AerCap first with A320/321 freighter conversion; and Airbus tips 399 more

NETHERLANDS-based leasing company AerCap is the launch customer for the new Airbus A320/A321 freighter aircraft.

AerCap has signed a firm contract with Airbus Freighter Conversion GmbH (AFC) to convert 30 of its passenger A320/A321s into freighters (P2F).

“The A320 and A321P2Fs are setting new standards in the feeder freighter market,” said Klaus Heinemann, chief executive officer of AerCap. “This order will strengthen and expand our portfolio with the most modern aircraft in the small freighter segment.”

Chief executive officer of Airbus Freighter Conversion Lars Becker said it was anticipated about 400 Airbus single aisle aircraft would be converted between 2012 and 2026. “The first A320 P2F will be ready in 2011. After ramp up, we plan to convert around 30 A320 family aircraft per year,” he said.

“The state-of-the-art. A320/A321P2F addresses the future growth of the air cargo market and targets at the replacement of the ageing smaller freighters in service today,” said Christian Scherer, Airbus executive vice president strategy and future programs. “These modern fly-by-wire aircraft will bring new levels of efficiency to freight operations. In addition this new application will further extend the service life of the successful A320 Family far into the 21st century and boost their residual value. We see a substantial market demand.”

Bomb-proof box under test in US

THE UNITED States government is considering what’s claimed to be the first bomb-resistant luggage container able to stop a small suitcase bomb downing an aircraft.

According to Howard Fleisher, deputy director of the Homeland Security Department’s Transportation Security Laboratory, the container holds dozens of suitcases and can protect large jets from small suitcase bombs that slip past airport luggage scanners.

Suitcase bombs have been a constant worry for aviation chiefs since one blew up Pan Am Flight 103 over Lockerbie in Scotland 20 years ago. Such bombs can get past security when they have explosive material that is too small to trigger an alarm from a luggage scanner.

But the bomb protection container could face some hurdles before it gets the green light. The US Transportation Security Administration (TSA) says it will not buy the US$18,000 Kevlar container, because Congress did not give it any money for them- and it will not require carriers to use them.

The TSA says it is in the process of certifying the devices as beneficial so that airlines can buy them.
A 2007 law requires the TSA to buy hardened containers for airlines to use when it sees a need.

BRIC, MEA markets experience major increases in logistics investment in ‘08

SIGNIFICANT private investments have been made this year in the Transportation and Logistics (T&L) sector in the Brazil, Russia, India and China (BRIC) and Middle East and African (MEA) markets.

And according to latest research by independent market analyst Datamonitor the sector is likely to experience much higher capital infusion in freight management companies and capacity during the second half of 2008.

The analysis — Transportation and Logistics Financial Deals Insights — predicts the cost savings rationale for M&A deals, particularly by strategic investors, can only increase in the remainder of 2008; albeit with lower valuation multiples compared with those in 2007.

It says financial market trends during 2007, including the tightening of credit and the weakening of the US dollar, bolstered the relative deal-making positions of strategic and foreign investors in the first quarter of this year. As of June 2008, says Datamonitor’s automotive and logistics lead analyst and report author Praveeen Ojha, there are concerns that the US economy is heading into, or already is in a recession.

“This will only increase the number of players in the transportation business up for sale as a potential contraction in economic output will negatively impact demand for transportation and logistics products and services, as well as shippers’ profits during the rest of 2008,” he said.

Ojha said that with financial deals drying up in the first quarter of 2008 because of the credit crunch, the BRIC and MEA markets were witnessing “the introduction of significant private investments”.

“Driven by the strong outbound demand for sea freight and air freight services from the Asia-Pacific, parts of Latin America and the MEA region, private equity funds and firms are turning their attention to both mid-size carriers (in shipping and aviation), as well as participation in port infrastructure development.

After several strong growth years in bulk and containerised shipping, substantial war chests have been developed for mergers and acquisitions and this will only strengthen the consolidation wave in the remainder of 2008,” added Ojha.

Cargolux suspends Melbourne flight

ARGOLUX is suspending one of its two weekly freighter flights into Melbourne because of declining yields and high fuel costs.

The carrier, which this weekend is celebrating nine years of operation into Australia, will — from September 20 — suspend its B747-400F Melbourne/Auckland/Hong Kong service.

“The yields are not there for us and it is costing us a lot to fly into Auckland as there is not much yield from there to Hong Kong,” said Sydney Franciscos, Cargolux manager Melbourne.

However, the carrier will retain its weekly Melbourne/Auckland/Los Angeles/Europe (Luxembourg) service.

Cargolux is the only all-freighter operator with a B747-400F nose-loader on this route. “It means we can move large cargo that other carriers can’t and it is an important market here for us,” said Franciscos. “We still need a footing in Australia and there is a big demand for us in Melbourne.”

He said the suspended service had been subsidised for some time by the airline’s other sectors and had been “digging deep” into Cargolux’s operating costs.

“Currently, all airlines have to be price conscious. They are feeling the pinch, because of the rise in fuel prices.  Freight carriers are not suffering as much as passenger airlines, but I understand many are cutting quite deeply into their operating costs.”

CHAMP expands by buying Softair

ACQUIRING Softair AG, the Zurich-based provider of integrated software solutions to cargo carriers and their distribution partners has boosted the market status of CHAMP Cargosystems as a full-service provider in its field.
Headquartered in Luxembourg, CHAMP is owned jointly by SITA and Cargolux International.

Softair was set up in 1985 and is best known for its Cargo One workstation product. More recently it has introduced the first of its new Cargospot suite which utilises Java/Oracle. This has sold well to many of Softair’s 100-plus airline customers.

John Johnston, CHAMP’s chief executive, said that the acquisition accelerated the company’s “vision to deliver the world’s first integrated enterprise model capable of powering any cargo operation to success”.

It would allow CHAMP “to expand and reinforce its addressable market to include ground handling agents, general sales agents and forwarders”.

Gabriel Weisskopf, Softair’s founder and chief executive, said the merger made “clear business sense” for both companies.

“The combination of expertise and best-of- breed systems means that CHAMP can now offer both licensed and hosted software services, providing benefits to all participants in the air cargo process, no matter what size of cargo operation, based on an open systems platform.”

On the web: www.champ.aero

DNA ‘firewall’ proposal would help NZ control ornamental fish imports

EXOTIC ornamental fish are a vast, growing and extremely complex international trade in which air cargo plays a key role.  Unit costs can be extraordinarily high for sought-after species in optimum condition while the volume of even more commonplace species is substantial. 

But some of these little creatures, cute as they might appear, have the potential to harm the eco-systems of their new homelands if released into the wild after importation.

With this in mind, New Zealand’s Lincoln University, a specialist agricultural facility with a high global reputation, earlier this year joined with MAF Biosecurity New Zealand to seek a post-graduate student interested in undertaking a study into the development of DNA bar-coding for exotic ornamentals.

This PhD project seeks to identity species and variants that pose a biosecurity risk to New Zealand.  The study is largely funded by MAF Biosecurity.

Dr Colin Johnston, a senior MAF scientist who is a key adviser to the study, said that high-risk ornamentals fell into two general categories: Those known to carry diseases of concern and those likely to establish well in New Zealand, thus posing an environmental pest risk.

“Carp in Australia is a good example of something that’s escaped and taken over waterways and changed the environment,” said Johnston.  “This PhD study will provide another brick in the wall in New Zealand’s biosecurity system.

“It’s adding to our knowledge, it’s giving us more molecular tools.  Part of the problem is identification of these fish species, especially when they’re very small.”

Johnston explained that with the molecular tools, “we can take a DNA sample from a fish due to be imported, and be able to tell if it’s one that we’re really worried about.

“Then we can stop the shipment or we can know we need to screen them for certain diseases.  At the moment, we rely very much on visual identification.”

Earlier this year, Kiwi biosecurity officials intercepted six live Siamese fighting fish which had been declared as ‘aroma’.  They were packed in small plastic bags and in tinfoil inside a polystyrene container.

No action was taken against the importer when it was discovered she had put the order on hold pending completion of biosecurity risk inquiries.

But MAF Biosecurity pointed to the risk of such ornamental exotics entering the country without rigorous checks, whether as air cargo consignments or by air-freighted mail carrying incorrect documentation.

Downturn continues for pax and freight

THE INTERNATIONAL Air Transport Association (IATA) has released international traffic data for August that confirm a continuing downturn. 

International passenger demand growth slowed to 1.3 per cent in August, following disappointing growth of 1.9 per cent in July. Passenger load factors fell to 79.2 per cent a sharp drop-off from the 81 per cent recorded during the same period last year as capacity growth outpaced demand.

International freight traffic saw its third consecutive month of contraction with a 2.7 per cent decline following drops of 1.9 per cent in July and 0.8 per cent in June.

“The contrast between the first half of the year and the last two months is stark,” said Giovanni Bisignani, IATA’s director general and chief executive.

“The slowdown has been so sudden that airlines can’t adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30 per cent higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a US$5.2 billion loss this year.”

Air freight has declined for the past three months, led by Asia Pacific carriers that posted a 6.5 per cent decline in July and a 6.8 per cent decline in August. “Airlines carry 35 per cent by value of the goods traded internationally. The  three-month decline—led by weakness in Asia-Pacific markets—is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better,” said Bisignani.

Cargo

•  The 6.8 per cent decline in international freight shipped by carriers in the Asia Pacific region had the greatest impact as they comprise 45 per cent of the global air cargo markets.

• The other big market players also showed weakness. European carriers experienced a 0.9 per cent decline, while US carriers reported weak growth of 0.8 per cent.

• Sharp declines in freight traffic in Latin America (-13.2 per cent) reflect restructuring in Brazil with cuts in capacity.

“The industry crisis is deepening and no region is immune. Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It’s a matter of survival,” said Bisignani.

Bisignani noted significant progress in Brazil where presidential approval for the removal of a fuel tax for international flights was published on 26 September. “After a two-year campaign, this is great news and the US$411 million savings over the next four years could not be better timed. The challenge is for other governments to follow Brazil’s example, conform with global standards and free the industry of crazy taxation. This is particularly true of India. Its carriers will post the largest losses outside of the US—US$1.5 billion this year—and they are being crippled by enormous taxation on fuel, particularly in domestic markets,” said Bisignani.

Dutch-Chinese combo is blooming hard for Aust to beat — FECA

What do ABBA and Australian flowers have in common?  They both were a hit in the early 1980s, writes John Newton.

But while the original ABBA has long gone, Australian flower exports have blossomed — though it has been a hard grind for growers over the past 25 years, with international competition getting stronger all the time.

According to Sally Sutton executive officer of the Australian Flower Export Council (AFEC) — previously the Flower Export Council of Australia (FECA) — air freighted flower exports today have remained stable and have been worth about A$80 million per annum for the past five years.

But she says it has taken “an enormous effort” to keep the competition at bay.

“Increasing competition from third world countries now sees Australia’s favourite floral exports — kangaroo paw, wax flower and  banksias — being grown in some of the world’s most exotic places.

“A decade ago, Australian flower exports were challenged, in quality and quantity, by the premium Israeli grown product, but far more worrying competition was yet to come. South America, particularly Chile and Peru, have produced excellent Australian product this season, entering the lucrative US$3 billion American floral market through Miami.

“But there is far more threatening Australian growers, such as Dutch investment in China. Australian flowers are ideal for the harsh growing conditions of the outer provinces. The Dutch remain the best growers in the world, with the Chinese the most prolific. It is a lethal combination for any competition,” said Sutton.

“While it is a natural occurrence to have competition, Australia was slow in managing its resources, selling out genetic property that has paved a golden trail for competing countries. FECA has managed enormous success from very little resources,” she said. Emphasis has had to be on clever promotions — and several promotions have succeeded in development of an Australian brand that equates our flowers to our own Australian resources.

“A lot of the success of Australian flowers has been through example — and an average of three to four AFEC international promotions per year has continued to ensure that Australian flowers stay a focus within the sights of global buyers.”

Sutton said that from Amsterdam to Atlanta and Beijing to Tokyo, Australian flowers show consistency in being wherever there are world floral buyers.

“We have become masters in achieving results on very little: we have won the highest accolades in the world for our exhibits, including winning at the Chelsea Flower Show and at the prestigious Horti Fair in Amsterdam.”

Sutton said AFEC remains an integral force within the industry. “Its positioning, as an association that is financially reliant on membership fees, confirms the group’s remarkable longevity for an industry body. Two decades of active promotion have contributed to what is an enviable global reputation.”

She said a large government grant had resulted from an AFEC proposal that looked to establish a national body for the industry. The new body — named ‘Wildflowers Australia’ had the responsibility of ensuring the Australian flower industry moves forward.

“AFEC takes its place on the board representing export, but the future of this highly competitive industry demands all facets of the industry are represented and work together. Other board members include the air freight industry, growers, researchers and investors.

“Developing the domestic market is another important strategy that the united body will look towards in ensuring the industry’s future is well planned,” added Sutton.

Emirates starts its slow, controlled migration to Dubai’s Terminal 3

THE LONG bus journeys from flight arrivals to the existing Emirates terminal at Dubai International airport are about to come to an end.

This follows the move next month by the airline to its dedicated new home in Dubai.

In a carefully-orchestrated move, the first phase of Emirates’ operations from Terminal 3 (T3) will launch all flights to the GCC and the Americas — 40 flights a day, around 15 per cent of the carrier’s total services. Phase two will include flights to the rest of the Middle East and Africa as well, increasing operations to 99 flights a day — 37 per cent of all flights.

Services to Europe will take off in the next phase, escalating operations to 168 daily flights or 60 per cent of all Emirates’ services. The fourth and final phase will include flights to the Indian sub-continent, East Asia and Australasia, bringing to 269 the number of daily flights ex Dubai.

The airline says each phase will commence after receiving a ‘Clean operational chit” from the previous one to ensure customers enjoy a smooth, seamless Emirates experience. Trials and testing at T3 continue at a feverish pace to iron out operational creases and remove any system bugs before the soft opening. The next major passenger trial is scheduled for September 27, with the phased opening of T3 set for October 14.

AerCap first with A320/321 freighter conversion; and Airbus tips 399 more

NETHERLANDS-based leasing company AerCap is the launch customer for the new Airbus A320/A321 freighter aircraft.

AerCap has signed a firm contract with Airbus Freighter Conversion GmbH (AFC) to convert 30 of its passenger A320/A321s into freighters (P2F).

“The A320 and A321P2Fs are setting new standards in the feeder freighter market,” said Klaus Heinemann, chief executive officer of AerCap. “This order will strengthen and expand our portfolio with the most modern aircraft in the small freighter segment.”

Chief executive officer of Airbus Freighter Conversion Lars Becker said it was anticipated about 400 Airbus single aisle aircraft would be converted between 2012 and 2026. “The first A320 P2F will be ready in 2011. After ramp up, we plan to convert around 30 A320 family aircraft per year,” he said.

“The state-of-the-art. A320/A321P2F addresses the future growth of the air cargo market and targets at the replacement of the ageing smaller freighters in service today,” said Christian Scherer, Airbus executive vice president strategy and future programs. “These modern fly-by-wire aircraft will bring new levels of efficiency to freight operations. In addition this new application will further extend the service life of the successful A320 Family far into the 21st century and boost their residual value. We see a substantial market demand.”

Bomb-proof box under test in US

THE UNITED States government is considering what’s claimed to be the first bomb-resistant luggage container able to stop a small suitcase bomb downing an aircraft.

According to Howard Fleisher, deputy director of the Homeland Security Department’s Transportation Security Laboratory, the container holds dozens of suitcases and can protect large jets from small suitcase bombs that slip past airport luggage scanners.

Suitcase bombs have been a constant worry for aviation chiefs since one blew up Pan Am Flight 103 over Lockerbie in Scotland 20 years ago. Such bombs can get past security when they have explosive material that is too small to trigger an alarm from a luggage scanner.

But the bomb protection container could face some hurdles before it gets the green light. The US Transportation Security Administration (TSA) says it will not buy the US$18,000 Kevlar container, because Congress did not give it any money for them- and it will not require carriers to use them.

The TSA says it is in the process of certifying the devices as beneficial so that airlines can buy them.
A 2007 law requires the TSA to buy hardened containers for airlines to use when it sees a need.

BRIC, MEA markets experience major increases in logistics investment in ‘08

SIGNIFICANT private investments have been made this year in the Transportation and Logistics (T&L) sector in the Brazil, Russia, India and China (BRIC) and Middle East and African (MEA) markets.

And according to latest research by independent market analyst Datamonitor the sector is likely to experience much higher capital infusion in freight management companies and capacity during the second half of 2008.

The analysis — Transportation and Logistics Financial Deals Insights — predicts the cost savings rationale for M&A deals, particularly by strategic investors, can only increase in the remainder of 2008; albeit with lower valuation multiples compared with those in 2007.

It says financial market trends during 2007, including the tightening of credit and the weakening of the US dollar, bolstered the relative deal-making positions of strategic and foreign investors in the first quarter of this year. As of June 2008, says Datamonitor’s automotive and logistics lead analyst and report author Praveeen Ojha, there are concerns that the US economy is heading into, or already is in a recession.

“This will only increase the number of players in the transportation business up for sale as a potential contraction in economic output will negatively impact demand for transportation and logistics products and services, as well as shippers’ profits during the rest of 2008,” he said.

Ojha said that with financial deals drying up in the first quarter of 2008 because of the credit crunch, the BRIC and MEA markets were witnessing “the introduction of significant private investments”.

“Driven by the strong outbound demand for sea freight and air freight services from the Asia-Pacific, parts of Latin America and the MEA region, private equity funds and firms are turning their attention to both mid-size carriers (in shipping and aviation), as well as participation in port infrastructure development.

After several strong growth years in bulk and containerised shipping, substantial war chests have been developed for mergers and acquisitions and this will only strengthen the consolidation wave in the remainder of 2008,” added Ojha.

Cargolux suspends Melbourne flight

ARGOLUX is suspending one of its two weekly freighter flights into Melbourne because of declining yields and high fuel costs.

The carrier, which this weekend is celebrating nine years of operation into Australia, will — from September 20 — suspend its B747-400F Melbourne/Auckland/Hong Kong service.

“The yields are not there for us and it is costing us a lot to fly into Auckland as there is not much yield from there to Hong Kong,” said Sydney Franciscos, Cargolux manager Melbourne.

However, the carrier will retain its weekly Melbourne/Auckland/Los Angeles/Europe (Luxembourg) service.

Cargolux is the only all-freighter operator with a B747-400F nose-loader on this route. “It means we can move large cargo that other carriers can’t and it is an important market here for us,” said Franciscos. “We still need a footing in Australia and there is a big demand for us in Melbourne.”

He said the suspended service had been subsidised for some time by the airline’s other sectors and had been “digging deep” into Cargolux’s operating costs.

“Currently, all airlines have to be price conscious. They are feeling the pinch, because of the rise in fuel prices.  Freight carriers are not suffering as much as passenger airlines, but I understand many are cutting quite deeply into their operating costs.”

CHAMP expands by buying Softair

ACQUIRING Softair AG, the Zurich-based provider of integrated software solutions to cargo carriers and their distribution partners has boosted the market status of CHAMP Cargosystems as a full-service provider in its field.
Headquartered in Luxembourg, CHAMP is owned jointly by SITA and Cargolux International.

Softair was set up in 1985 and is best known for its Cargo One workstation product. More recently it has introduced the first of its new Cargospot suite which utilises Java/Oracle. This has sold well to many of Softair’s 100-plus airline customers.

John Johnston, CHAMP’s chief executive, said that the acquisition accelerated the company’s “vision to deliver the world’s first integrated enterprise model capable of powering any cargo operation to success”.

It would allow CHAMP “to expand and reinforce its addressable market to include ground handling agents, general sales agents and forwarders”.

Gabriel Weisskopf, Softair’s founder and chief executive, said the merger made “clear business sense” for both companies.

“The combination of expertise and best-of- breed systems means that CHAMP can now offer both licensed and hosted software services, providing benefits to all participants in the air cargo process, no matter what size of cargo operation, based on an open systems platform.”

On the web: www.champ.aero

DNA ‘firewall’ proposal would help NZ control ornamental fish imports

EXOTIC ornamental fish are a vast, growing and extremely complex international trade in which air cargo plays a key role.  Unit costs can be extraordinarily high for sought-after species in optimum condition while the volume of even more commonplace species is substantial. 

But some of these little creatures, cute as they might appear, have the potential to harm the eco-systems of their new homelands if released into the wild after importation.

With this in mind, New Zealand’s Lincoln University, a specialist agricultural facility with a high global reputation, earlier this year joined with MAF Biosecurity New Zealand to seek a post-graduate student interested in undertaking a study into the development of DNA bar-coding for exotic ornamentals.

This PhD project seeks to identity species and variants that pose a biosecurity risk to New Zealand.  The study is largely funded by MAF Biosecurity.

Dr Colin Johnston, a senior MAF scientist who is a key adviser to the study, said that high-risk ornamentals fell into two general categories: Those known to carry diseases of concern and those likely to establish well in New Zealand, thus posing an environmental pest risk.

“Carp in Australia is a good example of something that’s escaped and taken over waterways and changed the environment,” said Johnston.  “This PhD study will provide another brick in the wall in New Zealand’s biosecurity system.

“It’s adding to our knowledge, it’s giving us more molecular tools.  Part of the problem is identification of these fish species, especially when they’re very small.”

Johnston explained that with the molecular tools, “we can take a DNA sample from a fish due to be imported, and be able to tell if it’s one that we’re really worried about.

“Then we can stop the shipment or we can know we need to screen them for certain diseases.  At the moment, we rely very much on visual identification.”

Earlier this year, Kiwi biosecurity officials intercepted six live Siamese fighting fish which had been declared as ‘aroma’.  They were packed in small plastic bags and in tinfoil inside a polystyrene container.

No action was taken against the importer when it was discovered she had put the order on hold pending completion of biosecurity risk inquiries.

But MAF Biosecurity pointed to the risk of such ornamental exotics entering the country without rigorous checks, whether as air cargo consignments or by air-freighted mail carrying incorrect documentation.

Downturn continues for pax and freight

THE INTERNATIONAL Air Transport Association (IATA) has released international traffic data for August that confirm a continuing downturn. 

International passenger demand growth slowed to 1.3 per cent in August, following disappointing growth of 1.9 per cent in July. Passenger load factors fell to 79.2 per cent a sharp drop-off from the 81 per cent recorded during the same period last year as capacity growth outpaced demand.

International freight traffic saw its third consecutive month of contraction with a 2.7 per cent decline following drops of 1.9 per cent in July and 0.8 per cent in June.

“The contrast between the first half of the year and the last two months is stark,” said Giovanni Bisignani, IATA’s director general and chief executive.

“The slowdown has been so sudden that airlines can’t adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30 per cent higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a US$5.2 billion loss this year.”

Air freight has declined for the past three months, led by Asia Pacific carriers that posted a 6.5 per cent decline in July and a 6.8 per cent decline in August. “Airlines carry 35 per cent by value of the goods traded internationally. The  three-month decline—led by weakness in Asia-Pacific markets—is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better,” said Bisignani.

Cargo

•  The 6.8 per cent decline in international freight shipped by carriers in the Asia Pacific region had the greatest impact as they comprise 45 per cent of the global air cargo markets.

• The other big market players also showed weakness. European carriers experienced a 0.9 per cent decline, while US carriers reported weak growth of 0.8 per cent.

• Sharp declines in freight traffic in Latin America (-13.2 per cent) reflect restructuring in Brazil with cuts in capacity.

“The industry crisis is deepening and no region is immune. Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It’s a matter of survival,” said Bisignani.

Bisignani noted significant progress in Brazil where presidential approval for the removal of a fuel tax for international flights was published on 26 September. “After a two-year campaign, this is great news and the US$411 million savings over the next four years could not be better timed. The challenge is for other governments to follow Brazil’s example, conform with global standards and free the industry of crazy taxation. This is particularly true of India. Its carriers will post the largest losses outside of the US—US$1.5 billion this year—and they are being crippled by enormous taxation on fuel, particularly in domestic markets,” said Bisignani.

Dutch-Chinese combo is blooming hard for Aust to beat — FECA

What do ABBA and Australian flowers have in common?  They both were a hit in the early 1980s, writes John Newton.

But while the original ABBA has long gone, Australian flower exports have blossomed — though it has been a hard grind for growers over the past 25 years, with international competition getting stronger all the time.

According to Sally Sutton executive officer of the Australian Flower Export Council (AFEC) — previously the Flower Export Council of Australia (FECA) — air freighted flower exports today have remained stable and have been worth about A$80 million per annum for the past five years.

But she says it has taken “an enormous effort” to keep the competition at bay.

“Increasing competition from third world countries now sees Australia’s favourite floral exports — kangaroo paw, wax flower and  banksias — being grown in some of the world’s most exotic places.

“A decade ago, Australian flower exports were challenged, in quality and quantity, by the premium Israeli grown product, but far more worrying competition was yet to come. South America, particularly Chile and Peru, have produced excellent Australian product this season, entering the lucrative US$3 billion American floral market through Miami.

“But there is far more threatening Australian growers, such as Dutch investment in China. Australian flowers are ideal for the harsh growing conditions of the outer provinces. The Dutch remain the best growers in the world, with the Chinese the most prolific. It is a lethal combination for any competition,” said Sutton.

“While it is a natural occurrence to have competition, Australia was slow in managing its resources, selling out genetic property that has paved a golden trail for competing countries. FECA has managed enormous success from very little resources,” she said. Emphasis has had to be on clever promotions — and several promotions have succeeded in development of an Australian brand that equates our flowers to our own Australian resources.

“A lot of the success of Australian flowers has been through example — and an average of three to four AFEC international promotions per year has continued to ensure that Australian flowers stay a focus within the sights of global buyers.”

Sutton said that from Amsterdam to Atlanta and Beijing to Tokyo, Australian flowers show consistency in being wherever there are world floral buyers.

“We have become masters in achieving results on very little: we have won the highest accolades in the world for our exhibits, including winning at the Chelsea Flower Show and at the prestigious Horti Fair in Amsterdam.”

Sutton said AFEC remains an integral force within the industry. “Its positioning, as an association that is financially reliant on membership fees, confirms the group’s remarkable longevity for an industry body. Two decades of active promotion have contributed to what is an enviable global reputation.”

She said a large government grant had resulted from an AFEC proposal that looked to establish a national body for the industry. The new body — named ‘Wildflowers Australia’ had the responsibility of ensuring the Australian flower industry moves forward.

“AFEC takes its place on the board representing export, but the future of this highly competitive industry demands all facets of the industry are represented and work together. Other board members include the air freight industry, growers, researchers and investors.

“Developing the domestic market is another important strategy that the united body will look towards in ensuring the industry’s future is well planned,” added Sutton.

Emirates starts its slow, controlled migration to Dubai’s Terminal 3

THE LONG bus journeys from flight arrivals to the existing Emirates terminal at Dubai International airport are about to come to an end.

This follows the move next month by the airline to its dedicated new home in Dubai.

In a carefully-orchestrated move, the first phase of Emirates’ operations from Terminal 3 (T3) will launch all flights to the GCC and the Americas — 40 flights a day, around 15 per cent of the carrier’s total services. Phase two will include flights to the rest of the Middle East and Africa as well, increasing operations to 99 flights a day — 37 per cent of all flights.

Services to Europe will take off in the next phase, escalating operations to 168 daily flights or 60 per cent of all Emirates’ services. The fourth and final phase will include flights to the Indian sub-continent, East Asia and Australasia, bringing to 269 the number of daily flights ex Dubai.

The airline says each phase will commence after receiving a ‘Clean operational chit” from the previous one to ensure customers enjoy a smooth, seamless Emirates experience. Trials and testing at T3 continue at a feverish pace to iron out operational creases and remove any system bugs before the soft opening. The next major passenger trial is scheduled for September 27, with the phased opening of T3 set for October 14.