Air freight remains a key part of humanitarian aid operations, but the challenges include a lack of affordable ramp-loading aircraft coming onto the market and an increasingly complex political environment, writes Megan Ramsay
In crisis situations such as the aftermath of humanitarian disasters, air freight can be the only way to ensure necessary aid reaches those who need it. But there are often a huge variety of operational challenges affecting those involved in this unpredictable business.
Not least of these is the question of the integrity of the various suppliers and partners in the chain – how can aid agencies be sure that they are dealing with reputable providers?
According to Marjo Leppännen, logistics delegate for the International Federation of Red Cross and Red Crescent Societies Nairobi, a key element is the pre-qualification of suppliers, alongside framework agreements, audits and strict ethical rules. In the event of the code of conduct being violated, a supplier can be suspended or removed from the approved list, adds Joscha Kremers, officer-in-charge of the procurement division of the United Nations (UN).
Another concern these days is that the cargo charter aircraft often used in humanitarian relief efforts aren’t getting any younger. “It’s true that parts of the global fleet are Antonovs and Ilyushins that are getting to a certain age,” Kremers acknowledges. “It’s a concern, but if they’re airworthy and well maintained, then they’re OK. In the future, though, we will need new aircraft, and we need to look into this with the industry.”
Dan Morgan-Evans, group cargo director at charter broker Air Charter service, notes that there are some new Ilyushins out there that comply with European Union ‘Stage IV’ criteria, but that newer aircraft will be more expensive. Plus, the entry of new aircraft into the global fleet will be a slow, gradual process, so capacity may be an issue.
Shahe Ouzounian, chief operating officer at broker Chapman Freeborn, says the ex-Soviet aircraft currently available are “robust and cheap”, but adds: “The concern is the lack of affordable ramp-loading aircraft coming onto the market. We need a five to ten-year investment plan, but most people are concerned with short-term budgets,” he observes.
Further problems arise with regard to distribution. “We need to have hubs in strategic locations for consolidation and distribution, but you never know where you’re going to need it – things are so unpredictable,” explains Christine Mendes, senior regional logistics officer for the World Food Programme. For instance, massive difficulties can arise in a war zone in relation to guaranteeing the availability of the right people and equipment to carry out last-mile logistics; the importance of good partners, government support, and possibilities such as the creation of a makeshift runway are some of the elements that come into play.
However, Morgan-Evans believes that aid is “more accessible” now than in previous years because “people know where to go and how to get it”. Plus, the actual transport involved is more efficient. The rise of the Middle Eastern carriers and the B777 passenger aircraft with its huge bellyhold cargo payload mean that cargo can be delivered quickly, perhaps flying to a hub airport in the belly of passenger aircraft before being chartered to its final destination.
According to Steven Verhasselt, vice president commercial at Liège airport, bottlenecks may be physical (such as a lack of infrastructure), technical (the actual unloading of an aircraft, for example) or legal (pertaining to Customs or landing rights, for instance).
Of course, when it comes to Customs delays, it’s no good having aid sit at an airport clogging up the gateway and not reaching those who need it. Therefore Customs brokers are an essential part of the chain, says Michael Brown, programme manager international logistics and forwarding at Airlink. He also raises the idea of humanitarian relief operations as a consortium or flexible network, whose “interchanging parts can come together on an as-needed basis” to respond to the particular needs of each emergency situation.
Ouzounian adds: “Today we face a complex political environment, so flying cargo over countries is not as straightforward as it used to be. Then there are sanctions regimes relating to conflict zones such as South Sudan, where the EU and US are among those imposing sanctions – and they’re not necessarily all steering in the same direction. The banks tend to run away from this,” he says, so financing can be a problem.
On the other hand, Leppännen points out that “air freight tends to be most visible to the public in emergency relief efforts” – and, adds Morgan-Evans, this visibility in the news media can lead to an increase in public donations to help fund operations.
The end of the Ruslan International joint venture brings the world’s two main An-124 operators, Antonov Airlines and Volga-Dnepr Airlines, back into direct competition
The world’s two main operators of the unique An-124 heavylift cargo aircraft, Antonov Airlines and Volga-Dnepr Airlines, on 31 December terminated their 10-year ‘Ruslan International’ sales and marketing joint-venture partnership and individually took back full control of marketing, sales, and operational management of their respective fleets.
The original rationale for forming the partnership in 2006 had been that both airlines each had so much aircraft capacity tied up in long-term contracts with governments that it was becoming difficult to meet the level of demand for ad hoc capacity. By co-ordinating the movements of the combined fleet of 17 An-124s (10 belonging to Russia’s Volga-Dnepr and seven to Ukraine’s Antonov) and other aircraft, the companies would be able to improve their use and increase availability. The system would also increase the life of the aircraft and reduce maintenance needs and costs.
The companies had argued that there would be cost benefits to customers, in part due to better aircraft scheduling for front-haul and back-haul work, although in practice some customers complained, anecdotally, that charter prices for the airlines’ An-124s rose following the formation of the partnership, allegedly because of reduced competition in the market.
At the time, these 17 aircraft made up around three quarters of the world An-124 fleet of around 26 commercially available aircraft. But the collapse of Polet in 2014 leaves little competition to Antonov Airlines and Volga-Dnepr Airlines in the supply of An-124 aircraft. And although they make up just a small fraction of the whole air cargo market, there are few alternatives for certain types of jobs, and so the future availability and pricing of these aircraft is a big deal to the air cargo charter market.
The break-up of the Ruslan International partnership is understood to have been politically rather than commercially motivated and that it was Antonov that terminated the relationship, as a result of the political tensions between Ukraine and Russia.
Antonov reportedly retaliated against attempts by the Russian Air Force and Volga-Dnepr’s to use an Ilyushin Design Bureau facility to carry out maintenance services on locally based An-124s. Although, Volga-Dnepr has since stressed that the group’s collaboration with Antonov “will continue for the technical aspects of airworthiness and flight safety support of its An-124-100 fleet”.
New sales structures
Commenting on the implications of the separation, Volga-Dnepr said it has “the full capability to continue to support all existing customer contractual obligations”. Meanwhile, Antonov announced that it was putting in place a UK-based team to lead its global sales and operations. The new sales and operations team, Dreamlifts Ltd (trading as Antonov Airlines), would be “managed by an international group of well-known experts from the outsize and heavyweight cargo industry, with decades of experience between them”, promising “a seamless transition for its customers in the global supply chain and a continuation of its flexible and highly personal service”.
CAAS asked Paul Bingley, commercial director of Antonov Airlines UK, about the transition and the prospects for the company after taking back sole control of marketing and operations for its aircraft.
“It was obviously a very big change for everyone; we’ve been together since 2006,” Bingley said. “The challenges were mainly logistical, as in moving offices, moving staff – but it was a quite seamless operation. It hasn’t taken that long at all for us to settle in. We’ve all been doing this for a long time anyway, so it’s not like it was a major change really; we’re still talking to the same customers, which is the most important thing. The customers still know us because we’ve been working with them for a long time.”
He said re-establishing the airline in the market as a separate entity had been relatively straightforward. “There have been absolutely no problems at all, and we are forging ahead now. We’ve got a lot of good customers… we still talk to the brokers and the forwarders that we were talking to when we were at Ruslan, so it’s been really positive.”
Bingley said the company is currently operating seven An-124s on a regular basis, two of which are modified to accept higher payloads of up to 150 tonnes, along with one Antonov-22 (the world’s largest turboprop), and one An-225 − the unique-capability Mriya with a 250-tonne payload. “We’ve got a couple of other little types of aircraft that we don’t generally market so much for the West; it’s usually done from Kiev,” he adds.
He describes the current market as “hard”, noting: “It’s been hard for a lot of airlines… but we get lots of enquiries for charters. We have no real geographical limitations, apart from the fact that we can’t fly over Russia. But that’s not a problem, most of the time.”
He also highlights the ‘open skies’ air services agreement signed in 2015 between Ukraine and the US as a potential competitive advantage for ad hoc charters to or from the US.
Although Antonov and Volga, when they formed their partnership 10 years ago emphasised it would help extend the life of the aircraft, this life does not seem under any immediate threat. “The AN-124s were built in the 1990s, but its life was extended, so it’s 19, or 20 years,” said Bingley. “So it’s going to be, for most of the aircraft, two decades. Most of them are being upgraded now with the Western avionics – there will come a time when the flight crews are reduced from six to four.”
In terms of the main characteristics of the air cargo charter market, or Anotonov’s section of that market, Bingley says: “Over the last two or three years, aerospace has been a big market for us. So: satellites, aircraft engines, helicopters…
“Obviously oil and gas has suffered and we haven’t picked up many flights because of that. In some ways, that affects the aerospace market as well, because a lot of oil and gas companies will use helicopters to survey what they’re doing and because the oil and gas markets have gone down, that affected the helicopter market as well.
“If you go back ten years, the majority of the business was military-related [due to the Afghanistan and Gulf wars]. That’s gone now.” He estimates that around 40% of the company’s business is currently aerospace-related.
“A lot of the satellites that are going into space are civilian, not military; we don’t really carry a lot of military satellites − mainly telecommunications, ground mapping; even (satellites) that survey the gravitational pull.”
He says the aviation industry also tends to be on a long-term upwards spiral, with Boeing and Airbus achieving steady sales of aircraft to carriers in different parts of the world. “A lot of those companies are making parts in different countries. So that’s an opportunity for us to fly those parts,” Bingley notes.
Wider logistics market
He says Antonov’s business is relatively unaffected by other recent changes or trends or developments within other parts of the air cargo or logistics market.
“We’re really a different market from your other standard airlines and companies like that,” says Bingley. “We get affected in some ways, the oil and gas industry being one, but we’ve made up for it in terms of aerospace revenue. There is an Antonov Salis project, on behalf of NATO and the EU countries. That is carrying military goods for NATO and for the EU.”
In terms of his expectations for 2017, Bingley says: “To build relationships with the customers. We’ve obviously got established relationships anyway; nothing has been affected by what has happened with us and Ruslan. Our concentration is on maintaining, developing and improving relationships where we can. The way it’s going so far is really very good.”