30


Issue 4 2020 - Freight Business Journal


Aviation faces existential crisis


The freight industry’s high-fl yers


Global aviation may be in turmoil, but planes are still fl ying – and that means that freight operators are still working hard to keep them in the air, moving vital spares and supplies around the world.


Networking brings benefi ts for Davies Turner Air Cargo


Ralph Perkins, director at Davies Turner Air Cargo (DTAC) says that the UK-based forwarder is one of the co-founders of the Aviation Logistics Network (ALN) and, as such, is actively involved in serving the routine, critical and AOG (Aircraſt On Ground) needs of the of the aviation market. Founded 12 years ago, ALN is


one of the leading – though by no means the only – freight network in the aerospace freight sector and its member count now stands at 382, and is still growing, says Perkins. It aims to fuse together the eff orts of the best “local heroes” in aerospace logistics, he explains, most of them independent companies, like Davies Turner, rather than multinationals. ALN is


also unusual in that


it operates a ‘one country, one member’ principle. For example, the US ALN member operates several sites but is a single, privately owned fi rm. There are also single members for major countries such as Russia, Canada and, of course, the UK.


This policy, says Perkins, has


helped create “a unifi ed network with common quality standards such as ISO”. Member companies, and the people that work for them, tend to be as much aerospace experts as freight gurus – many have backgrounds in aircraſt maintenance or engineering,


for


instance. There is also an ALN online training academy to help people keep their knowledge up to date. The aerospace market is very


diverse and includes entities ranging from MRO (maintenance, repair


and overhaul facilities)


through suppliers of aircraſt parts and spares, aircraſt interior and refurbishment companies, aircraſt engine leasing companies up to air frame manufacturers. These companies can in turn be


active in anything from the light aircraſt segment, corporate jets or helicopters right up to heavy commercial aircraſt . In fact, such is the size and


diversity of the industry, that there can be few freight forwarders who have not had some involvement with it at some time, Perkins considers, although relatively few would count themselves specialists in this sector. DTAC itself works directly with a number of airframe makers, both in the commercial and military sectors, or their suppliers.


the airline industry have ceased trading due to the diffi culties of maintaining profi t and juggling cash fl ow whilst at the same time investing in new equipment, diffi culties that had set in well before the current covid-19 crisis in some cases. Perkins points out: “You only have to look at the UK to see Thomas Cook, Flybe, BMI, Monarch…all well-known carriers operating large fl eets that have gone to the sword and all of whom had considerable logistical needs performed by various forwarding companies. Add


to that the


grounding of the new Boeing 737 range and the challenges faced in returning those aircraſt to fl ight aſt er safety issues and approvals in


shortages on many trade lanes, such as Asia


to Europe, will


probably be with us for many months if not years to come and it is likely that some carriers will either go out of business or merge with competitors. Some of the aircraſt fl eets that are currently grounded may well never take to the air again. Grim though the current outlook


may be, there are perhaps a few silver linings. If airlines don’t renew their fl eets to the same extent and the average age of aircraſt increases, there might be an uptick in the movement of aircraſt spares to keep older aircraſt fl ying. Another is the possibility that jet


fuel prices will remain depressed for some time, which will help cut airlines’ costs and perhaps coax passengers into the air again.


Hundreds and thousands virus,


Up to and including the corona it


has been a growing


traffi c for the forwarder, Perkins continues: “We have been actively involved


in providing tailored


solutions to the aerospace Industry for over 25 years now . We have a dedicated Davies Turner Aviation Division at Heathrow airport which is the UK representative of ALN which provides 24/7 AOG services to the industry in over 300 locations worldwide.” The aerospace market continues


to evolve. For example, the need for greener, more fuel effi cient aircraſt has led to an extensive development programme for new engines powering the next generation of aircraſt with over US$1 trillion invested in the upgrade of new equipment by the world’s airlines. However, not everything is rosy. Many well established names in


what is now a contracting market and I would not be surprised, sadly, to see more carriers face severe diffi culties.” Now that the industry has the


Covid-19 crisis – unprecedented in its size, scale and uncertainty - to contend with, the current airline model will inevitably see a realignment in both routes and frequencies. Perkins states: “This in turn will aff ect capacity and we may continue to see a lack of capacity linked to increased freight rates at least for the foreseeable future as airlines downscale in an eff ort to cut cost. This then feeds through to the whole ecosystem of the aerospace industry with new aircraſt orders being put on hold or cancelled, existing aircraſt being retired early or returned to the leasing companies to be recycled for parts.” The current airfreight capacity


Aerospace logistics has quite a few special characteristics not found in many other sectors, or at least found to the same extent. Aircraſt have hundreds of thousands of parts which need to be monitored and checked and are rated either by the number of cycles (take off and landings) or fl ight hours fl own. Each part has to have the relevant certifi cation to fl y which accompanies the part and without which cannot be fi tted to the aircraſt . Safety is paramount so the audit


trail and correct documentation of all parts is paramount. The delivery speed required is broken down roughly into three fairly universally recognised terms by the industry and analogous to a green-amber- red traffi c light system: Routine (parts


needed on a steady


rotational basis, typically going into aircraſt production lines with no urgency); Critical (parts needed within a specifi ed time frame to meet a deadline); and AOG - Aircraſt On Ground (an emergency situation whereby an aircraſt cannot fl y without the part being fi tted, oſt en due to a component


Global aviation faces possibly its worst crisis since the dawn of the modern industry, but that that does mean that it is about to totally disappear. Grand View Research, in its


report published in February 2020 – just before the corona crisis broke – estimates the global aerospace parts manufacturing market at US$907.2 billion in 2019 and had been expecting it to expand at a 4.1% a year from 2020 to 2027. Growth would be driven by rising demand for more effi cient aircraſt as airlines sought to cut their fuel bills and reduce greenhouse gas emissions. There would be increasing emphasis on reducing total aircraſt weight by using lightweight parts. Other trends noted by Grand


View are consolidation of tier 1 component and assembly- suppliers, with mergers and acquisitions helping to reduce supply chain complexity. But players in the aerospace parts manufacturing market at the same time face more competition in terms of product quality and design. Another trend is for emerging


technology such as additive manufacturing (‘3D printing’)


to


replace traditional manufacturing processes for smaller components. While North America still


accounted for over 50% of the total market by revenue in 2019, thanks


failure and the replacement part being unavailable at the maintenance facility). The key market sectors for DTAC


by volume are Asia (especially China and India, the fastest growing aerospace logistics markets), North America, Europe (France, UK, Germany Italy and Spain being key partly due to Airbus) Latin America (especially Brazil, Mexico and Chile) and the Middle East (UAE, Jordan and Saudi Arabia). DTAC has introduced several


innovations for the sector. These include Flite Cube, a foldable transportation cradle for


turboprop aircraſt engines


that serves for both maintenance and transportation which can be folded for storage when not in use and satellite tracked. A version suitable for jet aircraſt engines is under development. There is also a portable storage


solution for parts storage of AOG parts with entry through a


///AEROSPACE


to its huge aircraſt manufacturing industry, Asia Pacifi c will be the fastest-growing region with growth of 6.7% during the forecast period, while Europe is expected to see stable growth. Indeed, there has already been rapid growth in Asian manufacturers. How much of this projected


growth will remain aſt er the end of the corona crisis remains to be seen. The future aviation industry will almost certainly be smaller, thanks to shrinking economies, electronic apps replacing face to face meetings and holidaymakers wary getting on planes in case they catch something nasty. Many companies both airlines


and aircraſt manufacturers - have already taken pre-emptive action, making large numbers of staff redundant. Typical of the companies


grappling with the Covid-19 dilemma is UK-headquartered Rolls-Royce, which said in mid- May that it would axe up to 9,000 of its 52,000 jobs across its global network in response to production cutbacks by its customers, the airframe manufacturers. Airbus meanwhile is reported


to have cut its plane production by a third furloughed 3,200 of its staff across its European network. But despite the corona crisis,


some of the fundamental drivers behind change in the aerospace industry can be expected to remain in place.


chip and pin encryption system operated by mobile phone. The store is a 20ſt ISO container adapted for storage with entry system and video. Another innovation are anti-


static checking areas for avionics equipment to ensure that no magnetic fi elds interfere should the consignment need to be checked by customs or other authorities. Clearly, taking parts out en route for examination is something that is best avoided but where customs insists, anti- static mats and wristbands can help minimise the risk of sensitive avionics being compromised. Most of DTAC’s aerospace


logistics is by air or road – oſt en, express dedicated ‘bullet’ van services. Road can be as quick as air in some situations and suitable airfreight capacity is oſt en scarce on shorter-haul routes where bellyhold as opposed to main deck space tends to be the rule.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32