Nordic Air Cargo Symposium – PART 2

We continue here with the second part of our report on last week’s Air Cargo Symposium which was held in Stockholm.

 Delivered their individual market outlooks (l > r): Niek van der Weide, QR Cargo / Alexander Kohnen, LH Cargo + Conf. Chairman / Juha Järvinen, Finnair Cargo / Peter Panseel, DHL-GF / source: Euroavia
Delivered their individual market outlooks (l > r): Niek van der Weide, QR Cargo / Alexander Kohnen, LH Cargo + Conf. Chairman / Juha Järvinen, Finnair Cargo / Peter Panseel, DHL-GF / source: Euroavia

Here’s what the Carriers did have to say!

Global Outlook on Market Opportunities:
This was the theme chosen by Qatar Airways, Finnair and DHL Global Forwarding in their presentations on the prospects for air cargo in Northern Europe.

Qatar Airways, represented by Niek van der Weide, VP Cargo Sales EMEA & Americas got the ball rolling by presenting a picture of where Qatar Airways stands today.
Seventeen years in operation and growing strongly with a present fleet of 131 aircraft and many more on order.
The carrier now operates to 137 airports which include a total of 40 freighter destinations.
The freighter fleet is made up of 5 B777Fs, with two more on order and 3 A330Fs and one more on order.
This freighter fleet plus the belly capacity puts them, in Niek’s words, up front as a cargo operator.
On top of this, the new Doha airport which will open soon, is designed to handle up to 1.4 million tons of airfreight per annum.

Qatar Airways cargo management has put quite some emphasis on the Nordic countries for both cargo and passenger traffic.
QR is also one of the main carriers with regards to the export of fish from Scandinavia.
The market is presently served by 4 weekly A330Fs from Oslo as well as daily B787 pax aircraft from Copenhagen.
Commodities carried range from fish, pharmaceuticals, perishables, mining equipment, fashion articles and electronics and QR claims that load factors are very high on all sectors and that 2014 will show a further positive growth.
Qatar believes that by 2031 a total of 45% of airfreight will be uplifted on freighters despite the continued massive passenger aircraft growth.
An interesting statement - considering the present state of affairs of today’s all freighter carriers.

Finnair Cargo’s Juha Järvinen was somewhat less forthright, and not as optimistic in his short presentation as his colleague from the Middle East.

Juha stated that his airline sees yields from Scandinavia coming under further pressure due to the influx of extra capacity from the Middle East. This could be viewed as Finnair seeing much of their traffic routed from Helsinki to the Far East as being snapped away from them by carriers routing it at more attractive rates through their various desert hubs.
Finnair, although not happy with the market situation, does see a moderate growth for cargo out of Norway for 2014 but states that the picture is clouded by (in their view) an expected downturn in general cargo movements by -2% this year.
The exception being pharmaceutical exports which continue to grow.
And - there was the view of Peter Penseel, DHL Global Forwading’s Sr. VP of Network Carrier Management.
His message, in a very informative presentation to the Nordic audience was ”to optimize the product in order to reduce costs.“
He, as many others, also admits that the market is moving upwards, capacity is still too much and warns the market “not to celebrate too early.”
Peter was the only one of the presenters who actually stated that “the aim of the game is to make money.”
He, as others before him, highlighted the need to reduce critical cost in the supply chain in order that all within the chain can be successful, i.e. make money!
In his view there were two distinct trends in 2013.
capacity continues to move away from freighters
load factors continued to decline further.

SAS Cargo, as presented by Leif Rasmussen, its CEO Cargo, gave his audience a general rundown as to what continues to make the industry sick.
Supply and demand imbalance, overcapacity and (unfair) competition.
Also, that sea/rail transport is catching up on airfreight in offering shorter transit times.
He also stated that change is needed, but it’s not going to happen on its own.
SAS however, refrained from bringing the necessary solution to the table.

Gunnar Sigurfinnsson  /  source: hs
Gunnar Sigurfinnsson / source: hs

Icelandair Cargo’s M.D., Gunnar Sigurfinnsson showed how a small carrier, operating out of a small country can still offer an airfreight product successfully outside of its borders.
Gunnar admits that fish is not only a main part of the population’s diet, but also dominant in its export to other countries. This contributes up to 90% of their exports.
The carrier, founded in 1937, works with around 50 employees in the cargo division.
Interesting is that almost 56% of the cargo moved by Icelandair is on their two B757Fs which mainly operate between Iceland and European destinations.
They have one further B757F on lease to TNT in Liege.

Small country, big plans!
Icelandair has entered an MOU with AEROSCRAFT, a company which is developing a new form of “cargo airship.“
The plan is to have the first vehicle in the air by 2016.
According to Mr Sigurfinnsson, the advantages of such a mode of transport are many, including regular transport of 40 foot containers, no airports needed, diesel driven and vertical take-off and landing.
How exactly Icelandair would plan to integrate this form of transport into their present operation remains to be seen.

The conference closed with some trend spotting in the Nordic market.
Views which were interesting, but really not different from those of earlier speakers, on yield, capacity issues, cost efficiency, streamlining of operations and so on.
These were given by Geodis Wilson, AF/KL/MP and Scan Global Logistics managers.
It was good to see that in effect, that most all speakers were thinking on the future of airfreight in their regions along more or less the same lines.

Tom Hoang / source: hs
Tom Hoang / source: hs

Oh! - of course - Boeings Thomas Hoang treated the audience to his company’s outlook on how many freighters will be needed by 2030.

He still maintains that a total of 2,200 new freighters will be on the market by then, whereby 60% will be new aircraft and the remaining 40% will be conversions.

It’s Boeings view that classic freighters are disappearing very fast as carriers update to the necessity of adjusting to better fuel burn.
Who will need these 2;200 freighters in 2030?
No answer to that yet!

John Mc Donagh