What more can airports do?

posted on 8th June 2018
Airlines, airports and handlers debate the challenges of creating a better and more efficient cargo hub. Will Waters reports

Delegates went back to basics at this year’s Air Cargo Handling conference in Paris and debated, among other things, what an airport’s role should be in promoting, developing and facilitating air cargo, and what more they can do than they currently are. The debate revealed some significant frustrations among air cargo handling agents and airlines that not enough is being done by certain airports to support the cargo sector, while the excellent attention paid to cargo by a handful of airports highlights what co uld be achieved if the time, resources and space is made available.

Myles Nichols, global managing director for operations at Delta Cargo, believes one important way to move the air cargo sector forward is to work with airports on how to begin to incorporate cargo into the master-plan for an airport.

“For many airports, cargo is something of an afterthought,” he observes. “There has to be something built into the master-plan of the airport that allows for the economic prosperity of the industry to grow at the same time, in cooperation with the community, but it has to be hand in hand and be planned for.”

He says Atlanta is an interesting recent example of this. “The new international passenger terminal there has a cooler for perishable goods built into it,” he reports. This can be used, for example, where there is a technical problem and you need to pull important temperature-sensitive cargo off the aircraft, and where there is an urgent need for a cooler close by, he notes.

“That was not a tremendous expense, but it took a lot of planning, and is a great example of some forethought and some collaboration between the carrier and the terminal.”

While we don’t necessarily expect a passenger terminal to be built with cargo in mind, he feels there’s no reason why it can’t be. “Every airport is always under construction, so is not that airports don’t spend money; investments are constantly being made and remade,” observes Nichols.

He says another good example is Zurich airport and its secure vaults for high-value cargo. “That is somewhere that the airport and the handlers have worked together to create a fantastic facility. Now we probably don’t need that in Atlanta, but they do need it in Zurich. So it depends what the local needs are, and I don’t think that airports are necessarily best positioned to know that without the input from the various parties.

“And sometimes it requires investment from other parties that will benefit too, not necessarily just from the airport operator,” he adds.

P Balasubramanian (Bala), manager for global cargo operations at Emirates Airline, observes: “From my experience, airports develop the infrastructure, then they give out licences, and the users never get an opportunity to have a say in terms of what the airport should do in terms of infrastructure.”

However, where the link or the communication between airline, handler and infrastructure owner is close enough or good enough, airport cargo infrastructure changes can get done in a timely way to the specifications of the cargo handler – although it helps if all the parties are one and the same company, as Dirk Schmitt from Luxair Cargo, observes. “We are in the fortunate position where we are the cargo division for an airline that also happens to be a handling agent that owns the infrastructure, including the apron,” Schmitt says. “And so, as we have seen with the new larger freighter aircraft being introduced, the B747-8, which needs a wider apron, we have been able to expand the apron. We were able to feel the pressure from the customer – the airline – on us too in order to improve the infrastructure, and although the delivery has been delayed, we have got the infrastructure ready. This is where I feel we have a bit of an advantage.”

Steven Polmans, head of cargo at The Brussels Airport Company, comments: “I think that if an airport does not really treat cargo as a priority, you will not really be able to support the business and deliver facilities and procedures.” But he says it is not always easy for an airport to know how best to support its cargo customers.

“We had a few issues with ground handling standards a few years ago and said we wanted to have a standard SLA in place for all the ground handling agents,” he observes. “But in the end, nobody was happy with it; not the airlines; not the ground handlers. For some airlines the standards were too high; for others they were so low. So it is very difficult to put general standards in place.”

Polmans describes airports as being “a little bit on the sideline”, although potentially they are in a unique position to facilitate a better environment. But it requires people to “really start talking to each other” he says.

“I think everybody has a role to play,” he explains. “Sometimes people are talking different languages, and sometimes we can try to be a translator. We can bring the different parties together and act as a facilitator. We have to talk to everybody and try to facilitate the whole process from end to end.”

Olivier Bijaoui, executive president, chairman and CEO of Worldwide Flight Services (WFS), says his experience is that many major metropolitan airports have little interest in their cargo activities.

“The two airports that are the most dynamic in Europe are in countries with no local industry: The Netherlands and Belgium. In countries where industry is more important, like France and Germany, the interest is not the same. Maybe it is because they had the industry and so it was easy to fill up the aircraft.”

He says this lack of “dynamism” from some airports has been seized upon by a handful of more proactive airports in Europe. “They went to see the airlines and they attracted the airlines, and convinced these airlines that they were dynamic in giving them the opportunity to build road feeder systems to spread cargo all over Europe, because the cargo at these airports comes from France and Germany and countries that are producers,” says Bijaoui.

“At Paris, someone from the airport will occasionally say: ‘Oh, what about cargo?’ But the only thing they really care about with cargo is real estate. So, they remember me when I pay my bills every quarter, but when it comes to promoting the place…”

He says the last time he went anywhere with the airport authority promoting the airport was more 20 years ago, when the airport had a proactive cargo manager who managed to attract a number of freighter operators to Paris. But this individual was subsequently fired because he offered discounts as incentives, observes a dismayed Bijaoui.

His experience has been broadly the same in the US, where the only airports to show any interest in cargo are the minor ones.

“It seems that the ‘gifted’ airports have no interest in cargo,” he observes. “The guys that should really focus on ensuring that their real estate piece is good for cargo and at promoting their airport and the country, they don’t do it.”

Bala describes this phenomenon as “very challenging” and “a huge action point” for the industry. “The airport authorities have got to be made aware of the needs of the air cargo industry,” he implores.

Ross Marino, divisional VP at handler Dnata, agrees, describing the cargo facilities at London Heathrow’s Shoreham Road and Sandringham Road “a disgrace”. He adds: “We have been trying to do some amazing things at Heathrow, but our efforts have been met with a stony silence from the airport.” Marino says a similar thing has been happening in Australia and predicted that in 10 years, all of the cargo handlers at Sydney would be driven off the airport.

So can cargo ever compete with passengers in terms of its value to major metropolitan airports, for example in terms of real estate?

Bijaoui says: “The two most important things for airports are real estate and shops. This is where most of the money is. The cargo area in Paris is fairly massive, and unusually for an airport, all of the forwarders are on the airport, so from a real estate standpoint, hundreds of thousands of square metres are being rented by cargo, so this is good money for them.

“So, real estate counts for the airport, but does that mean that it translates into their heads that they should try to attract more business here because they can rent out more real estate? I have to say, not yet. And that is where the problem is: an airport needs to be promoted. You need to have a cargo team at the airport going round and promoting the whole industry.

“So today, the gifted airports are not making any effort, whereas the airports like Brussels and Amsterdam, they put plans in place, they build buildings, they put the infrastructure in place to enable people like us to do a good job.

“But if you go to Kennedy airport or the Shoreham Road ‘horseshoe’ at London Heathrow, it’s a nightmare. It is amazing that we are still able to do a good job in these places.”

Wolfgang Korte, managing director of Frankfurt-based LUG aircargo handling, says the problem for airports sometimes comes because national or regional authorities fail to give air cargo the priority that its importance to national and regional economies deserves, for example in airport planning and expansion decisions.

“Germany is a highly industrialised country with immense output of their cargo, but I’m sometimes under the impression that everything is done to avoid carrying this business by air,” says Korte. “We have a night ban at Frankfurt, and at Munich a decision has been made not to build a third runway. So this is a great barrier to our development and our ability to handle cargo at our airports. All the other airports nearby will benefit from this situation.”

After many efforts to get cargo onto the agenda at major metropolitan airports like Paris, Bijaoui has concluded that it is impossible.

“We have tried,” he says. “Meanwhile, we have regular meetings with Brussels and Amsterdam. Amsterdam even comes to us and says: ‘What do you need?’ It is a very different attitude.”

However, Winfried Hartmann, MD of Fraport Cargo Services has not given up hope, but believes it will require the air cargo sector to provide strong evidence of the value it generates for an airport.

“There is a chance,” he insists. “We have to tell them what our contribution is; what our share is. They are not doing their homework, working out what our contribution is, and that is why we have to do it for them, and demonstrate that cargo makes a fair contribution.”

Bala says that many passenger flights passing through metropolitan airports can only be justified by airlines on the basis of the amount of cargo that they carry, agreeing that cargo operators need to do more to show airports the contribution that cargo makes.

Hartmann says airport operator Fraport has been studying the contribution that cargo makes by analysing the number of flights that were only profitable because of the contribution of cargo. Although the study is not yet completed, the findings so far indicate that cargo contributes as much as 20%-25% to airport revenues and profits, rather than the 4% it had previously been thought to contribute based purely on revenues from freighter landing fees and cargo warehouse rents.

“Within airport organisations, the contribution of value made by cargo is very often sadly underestimated,” Hartmann adds. “Within my organisation I heard a comment that cargo just contributes 4% to the company’s number, so why are we going to invest in cargo infrastructure? But then they started to dig a bit deeper and have found that the overall contribution, because of passenger flights carrying cargo, is more than 20%, and that many passenger flights out of Frankfurt are only operated at good frequencies because of the belly cargo in the holds. And that is why I am deeply convinced that the cargo community should raise its voice much more and tell the airport operator what cargo is contributing to their balance sheet, and that it is worth investing in cargo.”

Hartmann believes the fact that end-to-end air freight transit times have not improved over the last 30 years is as much a problem of airports as it is a problem of airlines, handlers and customs authorities.

The question then becomes what kind of involvement by an airport adds value to an airport, and what can be neglected, adds Hartmann.

“There is no one-size-fits-all answer to this, because every situation at every airport is different,” he suggests. “But we have seen that if the cargo community approaches the airport managers with tailor-made solutions, it benefits both sides.”