China’s Hainan Airlines has appointed Worldwide Flight Services to provide ramp handling for its 3-5 weekly passenger freighter services to and from Shanghai Pudong, in addition to its longstanding cargo handling partnership. The cargo-only flights use Boeing 787 aircraft and can carry up to 20 tonnes of cargo on the lower deck. Hainan previously operated passenger flights to Seattle, and introduced cargo flights using passenger aircraft during the pandemic. WFS also holds handling contracts with Hainan Airlines at New York JFK and in Paris CDG.
Record results for DHL – but uncertain times ahead
Against the background of the war in Ukraine, Deutsche Post DHL Group’s announcement of record results for 2021 – which would be major news under almost any other circumstances – seemed almost irrelevant.
At a press conference on 9 March, group chief executive Frank Appel said that everyone at the company was clearly shocked by the outbreak of war in Europe and was doing everything it can to support its staff there.
However, in 2021, DHL benefited from the boom in E-commerce and the global economy’s swift recovery from the Covid crisis. In fact, said Appel: “In a challenging year, we achieved the best performance in the company’s history.”
However, the future is now uncertain. Much depends on the progress of the war and whether the rest of the world can prevent it from triggering a global recession.
DHL’s figures showed group revenue rising to €81.7 billion in the 2021 financial year, operating profit reaching €8.0 billion – up 65% – and free cash flow almost doubling to €4.1 billion.
The board is proposing an increase in dividend to €1.80 per share and has proposed a new €2bn share buyback program.
Revenue is in fact a third bigger than it was before Covid in 2019.
Appel predicted that the Ukraine war could slow down consumer demand and there would of course be a significant effect from increased fuel prices and the need to avoid Russian airspace, leading to longer sector times on routes between Europe and Asia.
But the immediate impact of the war is limited. Russia and Ukraine together account for less than 1% of the group’s total revenues; of greater importance was the effect on the global economy.
DHL’s Express and Global Forwarding arm would be most affected by the increase in global fuel prices. Express shipments are already subject to a fuel surcharge, but there was no similar mechanism for road freight, said Appel.
In answer to a question, he added that he did not know how many of DHL’s 400-450 employees in Ukraine had returned to their home country or how they were faring.
DHL was operating postal and courier services to Ukraine’s border with local carriers taking over from there, although volumes were clearly depressed.
A few shipments, mainly humanitarian supplies such as medicines were still moving into Russia, with the cooperation of the authorities there, Appel added. The future of DHL’s wholly-owned Russian subsidiary and its 3,500 employees had yet to be decided, he added.
American to join WebCargo
American Airlines is to join Freightos’ WebCargo booking platform. It will provide over 10,000 global forwarders with access to live rates, capacity, and instant electronic bookings. Bookings will be available on the platform in parts of Europe and North America in the first half of 2022 before expanding to other parts of the world later in the year.
American Airlines Cargo president Jessica Tyler, said: “Over the last two years, e-commerce volume has surged and demand for global freight has increased. American Airlines Cargo has continued to adapt and innovate in order to deliver excellent customer service, and the digital solutions provided by WebCargo create another important step forward in ensuring continued connectivity and visibility for customers.”
Broker appoints Americas chief
UK-based charter broker Chapman Freeborn – part of Avia Solutions Group – has appointed Hendrik Falk as senior vice president of cargo for the Americas.
He has held a number of senior positions at leading industry organizations, including Lufthansa Cargo, Polar Air Cargo, World Airways, Air Bridge Cargo, and most recently Swiss International Airlines.
Chief commercial officer, Neil Dursley, commented: “Hendrik Falk is a key new hire as part of our strategic five-year expansion plan for the Americas region. Hendrik will guide our team of experienced US brokers to expand our service offering, grow our client base, and broaden presence throughout the region.”
Qatar provides a magic carpet to Brazil for Ali Baba
Alibaba Group’s logistics arm, Cainiao Network has partnered with Qatar Airways Cargo in a weekly charter flight from Hong Kong to São Paulo, Brazil, one of its fastest growing e-commerce destinations in Latin America.
The first chartered Boeing 777 freighter departed Hong Kong Airport on 5 March, headed for São Paulo ‘s Guarulhos Airport, via a tech stop in Doha.
Cainiao’s chief strategist and general manager for export logistics, William Xiong, said: “Cainiao’s mission is to deliver globally within 72 hours; a goal that can be achieved with the right logistics partners. In just over a year, Cainiao has established a comprehensive operation in Latin America, and we see that e-commerce retail in Brazil, in particular, is growing at a phenomenal rate.
Fraport ‘pulls out’ of Russia
German airport company Fraport has halted its business in St Petersburg, Russia saying that there is no justification for the attack on Ukraine. Fraport has since 2009 been a minority shareholder in Northern Capital Gateway, the company that operates Pulkovo Airport. Currently, Fraport holds a 25 percent share in the company but does not have personnel on site and is not engaged in any airport operations or business activity at Pulkovo.
Record result for Lufthansa
Lufthansa Cargo says it has posted a record financial result for the second year in a row. Revenue rose to €3.80 billion (previous year: €2.76 billion), while adjusted EBIT amounted to €1,493 million (previous year: €772 million). A total of 7.2 billion freight tonne kilometers were sold last year compared with 6.5bn in the previous year. Average load factor improved by 1.7 percentage points year-on-year to 71.0%, while capacity increased by 8.7% to 10.1 billion freight ton kilometers offered.
Chairman of the executive board and chief executive Dorothea von Boxberg, said that in 2022, the German carrier would focus on sustainability and decarbonization of airfreight through its sustainable aviation fuel offerings and also begin to equip freighters with Sharkskin technology to help save fuel. Lufthansa was also working at full speed to convert to fully electronic air waybills.
CargoLogicAir to keep flying, say reports
The Daily Telegraph has reported that UK-based CargoLogicAir, would not be subject to sanctions as its owner, Alexey Isaikin, is a Cypriot citizen. This is in spite of his earlier involvement with Russian all-cargo carrier Volga-Dnepr Group, operator of the AirBridgeCargo fleet now banned from Europe and the US. CargoLogicAir operates two 747-400F freighters.
Ex-Soviet colonel can keep flying his jumbo jets to Britain (msn.com)
Airfreight – calm before the storm
The global air cargo market continued to catch up with pre-pandemic levels in February as freight volumes, capacity and load factors stabilised close to 2019’s performance, with rates also slowly trending downwards, according to the latest data from CLIVE Data Services.
Chargeable weight in February was at -0.7% to the pre-Covid level in 2019, and +2.6% compared to February 2021, with capacity in the market standing at -5.4% and +6.9% to the respective 2019 and 2021 figures.
CLIVE’s ‘dynamic load factor’ of 65% was 4.5% pts lower than in 2021 and close to 2% pts higher than in 2019.
But it warns that the war in Ukraine means that the market is heading into another period of significant uncertainty.
Managing director Niall van de Wouw, said: “Airfreight market conditions feel insignificant when you see what is happening in Ukraine and the suffering of the Ukrainian people since Russia’s invasion.”
“The war in Ukraine is another example of an external event of which the air cargo industry has no control over, but which is having a profound impact, as happened with Covid. When we consider the recovery of the aviation industry from the pandemic, the return of passengers is still a big question mark. The war in Ukraine presents another big question mark, particularly over Europe-Asia trade flows. It is difficult to overestimate what this could mean down the line.”
The sudden drop in capacity on Europe-Asia routes and overflight issues were already having an effect into North East Asia routes in the closing days of February, he said. Rising oil prices are also expected to significantly impact global airfreight rates.
Niall van de Wouw added: “Whilst we were seeing some clear signs of normality returning, there is still so little slack in the global air cargo system. It is quite unlikely that the trend of slowly declining rates will continue in March. The war in Ukraine causes immediate capacity issues to North East Asia and, therefore, will likely cause push up rates even more for these particular markets.
“Air cargo trucking services might also be affected as numerous Ukrainian drivers – which form an important share of the truck drivers in Europe – have decided to go back to their home country. A fragile global air cargo supply chain is already sensitive to minor shocks. War in Europe and its resulting sanctions could turn the industry upside down once again, just at the time when the covid impact was looking more under control. We remain in volatile and uncertain times.”
Ukraine relief airlift underway
UK-based charter company Air Charter Service (ACS) has arranged its first cargo relief flights in aid of refugees from the war in Ukraine. The first, a 737 freighter from the UK to Rzeszów – about 30 miles from the Ukraine border – took place on 2 March and ACS says it has at least six more flights planned for various organisations at time of writing. It has put its emergency response procedures in place to help deal with what could be a significant airlift.
ACS cargo personnel will be shortly arriving in Poland, to coordinate future flights into Warsaw, Rzeszów and Chișinău and further flights are being planned into multiple countries bordering Ukraine.
During previous large scale humanitarian relief operations, a large amount of air cargo capacity has been provided by specialist operators of large freighters such as the An124 and the now destroyed An225 (pictured, during happier times). However, says ACS, the industry must now mobilise with a smaller pool of aircraft available than would normally be the case due to many of these specialist cargo airlines being either Russian, which will obviously not be used, or Ukrainian who in many cases have had their operations disrupted or aircraft destroyed.
ACS director for humanitarian services Ben Dinsdale said: “The cargo so far has been medicines and tents being sent from airports in the UK, Switzerland and the Middle East. It is an evolving situation but there is the potential for a significant number more flights if the number of potential refugees being reported is accurate.
“The cargo industry is going to have to move into yet another gear to help deal with increased demand and the smaller pool of aircraft now available. In a market already struggling for available aircraft due to the well-publicised supply chain issues gripping the world, we have mobilised our cargo team and emergency response procedures to ensure we can find solutions for all relief flights heading to the region.”
Group cargo director, Dan Morgan-Evans added: “This is a heart-breaking situation. Having spoken to some of our colleagues who work for our Ukrainian airline partners, the stories are terrifying, and we plan to pull out all the stops to make sure we do our part in the operation and get as many humanitarian flights into surrounding countries where refugees have been arriving.
“The fact that a number Ukrainian aircraft that would normally be used in such humanitarian operations have been destroyed during this invasion just compounds the challenge the industry now faces. I am confident however that, as an industry, we will all rise to this challenge as we have so many times before.”
He concluded: “The fact that so many of our cargo aviation colleagues in Ukraine, who have contributed so much to so many refugee crises around the world are now refugees themselves is devastating, and we would ask any of them needing help to reach out to us and we, or our people on the ground in Poland, will do all we can to help.
“Beyond focussing on the charters, we are also looking today at what more we can do to help as a company and hope to have a plan in place this week.”