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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
LIKE many other air cargo carriers, MASkargo was forced to face up to an array of challenges last year, including the move to maritime cargo for some commodities, soft route market economies, the carbon footprint shadow and rising operational costs. But MASkargo has moved into calendar 2008 with a positive message that, problems notwithstanding, it will make the most of available opportunities and expand its services to “drive as well as support” customer requirements.
This message came through loud and clear at Air Cargo India in late January, for instance.
MASkargo was a major participant in this event, held at the World Trade Centre in Mumbai, where the operator exhibited in association with Acumen Overseas, its gsa for north and west India.
The Malaysian team not only promoted cargo services but also MASkargo’s long-haul capabilities and its Advanced Cargo Centre at KLIA.
High on the promotional agenda was this year’s TIACA Air Cargo Forum 2008, to be held at the KLCC in central Kuala Lumpur from November 4-6. MASkargo is promoting this major event globally.
“MASkargo is proud to be the host of the biggest and most- participated-in Air Cargo Forum ever since its inception 46 years ago,” said Rosli MdYasin, senior manager corporate affairs. “We know that we will do a great job at playing host as we have the facilities and capabilities to hold the biggest cargo conference in the world.”
He said that the event would “not only have a direct impact on the country’s economy but also boost the tourism industry”.
MASkargo and Acumen Overseas are working on a feasibility study that could see MH freighters flying between Kuala Lumpur and New Delhi from later this year. Plans for the new operation, which were discussed with forwarders and other stakeholders during Air Cargo India, are for an initial two flights weekly.
While MASkargo has no scheduled freighter service to India at present, it does utilise belly-hold capacity on MH flights to Chennai, Mumbai, New Delhi, Bangalore and Hyderabad.
The Air Cargo Forum in KL also was to the fore during MASkargo’s participation in the Malaysia Services Exhibition held at the Sharjah Expo Centre in January.
Dubai is a key point on the operational network for both B744F and B742 freighters in the MASkargo fleet. During the Malaysia Services Exhibition, which was organised by the Malaysian External Trade Development Corporation and involved nearly 170 companies, MH noted that it was keen to boost charter operations to and from the Middle East.
“We are looking towards positioning our charter business as well as offering other key products to this region,” said Shahari Sulaiman, managing director of MASkargo.
Charter operations to various destinations in January and February have boosted MASkargo’s cargo volumes. This included cargo shipments from Australia to Pakistan.
Both MASkargo and Malaysia Airlines’ passenger/freight operations are expanding cautiously, within the framework of phase two of the much-lauded Business Transformation Plan, put in place on January 30 this year.
Like BTP 1, which turned a slew of difficulties for the carrier into a record profit, BTP 2 continues the ‘re-invention’ of Malaysia Airlines based on five core principles. But, while BTP 1 sought - successfully - to overcome a variety of structural and operational problems, BTP 2 is looking more to the current and future challenges besetting nearly all international carriers.
MH has added two regional stations in recent months. On February 1, Yogyakarta in Indonesia came on line, the carrier’s fifth scheduled service destination in that country - the others are Jakarta, Medan, Denpasar and Surabaya.
In November last year, services commenced between KLIA and Macau. This is MH’s seventh Chinese port, joining Hong Kong, Guangzhou, Beijing, Shanghai, Xiamen and Kunming.
Both new routes are operated with B734 equipment, allowing only limited cargo uplift in either direction.
On the web:
www.maskargo.com
www.tiaca.org/2008
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE NEW Zealand Government has introduced a bill to clear up a legal anomaly involving the accidental importation of organisms.
The bill will impact directly on air cargo, which has already been affected by the problem.
New organisms currently enter the country either by being deliberately imported - “usually with the intention of being put to specific beneficial use” - or they arrive accidentally as part of a legitimate cargo.
The proposed bill will remove an anomaly where NZ’s Environmental Risk Management Authority (ERMA) has control of imports of new organisms and the Ministry of Agriculture and Forestry (MAF) is responsible for managing risks from accidentally-imported organisms.
Finding itself unable to function effectively, MAF has stopped issuing new import health standards and/or amending existing ones. This has prevented new lines of trade.
The new bill is expected to pass easily, perhaps with some amendments.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
AUSTRALIA will have a new international carrier from early March. And while the aircraft types operated by Sky Air World limit its freight uplift, the Brisbane-based company is keen to develop freight potential.
This will become more likely when/if Munda Airport is upgraded to allow it to function as an alternate to Honiara for Sky Air World’s Embraer E-170 and new E-190 jets. Munda also may eventually gain a direct service from Brisbane.
Sky Air World already has an AOC authorising RPT services which it has utilised on the Honiara-Brisbane route, but it has now applied to DOTARS for an International Airline Licence.
Another established carrier also will move up a notch as an Australian international operator when its IAL is approved. OzJet Airlines, which already operates to Norfolk Island and Bali, wants to launch scheduled services to New Zealand’s Palmerston North from Brisbane (four times weekly) and Sydney (twice-weekly).
It has sought allocation of capacity from the International Air Services Commission in the wake of Freedom Air’s impending demise and Air New Zealand’s decision not to operate internationally from Palmerston North.
Ozjet is acquiring 737-300 equipment for the service, using its existing fleet of B737-229 aircraft as back-ups.
Sky Air World and Pacific Blue battled it out for allocations on the Solomons route, with cargo being raised as a possible issue, albeit very secondary to passengers.
The IASC decided to allocate capacity to both companies in the interests of competition, giving Sky Air World 470 seats weekly and Pacific Blue 360 seats.
While relatively new - it got under way last year with a single E-170 - Sky Air World has already notched up considerable experience on the Brisbane-Honiara run. It operated flights on behalf of Solomon Airlines but the two fell out over a number of issues. It has subsequently flown a series of charters for a Honiara company.
It will now be in competition to Solomon Airlines (which is using chartered OzJet aircraft and code-sharing) and Air Vanuatu, as well as Pacific Blue. Our Airline (previously Air Nauru) also flies the route but largely as a fuel-stopper en route to Nauru.
Pacific Blue said the B737-800 aircraft it intends to use would offer up to three tonnes of freight capacity per flight. The interim 300s would also have adequate cargo uplift potential, it said, criticising Sky Air World’s E-170 which acquired a reputation for baggage and cargo offloading when operating the Solomon Airlines services.
Further, Pacific Blue pointed to its links with freight forwarders throughout Australia and its arrangement with Toll Corporation to sell belly-hold space.
However, Sky Air World noted that it would be using the bigger E-190, with the E-170 used only for back-up. The carrier is leasing a small fleet of E-190s to service its buoyant charter business as well as scheduled services.
With Munda operational as an alternate, it would be able to haul six tonnes of freight on the E-190 and three tonnes on the E-170.
While recognising the Munda plans as “theoretically possible”, the IASC said it could not “give it weight, given the uncertainty”.
Anyway, said the IASC, the freight side of things had to be kept in perspective because HeavyLift Cargo Airlines was handling a lot of the traffic from Brisbane and Cairns.
The foreign carriers on the run picked up most of the smaller consignments, especially perishables, the IASC noted.
All in all, it decided, “freight is likely to play a small part in the overall public benefits flowing from new services on the route”.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE PORT Authority of New York & New Jersey has allocated a further US$500 million for the upgrading of Stewart International Airport, the Hudson Valley facility it took control of in November last year.
Some improvements had already been made prior to this allocation, mostly to access roads and passenger facilities.
PANYNJ is also teaming with scientists at the Rensselaer Polytechnic Institute to develop an energy use plan for Stewart that would make it the world’s first carbon-negative airport.
The authority is keen to attract more scheduled and charter carriers, both cargo and passenger, to Stewart, pointing to the availability of a large area of land for logistics facilities, its long runway and other benefits.
“We have a belief that Stewart can be a kind of beacon for a lot of things,” said Anthony Shorris, PANYNJ’s executive director.
“An anchor for growth in the Hudson Valley, a major reliever of the other airports, a cargo and job-generating facility for a new economic growth patterns and a demonstration of the potential for sustainable development in aviation.”
The ‘other airports’ mentioned by Shorris are the authority’s John F. Kennedy International, Newark Liberty International, La Guardia and Teterboro airports. These facilities give PANYNJ a huge stake in global and US domestic air freight; the authority also has extensive marine terminal interests, a heliport, the World Trade Center site in lower Manhattan and public transit services.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
QANTAS Freight has made some customer service improvements, following a reorganisation of the carrier’s Central Reservations are which has been split into two separate customer responsive teams.
The area now has a dedicated export reservations and sales area, while a second tram has been created to focus specifically on customer care and general enquiries.
“In making these changes, we have improved and updated our automatic telephone system,” said Garry Mangelsdorf, general manager, freight customer service. “The new phone system will not only offer an improved range of options but will allow us to better monitor call volumes and call types so that, if necessary, we can fine-tune the allocation of resources to provide a service that is better aligned to customer needs.”
To make a booking, access Trackline or speak with customer service, customers simply selecting option one and follow the menu prompts.
A nationally accessible telephone number is being introduced — 1300 Freight.
According to Mangelsdorf, the ‘phone word’ is dialled in much the same way as a text message is constructed on a mobile phone. The letters that make up the word ‘freight’ correspond to numbers on an alpha numeric telephone keypad — it may also be dialled as 1300 373 444.
The new 1300 Freight number can be dialled from a landline or mobile phone within Australia for the price of a local call. The number will automatically recognise from which state customers are calling and direct them to either New South Wales or West Australian-based sales and customer support staff. All existing numbers will continue to work, but will eventually be phased out in favour of the new number.
Normal hours of operation remain 08.00 to 18.00 Monday to Friday and 08.00 to 16.00 on weekends, although a limited service is available outside these hours for urgent matters.
“As always, feedback on how we can further improve our service to suit your business needs is greatly appreciated, added Mangelsdorf. Customers can give their feedback via a member of the Qantas customer service team, through the customer support page on the website or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
QANTAS has announced a record before tax profit of A$905 million for the half-year to 31 December 2007, a 73 per cent increase on last year’s result.
Chairman Leigh Clifford said dividends had been increased and capital had been returned to shareholders, with gearing increasing by only one percentage point to 42 per cent.
Clifford said the result also reflected the ongoing success of the company’s business transformation program over the past five years.
He said the announcement of a merger between Qantas Holidays, Qantas Business Travel and Jetset Travelworld would be earnings per share accretive.
The chief executive officer of Qantas, Geoff Dixon, said the Group’s two-brand strategy had again underpinned the result.
“We have two very strongly-performing full-service and leisure brands. Our ability to direct our flying to the most appropriate markets is giving us a unique competitive advantage.”
Dixon said the key drivers of the results were: Strong domestic and international demand which led to a 2.2 per cent yield improvement and a 1.8 per cent improvement in seat factor to 82.1 per cent for the Group; a strengthening and significant investment in the Qantas brands — domestic, international and QantasLink — that led to a doubling of operating profit; aggressive build-up of Jetstar in both the international and domestic markets, leading to a quadrupling of profit to A$113 million for the half-year; a further A$311 million in efficiencies under the Sustainable Future Program; and operating expenditure increasing only 3.0 per cent, compared to capacity growth of 3.9 per cent, and unit costs reducing by 3.3 per cent.
Dixon said the Sustainable Future Program would deliver a cumulative A$3 billion in efficiency improvements by the end of the financial year.
“The program is critical to our growth strategy and to our ability to compete successfully in the international market, particularly against those carriers that have extensive government ownership underpinning their growth. To this end we are targeting further cumulative savings of A$1.5 billion by June 2010.”
Dixon said that the December 2007 results, for the first time, included separate reporting for the Group’s Loyalty and Freight businesses, in line with its business segmentation strategy.
“This is in accordance with our announcement last year that we will position these and eventually other portfolio businesses for greater growth outside their traditional aviation areas, and to provide alternative ownership options.”
Dixon said Qantas Freight was continuing to look for opportunities to expand in Asia and within Australia.
“We are leveraging our existing Qantas and DPEX networks and developing new markets with Qantas and Jetstar,” he said.
Dixon said while Qantas’ position was very strong, there were ongoing challenges for the industry overall. Looking ahead he said Qantas was seeing no significant dampening in demand in most markets, especially in the domestic and Australian outbound travel markets, as a result of the global economic slowdown, although there has been some softening in the UK and continued weakness in Japan.
"The first seven weeks of 2008 and our forward bookings are in line with forecast and we are confident of achieving a full year profit for 2007/08 at least 40 per cent higher than the reported 2006/07 profit before tax result," he said.
"As well, the Group’s ongoing business transformation initiatives have ensured that Qantas is well positioned to meet ongoing challenges, including fuel prices and competitor capacity growth."
• Qantas Freight was asked for expanded comment on performance but at press time had not returned phone calls.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE DWINDLING market for perishable air freight exports has prompted one Perth cargo industry boss to think outside the box. Peter Thorburn says: If it can’t be exported - let’s cook it here, writes John Newton.
Quality food exports such as lobsters and lamb, which would normally have been air freighted to Asia in times of high demand, are now being served up in Thorburn’s restaurant, which he helps run when he’s not at his director’s desk at VIP Freight near Perth International airport.
“The strong Australian dollar has meant Asian markets are looking elsewhere for cheaper products — and they are finding them in China, so the perishables air export market for all Australian freight forwarders is shrinking,” said Thorburn, an industry veteran of 24 years.
He started with Qantas Freight in Melbourne as a freight reservations officer before moving to Perth four years later in a similar job with the carrier. In 1991, he became a sales and marketing representative for Qantas Freight - a role he held for 10 years before joining VIP Freight, one of the top six freight forwarders in Perth.
Thorburn said another reason for the drop in the export of perishables was a fall of about 30 per cent in the total lobster market because of poor catches. “Strawberry exports to Hong Kong also are down, so local exporters have been forced to look for niche products to export such as abalone, marron and gourmet vegetables.
“To take up some of the slack, some exporters are generating new markets in the Middle East and, to a smaller extent, in Europe.”
Thorburn said air freight rates had led to VIP Freight changing tack.
“Like many freight forwarding businesses, we have diversified from air to sea freight because it is much cheaper,” he said. “And we have found that because of the current value of the dollar the import market has improved, particularly from China, Europe, Poland and the US, with the latter steadily increasing. When the dollar is high — imports are up and when it drops — exports increase.”
After running a restaurant called Limones in East Fremantle for 11 years (widely supported by the local air freight industry and airport workers), Thorburn went into partnership with a German couple in the nearby George Street Bistro which, for the past three years, has won ‘Best European Restaurant’ category in the annual awards run by the Restaurant and Catering Industry Association of Western Australia.
“The quality of product we sell in our restaurant would previously have gone for export,” said Thorburn, who is proud of the success of his business, much of the success of which he says is due to the German couple who run the kitchen.
And he’ll be even prouder later this year if his popular restaurant (again thanks to his workmates) scoops the national award.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE TOLL Group intends to make BALtrans a wholly owned subsidiary, probably from about the middle of April. But Toll has stressed to customers and investors that BALtrans will continue to operate much as it did as an independent company under public ownership, writes Kelvin King.
Some Toll branding is already evident, such as on the BALtrans Logistics website.
A Toll statement to the ASX confirmed that “very little change is expected to the current business structure of BALtrans. The existing management team, under acting chief executive Anthony Lau, will continue to drive the business forward.”
The BALtrans purchase is a very big move for Toll, one that gives it more clout in Asia and strengthens group operations in other parts of the world. It also anchors Toll’s steadily evolving status as a major global player.
Paul Little, Toll’s managing director, said that BALtrans was now a part of the Toll Group’s worldwide freight forwarding strategy.
“BALtrans is a well regarded global freight forwarder with a strong Asian base. We look forward to the integration progressing — BALtrans helps Toll build its global reach and to become a significant player in the global freight forwarding sector.”
Toll’s offer for BALtrans closed on Friday February 29 with acceptances in excess of 99 per cent.
From the outset there had been little doubt that the takeover would succeed. When Toll launched its bid in mid-December last year, Lau noted that “the founding shareholders have provided irrevocable undertakings to tender into Toll’s offer. I believe that Toll is an ideal owner of BALtrans, to enhance its growth momentum both regionally and globally, strengthening the company’s position as a leading global freight forwarder.”
Little reckoned that Toll and BALtrans had “highly complementary businesses in terms of strategy, focus, capability, customers and industry segments, with strong growth-oriented cultures. The companies will be able to leverage each other’s capabilities and customers to further accelerate growth.”
He estimated that, based on historicals, the inclusion of BALtrans with the Toll Group “would result in annual revenues outside Australia and New Zealand of in excess of A$1.2 billion, which is more than 20 per cent of our revenues, excluding Virgin Blue”.
BALtrans was then listed on the Hong Kong Stock Exchange and Toll’s bid of HK$7.60 per share — increasing to HK$7.75 should acceptances of 90 per cent or greater be received - represented a premium of 41 per cent over the pre-announcement trading price and 46.7 per cent above the average closing price over the previous 12 months.
This reflected Toll’s desire to “take control of such a quality business network,” said Little.
The bid valued BALtrans on an enterprise basis at about A$365 million.
Shareholders were fairly quick to take up the offer once it opened in late January. The offer period was extended to meet the requirements of the Hong Kong Takeovers Code.
On the web: www.toll.com.au or www.baltrans.com
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE AUSTRALIAN Federation of International Forwarders (AFIF) is not entirely satisfied with the wording of the new IATA Conditions of Contract under IATA Resolution 600B and has suggested further wording be added to the face of the forwarder HAWB (or Neutral AWB, where used as a HAWB). The new wording better explains the conditions of contract regarding carriage and is as follows:
“The conditions of contract on the reverse hereof, including the conditions of carriage referred to in conditions of contract, apply not only to carriage between airports of departure and airports of destination but also to all other carriage referred to in those conditions of contract and all other services provided by the carrier.”
Brian Lovell, chief executive of AFIF said the additional wording had been suggested to members because the new IATA Conditions of Contract do not adequately define the term ‘Carriage’ for their protection. The new Conditions of Contract require freight forwarders to review their trading conditions and the application of those conditions to the services which they provide to their customers.
Lovell recommended that the above wording be incorporated on the face of the HAWB forms so as to make it expressly clear that the conditions of contract appearing both on the reverse of the HAWB forms and in the Forwarder’s trading conditions of carriage do apply to all carriage. “Such application is not only in respect of carriage between airport of departure and airport of destination but also is in respect of all carriage referred to in the conditions of contract on the reverse of the HAWB forms and all other services which the forwarder has contracted to provide,” said Lovell.
The new provisions in the Conditions of Contract make reference to the Montreal Convention in addition to the Warsaw Convention, and treat 250 French gold francs as the conversion equivalent of 17 Special Drawing Riqhts (SDR). Also, Clause 4 relating to the carriers liability limitation has been changed by the replacement of a limitation of USD 20.00 per kilogram by a per kilogram monetary limit as set out in the carriers tariffs or general conditions of carriage, provided that that monetary limit, where it is less than 17 SDRs per kilogram, will not apply for carriage to or from the USA.
AFIF recently convened a series of briefing seminars for its members covering the changed Conditions of Contract with Peter McQueen, partner of Blake Dawson providing legal advice.
McQueen said it was disappointing that the redraft of the Conditions of Contract does not contain a definition of ‘carriage’ nor clarification of its their application to the provision of services under the air waybill outside airport of departure to airport of destination.
Lovell reminded members that four years ago forwarders in Australia were given advice by AFIF, through Blake Dawson Lawyers, as to how to cover the uncertainly of the limitations of liability beyond airport - to - airport (only) carriage. This was achieved by the insertion of a statement on the face of the House Airway bill (HAWB) or Neutral Airway bill (when used as a HAWB).
Lovell said members should pay particular attention to the wording of this statement and of the importance of incorporating appropriate standard trading conditions.
