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MAY 24
Vol. 39, No. 5D
IN THIS WEEK'S UPDATE
Southern Air to operate first DHL-owned 777F

On 10 May, Boeing delivered a 777F (66079) to DHL Express, the first 777F to sport a DHL Livery [FATs 004884-4885]. The aircraft is the first of at least fourteen, and up to twenty-one, 777Fs that were part of an order announced last year at the Farnborough Airshow [FATs 004505–4525]. In the months since the order was announced, the operator (or operators) of the incoming aircraft remained a mystery. Although DHL could easily place the new freighters with multiple operators, the first aircraft, will be operated on a CMI basis by Atlas Air Worldwide’s affiliate, Southern Air. 

Photos of the aircraft seen by Cargo Facts clearly indicate the aircraft is “operated by Southern Air.” Additionally, the aircraft carries a Southern Air registry (N705GT) and was recently ferried to the operator’s hub at Cincinnati/Northern Kentucky Airport (CVG). Cargo Facts believes DHL’s second 777F (66080) will also be operated by Southern Air using the registration N706GT. The aircraft is currently in assembly at Boeing’s Everett plant with delivery expected later this year. Neither DHL Express nor Southern Air could be reached for comment, but an announcement with more details is expected shortly. 

For DHL Express, the 777F order represented something of a departure from an earlier strategy that relied heavily on leased 777Fs. Following the order announcement, DHL Express said that directly purchasing the freighters would “improve the cost position of the DHL Express division going forward.” At present, however, there is no sign DHL Express has any plans to return its leased freighters. In fact, last year Southern Air began operating two ex-LATAM Cargo 777Fs (38091, 41518) for DHL Express, bumping the Southern Air 777F fleet to six units. Cargo Facts also believes a 777F previously leased by Emirates SkyCargo (35606) from Atlas Air’s leasing arm, Titan Aviation Holdings, will soon join the Southern Air fleet, and will likely operate for DHL Express.  

Looking beyond DHL’s second 777F in final assembly to the ten 777Fs on firm order and options for up to seven more it remains to be seen where these aircraft will be placed and which carrier will operate them. It’s no secret that other ACMI operators are interested in providing CMI services for DHL’s 777F.  Last year, Air Transport Services Group, Inc. acquired Oklahoma-based Omni Air, which provides ACMI services with a fleet of 767s and 777s. ATSG has since noted the relevance of the 777 platform to the company’s core cargo business and could add the 777F platform .

Atran launches scheduled 737-800BCF flights for Cainiao
Russia-based Atran began operating a weekly scheduled flight between Hangzhou (HGH) and Riga (RIX) via Moscow Vnukovo (VKO), with a technical stop in Krasnoyarsk (KJA) for Alibaba’s logistics arm, Cainiao. The flight will utilize the carrier’s sole 737-800BCF (32616, ex-NOK air), which Atran added to its fleet in January on lease from GECAS [FAT 004768].

Although the new route will contribute to higher asset utilization for Atran’s -800BCF, independent of other business, the service alone will not justify the lease rate for the 737-800BCF. Cargo Facts expects Cainiao will either continue to launch China-Europe cross-border flights with the aircraft or Atran will look to develop business elsewhere to boost flying time for the NG freighter. At least in the near-term, it appears Cainiao has no plans to control the full extent of the aircraft’s capacity. The aircraft is currently available for charters, according to posts on social media from company sales personnel.

Longer term, however, Cainiao could continue to work with Atran to launch new routes. The Russian carrier hinted at Cainiao’s involvement with the 737-800BCFs back in October 2018, when it was first announced that Atran would add two 737-800BCFs to its fleet. At the time, Paul Nolan, Fleet Development Director, CargoLogicManagement, said that the 737-800BCFs would help Atran “achieve its strategic objectives” for express and e-commerce customers with flights between Russia and China. Shortly after the order was announced, in December 2018, Atran’s parent, Volga-Dnepr Group, and Cainiao entered into an MoU that designated Atran and its affiliate carriers as “preferred” carriers for Cainiao’s “airlift capacity and logistics services.” The extent to which Cainiao utilizes capacity operated by Volga-Dnepr Group carriers is unknown.

As part of Atran’s October 2018 agreement with GECAS, the carrier has at least one 737-800BCF remaining on order with GECAS. Originally the second unit was expected to be introduced during the first half of 2019, but is now expected before year-end according to a source familiar with the carrier’s plans. 

For more analysis on Atran’s 737-800 utilization, see our story here

EVA Air Cargo to phase-out sole remaining 747F next month

Taiwan-based EVA Air Cargo is planning to operate its last scheduled 747-400BDSF freighter flight on 2 June, according to the carrier’s published freighter schedule. With the aircraft’s retirement imminent, delivery of EVA’s last remaining 777F on order with Boeing is expected shortly. If no further schedule changes are made, the lone remaining 747-400F in EVA’s fleet (27899) will be used next month for a final trans-Pacific flight between Los Angeles (LAX) and Taipei (TPE). 

For some time now, remaining service time for EVA’s 747 fleet has been limited. The current iteration of EVA’s freighter modernization strategy began to unfold in June 2015, when the carrier unveiled plans to replace its 747F fleet with 777Fs. EVA signed an LOI with Boeing for five 777Fs in June 2015 [FATs 002396-2399], and firmed up the order in July [FATs 002586-2590]. It wasn’t until August 2017, however, that EVA announced plans to retire the three 747-400Fs and two 747-400BDSFs that comprised its freighter fleet at the time [FAT 004010-4014].

See also: China Airlines launches into freighter fleet modernization with 777F order

Since announcing the retirement, EVA Air has steadily removed 747Fs from service as new 777Fs are delivered. EVA took delivery of its first 777F in November 2017, and its fourth and latest in December of last year [FATs 004101, 4403, 4632, 4728]. EVA’s three 747-400F production freighters (30607, 30608, 30609) were all nabbed by Atlas Air [FATs 004310, 4633, 4675] and two are now operating in Atlas Air livery, while the third (30609) was placed with Atlas-affiliate Polar Air. As for EVA’s freighter-converted 747-400BDSF that was in operation until February of this year (27898), Air Atlanta Icelandic acquired the aircraft earlier this month  [FAT 004871]. The fifth and final 777F on order with Boeing (62828) appears to have exited final assembly and is currently undergoing flight tests. Delivery within the next few weeks is expected. 
China and EU sign bilateral aviation agreements
This week, the European Union and China signed bilateral agreements on civil aviation safety and a “horizontal aviation agreement,” allowing EU airlines to fly to China from any EU Member State with a bilateral air services agreement with China under which unused traffic rights are available. The agreements are expected to expand cooperation between China and the EU in civil aviation safety areas including airworthiness and environmental certification, flight operations, air traffic control, licensing, and training, according to a report from CAAC News. The agreements are also expected to have significant economic benefits of about €3.5 billion for the EU and China by 2025, with expansions in passenger and freight operations. Currently, the European Commission estimates there are about 110 weekly round-trip freighter flights between China and the EU.
Amazon's $100 million Lakeland Airport project approved
On 20 May, city officials in the Florida city of Lakeland approved a proposal between Lakeland Linder International Airport (LAL) and Amazon, submitted the week before. The $100 million investment from Amazon.com Services, Inc., that will go towards the construction of a 225,000 square foot air cargo facility and a seven-jet cargo hangar at LAL. The new deal further expands Amazon’s already robust operations in Florida and thrusts LAL into the national spotlight as a hub for e-commerce. 

As part of the 20-year deal, Amazon will develop facilities on a 110-acre parcel of land leased from the airport. Amazon will pay approximately $80,000 a month for the land, with the option to renew the lease three times for ten years each – which could extend the current deal to a total of fifty years. Amazon will also pay LAL $0.85 per 1,000 pounds of cargo landed, with a 3-cent surcharge per gallon of fuel.  

For more on the deal, view our sister publication’s coverage here.
ACE Belgium Freighters denies trademark claim in DOT response

Last week, Alaska Central Express – operating as ACE Air Cargo – filed a notification of trademark infringement with the United States Department of Transportation concerning ACE Belgium Freighters’ pending foreign air carrier authorization in the US. In a letter to the DOT dated 21 May, ACE Belgium responded, clarifying that the operators’ names, aircraft, and service areas are sufficiently distinct as to not cause confusion between the carriers, and urging the DOT to move forward with the issuance of its foreign air carrier permit.

ACE Belgium emphasized the difference in its own 747-400F aircraft and those operated by Alaska Central Express, which include two Beechcraft 1900C turboprop aircraft, only one of which operates in cargo configuration. ACE Belgium requested that the DOT move forward with the issuance of its foreign air carrier permit, and that it “flatly reject any request by Alaska Central that DOT bring enforcement action against ACE Belgium Freighters for unfair or deceptive practices or unfair methods of competition.” Read more on ACE Belgium’s response at CargoFacts.com.
Recent freighter aircraft transactions: 
Amazon leased a 767-300BDSF from CAM (26915, ex-Air New Zealand) and handed it over to Air Transport International for CMI operation [FATs 004886-4887]. 
Northern Air Cargo took delivery of a 737-300F (25215, ex-Lufthansa), on lease from Automatic LLC, following the aircraft’s conversion to freighter configuration with PEMCO at its MRO facility in Tampa (TPA) [FAT 004891-4892].

 
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