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Volcanic Eruption in Iceland
The volcanic eruption which occurred on April 17 under-
neath the Eyjafjallajoekull glacier in Iceland grounded most flights for up to six days throughout Europe. The European air traffic control organization, Eurocontrol, confirmed that the lack of wind meant the very dense ash cloud was moving eastwards at a very slow pace. Several US-Europe flights had to double back.
According to an Associated Press report published on Wednesday, April 21, airlines announced that they had lost at least $1.7 billion as a result of the economic fallout and travel shutdown caused by the volcanic eruption.
A news release issued by the AP estimates that the entire aviation industry suffered losses in the amount of $3.3 billion as a result of the closures.
Giovanni Bisignani, head of the International Air Transport association, said in a news conference that airlines lost an estimated $400 million each day during the first three days of grounding as a result of the European government's fear of the risk that volcanic ash could pose to airplanes.
Bisagnani called the airspace closure crisis "devastating" in pointing out that the aviation industry lost $9.4 billion last year and was forecast to lose a further $2.8 billion in 2010.
The eruption has had more impact on European aviation than any event in history, including 9/11. Longhaul Far East carriers including Korean Airlines, Singapore Airlines and Malaysia Airlines were forced to cancel flights to Europe.
The highly abrasive material in volcanic ash causes the aircraft engine to shut down. Smoke and ash also sticks to the aircraft windows and threatens visibility. The ash cloud rose to critical altitudes of 20,000 to 40,000 feet.
As of press time, Germany airspace restrictions had been lifted and on Monday, April 26, Iceland's main airport reopened after a three-day closure.
Scientists say the volcano is still spewing ash, but the plume is not high enough to reach jet streams.
| Sources: |
Air Cargo World 4/16/10
Associated Press, 4/21/10
Los Angeles Times, 4/26/10 |
Along with shutting down the European skies for nearly a week and causing general havoc, the volcano blast and ashes also disrupted the Asia link to the global supply chain.
Freight forwarding firms and exports faced stalled delivery of goods typically sent via airfreight, including mobile phones, high-tech consumer electronics, luxury fashion items and advanced Asian electronic components critical to production lines in Europe. Japan's Fujitsu said its notebook PC shipments to Europe had been temporarily disrupted, but European inventory stocks were providing a buffer. Japan's No. 3 automaker, Nissan Motor, said it was halting production for a day on three lines at two Japanese factories due to parts shortage.
Taiwan's biggest electronics parts maker, Hon Hai Precision Industry, said their production has been set back by up to three days. Being a key part of the global technology chain, Taiwan has so far reported around $6 million in losses from grounded cargo. The losses are a fraction of last year's total exports of $204 billion in Taiwan.
In South Korea, a trade association said the economic cost of lost exports was an estimated $112 million. Over 3,000 tons of air cargo was grounded at Seoul's Incheon Airport, which is one of the world's top air cargo hubs. These export losses are also only a fraction of Korea's exports from last year of $363 billion.
Source: Cargonews Asia 4/21/10
Air France CEO says future response to ash clouds will be different
European airlines will respond differently to ash clouds from volcanoes in the future, according to Air France-KLM's chief executive, Dow Jones reported.
Pierre-Henri Gourgeon's comments follow the grounding of aircraft after the eruption of a volcano in Iceland more than a week ago.
"We were taken by surprise. The experience we've had means things will be dealt with differently in the future," Pierre Henri said.
He noted the US response to volcanic ash is better as airlines and authorities have more experience in dealing with eruptions.
In particular, European airlines only had information about where the ash cloud finished completely and not at what point planes might have been able to fly through the ash, the head of the Franco-Dutch airline said.
"After the event I think all those concerned by what happened are saying that we should have started flights sooner," Gourgeon added.
Source: Cargonews Asia 4/26/10
Closing the skies and grounding flights for five days in Europe has not only caused a tremendous backlog in the Far East, but some carriers stopped accepting cargo due to lack of warehouse space. Generally, shippers are accustomed to seeing capacity shortages in the run-up to Labor Day, but that problem will be compounded as a result of flight operations returning to normal to get the stranded volcano cargo moving first. It is anticipated that the carriers will push for an increase in the airfreight rates to offset their losses and try to get caught up to schedule. Despite offering charters at higher rates, it is still estimated that there will be a serious backlog in Hong Kong and other Far East points of 2 to 3 weeks.
Where there's a will, there's a way. In Europe, many of the logistics companies and express parcel operators resorted to trucking cargo to minimize the delay in deliveries. Normally within Europe, express shippers rely on cargo planes for shipments to destinations more than 300 miles from their logistic hubs, but now trucks are being used, for example to take packages from Belgium to Italy and Russia. A large proportion of the cargo that is usually flown was stored for movement after the sky cleared.
Peak Season India
We are reminded by our extensive network of overseas partners that the space situation in India has further deteriorated. The backlog keeps building up and the capacity to manage the demand is insufficient. As of April 12, the backlogs in main airports are as follows:
- Delhi: 2,0000 - 2,300 tons
- Chennai: 1,000 - 1,200 tons
- Bangalore: 300 - 400 tons
- Mumbai: 200 - 300 tons
Airlines are giving preference to express cargo and most of the space is allocated for express and high rated cargo and high density shipments.
Volumetric shipments are given least priority and most carriers do not entertain volumetric cargo. AIT's offices and partners are making block bookings well in advance in order to up life our customer's shipments on schedule. Please alert us to your booking needs well in advance to avoid undue delays in transporting your cargo.
To avoid shipments being misplaced or damaged, our agent has deployed additional staff, which will monitor cargo at the airport to ensure shipments are handed over to bonded areas of carriers. All possible steps towards safeguarding your cargo are currently being taken.
NEW REGULATIONS
Shipping Lithium Batteries
An article from E-Cargonews Asia (3/15/10) indicates that carriers are charged up over calls for a lithium battery ban. US authorities are determined to further tighten restrictions on shipping these batteries via airfreight.
The proposed new rules threaten to hamper airlines' ability to carry such traffic and force shippers to make far-reaching changes in how they move this traffic.
Last year, a fire was discovered on a FedEx freighter which was apparently started by a shipment of battery-powered devices. In another incident, UPS workers unloading a freighter found a lithium battery in a burned package. This commodity has already been banned from passenger aircraft. After these incidents, the Airline Pilots Association pushed US lawmakers and aviation authorities to ban such batteries from all planes and now both the US Department of Transportation and Capitol Hill lawmakers have moved in this direction.
The DOT has proposed a new rule that would classify lithium batteries as hazardous cargo, requiring FAA approved containers for their transport by air and the House of Representatives has passed similar language in a legislative effort. Both initiatives carry the requirement that shipments must be accessible by flight crews at all times, which would effectively bar use of passenger airlines.
The ruling covers not only bulk shipments; it extends to all such shipments, including electronics that are equipped with these batteries. Shawn McWhorter, President of the Americas at Nippon Cargo Airlines, pointed out that there is so much embedded in computers, laptops and many other electronic devices which make it sound like the batteries would have to be taken out of the commodities and shipped separately. The restrictions could extend to temperature monitoring devices that are equipped with lithium batteries. Temperature loggers are used to monitor temperature-sensitive cargo on a regular basis by one of the most lucrative business segments for the air cargo industry - the pharmaceutical and bio-medical sector.
Brandon Fried, Executive Director of the US Airforwarders Association, warns restrictions would have severe repercussions for the electronics industry. He urged all interested parties - from airlines and forwarders to shippers - to oppose the proposed rules, by targeting the US Senate and most especially the DOT since the DOT is "more malleable" in its rule-making.
Source: Cargo News Asia 3/15/10
Shanghai Expo 2010: Special Security Measures on Cargo Acceptance
Please be aware that the World Expo will be hosted and held in Shanghai this year from May 1 - October 31 and will occupy large areas of the Shanghai CBD on both sides of the Huangpu. As with the Olympics, it is expected that this event will result in many special security measures, including cargo restrictions and special procedures over the duration of the event.
AIT has not yet been fully informed of all measures from our overseas partners, but so far the authorities have announced the following restrictions and adjustments, which will take effect beginning midnight on the 15th of April 2010:
- Additional inspections, resulting in possible delays, for both inbound and outbound air cargo.
- X-ray scanning required for all cargo and any oversized cargo (exceeding 1.5m x 1.5m x 1.65m) will need to manually be checked.
- Cargo requiring 24-hour refrigeration will not be accepted.
- PVG Police and Security Bureau will carry out random inspections for explosives and all oversized cargo. All oversized cargo will need to be inspected.
- According to the notice from PVG Public Security Bureau, agents need to provide original road transportation passes for toxic chemicals besides related documents when doing the delivery/pick-up of toxic chemicals (mainly class 2.3 and 6.1). Agents also need to provide original transportation passes of radioisotopes during the Shanghai Expo besides related documents when doing the delivery/pickup of radioisotopes.
- Ocean carriers calling both Waigaogjao and Yanshan ports will not accept the following DG:
- Catalogue 2.1 : UN1038, 1049, 1978, 3374, 3478, 3479
- Catalogue 2.2 : UN1073, 1977
- Catalogue 3 : UN1302
- Catalogue 4.1 : UN2556, 2557, 3097, 3474
- Catalogue 4.2 : UN1369
- Catalogue 4.3 : UN1402, 1403, 3476
- Catalogue 5.1 : UN1450, 1461, 1462, 1482, 1873, 2626, 2627, 3210, 3211, 3213, 3214
- Catalogue 6.1 : UN1541, 1580, 1613, 1642, 1680, 1809, 3294
- Catalogue 8? UN1818, 2280, 2576, 3477
We will keep you informed of any additional measures planned during this period.
UP, UP, AND AWAY - AIRLINE UPDATES
Boeing delivered two brand new Boeing 777 freighters to Thai Airways International at the end of March. Up until now, Thai could only carry belly cargo on its passenger flights. This new purchase will now allow Thai to further develop its air cargo business.
Source: Cargonews Asia 3/31/10
The cooperation between Austria Cargo and Lufthansa Cargo will be good news for shippers and forwarders alike. The vast global network of Lufthansa cargo will be strengthened because of the 109 continental and 9 intercontinental destinations served by Austrian Airlines. Lufthansa will market all Austrian Cargo capacity and freight will move under the 020 airway bill. Cargo can be e-booked and LH's TrackIT engine will be used for tracking cargo.
Lufthansa pilots canceled their threatened four-day strike scheduled for April 13-16. The dispute over wages and job security had been growing for several months.
The initial walk-out by pilots in February cost Lufthansa US $64 million before the company managed to persuade the German courts that the strike was illegal.
Both parties will now enter mediation.
Source: Air Cargo News 4/8/10
Air France - KLM cargo traffic increased by 2.1% in March, according to Reuters. The load factor rose by 9.9% to 72.5%.
Source: Cargo Asia 4/9/10
The special cargo handling unit of KLM has shipped Matisse's "The Dance" from the Hermitage museum in St. Petersburg to Amsterdam. According to the museum, it is one of the icons of art history and is rarely loaded out. "The Dance" (second version) is a 14 ft x 10 ft decorative panel painted in 1910 for a Moscow mansion of Russian businessman and art collector Sergei Shchukin.
Andre Mulder, AF-KL Cargo VP - Special Cargo, commented they have accumulated a wealth of experience when it comes to transporting artwork worldwide but this was still a special occasion since it is a masterpiece from one of the most famous museums in the world.
The Museum of Modern Art in New York now houses a paler version that Matisse painted a year earlier - in 1909.
Source: Air Cargo World 4/9/10
The merger between British Airways and Iberia Airlines which was originally agreed upon in November 2009 is now expected to be completed by December 2010, subject to approval from regulators and shareholders.
One stumbling block could be BA's combined deficit of GBP 3.7 billion in their pension fund. If all goes well, the merger is expected to save the airlines approximately USD $533 million. The new company name will be International Airlines Group, but both carriers will work under BA & IB. Headquarters will be in London with BA retaining 55% ownership for its shareholders.
The merged group will have 408 aircraft and will serve 200 destinations. BA will gain better access to Latin America.
Source: BBC News 4/8/10 and Air Cargo World 4/9/10
Giovanni Bisignani, Director General of the IATA, has said more airline mergers are essential in order to cut costs and improve competitiveness in an industry that has seen combined losses of US$2.8 billion this year.
He calls for regulatory support for barrier-free mergers across borders because the present legal frameworks are hindering extensive global industry consolidations involving, for example, USA and European airline. Bisignani would make no comment on a possible merger between United Airlines and US Airways.
Source: Cargonews Asia 4/12/10
Aryan Cargo Express (ACE), the Indian all-cargo carrier, will launch its international services with China and Hong Kong set to be its first destinations.
ACE was awarded its Air Operator's Certificate earlier in April and is presently in the process of obtaining slots at additional airports in Japan, Thailand, the UAE and Italy. Executive Director Singh Dungarpur said the plan is to connect international destinations with Delhi, Mumbai and Chennai. ACE is aiming to establish hubs in Bangkok and Sharjah to allow expansion into Europe and Africa.
Source: Air Cargo World 4/1/10
Qantas Freight is joining the Cargo 2000 airfreight quality management program as an associate member. According to Theo Triantafillides, head of commercial, by joining a quality management system like Cargo 200, Qantas is ensuring their internal processes are aligned with the industry's preferred quality measures. Membership means Qantas Freight will report and receive monthly performance updates and benchmark data showing how it is performing against competitors.
Source: Air Cargo World 4/1/10
Singapore Airlines has begun daily A380 services to Zurich. This new service is the carrier's third A380 European destination joining London Heathrow and Paris Charles de Gaulle. The airline also has increased its Munich/Manchester service to five times a week with B777-300ER aircraft.
Munich is SIA's second destination in Germany. Frankfurt is linked with two daily flights from Singapore, one of which continues to New York. SIA, in a related move, has acquired a 1.18% stake in Chilean carrier LAN Airlines. In 2011, the Santiago-based company will become the first airline in the Western Hemisphere to get the B787. SIA is also scheduled to receive its first B878s next year.
Source: Air Cargo World 4/1/10
In an effort to turn itself around after filing bankruptcy protection on January 19, Japan Airlines has planned withdrawal from dedicated cargo flights. This decision is causing concern for forwarders and other industry insiders, who are now considering forming ties with other carriers.
Earlier this year, the carrier had looked to integrate its cargo operations with Nippon Cargo Airlines but the talks fell through. Ending the cargo flights is expected to reduce JAL's freight transport capacity by around 25%. This decision will be problematic, as it will make it difficult to transport large items since passenger flights contain limited cargo space.
Source: Cargonews Asia 4/12/10
AIRPORT UPDATES
Al Maktoum International Airport (also known as Dubai World Central) should open at the end of June but it remains unclear which carriers, if any, will move operations to it. The grand and hugely ambitious plans for a giant complex and six-runway airport were delayed due to the economic downturn until now.
Because of commercial confidentially, Andrew Walsh, the airport VP of Cargo and Logistics, cannot reveal what type of carriers are interested in operating out of the airport. One possible target could be sea-air operators. Walsh said sea to air transfers will be possible in four hours at the new airport, compared to 16-24 hours in the current one.
Source: Air Cargo News 4/1/10
Having received planning permission to develop 120,000 sq meters of land for a new logistics center, Budapest Airport expects the first phase will conclude with a new 5,000 sq meters facility for Magyar Posta (Hungarian Post Office) that will open in October. Kam Jandu, Director of Aviation at Budapest Airport, expects the expanded facilities will provide a huge potential to grow new cargo traffic, especially from Asia and other long haul destinations.
Source: Air Cargo World 4/9/10
Opening up Port-au-Prince, Haiti airport after the January 12th earthquake has now allowed international aid to be delivered. For instance, the Japanese Self-Defense force has provided earthmoving equipment. Volga-Dnepr Airlines, the Russian airline, has completed 36 humanitarian aid flights on behalf of the Japanese government - from Sendai and Sapporo and on behalf of the Canadian government from Quebec and Trenton. The initial cost of recovery from the earthquake that claimed more that 220,000 lives and left 1.3 million people homeless has been estimated at $11.5 billion.
The International Federation of Red Cross and Red Crescent Societies have pledged $300 million towards long-term recovery and reconstruction.
One of the latest donors, U.S. regional carrier SkyWest Airlines, has collected $184,000 for the American Red Cross in less than a month. With over 10,500 employees, SkyWest operates Embraer and Bombardier jets for Delta, United and AirTrans to 146 cities in the US, Canada and Mexico.
Source: Air Cargo World 4/9/10
PREPARING FOR TAKEOFF: A THOUGHT TO PONDER
Not the cry, but the flight of the wild duck, leads the flock to fly and follow.
- Chinese proverb
If you have any questions or comments regarding the Air eNewsletter,
please contact Kathleen Lally from the AIT International Air Department. |
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