With the Rio Olympics 2016 just around the corner, preparations are going on in right earnest across the host country – Brazil. The air cargo industry, on its part, is leaving no stone unturned to ensure logistics is in place. Will the Olympics have a positive effect on the already troubled infrastructure and boost the Brazilian economy?
“Rio is ready to welcome the world,” proclaims the official website of the upcoming Rio Olympics 2016. With the world’s biggest sporting event just around the corner, preparations are going on in right earnest across the host country – Brazil. The air cargo industry, on its part, is leaving no stone unturned to ensure logistics is in place.
Brazil has a bigger challenge to face as the host of the Olympics than it did for the 2014 World Cup, with more commercial and charter flights arriving, and more heads of state. Brazil is expected to welcome 14,850 competitors from 206 nations, plus an additional 9.3 million visitors. More than 10,000 athletes will compete in the first ever Olympic Games to be hosted in South America, which lasts from August 5 to 21. The Paralympic Games will take place from September. The quest for Olympic glory will take place at 32 venues across Brazil, including Rio de Janeiro, plus five football co-host cities: Belo Horizonte, Brasília, Manaus, Salvador and São Paulo.
Airports and cargo operators have been bracing up in the run-up to this mega event. Since the beginning of the airport concession in August 2014, RIOgaleão Cargo has invested almost R$ 30 million to improve its infrastructure and operational performance. “The Olympics are a great opportunity to demonstrate our new capabilities and show the global market all that we have done to become one of the most modern and efficient gateways in Latin America.
In response to an expected increase of 2,000 tons in cargo imports, we have created an exclusive, fully dedicated space for imports and exports related to the Games,” said Patrick Fehring, Director of RIOgaleão Cargo.
The airport´s Olympic Warehouse measures 2,800 m² with additional areas available as contingencies, especially during the busy period immediately after the Games. The facility counts on dedicated staff and equipment from the airport and all government agencies and operates 24/7, ensuring the speedy processing of shipments.
Meanwhile, LATAM Airlines, the official airline for the Olympic and Paralympic games has invested up to R$20 million ($5.7 million) in the preparation for the Games, with R$15 million ($4.3 million) allocated to special operations and R$5 million ($1.4 million) for potential contingencies during the events.
“We began our preparations in June last year to speed up services for athletes, provide care for Paralympic athletes, accommodate special air cargo and coordinate large-scale simultaneous arrivals and departures in a single city,” said Eduardo Costa, Senior Director of Services and Innovation at LATAM Airlines Brazil in a press statement.
LATAM unveiled its new livery in April, with a few special touches to reflect Rio de Janeiro’s hosting of the 2016 Olympics, after it announced in 2015 a new branding integrating both LAN and TAM.
The Olympic flame, which is never extinguished, was transported by the airline in the 767’s passenger cabin. It burnt in four closed lamps fuelled by kerosene. Four pilots and nine flight attendants were on the crew on the flight. About 100 passengers, including members of the 2016 Olympics organising committee, LATAM executives and athletes, were on board.
While no specific investments were made for the Olympic Games, LATAM Cargo Brazil has made investments aimed at making improvements in cargo warehouses (approximately US$30 million for the 2014-2016 period).
LATAM Cargo has also developed a plan that consists of maximizing available space in the bellies of passenger aircraft. “We have a good flight frequency to Rio, which helps deliver Olympic equipment. Additionally, this is complemented by the capacity on our dedicated freighters,” informs Luis Quintiliano, LATAM Cargo Brasil’s Executive Director.
In terms of special shipments, LATAM Cargo has received some 1,200t of broadcasting equipment, merchandising and other materials destined for the Rio 2016 Games. Emirates, LATAM, Lufthansa, Cargolux and Atlas are amongst those freighter operators that have already confirmed or operated dedicated Olympics charters into GIG, and amongst them 12 charters bringing in the 300+ horses that will participate in the equestrian events.
Vanderlande’s site-based operations and maintenance (O&M) team at Terminal 3 of São Paulo-Guarulhos International Airport (GRU) is anticipating the start of the 2016 Olympics. Over the past six months, the team has been working closely with the airport to prepare the site for the extensive number of visitors that will make use of São Paulo-Guarulhos for their transfer or final destination to the Olympic Games. The service team has been preparing for the significant baggage volumes.
European carrier Cargolux began a B747 full freighter service return to Rio de Janeiro from March. Luxembourg-based Cargolux said in a statement, “The return to Rio was driven by growing demand for pre-Olympic Games freight capacity between March and August. The Olympic Summer Games 2016 will take place from August 5 to August 21 and shippers have already expressed interest in using the expertise of Cargolux for their valuable equipment.”
Olympics 2016 – Hope for Brazil’s troubled economy?
The Latin American air cargo market and Brazil in particular has been facing a very challenging period due to political instability as well as a general decline in economic activity. Even if a downward trend has been observed since the beginning of the year, in the case of Brazil, exports are expected to grow, mainly driven by a drop in the price of the real. However, this factor has a negative impact on imports.
“The positive note is, however, that there are many business opportunities yet to explore within the Brazilian market, among which is domestic courier (generated by e-commerce) and shipments made by individuals and small- and medium-sized enterprises. A rise in the transport of specific products — including pharma and electronics — is also expected,” observes LATAM Cargo’s Quintiliano.
Brazil is known for its volatile economic cycles, with dramatic ups and downs. In 2013, for example, air freight imports declined by over 20 percent relative to 2012; but in 2014 airfreight imports grew by over 50 percent, which more than compensated for the previous challenging year. “Given that reality and some of the encouraging measures being implemented by the new government, we are confident that the current crisis will be followed by a period of intense economic activity, full of opportunities for those engaged in the air freight industry,” believes believes Riogaleao’s Fehring.
However, Fehring does not expect the Olympic Games to change the dynamic of the air cargo industry in Brazil as a whole “apart from providing additional cargo volumes for a short period of time.”
That said, the Olympic Games will be an opportunity to showcase RIOgaleão’s new capabilities, as well as its improved operational efficiency and infrastructure. Its new pharma centre, for example, is the largest and most modern amongst the Brazilian airports and has been extremely well received by its multinational pharma customers in Brazil. In addition,the airport will receive a number of carriers that do not regularly serve Rio de Janeiro, allowing us to build relationships and generate new business opportunities.
Echoing similar views, Quintiliano says, “The host of this type of event has a great visibility opportunity. This will allow Brazil to showcase its culture, infrastructure advances and people’s hospitality to the world. It is not, specifically, an opportunity for the cargo industry, but this visibility will provide several advantages for us as a country, including the possibility to explore new business opportunities and boost current ones.”