Weekly Wrap: Takeaways from Cargo Facts Symposium 2020

Air cargo leaders assembled this week for the fully virtual Cargo Facts Symposium. The conference featured speakers from Atlas Air, Boeing, GECAS and more, as well as a fireside chat with Rich Corrado, president and CEO of Air Transport Services Group. As the Symposium was happening, the first A321-200P2F entered revenue service with Qantas , and Kalitta surfaced as the launch operator for the 777-300ERSF , giving panelists much fodder for discussion during sessions related to narrowbody conversions and widebody freighters. Discussions and presentations were revealing of the resilience and continued importance of air cargo as the COVID-19 pandemic continues to kick up significant headwinds for aviation as a whole. In this edition of the Weekly Wrap, Cargo Facts Editors Charles Kauffman and Jeff Lee are joined by Jim Edgar, Senior Consultant of Cargo Facts Consulting, to recap the major takeaways from this year’s Symposium. For the latest coverage on the Symposium, see our website here . A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Charles Kauffman Hi everyone and welcome to Cargo Facts Connect, the podcast and video series of Cargo Facts, the newsletter of record of the air cargo and freighter aircraft industries for over 40 years. This is the Weekly Wrap of what's happening in the world of freighters and conversions. It is Friday, October 29 2020. I'm Charles Kauffman, Senior Editor of Cargo Facts, and I'm joined today by Cargo Facts’ Associate Editor, Jeff Lee. In this special Cargo Facts Symposium edition of the weekly wrap, I'm pleased to also welcome a special guests to our podcast, Jim Edgar, Senior Consultant of Cargo Facts Consulting. Now, for those of you who don't already know Jim, his rich career in aviation spans more than 50 years, and includes both commercial and military experience in various passenger and cargo positions. Most recently Jim retired from Boeing after more than 30 years, and was in his last position as regional director of cargo marketing for nearly 25 of those 30 years. in that capacity, he was also on the board of directors of the International Air Cargo Association, and chair of its education and research committees. Very proud experience that across the industry, it is a pleasure to welcome you to Cargo Facts Connect Jim Edgar Thanks so much appreciate the kind introduction and looking forward to contributing to this podcast. Charles Kauffman We're equally excited to have you here. Now we've just presented the 26th annual Cargo Facts Symposium, for the first time it was presented as an all virtual event. But I would say the event remained an excellent forum for thought leaders across the air cargo industry to connect and meet face to face during this incredibly difficult time for the industry. And Jim, I'm really interested in, you know, hearing from you after, you know, many years in this business, and you've been to a few Cargo Facts Symposiums in the past. What were some of the major things that stood out to you this year? Jim Edgar Yeah, well, a couple of things in thinking about this podcast that you kindly offered, was the timing of it was interesting in that the very first day of the event, the a 321 P2F, went into service. And then the last day the Kalitta 777-300ER conversion order was for three was mentioned. So I thought that was really propitious timing in terms of the industry and you know, you usually expect that they'll make might be if you're very fortunate, major announcement, but I thought that was most interesting, the timing of all that. But I have to say a couple of things. First of all, in terms of the quality of the panelists, I was very, very pleased and thought that it went together very well. Your growth panel included a, you know, a variety of different operators and perspectives. The wide body panel was very interesting and the narrow body panel as well. But I thought the quality of the panelists, the interview with Rich Corrado was just really well done. I was also you know, and this is a little bit longer term takeaway based on my years in the industry. It always impresses me how resilient the air cargo industry is, whether it's SARS or whatever the crises the air cargo industry, historically has fared much better. And of course, the presentation by Greg Gilman of Boeing the final day about the traffic. You see the Intercontinental service is down 60 to 70% some even more and to be in the low double digits for air cargo is pretty remarkable. And I you know, I spent a lot of years my life in this industry and I think everybody has to be aware how resilient and how significant our industry is. And this was driven home by that traffic report. Um, Wolfgang's discussion about their plans, I think everybody is, is looking to the future, but doing what they have to do to position themselves today. Charles Kauffman Thank you for that very nice summary of the event. And, you know, you mentioned a couple of news items came out around during the event, and that really provided some fodder for discussion, I think, maybe would be interesting to start with the, with the 777-300ERSF. I remember, you know, there has been discussion about that program for more than a year now. The launch order was, was announced in October of 2019. I recall, you know, back to the previous discussions, you know, there were there were some questions around where that crater converted, triple seven would fit into the market. And I think, initially, it had been offered as somewhat of a replacement option for some of the freighter converted, and four sevens that are currently in the global fleet. And with a Kalitta launch order obviously, Calais cooperates a number of the freighter for 747-400BCF. And that's certainly kind of aligning with expectations around that aircraft. Jim Edgar Kalitta is has been an interesting operator to observe over all these years in that, you know, they focused early on with DC-8s, and then went to 747s seven. But, you know, they've really diversified their fleet in the last several years taking on 777Fs and 747-400Fs. And so I really, I have to be admiring of their strategy, they're being very proactive. And clearly, Richard Greener and GECAS and IAI are offering a product that has a lot of potential and makes a lot of sense, we've heard a lot of, of why not questions over the years about the 777-300ER and what it could do its capability. And, you know, you have to hand it to GECAS and IAI for bringing it to market. And you then have to compliment to Kalitta for being the launch operator for that aircraft. So in some sense, I think based on Kalitta’s, more recent strategy, five to 10 years, they've proven to be an operator that is opportunistic. And so in some respects, it makes a lot of sense that they are the launch operator for that aircraft type. Jeff Lee I guess they taught us that they'll be using these. Well, these first three, eventually to replace the older 747 400BCFs. So I guess we that kind of confirms, in a way the role that this this new model will play in the years to come. And you also mentioned the A321, which just entered service. What do you see, you know, do you see more interest coming in for this airplane as more began flying around the world? And, you know, despite the 757 feedstock situation, I mean, we heard that seven by seven isn't, it still has a decent life ahead of it? What do you see, you know, for the 321? Jim Edgar Well, it's interesting that you asked Jeff because I paid very close attention to the operators as well as the lessors, and it seems like right now and I understand EFW’s frustration that there's an awful lot of talk and rightly so about 737-800s, and there's multiple choices there in terms of conversion opportunities, but almost every single operator that has 737 freighters of some type in their fleet, either classics or 800, or next gens. And the lessors mentioned at one point in answering a question or making a statement, that they were also keeping their eye on the a 320 series. And I thought, that's very interesting, because many of these operators are at this point exclusively 737 or 757 operators. And my guess is, if we were in Shanghai, we get the same kind of indication from the Chinese carriers that everybody's watching this aircraft. And one of the questions that I was interested in asking Wolfgang is, what were their what was the FWS concerns and expectations early on in the A321P2F in service experience, because I think that's going to be telling how it works out. If that proves to be more or less a 757 replacement? I think a lot of people are going to be a lot of operators and less sores are going to be drawn to that airplane. So I think it offers some huge potential, and I think EFW and the others that are getting involved in a 320 series are aware of that. Jeff Lee We touched on this in the session yesterday, but how important do you think the lower-hold containerization capabilities are? Jim Edgar Yeah, I think it depends on the operator. I mentioned that one of the Express carriers who I will not identify, specifically when they came to us for aircraft, even wide body did not want a mechanized system, even on the main deck because they wanted to go with simplification. But I really think that containerization is here to stay. I think that there can very strong case can be made for a manual loading in terms of the lack of ground equipment investment, but when you come to express operations, it's about speed and efficiency and the investment, that kind of investment is not as significant a factor because your aircrafts carrying cargo exclusively. It's not about passengers versus cargo. So I think, and I can tell you that Boeing's well aware of it to that, for any new aircraft in that size category container is at least a containerized option is a must. And Rob Malala mentioned that their sliding carpet was an option. And that's certainly a viable and has proven successful. But I think ultimately, I think it's going to be containers. I Charles Kauffman think that's a nice, a nice way to frame it there. And, you know, with the first aircraft in service with Qantas, that there's going to be many or many or certainly watching how that lower hold is being utilized. And on the narrowbody freighter conversion panel. There was also discussion of, you know, what, what the first series of maintenance checks might look like for that aircraft and Airbus narrowbody freighters are new to the market right now. Boeing currently dominates that space. I think it was also interesting hear from some of the appraisers that they still think that this program is a few years off. But definitely the other programs are nearing maturity but it's still going to be a few years maybe before we really have a clear picture of where this aircraft fits into the market and you know how well received it'll ultimately be but it's certainly an exciting time for for narrowbody freighters. We're running low on time, but I you know I am I'm curious after watching this symposium as an attendee, you know, if you could if you could wear the hat of maybe a junior executive in attendance was there was there kind of a key takeaway or a piece of advice that may be stuck with you as, as we look ahead to continue to difficult time for aviation as a whole? Jim Edgar Well, I, I've said this when I was on the board multiple times at TIACA but our industry is obviously a very unique segment of air transportation. We used to say that the only similarity between passenger business and cargo businesses it was carried in a tube. But the air cargo industry is really a besides being unique is really a very relationship oriented industry. And those that spend the time in in thoroughly understanding and studying the dynamics of the industry in every way, regardless whether they're a supplier, a shipper, forwarder, an airline, whatever, um, are in for a very rich, personally exciting and challenging time. And you don't have a lot of people that just sort of pass through the industry, once they get a taste of it, they stay. And you see that in the dynamics of some of your panels and the relationships and the long term understanding. This is a really, really good place to be I mean, commerce is here to stay, and I think that oftentimes, the outside world, the other segments of the air transportation industry don't understand that. And there's a lot of people that you know, are looking for kind of the next ring, or the next rung. And I think the air cargo industry is a very personal industry. It's a very dynamic industry. It's a very significant industry in terms of world trade. And, you know, I can stay say, looking back over all these years, the people you meet are just tremendous, just great. And they have so much information and so much experience where the passenger side is not you know, passenger businesses, retail business, the, the air cargo business is more of a wholesale business. So it's much more relational. And that's, that's what I've really found satisfying and endearing in being part of this industry. So I would encourage somebody that's relatively new, to hang in there, learn all they can learn, get all the experience and perspective you can from those that have been around a while and really enjoy the ride because it's a great place to be. Charles Kauffman And I couldn't agree more. I think that's great advice. And I really want to thank you for taking the time to join us on this episode of cargo facts Connect. It's been a lot of fun and a real pleasure to have you on the podcast today. Thank you, Jim. Jim Edgar Thanks to both you and Jeff and the entire Royal Media and Cargo Facts team. It really has been a pleasure and I look forward to seeing people in person at some point not too far in the distant future.

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