commerce and worldwide image to a country the size of a postage stamp (like Switzerland), is considered a vital national resource.” But clearly for SQ, things will never be the same . . . KLM lost 54 million euros ($62 million) for its fiscal first quarter, ended June 30 compared to income of 11 million euros last year. “Our first-quarter results continue to reinforce the necessity of structural changes going forward,” said President and CEO Leo van Wijk. “Traffic demand was weak and yields dropped. Although the impact on traffic volumes from the outbreak of SARS is now diminishing, there continues to be pressure on yield.” KLM cargo nosedived to 14 million euro from 20 million euro as a 3% rise in RTKs was offset by a 7% drop in yield, resulting in a 4% decline in revenues to 259 million euro. In view of “market circumstances and subsequent reduced capacity deployment,” KLM said it is speeding up erasing all its 747-300s so that all seven will be gone by December . . . Cargo numbers at Denver International Airport continue to decline. WorldPort, a cargo project at the airport has been devastated. WorldPort was supposed to be a $100 million, seven-building air cargo complex at DIA with 500,000 square feet. So far, two buildings have been built. The first is occupied, by U.S. Customs while a second 60,000-square-foot building, is vacant. The idea was to leverage DIA’s location with a brilliant complex of high capability inland cargo facilities during a time prior to 9/11, when elsewhere major American cargo gateways were busy. Undaunted, the airport says that it will launch a study. You expected that maybe they would say: “We give up!” . . .