Freighter Aircraft and the "New Normal"
Dedicated freighter aircraft was a concerning subject reported in much of September's air cargo media. The news first revolved around comments from Lufthansa Cargo, which recently announced a 25% to 30% increase in rates and broached the subject of getting out of the freighter business due to falling profit and the inability to achieve market balance on roundtrip flights.
Then the International Air Transport Association (IATA) estimated that airlines have decommissioned (parked in the desert, as reported in previous editions of the AIT eNewsletter) 227 freighter aircraft during this recession. Paul Page, Editorial Director of the Journal of Commerce, shared in his editor's letter, "the private Ascend consulting firm put the figure closer to 480 aircraft, or nearly 25% of the existing freighter fleet."
On the heels of that news, Air France-KLM announced that it would get out of the freighter business over the next 2 years and turn over its entire freighter fleet to Martinair, a sister company. This would make Martinair one of the largest all cargo airlines in the business. This also makes it easier to add or discontinue flights as markets and demand shift.
Federal Reserve Chairman Ben Bernanke recently suggested that the recession has just about ended, or "probably ended in the United States." In the optimism of that assertion, signs have suddenly become clear indicating just how devastating these past 12 to 18 months have been for air carriers.
Some other headlines and news items:
- USA carrier American Airlines has warned cargo and airport staff to expect layoffs in tandem with November 7 schedule reductions
- Iberia lays off 100 executives
- Air France lays off 1,500 cargo employees
- International airlines lost around US$1 billion a month for the first six months of the year (Jan-June 2009), according to the International Air Transport Association (IATA)
- European and Asian airlines fared the worst, with 16 Asia-Pacific carriers losing US$1.3 billion compared with losses of US$958m a year earlier
- So far this year net losses for 50+ airline sample in excess of $6 billion, excluding "mark to market" fuel hedging gains
- Jet fuel prices, pushed higher by crude oil, move above $80 a barrel, intensifying airlines cash burn
- Passenger and freight volumes are now starting to improve, but on very fragile foundations so far
- 227 freighters taken out of service this year reducing capacity by 3%, but new deliveries sustain risk of excess capacity worsening (IATA Q3 Cargo e-Chart book)
- Air freight benefiting from shippers now requiring more timely transport - air freight price competitiveness falls against 39% decline in ocean freight rates (IATA Q3 Cargo e-Chart book)
- Los Angeles International Airport (LAX) has reported its smallest air freight tonnage drop in a year ... off 9.9% compared to July 2008
- Tony Tyler, Chief Executive Officer, Cathay Pacific, e-Cargo News Asia - September 08, 2009:
- "The fact is that both our passenger and cargo business have been hammered at the same time, and that makes this a downturn like no other - and the worst thing of all is there is still no end in sight."
- "This is a truly global downturn in the industry - unlike anything else we've seen in terms of impact. I've been in the business 30 years and seen many highs and lows, but the past year and a half is as bad as it's ever been."
- "What if the changes we have seen recently - lower premium demand, lower yields for passenger and cargo business - are not just cyclical? What if these changes are actually structural and airlines have to become acclimatized to a 'new normal' where things need to be done differently than before"?
This phrase from Tony Tyler, "New Normal" is beginning to catch on. Again referring to Paul Page's editorial, which is titled, "New Normal" (JOC 09/21/2009), he wrote:
With the Peak shipping season here and activity barely causing a ripple in global transportation networks, attention among shippers and carriers alike is already turning to next year and what the business community is terming the "new normal."
What does all of this mean for the airline industry? Well, when we emerge from this tunnel, the world of air cargo will be dramatically different. There will be fewer airlines serving fewer cities carrying less cargo on smaller airplanes. A smaller supply of available capacity will exist and any incremental increase in demand will cause carriers to raise rates.
Increased demand is not the only cause of carriers such as Lufthansa, Air France-KLM, Cargolux, Delta and just about every airline handling Asia exports to raise rates in October.
It is simply that they have no other recourse; they have hit revenue-bottom.
Airlines have cut staff, parked airplanes, discontinued passenger "perks," charged for services which for decades were free (i.e., checked baggage), gone into bankruptcy and out again, and yet still they collectively cannot turn a profit.
This, more than anything, has lead Lufthansa Cargo and others to raise cargo rates; the decision in the board room has become either find a way to be profitable or get out of the business all together.
Shippers and forwarders need not spend too much time on the shoreline looking out to sea hoping ocean freight will help them. Steamship lines' GRI's and PSS charges have been implemented and they are sticking. Like the airlines, ocean carriers reacted to decreased demand and cut capacity - now that demand has slightly increased, so have container rates.
As we enter the fourth quarter of 2009 and see the proverbial light at the end of the tunnel, we must brace ourselves to face the reality of this "new normal" when we emerge on the other side.
Air Cargo World Record
September's featured airplane was the Antonov 225 and AN 124, the 225 being the largest all cargo jet to fly.
Last month, the AN-225 set a world record by carrying the single largest piece in air freight history, a transformer weighing 189.89 tons. The flight departed from Airport Frankfurt-Hahn to Armenia. The only suitable aircraft for this transport was the Antonoy AN-225.
Air Cargo Screening - the countdown continues!
As the final implementation of the government's mandate to screen one-hundred percent of all cargo boarded on passenger aircraft nears, several editorials warned shippers (including forwarders) not to wait until the last minute hoping that the US Government will change its mind. The word out of Washington DC is that there is no going back; the industry has met its 50% threshold and the government fully expects 100% compliance by the due date in 2010.
100% screening less than a year away
USA shippers optimistic the country's Transport Security Administration (TSA) would back away from its plan for 100 percent cargo screening on passenger aircraft by August 2010 have had their hopes dashed.
The TSA recently announced an Interim Final Rule (IFR) implementing the Certified Cargo Screening Program (CCSP) - the system TSA will use to fulfill the air cargo security requirements of the Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 Act).
"We developed a common-sense solution that will greatly enhance air cargo security by using valuable data from pilot programs and engaging thousands of stakeholders," said TSA assistant administrator John Sammon.
"This program is a critical step toward meeting the mandate of the 9/11 Act in an efficient and effective manner that facilitates the flow of commerce."
Source: Cargo News Asia
The Price of Clean Energy
Carbon dioxide emissions from the U.S. and China are near parity, but the source of emissions differs widely. For example, 29% of the U.S.'s emissions come from transportation, while in China transportation accounts for only 8% of emissions. If both countries adopted aggressive programs to convert their transportation sectors to electrified vehicles - aiming for 45% electrified vehicles by 2030 - together they could reduce emissions by about 1.1 gigatons annually. But McKinsey estimates that such programs would require significant investment in new technology and production, amounting to $28 billion in China and $50 billion in the US.
Source: China and the US: The Potential of a Clean-Tech Partnership
British Airways Takes Responsibility
In November 2007, BA created a Corporate Responsibility department that organized a Corporate Responsibility program under four streams – Environment, Community, Marketplace and Workplace.
Highlights and achievements:
- 191 aircraft engines modified on BA's Boeing 747 and Boeing 777 aircraft to reduce NOx and improve fuel efficiency
- 120 community and conservation projects supported in 2008/09
- 35% recycled across Heathrow and Gatwick with amount to landfill reducing by 7.2 per cent
Click here to read the complete 2009 Corporate Responsibility Report
C-130 Hercules
The Lockheed C-130 Hercules is a four-engine turboprop military transport aircraft built by Lockheed. Capable of takeoffs and landings from unprepared runways, the C-130 was originally designed as a troop, medical evacuation, and cargo transport aircraft. The versatile airframe has found uses in a variety of other roles, including as a gunship, for airborne assault, search and rescue, scientific research support, weather reconnaissance, aerial refueling, maritime patrol and aerial firefighting. It is the main tactical airlifter for many military forces worldwide. Over 40 models and variants of the Hercules serve with more than 50 nations.
During its years of service the Hercules family has participated in countless military, civilian and humanitarian aid operations. The family has the longest continuous production run of any military aircraft in history. In 2007 the C-130 became the fifth aircraft - after the English Electric Canberra, B-52 Stratofortress, Tupolev Tu-95, and KC-135 Stratotanker - to mark 50 years of continuous use with its original primary customer, in this case, the United States Air Force. The C-130 is also the only military aircraft to remain in continuous production for 50 years with its original customer, as the updated C-130J Super Hercules.
 C-130 Cockpit
Design & Development
The Korean War, which began in June 1950, showed that World War II-era transports were inadequate for modern warfare. Thus on 2 February 1951, the United States Air Force issued a General Operating Requirement (GOR) for a new transport to Boeing, Douglas, Fairchild, Lockheed, Martin, Chase Aircraft, North American, Northrop, and Airlifts Inc.
Five companies tendered a total of ten designs: Lockheed two, Boeing one, Chase three, Douglas three, Airlifts Inc. one. The contest was a close affair between the lighter of the two Lockheed (preliminary project designation L-206) proposals and a four-turboprop Douglas design.
The Lockheed design team was led by Willis Hawkins, starting with a 130 page proposal for the Lockheed L-206, and another two-turboprop and heavier one. The company won the contract for the now-designated Model 82 on 2 July 1951.
The first flight of the YC-130 prototype was made on 23 August 1954 from the Lockheed plant in Burbank, California. The aircraft, serial number 53-3397, was the second prototype but the first of the two to fly. The YC-130 was piloted by Stanley Beltz and Roy Wimmer on its 61-minute flight to Edwards Air Force Base; Jack Real and Dick Stanton served as flight engineers.
 Cargo is airdropped from a C-130 Hercules Production
After the two prototypes were completed, production began in Marietta, Georgia, where more than 2,300 C-130s have been built.
The initial production model, the C-130A, was powered by Allison T56-A-9 turboprops with three-blade propellers. Deliveries began in December 1956, continuing until the introduction of the C-130B model in 1959. Some A models were re-designated C-130D after being equipped with skis. The newer C-130B had ailerons with increased boost - 3,000 psi (21 MPa) versus 2,050 psi (14 MPa) - as well as uprated engines and four-bladed propellers that were standard until the J-model's introduction.
Operational history
The Hercules holds the record for the largest and heaviest aircraft to land on an aircraft carrier. In October and November 1963, a USMC KC-130F (BuNo 149798), bailed to the US Naval Air Test Center, made 29 touch-and-go landings, 21 unarrested full-stop landings and 21 unassisted take-offs on the USS Forrestal at a number of different weights. The pilot, LT (later RADM) James Flatley III, USN, was awarded the Distinguished Flying Cross for his participation. The tests were highly successful, but the idea was considered too risky for routine "Carrier Onboard Delivery" (COD) operations. Instead, the C-2 Greyhound was developed as a dedicated COD aircraft. The Hercules used in the test, most recently in service with Marine Aerial Refueler Squadron 352 (VMGR-352) until 2005, is now part of the collection of the National Museum of Naval Aviation at NAS Pensacola, Florida.
 AC-130H gunship jettisons flares
Specifications (C-130H)
Data from USAF C-130 Hercules fact sheet, International Directory of Military Aircraft, Complete Encyclopedia of World Aircraft, Encyclopedia of Modern Military Aircraft
| General characteristics |
| Crew: |
5 (two pilots, navigator, flight engineer and loadmaster) |
| Capacity: |
- 92 passengers or
- 64 airborne troops or
- 74 litter patients with 2 medical personnel or
- 6 pallets or
- 2-3 HMMWVs or
- 1 M113 armored personnel carrier
|
| Payload: |
45,000 lb (20,000 kg) |
| Length: |
97 ft 9 in (29.8 m) |
| Wingspan: |
132 ft 7 in (40.4 m) |
| Height: |
38 ft 3 in (11.6 m) |
| Wing area: |
1,745 ft² (162.1 m²) |
| Empty weight: |
75,800 lb (34,400 kg) |
| Useful load: |
72,000 lb (33,000 kg) |
| Max takeoff weight: |
155,000 lb (70,300 kg) |
| Powerplant: |
4x Allison T56-A-15 turboprops, 4,590 shp (3,430 kW) each |
| Performance |
| Maximum speed: |
320 knots (366 mph, 592 km/h) at 20,000 ft (6,060 m) |
| Cruise speed: |
292 kn (336 mph, 540 km/h) |
| Range: |
2,050 nmi (2,360 mi, 3,800 km) |
| Service ceiling: |
23,000 ft (7,000 m) |
| Rate of climb: |
1,830 ft/min (9.3 m/s) |
| Takeoff distance: |
3,586 ft (1,093 m) at 155,000 lb (70,300 kg) max gross weight; 1,400 ft (427 m) at 80,000 lb (36,300 kg) gross weight |
|
|
If you have any questions or comments regarding the Air eNewsletter,
please contact Joseph Hoban from the AIT Air Department. |
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