Digital Air Cargo Forum

Airports4Cargo
How Air Cargo Adds Value to Airports
Key trends impacting the air cargo industry

Key trends creating opportunities... ...and challenges for air freight

Air cargo traffic is on a recovery path and is The unprecedented downturn has put
increasingly important to airlines pressure
on cash and investment ability

Intensified e-commerce activity has supported Distributing the long-awaited Covid-19 vaccines
traffic and is creating growth opportunities may be air cargo’s biggest challenge yet

The crisis emphasized the importance of Ageing physical infrastructure in some markets
Digital, where the industry has room for has reduced air cargo potential
improvement

What is the role of airports in responding to these trends?

2 Note: Non exhaustive
A model to assess cargo’s value to airports
Air freight creates three types of value to an
airport
Impact
Economic Value
 Engine for developing the local
Economic value industries and broader logistics
to the country/region  Attracts new industries/companies
providing high-value trade

Strategic Value
 Contributes to airlines’ profits,
Strategic value including passenger airlines
to the airport’s (end) customers
 Supports end customers business
(freight forwarders, shippers)

Financial Value
Financial value  Land and facilities rent, either at
to the airport or off airport
 Landing & parking fees of
freighter flights

More measurable Less measurable

3
Financial value: an opportunity to diversify revenues
Breakdown of airports’ total revenue
(2018)
% of total revenue
24% Cargo movements Cargo contribution
represent only 2% of total (estimated)
movements

Cargo facilities can

represent a significant %
13% of rental / real estate
11%
10%
In case of additional cargo
8% handling charges
6% 6% 5% 5%
4%
2% 2%
1% 1%

Passenger Landing Retail Other Car Terminal Real Non- Other Security Rental Food & Cargo
charges & Parking con- non-aero parking rentals Estate operating Aero- charges car con- Ground beverage charges
charges cessions revenue revenue nautical cessions handling
charges

Cargo represents around 10% of airport’s revenue on average

4 Source: ACI Statistics; NACO analysis
Strategic value: cargo is ever so important to airlines

About 60% of
our fleet is flying now,
largely due to cargo.
The airline has made money
Cargo is forecast on flights that are only 20%
full of passengers but 100%
to represent 26% of airlines full of cargo.
revenue in 2020, up from
12% in 2019. Cargo
will become
an increasingly
As of early October, the important part of our
number of passenger aircraft business as we plan
adapted to transfer in-cabin to expand to
cargo is estimated to be at dedicated freighters
around 2,500. and focus on e-
commerce.

5 Source: IATA, Industry news

Economic value: employment and economic output
Cargo’s Example:
Economic Value contribution of a transpacific cargo flight at a North American airport
is Driven by:
ILLUSTRATIVE
■ Structure of the local economy
$7M - $12M
■ Nature & value of carried goods Output

■ Type of flows: (re-)exports,

imports and transhipments
■ Synergies with broader logistics
30 - 60
Jobs

$2M - $4M
Wages

Note: analysis is indicative only, actual economic impact largely varies depending airport, economic conditions, cargo markets, etc.,
6 values in USD; assumes year-round freighter flight, twice weekly frequencies, 747-400F. Source: InterVISTAS analysis
Airports have experienced a wide range of traffic impact
Top 30 cargo airports, international traffic vs. YoY growth
2019-2020 YoY growth
20%
LGG
SDF ANC Mostly airports with high
10%
MEM LEJ e-commerce / freighter activity
LUX TPE PVG
LAX
0% BRU
CGN ORD MIA ICN HKG
DOH Top 30
KIX CAN NRT average
-10% ISL
-8%
AMS FRA
BOG
-20% CDG
SIN
Mostly airports with high
-30% DXB reliance on belly cargo
JFK BKK LHR

-40%
PEK

-50%
0.0 0.5 1.0 1.5 2.0 2.5 3.0

Cargo traffic, Jan-Aug 2020 (million tonnes)

Note: international freight, data up to August 2020 limited to airports reporting monthly data
7 Source: ACI Monthly Traffic Analysis; NACO analysis
From Cargo Airport to Cargo Ecosystem

Role of Cargo Ecosystem

 Ensure continuous collaboration

Government
/Regulator between stakeholders
Economic
Integrator board
s  Evaluate “pain points” and
develop end-to-end logistics

Shipper /  Support and advocate development

Airline Consignee
of cargo policies
Airport
 Drive joint innovation programs,
Ground Freight e.g. digital, sustainability
Handler Forwarder

Customs  Joint marketing and cargo

traffic attraction
9
What represents a strong cargo ecosystem?
Common criteria for an air cargo airport/ecosystem

Connectivity Ground Handling End-to-end

and Air Capacity and Warehousing Logistics

■ Network coverage ■ Fast throughput time ■ Proximity to cargo markets

and industry clusters
■ Choice of ■ Quality & security of
airlines/routes handling ■ Hinterland connectivity
■ Cost of capacity ■ Capacity availability ■ Availability of logistics
companies
■ Quality of capacity (main- ■ Range of cargo
deck & widebody belly) products ■ Ease of doing
business
■ Night operations

10 Note: criteria and their importance may vary by market

Thank you!

Soufiane Daher
Air Cargo Advisor
+31 6 3030 4422
soufiane.daher@naco.rhdhv.com

For more information please visit:

About Air Cargo Gives How Air Cargo The Need To Diversify
NACO Cargo Vaccine Distribution Adds Value to Airport Revenues
11 Its Best Shot (article) Airports (article) (whitepaper)