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GENEVA: July 26, 2018. An IATA survey of airline heads of Cargo and CFOs in July suggests operating profit margins came under increasing pressure during the second quarter this year.

JeJu Air 737 800Some 54 percent of respondents said they expect to see further cost increases in the next 12 months as a result of higher fuel prices. However 57 percent expect increased profitability due to rising passenger and freight yields.

The outlook for cargo demand has softened slightly in the past two surveys, which partly reflects uncertainty caused by the recent pick-up in global trade tensions says IATA. Nonetheless 58 percent of respondents expect airfreight volumes to rise further in the year ahead.

Almost two-thirds (65 percent) of those surveyed reported a rise in air cargo volumes in Q2 compared to a year ago. Despite the recent pick-up in trade tensions between the US and China, IATA says a number of respondents noted demand remains strong on key Atlantic and Pacific routes.

Following the rise in cargo yields in the second half of 2017, 58 percent of the IATA respondents reported an increase in freight yields in Q2 2018 – the highest percentage since October 2010. At the same time the proportion of executives who expect freight yields to decline over the next 12 months fell to an eight-year low of four percent.

Pictured: Boeing and Low-Cost Carrier (LCC) Jeju Air celebrated the delivery of the airline's first direct-buy Next-Generation 737-800 airplane this week. Jeju Air has become the first LCC in Korea to own and operate the type.

Blockchain alliance membersNORFOLK, VA/NOIDA, India: May 24, 2018. Norfolk Southern and HCL Technologies have joined the Blockchain in Transport Alliance – a consortium of more than 250 transport and logistics companies developing standards and promoting education in blockchain technologies.

“Norfolk Southern’s membership with BiTA will help us identify opportunities where blockchain can be used to improve the transportation supply-chain for our customers,” said Fred Ehlers, vice president Information Technology and CIO.

Based in Noida, India HCL has developed a ‘CoTrust Blockchain Application Platform’ that uses key enterprise blockchain engines to enable rapid development and deployment of Blockchain applications.

Ajay Bahl, HCL executive vice president and head of Public Services and Manufacturing Business (North America), said joining BiTA would allow the company to engage in the development of standards for how blockchain technology will be used in track and trace, provenance, smart contract management, compliance management and fraud detection.

Blockchain technologies create a permanent, digital ledger of transactions that can be securely shared among a distributed network of computers.

"As BiTA membership has grown, companies in all areas of the supply chain have joined forces to help us work toward common blockchain standards that will define the future of freight movement,” declared BiTA president Chris Burruss. “Norfolk Southern brings a level of intermodal and rail expertise to the Alliance that will benefit all members and the industry as a whole."

Noting the use of blockchain technology will introduce greater transparency to a supply chain, Burruss added: "We are fortunate to have member companies like HCL Technologies, who have experience with blockchain applications. They will be a key player in helping us develop blockchain standards in transportation.”

Founded in August 2017, Alliance members include truckload, LTL and parcel carriers, forwarders, manufacturers, law firms plus technology and insurance companies.

PARIS-CDG: April 05, 2018. As France endures rail and air disruption caused by on-going labor unrest, the Air Cargo France Association (ACFA), created in July last year, has been officially launched.

ACFA Founding members are the ADP Group, Air France Cargo, TLF Overseas, SYCAFF, WFS, SODEXI, CIN France, the Interregional Customs Directorate of Roissy, Orly and Le Bourget, the France’s Civil Aviation Authority, and the Delegated Prefecture of Roissy-Orly-Le Bourget.

“The creation of the Air Cargo France Association is an important step forward for Paris-Charles de Gaulle, Europe's leading airport for air cargo,” declared ADP Group managing director and ACFA president Marc Houalla.

“It expresses the desire of the cargo community to act together to offer all our customers a service and infrastructure to the best standards, to be a force of proposal to the public authorities, to showcase the strengths of the platform in Europe and in the world,” he added.

Replacing a cross-industry cargo committee that represented the private sector, government agencies, airport managers and professional organizations, ACFA says its main objectives are to communicate the added-value provided by all stakeholders who contribute to the air cargo supply chain and improve air cargo services through new technology.

Five working groups have been set up to provide an ACFA road map covering communications, management processing of container assets, identifying and creating tomorrow’s employment opportunities, work-flow digitalization, and enabling CEIV Pharma certification for all operators.

In addition to Houalla as chairman, ACFA has three vice-chairs: Elisabeth Herelier, general manager of Air France-KLM-Martinair Cargo; Jean-Marc Baduel, Head of SYCAFF; and Herbert de Saint-Simon, Head of TLF Overseas.

US AviationDayNEW YORK, NY: February 22, 2018. IATA director general and CEO Alexandre de Juniac says the U.S. government should get out of the business of running America's air traffic management network.

Speaking in New York this week he said the system should be run by a non-profit NGO in order to modernize itself with more efficient technology.

The IATA head also criticized the idea of governments funding infrastructure development through privatization – as proposed by the Trump Administration.

"We have yet to see an airport privatization that has, in the long-term, delivered on the promised benefits of greater efficiency for airlines and a better experience for our customers," said de Juniac. "To date there has been no regulatory formula that effectively balances the interest of private owners to earn a profit with the public interest to have the airport serve as an engine of economic growth.

"By all means, invite private sector expertise to bring commercial discipline and a customer service focus to airport management, but leave ownership in public hands," he suggested.

IATA expects 7.8 billion passengers to travel globally in 2036 – nearly double that of 2017. To meet the demand de Juniac pointed out it "was not rocket science" to have sufficient runways, terminals and airspace.

"I believe, however, that we are headed for an infrastructure crisis- and that includes in the U.S. where we expect passenger numbers to rise 57 percent over the next 20 years to 1.1 billion."

Noting an increase in Customs and TSA charges in Trump's latest budget proposals, de Juniac said it would be unlikely if the money raised went on aviation-related infrastructure improvements: "About 21 percent of the average [U.S.] domestic ticket cost is taxes and charges. And instead of funding much needed aviation investments, too much of this money is being spent elsewhere.

"It's bad enough being taxed like a sin. It is unbearable to have those taxes spent elsewhere." he added.

MUNICH: May 17, 2017. Meeting at the transport logistic trade fair last week, members of Russia's Associated Cargo Experts Alliance (ACEX) and the Committee on International Cooperation of the Russian Union of Industrialists and Entrepreneurs (RSPP), signed an agreement to develop logistics services worldwide.

Oleg Dunaev, chairman of the RSPP transport and logistics subcommittee, signed the memorandum together with Uwe Leuschner, CEO of DB Cargo Russia. Other signatories included representatives from ACEX members in Switzerland, the Netherlands, Italy, Germany, Finland, Latvia, Ukraine and the UAE.

ACEX 1ACEX includes 50 independent logistics companies in Russia, the CIS and Baltic countries plus 50 members worldwide. According to ACEX director Miroslav Zolotarev, the group is also a member of the World Freight Alliance, China Cargo Alliance, Global Project Logistics Network, AirCargoGroup and Worldwide Cargo Marketing network.

Exhibiting for the first time at transport logistic, members from Moscow, Saint Petersburg, Togliatti, Kazan, the Baltic States and Finland shared a stand with the RSPP.

Nikita Kovalevsky, CEO of ACEX Finland member Optima Freight compared the event to a 3D logistics model: "When you come to transport logistic you see all the scale of the logistics world. Maybe the image can become even more vivid if I compare the exhibiting with the moment when a watch-master opens a watch and sees the mechanism working through the microscope. Everything becomes clear," he added.

Zolotarev said the ACEX goal by 2018 was to double the membership in Russia, the CIS, the Baltic countries and worldwide to produce a combined turnover of €10 billion.

Leuschner commented: "Business people do not know when the [Russian] sanctions will be lifted, but we are prepared to work in Russia and present our ideas and concepts, provide better quality and better prices. It is our long-term policy. When a delegation of German business people and I recently met president Putin, he assured us that Russia will be improving conditions for foreign investors and guarantee security of development of their businesses."

ACEX said the Russian logistics booth was organized under the umbrella of the RSPP and was intended to demonstrate modern technologies "in the field of freight forwarding, EDI-declaring, IT logistics solutions, programs of legal and foreign economic support for cargo owners worldwide".

menenMIAMI: January 31, 2018. The International Air Cargo Association has announced a new vision that includes more training and consultancy projects to ensure it remains relevant in a fast-changing industry.

The new vision has been developed by a think-tank of industry experts set up by TIACA's leadership team that includes Ram Menen, one of the association's founding members.

"The dynamics of air cargo has had a major makeover the past years," said Menen. "In keeping with this evolution, it is important for TIACA to stay relevant and show leadership in catalyzing the change needed to embrace the new norm."

The association says it will work closely with other organizations and government agencies, building on recent agreements with regional bodies in Africa, Latin America, North America, and Asia.

TIACA will also establish member clusters representing airlines, airports and ground handling agencies (GHAs) to develop solutions beneficial to the entire industry.

"TIACA is the only association representing all parts of the air cargo supply chain, and we have a 28-year history of championing our industry and supporting the development of talent and best practice," explained Sebastiaan Scholte, association chairman and CEO of Jan de Rijk Logistics. "The logistics landscape is rapidly evolving and disruptive business practices are challenging us to innovate; there has never been a more relevant time for TIACA to take the lead."

Association secretary general Vladimir Zubkov said TIACA members were already benefiting from new agreements with associations in other parts of the world.

Pictured: Former Emirates SkyCargo division senior vice president Cargo Ram Menen; president and chairman of TIACA between 1995 and 1996.

MONTREAL: March 28, 2017. Less than a week after the imposition of a laptop ban on certain carriers flying to the UK and U.S. from parts of the Middle East, IATA said the two governments should act quickly to find a better way to screen electronic devices.

According to IATA's director general and CEO Alexandre de Juniac, "The current measures are not an acceptable long-term solution to whatever threat they are trying to mitigate. Even in the short term it is difficult to understand their effectiveness. And the commercial distortions they create are severe," he added.

B787  IADIATA also said the way the ban was imposed was "woefully lacking" given there was no prior consultation and little coordination with the aviation industry.

Noting the need to maintain public confidence in the security of an industry that operates an average 100,000 flights a day, De Juniac wondered why the U.S. and the UK don't have a common list of airports; and how can laptops be secure in the cabin on some flights and not others, including flights departing from the same airport?

"Surely there must be a way to screen electronic equipment effectively? The current situation is not acceptable and will not maintain the all-important confidence of the industry or of travelers," he said.

Despite the only U.S. Customs & Border Patrol pre-clearance facility in the Middle East at Abu Dhabi, U.S.-bound passengers remain subject to the ban on Etihad's 45 flights a week to New York, Washington Dulles (right), Chicago, Dallas-Fort Worth, Los Angeles and San Francisco.

However In an anomaly cited by IATA, Abu Dhabi and Etihad are not subject to a similar ban on flights to London, Manchester and Edinburgh.

The U.S. has applied its ban to airlines originating in Egypt, Turkey, Kuwait, Saudi Arabia, Jordan, Morocco, Qatar and the UAE, while the U.K. ban applies to flights from Turkey, Lebanon, Egypt, Saudi Arabia, Jordan and Tunisia.

De Juniac said both countries should work quickly with the airline industry to find a way to keep flying secure "without separating passengers from their personal electronics."

Meanwhile Qatar Airways is not waiting for government action by introducing a free laptop loaner for its business class passengers on flights to the U.S. for collection after boarding. The airline said it is also providing one hour of free Wi-Fi for all passengers and a special Wi-Fi package of US$5 to stay connected for the flight duration.

MIAMI: October 26, 2017. The Board of the International Air Cargo Association has appointed Jan de Rijk Logistics CEO Sebastiaan Scholte its new chairman and Steven Polmans, head of Cargo and Logistics at Brussels Airport Company, as vice chairman.

Scholte, who has been TIACA vice chairman for two and a half years, takes over from Sanjiv Edward, head of Cargo Business, Delhi International Airport.

Sebastiaan Scholte and Sanjiv EdwardIn thanking Edwards for his dedication and energy, TIACA secretary general Vladimir Zubkov said the organization was fortunate to have two such experienced Board members.

Scholte's air cargo experience includes executive positions at Aeromexico and Cargolux prior to his appointment in 2010 as CEO of Jan de Rijk Logistics.

"TIACA is, and will be, the only organization covering the whole air cargo supply chain, and in order to stay and become more relevant we will now work on becoming more agile and engaging more with our membership base," he commented.

"There is a need for more transparency and visibility across the supply chain and TIACA can play a role in facilitating this.
"In addition, we must ensure we are motivating the next generation of air cargo leaders and you can expect to see TIACA putting an emphasis on training and encouraging young people to join the industry."

Polmans' two decades in the air cargo industry includes working for ground handler Aviapartner and logistics marketing specialist GLU4 BV. He joined the Brussels Airport Company in 2010 and became head of Cargo in 2012.

He is also chairman of Air Cargo Belgium, an initiative bringing together airlines, handlers, forwarders and the airport authority for the greater good of the community.

"Collaboration and cooperation between all parties in the air cargo supply chain is the only way forward to solve many of today's issues," noted Polmans.

"TIACA is the only organization representing all of those different players, and we are the natural platform to facilitate genuine collaboration and work towards a more innovative and quality- driven industry," he added.

Pictured left to right: TIACA chairman Sebastiaan Scholte with his predecessor Sanjiv Edward.

GENEVA: March 07, 2017. Noting an increase in the shipment of silicon materials, IATA reported a 9.0 percent year-on-year jump in airfreight tonne-kilometers (FTKs) in January 2017, while capacity fell to 3.5 percent in the same period.

This was one percent less than December 2016 but well above the 3.0 percent annual growth rate over the past five years. The growth coincided with a rise in new export orders last month that reached their highest level since March 2011, according to the Association.

"It's been a good start to the year for air cargo. Demand growth accelerated in January, bolstered by strengthening export orders that outpaced the capacity growth that should be positive for yields," said IATA director general and CEO Alexandre de Juniac.

"Longer term, the entry into force of the Trade Facilitation Agreement will cut red tape at the borders for faster, cheaper and easier trade. The onus is now on the industry to seize the opportunity to accelerate the modernization of processes to make air cargo an even more compelling option for shippers," he added

RFD airport Amazon Prime AirAll IATA regions, with the exception of Latin America, reported an increase in demand in January with North American airlines' freight volumes expanding 6.1 percent as capacity increased 0.6 percent. Despite the strong Dollar, U.S./international freight volumes grew by 8.7 percent during the month – the fastest pace since the disruption in U.S. seaports boosted demand in February 2015.

Reflecting the general rise in North America traffic, Chicago Rockford International Airport (RFD) has reported a 15.9 percent annual increase in air cargo as a result of ABX starting operations on behalf of Amazon last September (right), and UPS adding two flights a week in the last quarter of 2016.

The airport handled 922.69 million pounds of airfreight during the year– up from 795.84 million in 2015. This month ABX began a fourth flight a day from RFD for the eCommerce giant.

"We are very pleased with our cargo numbers for 2016," said Mike Dunn, executive director. "[They] support the fact that we are committed to taking well-calculated and thought-out risks to ensure RFD remains one of the strongest economic drivers in the region. We will continue to proactively identify and seek out cargo partnerships," he added.

Meanwhile Asia-Pacific IATA members saw volumes grow 6.0 percent in January this year as capacity increased 6.6 percent. IATA cited the rise in China's Purchasing Managers Index (PMI) to a 21-month high; Japan's PMI to a 36-month high; while Taiwan, Korea and Vietnam also reported increases.

Helped by new export orders - particularly in Germany - and the ongoing Eurozone currency weakness, European airlines posted an 8.7 percent increase in airfreight traffic  as capacity expanded 3.3 percent during the month.

Middle Eastern carriers reported an 8.4 percent rise in FTKs as capacity rose 3.3 percent year-on-year; while African carriers saw freight demand increase 24.3 percent due to strong growth on trade lanes with Asia. IATA said demand between the two continents jumped 57 percent during the month on the back of rapid long-haul expansion and increased direct services.

However, "blighted by weak economic and political conditions" the Association noted a 4.1 percent drop in traffic for Latin America airlines in January, despite a 1.4 percent capacity contraction year-on-year.

GENEVA: September 06, 2017. IATA reports an 11.4 percent increase in freight tonne kilometers (FTKs), in July over the same period a year ago.

The association said July's year-on-year rise is nearly four times higher than the 10 year average growth rate of 3.1 percent and the fourth time in five months of double-digit annual growth.

DHL CVG hubCapacity grew by 3.7 percent in the same period to have a positive impact on airline yields - consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators, said IATA.

There are, however, signs that demand growth for air freight may be nearing a peak as seasonally-adjusted airfreight volumes remained flat in June and fell in July.

"July was a strong month for air cargo with double-digit growth. And for the third consecutive month demand for air freight grew at a faster pace than demand for air travel," said Alexandre de Juniac, IATA's director general and CEO. "While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak," he warned.

According to IATA economist David Oxley, airfreight demand indicators are becoming less supportive for freight growth, particularly business confidence: "To be clear, the new export orders component of the global PMI remains close to a six-year high and, crucially, is still well above the notional 50-mark that indicates growing export order books. However, the indicator has broadly tracked sideways so far this year.

"Given the strong relationship between year-on-year changes in the indicator and industry-wide FTK growth, recent developments are consistent with a moderation in year-on-year air freight growth towards the end of the year," he continued.

(Pictured: Cincinnati/Northern Kentucky International Airport (CVG) reported an 8.8 percent year-on-year increase in air cargo traffic to 205,000 tons for the first quarter of 2017. DHL has invested US$280 million in its CVG hub and now employs 3,000 people. Meanwhile Amazon is investing US$1.5 billion to build a 900-acre air hub for 100 aircraft and employ 2,700 people in a new three million sq.ft. facility.)

GENEVA: January 19, 2017. In its latest quarterly survey of airline CFOs and heads of cargo this month, IATA said 18 percent of respondents reported an annual increase in freight yields in Q4 2016 - the highest share in two years - due to a strong 2016 peak season boosting demand on certain routes.

Some 52 percent of respondents reported an annual increase in cargo volumes although they said profitability remained unchanged year-on-year. Some 39 percent noted an increase in profits, while the same number reported a decrease.

Ethiopian freightHowever in what used to be a concern with freighter aircraft operations, cargo managers said the addition of more passenger aircraft, and a subsequent increase in bellyhold capacity, is likely to have a negative effect on freight yields for the next 12 months.

Over 90 percent of respondents expect cargo yields to remain unchanged or to fall further over the year ahead, according to the survey.

Meanwhile Ethiopian Airlines, the largest IATA cargo carrier in Africa, is planning to begin services to Victoria Falls (Zimbabwe), Antananarivo (Madagascar), Conakry, Oslo, Chengdu, Jakarta and Singapore between February and June this year.

"Looking beyond the current economic slowdown, especially in the oil export-dependent economies of Africa, we firmly believe that the continent will become the magnet for foreign direct investment, trade and tourism," said airline CEO Tewolde GebreMariam. "These are the engines of air travel growth and in turn efficient air connectivity also drives socio-economic development and we are happy to contribute our share in the 21st Century African Transformation," he added.

According to IATA, the results of its latest survey suggest the profitability cycle has weakened and the airline operating environment has become "more challenging since mid-2016, with fuel prices trending higher but yields continuing to trend downwards".

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