Will SAA face a hard landing?
Will SAA face a hard landing?

South African Airways in financial troubles
Recent reports the South African press state that the national carrier, South African Airways ‘is on the verge of bankruptcy.’ They say that the carrier has run out of money and that the country’s parliament has been informed of the critical situation. The situation seems so bad that soon SAA will not be able to pay salaries to its employees as the cash flow situation has dramatically changed for the worse. The reports go on to say that if the airline does not get a cash injection of 792 million rand from the government, by October, then they are insolvent. This cash injection it seems will not be of much help as they’ll need a further 790 million by December this year. SAA has been making losses for the past seven years and a study presented to the board by consultants Ernst & Young already in 2015 stated that of the 48 largest contracts awarded by SAA to outside contractors, 60% of them were wrongly negotiated, poorly contracted and weakly managed. Union trouble compound the issue as well as claims from one union that “corruption at SAA is rife, it’s clear that the state owned entity is being looted.” The unions are planning strike action unless drastic changes are implemented fast.
In the meantime the company has announced that Vuyani Jarana has taken over as CEO beginning of August. He will be the fifth (sic!) CEO at SAA since 2013. Mr Jarana is highly respected in South African business circles and was, until his appointment to SAA, the boss of South Africa’s telecommunications company, Vodacom.


Cologne-Bonn Airport has a record July
CGN Airport witnessed a notable air cargo and passenger increase during July. This follows on a bumper first half year result which the airport had previously announced.
Almost 70,000 tons of air cargo passed through the airport in July. This represents an increase of 11% over the same month in 2016. The prognosis until the end of the year has now been adjusted upwards to a total of 800,000 tons. The passenger results for July were also healthy. Almost 1.3 million passengers were handled. This was an increase of 4% over July 2016. Here also, the year prognosis was adjusted to 12.2 million passengers.

Brussels Airlines operates A330 passenger aircraft on the Mumbai route  -  picture: hs
Brussels Airlines operates A330 passenger aircraft on the Mumbai route - picture: hs

Additional Mumbai flight ups Brussels Airlines’ tonnage
Starting 29 October, Brussels Airlines will introduce a 6th weekly flight on the sector Brussels-Mumbai, executed on Saturdays. The service is very popular in the cargo community. Brussels Airlines decided to start the route after Jet Airways’ move to AMS in 2016. Their maiden flight took off on 30 March.
As for cargo, the Mumbai flights have generated some 500 tonnes per month on the entire sector. The additional service may lead to roughly 860 extra tonnes annually. As Mumbai Airport is a strategic partner of the Pharma-aero initiative, of which Brus-sels Airport is one of the founding airports, pharmaceuticals make up the bulk of the volume.
Another important commodity is diamonds. Brussels Airport is a mere 45 km away from Antwerp, still the world centre of the diamond trade. Some 80% of the global production of rough diamonds are traded through Antwerp.

time:matters passes the “ten year mark”
It’s just ten years ago that time.matters, the expert for time critical shipment transport throughout the world, opened their Courier Terminal in Frankfurt. The terminal is situated at Frankfurt Airport’s CargoCity North where mother company, Lufthansa Cargo, operate their cargo terminal. The terminal which was previously run by Fraport Cargo Services was taken over in August 2007 and started business with 15 employees. In the meantime over 40 employees take care of time:matters’ clients which come from a wide-range of industrial branches such as life & health, automotive and aviation. The company states that in the meantime around 3,500 shipments with a volume of 1,100 metric tons pass through the facility each month.
time:matters also has booking and service lines set up in Amsterdam for the Benelux,  France & UK, Vienna for Austria & Switzerland and Singapore.


Hactl post strong first half-year growth
Hong Kong Air Cargo Terminals (Hactl) the independent cargo handler at HKG, has announced an almost 17% (16.6%) increase cargo handled in their facilities in HKG from January to June 2017. A total of 860,242 tonnes of export, import, mail/express and transshipment cargo passed through its doors.
Some of this success lies with the notable increase in cargo charters operated through HKG between January and May of this year. A total of 602 charter flights were registered compared to just 100 during the same period 2016. This increase was seen as the continued modal shift from sea to air in the region as well as what Hactl terms as a certain overflow through HKG from the Chinese mainland. Other factors such as the increased e-commerce traffic also played an important role in the first half-year results.

HACTL freight terminal at Chek Lap Kok Airport, Hong Kong  -  photo: hs
HACTL freight terminal at Chek Lap Kok Airport, Hong Kong - photo: hs

Deutsche Post DHL Group post Q2 results
Frank Appel, CEO of Deutsche Post DHL Group had good news, but also some warnings regarding the Group’s 2017 second quarter results.
The good news was that revenues increased by 4% to EUR 14.8 billion and the operating profit for Q2 rose by 11.8% to EUR 841 million. Furthermore, Mr Appel stated that it is expected that the EBIT result for the full-year 2017 would increase to about EUR 3.75 billion. The results could however have been better if the air freight margins within the Groups business had been better. This applies especially to air freight results in Asia which remained almost unchanged compared to a year ago. The revenue rose by 6.3% but at the same time air cargo gross profit fell by 6.3%. He pointed out, however, that despite the pressure on air freight margins, the company is in a good position to reach its EBIT target for this year.

Is the cargo boom going to continue?
The air cargo industry is riding on a high since the first half year figures were presented by IATA and WorldACD. An increase in cargo-traffic of almost 11% has been recorded between January and June this year and many are looking at (hoping) that the trend will go on until the end of the year. The present figures show the strongest half year growth since 2010 where the world was faced with the financial crisis.
Will it continue? Don’t forget that air cargo demand during January to June 2016 was exceptionally flat and the present half-year figures reflect a return to cargo flows just before the financial crisis in 2010. Back to normal. However, a turnaround is there, but will it hold till December? IATA is not so sure and is rather skeptical as they think that the cyclical growth curve is at the top. On the other hand, global sales continue unabated and the air cargo scene also continues to gain more of the traditional ocean carrier’s cargo onto the main decks and bellies of the aircraft.
It looks good for the rest of the year, provided there won’t be major political or even military conflicts. But the following 12 months will show whether we are “really back on track.”

The Air Transport Services Group (ATSG), through their subsidiary Cargo Aircraft Management (CAM), have received a further Boeing 767-300BDSF aircraft which was once an American Airlines pax aircraft. It was converted to a freighter by Bedek Aviation. Whether this one will also be allowed to the Amazon Prime fleet, remains to be seen.
AeroLogic, the Leipzig, Germany-based cargo carrier has received another B777F which is on lease from GECAS. The freighter was previously leased by GECAS to LATAM Cargo, who in the meantime have returned two B777Fs to GECAS. Both aircraft have now ended up with AeroLogic (for more pls view our report).
An ex TUIfly Nordic passenger B767-300 was converted to freighter (BDSF) by Bedeck Aviation and was slotted for use by DHL Express. It has now ended up with U.S.-based Kalitta Air instead.

John Mc Donagh  /  Marcel Schoeters

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