Atlas and Bain Capital aim for joint lease company
Boston, USA-headquartered financial investors Bain Capital announced towards the end of December that they and Titan Aviation Holdings, a daughter company of Atlas Air Worldwide holdings, will join forces on a joint venture with the aim of “developing a diversified freighter aircraft leasing portfolio.“
The new joint venture sees Bain contributing US$360 million of equity capital and Titan a further US$40 million. These amounts can be increased by one or the other of the partners in the future, depending on planned aircraft acquisition commitments. The aim of the Bain / Titan venture is to capitalize on what both partners see as a growing demand for freighter aircraft in the coming years in order to cater especially for the express parcel services and e-commerce markets.
Titan Aviation Holdings already has almost 40 aircraft on their books. Twenty-three of these are B767Fs and twelve are B777Fs.
LuxairCargo reports cargo decline
2019 ended with sobering results for ground handler LuxairCargo based at Luxembourg’s Findel Airport. Volumes went down 8.4 percent on a y-o-y comparison, reaching 880,000 tons. And the management expects the downward trend to continue unabated in 2020, to reach only 846,000 tons. Main reasons are the multiple trade and tariff conflicts first and foremost triggered by the Trump administration, negatively influencing world trade.
A positive highlight was the expansion of parking spaces from 8 to 12 stands for Jumbo freighters adjacent to the cargo terminal at Findel which were completed in November. This way, a major bottleneck for loading, unloading and the processing of freight shipments was eliminated, upping the throughput capacity to one million tons per year.
EMO-TRANS expands in Asia
Logistics company EMO-TRANS has opened an office in the Philippines. The station, that is operational since January 2nd, closes a gap in the agent’s extensive network in the APAC region. Partnering in this joint venture termed EMO Trans Philippines Inc. is the agent’s long-standing local ally Sky Freight. “The new office complements our Asia footprint in response to the demands of our clients for innovative supply chain solutions,” comments Marco Rohrer, President and CEO EMO-TRANS.
Gloria Legaste has been appointed Managing Director of EMO Trans Philippines Inc. She is supported by Marie Grace Hernandez, Operations Manager.
Operations with IAI B737F conversions restarted
CargoForwarder Global reported in December that Israel Aerospace Industries (IAI) had issued a warning to operators of recently B737-700BDSF converted aircraft, that there could be safety issues regarding structural limitations which could lead to unsafe incidents during an emergency or hard landing of the aircraft.
Alaska Airlines, Qantas Freight and India’s SpiceJet then all grounded their respective B737-700BDSFs until further notice. In the meantime Alaska Airlines, which operates three of the type have allowed flight to resume, but still with certain restrictions on loads and types of cargo which can be carried. Express Freighters Australia which operates four of the aircraft on behalf of Qantas Freight has also reintroduced services with the B737-700BDSF. The same applies for Delhi-based SpiceJet who has also allowed their three aircraft back into the air. The problem arose when IAI discovered possible irregularities concerning the aircraft’s rigid barrier which is installed between the main freight deck and the cockpit.
ULS Cargo looks at A321 P2F conversions
Istanbul-based ULS Airlines Cargo which operates a fleet of three aging Airbus A310-300 freighters has said that it is contemplating the acquisition of Airbus A321 P2F aircraft into their fleet.
The carrier’s three A310Fs are currently all operating on behalf of Turkish Airlines Cargo on regional routes. ULS Cargo managers have not elaborated on when they would like to see the A321P2F in service with the carrier. It was reported last year that ULS Cargo was also considering the introduction of Airbus A330-300 freighters into the fleet. However, nothing more has been heard about the A330s since then. The ULS Cargo A310Fs are almost thirty years old and are reaching the end of their active life cycles.
WorldACD - Better November trend
November, although not a good month according to recent WorldACD figures, seemingly fared a little better for the air cargo industry than the months before.
Although chargeable weights and Direct Ton Kilometers (DTK’s) dropped YoY during last November, actual load factors have again increased Month on Month (MoM). The month-over-month total chargeable weight for November actually increased by 0.4 percent compared to the previous year. However, Year-over Year (YoY) total chargeable weight is now at -2.5 percent. Interesting to note in the WorldACD figures is the decline of general cargo YoY by -5.5 percent whereby special cargo transport increased by +4.2 percent. Yields in November rose by +4.1 percent MoM but still remain at -10.7 percent YoY. The November MoM load factor rose by 2.4 percent in November but still remains at -2.1 percent YoY. Things could have been much worse if commodities such as pharma (+5 percent), high-tech (+14 percent) and flowers (+6 percent) had not increased as they did in November.
FedEx cuts down international sectors
Memphis-headquartered FedEx Express it seems is also starting to suffer under the continued weak air cargo demand. The carrier has announced that it is considering an earlier aircraft retirement programme as well as cutting down on some international routes.
Although early aircraft retirements are seen as the main step in cutting costs, there are also considerations in effect which would see some of the so called multiple international routes being reduced or done away with altogether. The carrier has however so far not specified which routes could be affected. By the end of 2019 FedEx Express had retired a further ten Airbus A310-300Fs from the fleet, leaving just three of the type still in service.
FedEx Express net earnings for the September to November 2019 financial quarter were only US$560 million - a drop of 40 percent in comparison to the same period of 2018.
Sun Country to operate B737Fs for Amazon
Amazon continues with its domestic USA aircraft expansion plans by announcing that Minneapolis-based Sun Country Airlines which is a low cost (LCC) passenger operator will start operating flights for Amazon with a fleet of ten converted B737-800P2Fs. Operations are expected to start some time during the second quarter of 2020.
Sun Country Airlines operates a fleet of around 30 passenger aircraft mainly on leisure routes to the Caribbean, Mexico and Central America. It is said that Sun Country’s owners, the New York-based equity house Apollo Global Management was not all that happy with revenues coming from the present LCC operation and told the Sun Country management to find new sources of income.
The Amazon deal can become a very beneficial source of income in the future for Sun Country Airlines who in the meantime have cut costs on their passenger operations, but have also added up to twelve new leisure routes into their programme which are said to bring higher revenues.
John Mc Donagh
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