Freighter Friendly Airports Checklist for a successful takeoff…..

Motivation

 Revenue Potential  Air Cargo is a $45-$75 billion  Represents only 20% sector annual business of total distribution logistics  Growth Potential  Over the last decade has grown by 6.1%   Market size doubles every ten years It is expected to grow between 4-6% decade annually over the next  Capacity Relief Potential  Many major airports in US and European Air Systems are expected to reach capacity within few years

Industry Structure

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Industry Characteristics

 Freight Demand Segmentation  Shipment Size  Conveyable: Sort-able Packages  Unitized Small Packages  Heavy/Outsize Pieces  Door-to-Door Velocity  Fastest (time critical)  Slowest (rate sensitive) Freighter Friendly Airports 4

Industry Characteristics

 Geographic Concentration 

97 percent of world air freight tonnage moved to, moved from and moved within Asia, Europe and North America



56 percent of world air freight tonnage moved to, from and within North America alone

8,534 (8,234) 9,273 (8,394) 8,497 (8,222)

MergeGlobal Inc

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Industry Characteristics

World’s Leading Cargo Airports

1 Rank 2 3 4 Airport Memphis Honk Kong Anchorage Los Angeles Rank 11 12 13 14 Airport New York Chicago London Amsterdam Rank 21 22 23 24 5 6 7 8 Tokyo NRT Miami Frankfurt/Main Paris 15 16 17 18 Incheon Taipei Indianapolis Osaka 9 Singapore 19 Bangkok 29 10 Louisville 20 Newark

Source: Airports Council International Data 2001, Anchorage incl. transit freight

30 25 26 27 28 Airport Dallas/Ft Worth Atlanta Tokyo HND San Francisco Dubai Seoul Oakland Beijing Brussels Philadelphia

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Industry Characteristics

 Freight Forwarders’ Concentration 

More than 5000 Freight Forwarders worldwide account for more than 80 percent of international air freight tonnage



Top 15 Freight Forwarders account for 61% of total international market

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Industry Characteristics

 Belly-Cargo Concentration 

Up until recently, more than 60% of international air freight was carried by passenger/combi aircraft



Average Freight Load Factor lies within 40-60% range

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Requirements for a Cargo Airport

 Long Runway  Spacious Ramps and Aircraft Parking  Landing Aids  Freight Storage and Movement Facilities  Transportation Infrastructure  Support Infrastructure  Labor Freighter Friendly Airports 9

Requirements for a Cargo Airport

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Evolution of Cargo Airports

 Global TransParks/ Cargo Hubs  North Carolina Global TransPark/ Kinston Airport  Industrial Airports  Alliance Airport, Fort Worth  Regional Air Cargo Centers  Memphis, Louisville, Wilmington (US)  East Midlands (UK)  Niche Market Airports  Manston (UK)  Leige (Belgium)  Capacity Reliever Airports  March Airport, Los Angeles Freighter Friendly Airports 11

Europort Vatry, France

 Central Rural Location  100 miles east of Paris, in Champagne region  Single 3,850 m runway   5000 acre area 4,200 sq.m. cargo terminal  100,000 sq.m. warehouse space  300,000 sq.m. warehouse capacity under construction  Highway Link Freighter Friendly Airports 12

Factors Affecting Performance

 No high speed rail link  SNCF has planned a Vatry rail terminal on Paris Strasbourg line in 2006  Market domination by Freight Forwarders  FF based in major cities centers  Geographic Concentration of Cargo  FF collect freight from major city centers/ industrial hubs  Domination of non-express cargo market by passenger/combi aircraft  Belly-cargo is carried from/to major passenger hubs Freighter Friendly Airports 13

Modified Checklist for Success

 Long Runway  Spacious Ramps and Aircraft Parking  Landing Aids  Freight Storage and Movement Facilities  Transportation Infrastructure  Support Infrastructure  Labor  Strategic Geographical Location (preferably close to major cities)  Secure Ramp Space/ Warehousing Facilities Freighter Friendly Airports 14

Secure Cargo Area-New Dimension

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Encouraging Signs

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Stringent Noise Restrictions at Major Airport/ Night Curfews

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Major airports obtaining ownership stakes in cargo airports

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Move toward application of integrated business model to heavy cargo

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Conclusion

“ A truly freighter-friendly airport offers around-the clock operation, spacious ramps and aircraft parking, effortless transfer between the aircraft parking lot and warehouse, easy access to customers’ logistics centers and a strategic and geographical location easily accessible to its prime market”

- S.J. Yang, Vice President, Korean Air

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