For Halifax Stanfield, focus is on freighter activity to Asia, Europe
Halifax Stanfield International Airport is Atlantic Canada’s principal full-service airport providing passengers and cargo clients with access to markets across the globe. The Halifax International Airport Authority (HIAA) is a Canadian airport authority charged with operating Halifax Stanfield International Airport on behalf of Transport Canada. Bert van der Stege, Vice President & Chief Commercial Officer at Halifax International Airport Authority, in an interview to The STAT Trade Times, talks extensively about the cargo growth at the airport and the plans ahead to increase the cargo volume handled at the airport.
With more than 33,000 tonnes of cargo processed through the airport in the year 2016 what do you expect the volume will be by the end of this year?
Air cargo saw substantial growth last year. In fact, it was a record year for cargo handled at Halifax Stanfield. In 2016, almost 34,000 metric tonnes of cargo was processed, up 4.1 percent over 2015. Our latest numbers show an impressive improvement in quarter one of 2017, volume is up 21.4 percent year over year. This increase was bolstered by new direct flights to China.
What are the important factors that make Halifax Stanfield International Airport the best choice for customers (airlines, shippers) to pick when it comes to cargo?
We have a fabulous niche product in our live lobster with demand to the EU remaining steady and growth to Asia of some 450 percent over the last 5 years. There seems to be ample supply and yields are high enough to attract the interest of a number of airlines. In Asia, our primary markets are China and South Korea. However, through the various connections offered by our cargo operators, there is seafood export from our region to other countries in Asia, including to India. Qatar Airways Cargo, for example, connects India very well once the Halifax B777 freighter arrives in Doha. So does Korean Air Cargo via Incheon. CargoJet offers connections through its partners and Air Canada recently started a major expansion into India and usually has room in the belly of the passenger aircraft for high-yield time-sensitive live lobster. In addition to our niche product, Halifax Stanfield has a number of qualities that are attractive to cargo carriers including: competitive landing fees and handling costs, 24/7 operations including Canada Customs, uncongested, no noise restrictions and we are well positioned geographically between North America and Europe.
On the more general global air cargo trend, how do you look at the issue of over capacity and falling yields? As an airport what do you think is the role that you can play to rationalize capacity and improve yields?
Our demand far exceeds capacity and yields for live lobster to Asia and Europe are some of the highest out of North America. The way we position our airport is that we believe this is the best and fastest way to transport live lobster. Almost 52 million pounds of live lobster was trucked to the US in 2016. Part of that is historic, some is product purchased by US-based companies, but it’s believed that some 80 percent of that volume goes on flights from gateways with much greater (belly) capacity like Boston, Newark or JFK. Retailers and customers, however, value the high quality and the freshness of live lobster arriving at the destination following a dedicated freighter flight from Halifax and thankfully are prepared to pay a premium for this service.
There is a growing trend of community initiatives to ensure enhanced air cargo value proposition particularly for key commodities that require specialized logistics requirement, where do you think is Halifax Stanfield International Airport in community initiative to improve air cargo value chain?
Because of the significance of cargo at Halifax Stanfield, we are making a number of investments to improve our cargo operations. Our investment not only supports our seafood industry, it also provides a positive impact to our provincial economy. This investment puts us in a good position to handle increased volume of exports. We’ve invested a significant amount to extend our main runway, add taxiways and apron space and opened up new lands for lease.
Within the North American regional market where do you see yourself in the next five years? Are there any specific areas that you would want to concentrate and invest in?
For us at Halifax Stanfield, regional freight business is not a major focus, as we realistically can’t compete with truck freight rates. But for high-yield time-sensitive freight there are sufficient options. We have daily FedEx and daily CargoJet flights, offering both regional connections as well as access to the main FedEx and UPS hubs. Passenger aircraft assist in providing belly capacity and we have several wide-body freighter aircraft operating per week to Europe, Asia and the Middle East. Our growth and investment will focus on freighter activity to Asia and Europe rather than within North America.
As Atlantic Canada’s gateway, how do you intend to increase the volume of cargo (both domestic and international) transiting through or ending at Halifax Stanfield International Airport?
We are working to secure additional cargo carriers, especially to markets in Asia and Europe. We know demand for live lobster is high and growing fast, in particular in China.To help develop business relationshipsin China and to support and market our seafood products, we’ve participated in trade missions to China with the Province of Nova Scotia and just recently completed a visit to China together with the Mayor of Halifax, Mike Savage.We’ve developed our own China strategy to improve ties and business relationships and further grow the share of live lobster exports.
What are some of your long term plans for airport cargo infrastructure to attract new cargo commodities and increase cargo volume handled?
Our most recent cargo investment was in a $5 million apron that opened at the end of 2016. The addition of the 17,000 square metre apron improves turnaround time and makes Halifax Stanfield more attractive to cargo operators. We will soon outline further expansion plans and are in the process of preparing an EOI to work with our partners in developing additional facilities and expand our cargo service area and supply.
Do you expect to see significant growth in your primary air export commodity which is fresh seafood particularly the famous Nova Scotia lobster?
As demand for lobster and seafood continues to grow, especially to Asia and Europe, Halifax Stanfield is poised for continuing growth in seafood exports. A number of factors are leading us to believe we’ll continue to see strong growth over the remainder of the year, as demand for Nova Scotia’s seafood remains positive. Factors contributing to this positive outlook include: our lower Canadian $ (vs. USD) and the removal of an 8 percent duty on live lobster in the EU following the ratification of CETA (Comprehensive Economic and Trade Agreement). This allows our exports to be very competitive.
What are your plans to increase the number of cargo carriers (particularly international) in the long term?
At Halifax Stanfield we carefully manage growth. We are working to secure additional cargo capacity especially to markets in Asia and Europe where demand for seafood and in particular live lobster is high and growing fast.