Huang-Hsiang Sun is the new chairman of China Airlines. Sun joined the airline in 1970 and became president in June 2008. He recently answered questions submitted by Air Cargo World about the air cargo industry’s and China Airlines’ future.
1. What is the outlook for the air cargo industry?
Overall speaking, we see a 3 percent year over year growth from 2012 through 2016 in line with the [International Air Transport Association] five-year tonnage forecast. On the demand side, we believe this reflects a slowly recovering market in many regions, and we believe the European market, which is lagging other regions, will return to a growth track within the next few years. Fuel price is also a key consideration in the air cargo market, and yet we see no signs of a price drop. Considering all these factors, we believe the market for carriers will remain challenging in coming years.
2. What role does China Airlines play in the country of China’s growing market?
China Airlines currently serves 24 destinations in China. In June 2013, China Airlines plans to add Ürümqi, Lìjiāng and Weihai, where it will be able to load cargo in the belly. In addition, we offer freighter services at five destinations approved by the governments of China and Taiwan: [Shanghai Pudong International Airport], [Guangzhou Baiyun International Airport], [Nanjing Lukou International Airport], [Xiamen Gaoqi International Airport], and [Chongqing Jiangbei International Airport]. This gives China Airlines an opportunity to capture a share of the growing cargo market between Taiwan and China. In combination with our global network, cross-strait services also provide an extensive air network for cargo going in or out of China via Taiwan.
3. What are some of the latest air cargo technology trends you have observed?
China Airlines has been working on E-freight since 2009, and the service has become increasingly popular with our cargo customers. This year, with the introduction of the IATA Multilateral e-AWB Agreement, airlines and freight forwarders can start to implement e-AWB without costly and lengthy legal process. As a result, E-freight will move forward smoothly and rapidly. China Airlines is in favor of this initiative and will sign the agreement accordingly. Security is also a crucial component of the air cargo supply chain. Regulators, IATA and air transportation related parties are all involved in e-security developments, such as e-Consignment Security Declaration, and U.S. Air Cargo Advance Screening. With these industry-wide security enhancements, China Airlines is confident of providing more secure airfreight transportation. From product perspective, we also see more and more temperature-sensitive being transported by air. To make ourselves more competitive, we have already introduced Envirotainer into our system to provide active cooling transportation to shippers with temperature-controlled containers from the time of loading on their premises, en-route, and all the way to the warehouse at the final destination. In addition, GPS devices capable of tracking temperature, humidity, shock and pressure during the whole transportation cycle are now available and applied in the airfreight industry without jeopardizing flight safety. In the near future, China Airlines will allow customers to carry this monitor device along with their sensitive shipments in the air. Mobility is also a very important subject for airlines in both the passenger and cargo businesses…Our cargo customers are now able to use smart phones to retrieve various information, such as flight movement and cargo tracking, anywhere, anytime. For operational efficiency, our cargo staff will soon be equipped with mobile devices to identify cargo or ULDs on the ramp or in the warehouse and take remedy action on the spot without going back to office to retrieve information.
4. What are the ramifications of the ongoing emissions debate for air cargo?
To minimize the impact we have on the environment, environmental protection has becomes one of the key focus areas of our corporate management. We introduced measures to conserve air fuel in 2007 and have been implementing the ISO 14001 (environment management system) since 2012. The EU set an Emissions Trading Scheme and asked airlines to implement the scheme from 2012 to 2020. While we agree with the spirit behind emissions trading, which is rooted in environmental protection, we have a different opinion from the European Commission on how to approach it. Considering the global nature of the aviation industry, we expect the International Civil Aviation Organization to establish a global resolution for aviation emissions reduction.
5. How do you see China Airlines’ air cargo growth in the coming years?
In 2012, we adjusted our freighter capacity to an optimal level, which allows us to maintain stable service and also gives us the flexibility to withstand periods of low demand and high supply. In 2013, we are resuming trans-Pacific and European routes at a moderate pace to capture market share amid a gradual global recovery. In addition to cargo shipments originating in our main hub [Taiwan Taoyuan International Airport], we also offer direct services on Japan-U.S. and Southeast Asia-Europe routes…We expect the market to recover gradually starting the second half of 2013. Given variables in the world economy and industry demand and supply, we continue to optimize our network and product mix to better meet customer needs. By continuously enhancing our flexibility and capabilities in a changing market, we are confident that we will continue to grow in line with the industry.