…noted Glyn Hughes, Director General TIACA, in summarizing the panel titled “Precious Cargo”. In addition to this expansion of the term, the event offered interesting insights into new developments in this product segment, which is extremely important for air freight in every respect. These included packaging, handling, temperature requirements and, last but not least, high transport rates.
Frank Van Gelder is a highly recognized expert in pharmaceutical transport worldwide – company courtesy
The term ‘Precious Cargo’ is used by the industry primarily to describe the transportation of pharmaceutical products from the shipper to the recipient. That is nothing new. However, addressing the panel, the authors of this report remarked that according to their understanding, paintings from Pablo Picasso or Lionel Feininger, sculptures made by Leonardo da Vinci or, quite simply, gold bars, diamonds, or banknotes as well as expensive racehorses fall under this term. This was consented by the panelists.
Precious and expensive Yet, apart from these conceptual subtleties, the topic mostly revolved around pharmaceuticals, due to the paramount importance of the product for the cargo industry and supposedly because Frank Van Gelder, Secretary General of the lobby organization, Pharma.Aero, sat on stage. He pointed out that in some cases pharmaceuticals represent a far higher value than electronics, machinery, and even precious metals. When transported by air, the value per kilogram varies between €600 and €1,400, said Frank. In contrast, pharma shipped by vessel averages €70 per kg in worth. Further to this, Van Gelder delivered an insight into the latest development of heart valves. A single specimen of this tube-like small device costs approx. €100. Once packed in a ULD, the value of the entire consignment could reach two million euros, or even more, he noted.
Latest trends He explained that patients living in remote areas, be they in Australia, Canada, Brazil or many parts of Africa, increasingly tend to use portable Bio markers. This enables medics to get an instant overview over their health status, and saves patients from having to travel long distances to reach a hospital or specialized clinic in order to have their condition checked. Frank went on to say that, nowadays, special cancer treatments are in some cases done by micro radioactive products, and these need to be transported in a very special way e.g. using liquid nitrogen – a time critical necessity to prevent them from being spoiled. Touching the environmental footprint of pharma transported by air, he admitted that the CO2 emissions are considerable. Modal shift from air to ocean might be an option but does not fit many time and temperature critical pharmaceuticals. This said, air freight will remain being the most efficient mode of pharma transportation, despite high prices in comparison to ocean.
From air to sea Finally, he astonished attendees by revealing that some vaccines can meanwhile be freeze-dried. They resemble instant coffee that can be dissolved in water as soon as they are needed. These powdered serums can be stored for longer periods in unconditioned warehouses. So, their supply from overseas does not necessarily need to be fast, enabling shippers and forwarders a modal shift from expensive air to lower-priced ocean freight. Will the air cargo industry lose business due to freeze-dried vaccines? “Yes, it will, but only to a marginal degree,” Frank admitted. However, the loss is easily compensated by the global upswing of other precious cargo items needing air transportation.
The TIACA Executive Summit delivered a firework of hot industrial topics, impressions, and important impetus for the 350 or so delegates who attended the professionally organized event. This becomes clear by the statements given to CargoForwarder Global. We asked them what they thought were the most important takeaways, and whether they felt the event had been worth attending.
Brandon Fried, AFA, USA – photos: CFG/hs
Brandon Fried, Executive Director, Airforwarders Association (AFA), USA It is always worthwhile attending meetings like this one, run by TIACA in Brussels, to share our organization’s perspectives and compare the views of our European and international peers. Informal meetings enable us to gain new or additional insights, particularly on the role that the ground handling of freight plays at most airports. Since a major ocean parts Brussels and Washington, we often don’t have sufficient information about what’s happening on the other side of the Big Pond, despite electronic channels being available to discuss issues with each other. But face-to-face events, as the TIACA Summit proves once again, are significantly more valuable and more sustainable than Zoom calls or the exchange of emails. In addition to the many individual aspects that were discussed or presented here and the deepening of existing relationships with air freight experts, I will take two key takeaways back to Washington: First and foremost, it is the increased importance of the role transcontinental or even domestic supply chains play which is not only confirmed by experts, but also acknowledged by the general public. Let me cite one of the panelists here at the TIACA meet: Speaking about bottlenecks, he mentioned toilet paper which became temporarily unavailable during the pandemic due to supply bottlenecks. This has opened many people’s eyes to the relevance and complexity of transportation. The example may sound simple, but it illustrates very practically the consequences of disrupted supply chains, leading to empty shelves at supermarkets. This made supply chains, including the role of air and ocean freight, visible and tangible for a great number of consumers. Secondly, I found it remarkable that the topic of logistics is successively gaining a much higher priority at an increasing number of universities and educational institutions, as the examples from Florida presented at the TIACA session showed. The pandemic was a wake-up call showing the young generation that logistics is a viable career option offering plenty opportunities without sacrificing income. And finally, a word on AFA’s new self-image: we need to open thematically and focus more strongly than before on world events. Isolationism has never been a good solution, neither politically nor economically. Only global trade enables global peace is our strong belief.
Celine Hourcade, MD Change Horizon
Celine Hourcade, Managing Director, Change Horizon I was invited by TIACA to speak on sustainability and run a panel. This topic impacts all players across the industry: shippers, airlines, forwarding agents, ground handlers, and consignees along with their organizations. Sustainability is no longer a marginal issue but has long since arrived in the center of society, which was also made clear in Brussels. What also became evident is the industry’s expectation to accelerate the pace of transformation by skipping outdated practices and implementing greener solutions in air, ocean, and road, instead. This would also significantly improve the rather poor reputation of aviation in the public eye. Besides this pressing topic that fortunately is constantly gaining traction, I saw a lot of young people attending the event and also more female participants compared to past TIACA meetings. This is one important takeaway I bring back home. Further to this, I appreciated the broad spectrum of topics discussed in Brussels, covering the most pressing aspects and challenges the cargo industry is facing. Last but not least, networking also played a key role. People who attend such events not only expect to be informed about latest market trends and current developments in the industry through on-stage presentations, but also show up to meet with peers to deepen existing contacts or establish new ones. This is a very important aspect for which there was plenty of room at the TIACA event, thanks to professional scheduling.
Pascale Demieter, Chief Coast Air
Pascale Demieter, Head of Coast Air I have just returned from San Francisco and instead of going straight to my office at Liège Airport, I decided to attend the TIACA Summit here in Brussels. Why? Mainly to exchange information with the participants. In other words, for networking reasons; to deepen existing relationships and see acquaintances from the industry again. In general, networking at such events offers me the most added value.
What is also important for me, however, is to find out whether air freight will pick up again, worldwide, in the spring of next year at the latest. It is very important for me and my company, Coast Air, to gain an impression by discussing market outlooks with leading industry representatives.
Generally speaking, I find it depressing to see how business is being successively jeopardized by military action and political decisions. The Hamas attack on Israel and the military response to it is just the latest example. The Russian war against Ukraine and the destabilization of parts of Africa by the Wagner mercenaries with the support of the Kremlin, are further disgusting examples. Air freight is no stranger to crises, but the current accumulation of conflicts is becoming increasingly burdensome. I predict that many companies will not survive this valley of tears.
Tom Hoang,Boeing Commercial Airplanes
Tom Hoang, Regional Director, Cargo Marketing, Boeing
Was it worth attending the event? The answer is a resounding yes. We all have seen an excellent summit, with TIACA bringing value to the industry by addressing important topics such as sustainability, e-commerce or digitalization, in addition to market tendencies or modal split issues and their consequences for the cargo industry. One topic of specific interest from Boeing’s point of view, was the nose door issue of freighter aircraft, which is of utmost importance for our company. In fact, we stopped producing any cargo aircraft capable of elevating the cockpit section to allow the front loading of outsized or voluminous pieces such as oil drill equipment, for instance. However, the good news is that there are still 140 Boeing 747-400 units flying with an average age of 20 years. These can be P2C converted, expanding their life cycles for at least another 10 years. In addition, there are 107 Boeing 747-8 freighters in global operation, equipped with nose loading capabilities and averaging 7 years of age. Just think of Cargolux or Atlas Air and their large fleets of nose door Boeing freighters. So, in total, we speak of a nose loading potential of almost 250 B747s, with most of them securing supply for the next 20 to 25 years. I’m grateful that this issue was raised at the TIACA meeting, allowing me to shed light on this much debated topic.
Following the initial opening speeches at TIACA’s Executive Summit, a fitting first panel set the foundation of the event by taking stock of the current state of the air cargo industry and discussing the outlook for the coming year. Moderated by the association’s Director General, Glyn Hughes, the panelists included a well-rounded cross-section of the industry’s key players: Wilson Kwong – CEO of HACTL, Geert Aaerts – Chief Cargo & Real Estate Office, Brussels Airport Company, Turhan Özen – Chief Cargo Officer, Turkish Airlines, Yossi Shoukroun – CEO of Challenge Group, and Marco Tafuro – Air Freight Director, UPS Europe Region.
Challenging 2023, but various shades of optimism for 2024. Image: CFG/bg
The consensus was very clear: 2023 had and was continuing to present a series of challenges, but also brought to light significant opportunities for growth and adaptation. Yossi Shoukroun highlighted the year’s rocky start, pointing out that 2023 was a year of transition marked by the global recovery from the COVID-19 pandemic. Passengers returned to the skies, bringing belly capacities, while costs surged, impacting profitability. Nevertheless, Challenge Group was fortunate to retain the trust of its customers as it continued to provide a reliable supply chain. With the unforeseen, recent developments in Israel, however, the group is again faced with rising yields and “a situation where it is hard to go back to normal.”
Responding to crisis Whilst Israel currently faces political unrest, Türkiye had to deal with unexpected, devastating natural disasters at the start of the year when earthquakes hit the country on 06FEB23. From that moment on and until early MAY23, Turkish Airlines deployed almost half of its freighter fleet to support earthquake victims with seamless material flow. Turhan Özen emphasized the excellent collaboration in the air cargo community coming together in possibly the largest scale support to date. “By MAY23, we were able to concentrate on the [cargo] market and realized it wasn’t going very well,” he continued, stating a 12% decrease in chargeable weight, and a 35% drop in rates since capacity was higher than 2019 levels, but offered mainly as belly space. Nevertheless, he was the most optimistic of the panelists, being of the opinion that the next 6-12 months would remain difficult, but the industry could look to better times from the second half of next year.
e-commerce and investments Tonnage/volume drops over the year were also reported by HACTL (1.3% drop for HKG airport, JAN-SEP23), and Brussels Airport (-4% year-to-date drop in numbers). Whilst Wilson Kwong reported a surge in e-commerce activity in recent weeks, is firmly convinced that “this time round, the [seasonal] peak is certainly happening!” and optimistic about medium and long-term prospects, Geert Aerts underlined the importance to forging ahead in times of challenge: “Our strategy, focusing on niche markets, community, digitalization, and accelerating sustainability, is paying off. We are weathering the storm, which is a cyclical event, continuing to invest in our Roadmap plans in preparation for the upcycle, too.” A point that was echoed by Marco Tafuro: “It is a challenging year, but still, if we learnt a lot during 2023, it is to continue to focus on improving, innovating and dealing with challenges to deliver value to customers.” That value to customers is achieved by listening to their requirements, Hughes stated. Shoukroun illustrated the uncertainty in the never-ending changing world, and summarized that, in the face of all that was going on, “customers are looking for certainty – reliable and efficient supply chains.” This required intelligent fleet scheduling as well as building solid networks together with quality partners.
A growing shift towards Sustainability Glyn Hughes addressed the topic of sustainability since this is a growing decision factor for young people choosing where to work. Geert Aerts lamented the lack of awareness of the general public as to the enormous societal impact that the air cargo industry brings to economies and society, and underlined that “collaboration between all parties is the only way to tackle the challenges we face, going forward”. To that end, he announced a brand-new, first time initiative: “Together with Air Cargo Belgium and TIACA, we [Brussels Airport] will launch world-first TIACA BlueSky Community Program. We will support members to do the BlueSky assessment and reconcile all inputs into a common goal to collectively work on challenges. This is an important next step!”
Adapting to workforce changes After discussing various commodity developments in e-commerce and healthcare, along with the logistical challenges, risks, and opportunities posed by these, the panel then addressed the evolving nature of the workforce. Wilson Kwong shared insights from HACTL’s experience, noting that while they managed to retain their workforce during the pandemic, changing demographics pose a new challenge. As an aging workforce approaches retirement, the industry must find innovative ways to attract and retain younger talent. Automation, Kwong explained, is one avenue, but the nature of the industry still necessitates human involvement.
Looking ahead to 2024 The outlook for 2024 was a mix of cautious optimism, realistic assessments, and incredible plans. Turhan Özen, whose airline is looking to practically double its passenger fleet to 800 in the next 10 years, and increase its number of freighters (mix of own and leased) from 24 to 40 within the next five years, highlighted the importance of monitoring demand and sales ratios to pick up on trends, pointing out that – if not impacted by geo-political circumstances – “I am optimistic that by latest Q4/24, demand will start to pick-up. Air cargo will be the first to react very positively to economic upturn – no later than SEP next year.”
Wilson Kwong said: “2024 will see the full opening of a free runway system in HKG. We will see a lot of volatility, but also small growth compared to 2023.” Tafuro shared a similar view, since some verticals showed good expectations for growth, but also expected challenges for the first half for 2024. Aerts pointed out “Last year, we all had our hopes up that 2023 will be better”, and was more cautious regarding 2024, given the threat of war expanding in the Middle East: “At best, we will remain flat [regarding growth], maybe a little bit up. U.S. is a strong economy – this might be good sign. Perhaps recalibrate estimates at end of this year,” he suggested.
Planet to Planet! Shoukroun’s outlook, too, was similar to Aerts’: “2024, in terms of global economy and geopolitical situations, will not change. The signs are not good, and the impact is that fuel costs will increase.” He predicted fewer passengers in 2024, “so cargo operators will benefit.” One outcome of the pandemic, however, was that “production origins are now moving,” hence cargo networks would need to adapt. What was previously mostly made in China, was now being split across Southeast Asia and Africa. Plus, China was starting to consume as well as export, “so there are new challenges in ecommerce. Instead of China-to-Global, we are now looking at Global-to-Global.”
Hughes could not resist looking even further forward, “And from G2G, we move to P2P – Planetary to planetary!”, he joked, bringing the first TIACA Executive Summit panel to a successful close.
Around 350 international delegates from all across the air cargo industry descended upon Brussels last week for The International Air Cargo Association (TIACA)’s Executive Summit. The Airport’s iconic Skyhall provided a light, airy and relaxed conference backdrop, which reflected the general attitude of the attendees. A back-to-back agenda offering a broad spectrum of air cargo industry topics, nevertheless also allowed for adequate networking time. These are CargoForwarder Global’s impressions of the event.
Smiles all round at the official opening ceremony. Image: CFG/bg
Hailed as the largest TIACA Executive Summit to date, its Chair, Steven Polmans subsequently expressed his pride and verdict: “The cooperation between our team and our host, Brussels Airport Company, led to a highly successful event where the industry came together to network, learn, discuss, and debate issues affecting the industry. The energy throughout the event was extremely positive and fun. This underscores the importance the association’s events bring to the industry as we work together to unite us all on a global scale.”
Certainly, taking place on his home turf, sponsored by Brussels Airport, with a strong Nallian/BRUcloud presence and other key national players, the event appeared more intimate and familiar than its predecessors. This was reflected both in the relaxed attitude most delegates had, as well as in the fun, red Tintin et Milou ‘goodie bags’ adorning everyone’s shoulder at some point over the three days. Not to mention, the general humor and awful puns peppering parts of the moderation, throughout – liberally supplied by TIACA’s Director General, Glyn Hughes.
Something for everyone Before the agenda’s packed mix of topics (which included a look at trade and business challenges, airports, regulatory challenges, creating new opportunities, drones, digital innovation, workforce developments, precious cargo, sustainability, air cargo outlook, freighters, talent, statistics, etc.), really got going on 07-08NOV23, a more hands-on approach was offered as a regional introduction, the Monday prior. Around 30 participants turned up for a comprehensive tour of Brussels Airport on the morning of 06NOV23. Starting at the airport office, the group was presented an overview of the company’s strategy and focus points and learned that (among other things such as BRU being the country’s second largest economic driver after Antwerp), at a record annual revenue of €280 million [in 2022], Pharma was worth 6 times more than all the [1,600 types of] beer and chocolates in Belgium!
The airport has ambitious expansion plans and leads the way in CEIV Pharma certification and digitalization. Delegates of the airport tour visited the immaculate warehouses of Swissport and Expeditors before boarding an airside bus to pass DHL freighters, photograph a Hongyuang Group freighter, and see one of the airport’s USPs which secure its position as preferred Pharma hub in Europe: Airside Pharma Transporters that ensure a closed cool-chain between warehouse and aircraft.
Slightly cloudy BlueSky Parallel to the Airport Tour were Nallian info sessions on cargo community system digitalization, which appeared well-attended. A BlueSky workshop was offered to those interested in learning more about TIACA’s sustainability program. Though the timing was well-planned to finish just before the welcome reception nearby, attendance was unfortunately far from what it should have been for such an important aspect of our industry and a helpful, well-thought-out program to guide companies on their sustainability journey. CFG’s suggestion would be to offer regular webinars on the topic, to accelerate awareness, acceptance, and adoption. Currently 15 companies are already benefiting from BlueSky guidelines, since the program was launched last year.
Rock of Ages When they say that TIACA covers the entire air cargo industry, it is still nonetheless a delightful surprise to find that it grows its own entertainment, too. The Welcome Reception on 06NOV23, from 6-8 p.m., was accompanied by an excellent German import band by the name of Mallet, and featuring none other than TIACA member, BeConProject’s CEO, Uwe Beck. The band, which has been around for 4 decades, delivered high quality classic rock music, covering both hard and soft rock – the latter perfectly reflected in the guitarist’s stunning, silky-smooth hair.
That evening also saw around 40 Under-40s gather together for the Cargo Collective initiative – a network hosted by Michelle Lawrence, Sara Van Gelder, and Sam Quintelier, aimed at “inspire[ing] the next generation and empower[ing] the future of air cargo”. Some of the new generation in attendance, had flown in all the way from FUI Business – a Florida-based university offering a logistics program, and where PayCargo had provided event sponsorship.
In fact, overall, the delegates’ average age was lower than at previous TIACA events and there was a good gender mix. The food throughout the event, and particularly at Sint-Goriksplein, the evening location on 07NOV23 (a social meeting venue originally dating back to the Middle Ages, with the current original market building constructed in 1881), was top quality, and of course, no one could leave without tasting the national Moules et Frites specialty – particularly since the oil from Belgian frites is used to produce SAF – as delegates were taught back in the conference hall, the next day.
A perfect chocolate box of topics The core of the event took place 07-08NOV23, with a packed agenda, and with almost all panels being very well attended. Opening with an aerial performance artist in honor of Amelia Earhart – one of the aviation industry’s first women and a fighter for women’s rights – and to encourage more, TIACA’s DG Hughes urged those present to put the industry’s women forward for future Hall of Fame nominations. Among the opening speeches, was one from the Flemish Minister for Mobility and Public Works, Lydia Peeters – an encouraging link to those in government with influence on the air cargo industry’s future. A good mix of panel discussions and presentations followed, tackling the various challenges within the industry, adding some new information (with presenters such as UPU and the International Trade Center), dispelling a few myths (such as the nose-door drama which covers 3% of all global shipments and will not be a problem for another 20 years at the moment), and updating the audience on past Sustainability winner projects, for example. Alongside the three recurring central themes of Sustainability, Talent, and Digitalization, one incredibly popular buzzword this time around, was AI. Interestingly, it had even been deployed to create a couple of strikingly odd, future air cargo images for the Trade presentation. Two event highlights were the 2023 Hall of Fame induction, as well as the winners of the Sustainability Awards (both of these topics – and other TIACA panels – are reported on separately in this week’s and future CFG editions).
Next events “Logistics is the lifeblood that keeps the world in motion,” was one memorable quote from Steven Polmans’ self-proclaimed “longest welcome speech, ever!” during which he also announced his third term as Chairman and pledged “that I will spare no effort in fortifying and improving TIACA, just as I have done over the past 4 years.” Speaking to delegates, the overall feedback regarding the event was positive, therefore boding well for the association’s 2024 plans, which include two more Regional Events, taking place this time in Latin America and Asia, and its next global event: the Air Cargo Forum in Miami, Florida, 12-15NOV24.
The WestJet press releases are coming in thick and fast, these days. From expansion to new markets, through to mega fleet orders, to putting a core hub focus on Calgary International Airport (YYC), the 26-year-old airline is literally taking off. And it is transitioning into serious air cargo, too. CargoForwarder Global (CFG) grabbed the opportunity of the World Cargo Symposium in London last month, to talk to its Executive Vice President Cargo, Kirsten de Bruijn (KdB), about what it is like to build a cargo fleet and organizational structure from the ground up.
CFG: You took up your new position in MAY22, moving to a new continent and a predominantly passenger-focused airline, until now. How are you enjoying working life over at WestJet? KdB: It has been interesting first 4 months. Things are very different in Canada – from both the WestJet and the Canadian culture points of view. Working for a private equity airline compared to state-owned ones, there is a lot of focus and free space to develop our cargo strategy. The decision to start with four 737-800BCF freighters had already been taken before I arrived, and they will form the basis of our cargo fleet.
CFG: WestJet comes across as a very vibrant, dynamic airline, and has been active in belly cargo since years. What does the Canadian cargo market look like? KdB: The Canadian freight market differs greatly from the global one. While freight forwarders bring in part of the business, more than half of our cargo shipments actually come directly from private people and companies simply calling in to book. Because Canada is so large, trucking is not an option and therefore air freight is the logical alternative. We have a huge domestic market with all kinds of customer bookings – many of them for pets. Probably around 80% of that customer contact is animals. Would you book your pet online? Unlikely, because you want to speak to someone about your booking, right? WestJet is a fun, caring airline, so we take a lot of calls. Our customer segmentation is very different to the norm. You could say around 40% of our billing is done via CASS, the rest comes in via credit cards. We therefore have a digital roadmap to improve self-serving capabilities and process efficiencies, and will be cutting over to new platform at some point in the near future.
CFG: What is it like, building the airline’s freighter operations from scratch? KdB: Super cool! We are learning a lot. Getting the organization up and running is a challenge. Passenger schedules are one thing. How will we ensure freighters operate on time? We need to build up engineering expertise and an inhouse OCC (Operational Control Center), for example.
CFG: You recently appointed Bharat Bhatia as Head of Cargo Operations – what kind of tasks are you looking to cover? KdB: Yes, we’re very happy to have Bharat and his vast cargo experience from his time at dnata and KLM. We need a strong commercial team for the different customer segments, which include eCommerce as well private customers and freight forwarders. So, the people we are looking to employ need an open mind and a thirst for learning to do sales differently to the global freight set-up. We have to focus on operations, network-planning, scheduling. We’ve been hiring for digital ambition, and high-level competencies and skillsets, looking to select the best human capital there is. WestJet is very modern in its approach, so it also has certain remote positions across Canada.
CFG: Do you have any CEIV certification or commodity expertise build-up plans? KdB: We already offer all the commodities and will review what is required. Our current focus is on safe and secure freighter operations with proper, trained skills.
CFG: Thank you, Kirsten!
Double the fleet and Calgary as WestJet’s passenger hub Already operating one of the youngest fleets in North America (circa 170 planes with an average age of under 10 years), the WestJet Group communicated a huge aircraft order on 29SEP22: “With this additional order, the WestJet Group will accept delivery of no fewer than 65 aircraft in the next six years, at least 50 will be 737-10 aircraft,” WestJet Group Chief Executive Officer, Alexis von Hoensbroech announced. Less than a week later, on 05OCT22, the next major announcement was made, billed as a first-of-its-kind, historic partnership: the decision to make Calgary Westjet’s core passenger hub, with an investment of 9 billion CAD, practically doubling its fleet operations out of Calgary to around 100 aircraft, including all 9 of its widebody, intercontinental B787 Dreamliners. “This is less about WestJet. This is about making Alberta the leading province for aviation in Canada, and we are very proud to play a key role in that,” Alexis von Hoensbroech said. “Air connectivity is the only access to a place like Calgary, or Alberta […], as this is so far away from most other geographies, so therefore air connectivity is mission-critical for the economic success of place like Calgary.” While during our interview on 29SEP22, Kirsten de Bruijn told me that “Calgary is not the hub, we have big cargo hubs, too,” pointing to Vancouver and Toronto, for example, the question now, since the 05OCT22 announcement, is whether Calgary will become a main cargo hub, also? Cargo, too, is mission-critical for an economy’s success – more so than passenger.
East meets WestJet On 07OCT22, WestJet announced the enhancement of its codeshare agreement with Korean Air – one that it has had since 2012 – to include flights across the Pacific to Asia for the first time. Hence, WestJet now has a codeshare on Korean’s flights between both Toronto Pearson (YYZ) and Vancouver International (YVR) in Canada and Incheon International Airport (ICN) in Seoul, South Korea. “This is WestJet’s first reciprocal codeshare with an Asian partner,” the press release underlines. “It’s incredibly exciting for WestJet to codeshare on flights across the Pacific to Asia for the first time […]”, John Weatherill, WestJet Chief Commercial Officer, stated, going on to say: “We’re looking forward to the new opportunities our now reciprocal codeshare will bring to consumers travelling between Canada and Asia.” Tae Joon Kim, Korean Air Senior Vice President and Head of International Affairs & Alliance, said: “We remain committed to bridging Canada, Korea, and Asia through our hub at Incheon Airport.” Whilst it is clear that the primary focus here is on passengers, Korean Air featured as the fifth strongest cargo airline in 2021, so will there be a cargo joint venture in future, too? WestJet is on a runway – and accelerating. We look forward to following its cargo development and growth.
Brigitte Gledhill
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Orders for passenger to freighter conversions of Airbus A330s and A321s are piling up at ST Engineering and its subsidiary, Elbe Flugzeugwerke (EFW). The sad story is that they can only be processed at a snail’s pace. Why? Because there is a shortage of components, and suppliers are not keeping up with contractually promised deliveries of aircraft parts. There is little hope that this will change for the better soon.
The order books of the Singaporean-German group are filled to the brim, but production is not keeping up with demand. A bizarre situation and unique in the history of both companies. Originally, 14 A330s were scheduled to be converted from passenger to cargo aircraft at EFW’s Dresden plant this year. Yet, the reality looks bleak: “We will hardly manage more than eight P2F conversions by the end of 2022,” says Wolfgang Schmidt.
Aircraft converters are hit by grave supply chain disruptions As VP Sales, Marketing & Customer Support, Airbus Freighter Conversions & MRO at EFW, he ought to know best. The reason for his pessimistic forecast is that there are simply too few components to work off the orders. The executive delivers a striking example: “We purchase rivets from a contractual supplier. But he can’t deliver the next batch until – believe it or not – September 2023.”
“Disastrous situation” So, ST Engineering and EFW will have to wait almost a year for the next delivery. Until then, however, P2F conversions cannot stop just because rivets are missing. Yet, switching to other suppliers is extremely difficult and faces many administrative obstacles. Understandable, because due to security reasons in aircraft manufacturing, every component, whether it is a bolt, nut, rivet, or cable, must come from a certified supplier which is liable for its products. “And certifications take an awful lot of time,” Mr. Schmidt knows from experience. The lack of components and aircraft parts is a “total disaster,” he says. It causes grave production delays. The extent of the deficiencies is illustrated by this figure: 11,000. That is the average number of parts needed for P2F conversions. Since all components are meticulously documented, aircraft are the most transparent means of public transport ever built.
Third-party solutions How ST Engineering and EFW can overcome the persistent shortage of components is an open question. Material pooling with MRO providers such as Lufthansa Technik, Singapore Airlines Engineering, for instance, might be one option to easy the squeeze. Another is the outsourcing of work packages to external providers. As was done on Friday (07OCT22), when EFW and Turkish Technic (TKT) signed an accord, enabling TKT to become the first MRO company to provide third-party conversion solutions for EFW’s A330P2F program. “We have a growing P2F order book which mirrors a strong market demand for Airbus freighter conversions, with the A330P2F program being increasingly considered as the preferred next-generation platform in the medium to widebody category,” states Jordi Boto, CEO of EFW. “Through our collaboration with Turkish Technic, which has deep experience in maintaining Airbus aircraft, we will ensure meeting our customer commitments in a robust manner.”
Packed orderbook According to information obtained by CargoForwarder Global, the combined P2F order book of ST Engineering and EFW comprises almost 200 aircraft: more than 90 A321P2Fs and 100+ for the larger A330 variant. Manager Schmidt speaks of “huge backlogs” his company is facing. After all, in addition to Dresden and Singapore, subsidiaries based in China and the USA, are also involved in conversion projects. This increases the chances of gradually reducing the backlog. However, in Mobile, Alabama, only one conversion has taken place so far. And Turkish Technic speaks of Q3, 2023, before the first A330P2F converted jetliner will roll out of its production shop at Istanbul Airport.
More third-party providers might join the club It can be expected that similar to Turkish Technic, more external converters might step in, joining ST Engineering and EFW’s bandwagon. The statement of Prof. Ahmet Bolat, Turkish Technic Chairman of the Board, delivered during the signing ceremony might motivate them. When asked about the new industrial partnership between TKT and EFW, the executive said: “We are happy to cooperate with EFW in their A330P2F program. Passenger-to-freighter conversions require a combination of industry-leading expertise, structural skills, and operational excellence. With extensive know-how and close collaboration with suppliers, we are always well equipped to provide technical services and solutions for our customers. We look forward to expanding our partnership further with EFW.”
Lessor AerCap Holdings N.V. (AerCap) has placed firm orders for 15 Airbus A321P2F aircraft conversions and an option for another 15 A321P2F conversions with Elbe Flugzeugwerke (EFW). Dublin-based AerCap is the world’s largest owner of the A320 family of aircraft. So the feedstock for the conversions will come from the lessor’s own portfolio of jetliners.
Triggered is the deal by the burgeoning market demand for freighters, including smaller ones like the P2F converted A321. Touching the performance, converter EFW points out that the A321P2F is a next-generation freighter and the first in its size category to offer containerized loading in both the main deck (up to 14 full container positions) and lower deck (up to 10 container positions). With a gross payload capability of up to 28 metric tons (about 61,800 lbs) and a range of more than 2,300 nautical miles (about 4,260 kilometers), “the A321P2F is the ideal narrowbody freighter aircraft for express domestic and regional operations,” highlights Elbe Flugzeugwerke in its announcement. Therefore, it can be expected that most of the AerCap A321P2Fs will be seen in DHL, UPS, ASL, or FedEx colors one day. However, the name of the future operator or operators, in case it’ll be more than one, is not revealed by AerCap.
Will DHL be the operator? “Extending the life of our A321 fleet will complement the Cargo portfolio and meet the strong demand from our diverse customer base, from which we’ve seen a significant appetite for this freighter,” said Rich Greener, Head of AerCap Cargo. He went on to say: “The A321 freighter is the best-in-class and most fuel-efficient aircraft to replace the B757-200 freighter. This transaction is in line with our cargo portfolio strategy of diversifying our fleet with improved economics and returns. We look forward to working with the EFW team on this program and thank them for the trust they have placed in AerCap.” This statement is likely to fuel speculation that DHL Express is the future operator. This is because the Integrator’s fleet of Leipzig-based B757 freighters is approaching the operational age limit and needs to be replaced by more modern and fuel-efficient freighter aircraft. But there is no confirmation for this. “We are glad that we may finally announce the agreement with AerCap on this volume order for A321P2F conversions,” says Jordi Boto, CEO of EFW. “Our young A320P2F family programme has gone from strength to strength and gained traction very quickly in the market with a dozen aircraft already in operation.” Presumably, converter EFW will not really care about the livery displayed on the fuselages of A321s following their upcoming new lives as freighters. “We are glad that we may finally announce the agreement with AerCap on this volume order for A321P2F conversions,” says Jordi Boto, CEO of EFW. “Our young A320P2F family program has gone from strength to strength and gained traction very quickly in the market with a dozen aircraft already in operation.”
Growing network of Airbus P2F converters EFW’s A321P2F program is developed in collaboration with ST Engineering and Airbus, with EFW holding the Supplemental Type Certificate and steering the overall conversion program as well as marketing & sales efforts. To meet the rising demand for freighter conversions, ST Engineering and EFW have set up new conversion sites in China and the U.S. to ramp up total conversion capacity for all their Airbus P2F programmes comprising the A330P2F, A320P2F and A321P2F. Because of fast growing demand and limited own capacity the company. In addition, they started conversion programs with third party MRO companies. So recently done for A330P2F programs with Istanbul-based Turkish Technic.
The joint freighter flights operated by DB Schenker and Lufthansa Cargo, and powered by Sustainable Aviation Fuel (SAF), will be continued during the upcoming winter schedule. Tomorrow, (14OCT22), the 150th of these SAF flights will depart from Shanghai Pudong (PVG) and arrive at Frankfurt Rhine-Main Airport (FRA) later that day. In a way, it is a double anniversary, because the logistics heavyweight is also celebrating its 150th birthday this year.
According to data captured during the last winter timetable, on average, 174 tons of fossil fuel burn were saved per flight on the FRA-PVG sector thanks to SAF usage. This added up to a net reduction of 20,250 tons of greenhouse gas emissions from the end of OCT21 to 27MAR22, when the winter flight schedule ended. In the upcoming half-year flight period, it will be even more because, since Russia’s assault on Ukraine 24FEB22, all western aircraft have to circumvent Russian airspace on sectors linking Europe and the Far East, which prolongs flights by 1.5 to 2 hours each. Therefore, CO2 savings in the upcoming winter schedule are expected to significantly exceed the figures from a year ago, where 14,175 tons of CO2 emissions were saved thanks to the burn of SAF instead of traditional kerosene.
Ongoing commitment It is also noteworthy that third parties have meanwhile jumped on the bandwagon by supporting the Schenker-Lufthansa Cargo SAF initiative. The first to do so was Finnish IT producer, Nokia, which has committed to regularly contribute 10 tons of freight per flight traveling from Shanghai to Frankfurt, willing to pay the higher SAF price per consignment. As things stand, this is three to four times the price of fossil fuel-based rates, increasing the cost of air cargo transports. Similar support comes from Schenker’s major Chinese customer, Lenovo, which has even booked 20 tons of capacity for its own goods on the weekly SAF flights jointly operated by Schenker and Lufthansa Cargo from PVG to FRA. Particularly important for the SAF project and the involvement of further supporters, is that Schenker and Lufthansa Cargo have decided to continue their joint mission at least until the end of MAR23 – the third prolongation since the flights began.
150 flights are only a pleasing interim result This is emphasized by Achim Martinka, VP DACH & Key Account Management at Lufthansa Cargo, who hopes for an even longer period of joint SAF flights: “We are very pleased that, thanks to DB Schenker’s ongoing commitment, we have reached this important milestone for our joint CO2-free flights. The topic is of key priority for both companies and is driven by our full conviction. This is why we also quickly decided to extend this important sustainability project, setting possible obstacles aside. Both of our commitments are long-term and are to be expanded where possible. In this respect, we look forward with confidence to the next 150 flights and hopefully many more to come.” 300 SAF flights: Schenker executive, Thorsten Meincke did not want to go that far, but the Global Board Member for Air & Ocean Freight at DB Schenker, also praised the SAF initiative by emphasizing the benefits for the CO2 footprint of those customers who decide to come on board: “Since spring 2021, our unique SAF full charter helps customers to make their supply chains more sustainable. Now, the 150th CO2-neutral flight covered by SAF is already taking place! What a great achievement in our company’s 150th anniversary year. We will celebrate the twofold anniversary by extending our successful partnership with Lufthansa Cargo,” the manager stated.
SAF: It’s now time to act What he did not say but might have thought: Those players who today decide to use SAF for their air transports, are likely to have market advantages in the future, because SAF is a scarce commodity, and fossil fuel will become significantly more expensive in the near future triggered by stricter environmental laws. Lufthansa Cargo is Schenker’s largest partner in SAF usage, but not the only one. The logistics company committed to purchasing a significant number of SAF credits from Singapore Airlines to provide its customers with SAF options to reduce the carbon footprint of their individual supply chains. And more deals are just around the corner: “In order to drive the green transition of our industry, we have several further SAF-related initiatives in the pipeline,” an executive said. However, he did not want to comment on when this will happen, and which further partners might be involved.
