# Presentation: 252530

## How A Freighter Airline Looks At Airports

**FAA Aviation Forecast Conference**
- March 18, 2005

- Nippon
- Cargo
- Airlines

**Pete Diefenbach**
- Senior Advisor, The Americas

## Agenda

**Introduce NCA**
**Our Growth Strategy**
**How We Select Airports**

## Nippon Cargo Airlines (NCA) operates a global, airport-to-airport freight network with a fleet of 11 Boeing 747 freighters.

**NCA operates a fleet of 11 Boeing 747 Classic freighters.  We plan to convert to a 747-400 fleet within eight years.**
**Our network links Japan with key trading centers in Asia, Europe and North America.**
**Our product is highly reliable, airport-to-airport (A2A) freight transportation.**
**Our main customers are air freight forwarders.**

**NCA Global Network**

*Source: NCA February 2005 flight schedule*

## NCA serves the largest North American gateways to Asia.

**Our four North American gateways serve the entire U.S., Canada and Mexico via truck connections.**
**There are a number of freight forwarder consolidation centers at each gateway.**

**Transpacific Airlift Capacity (All Carriers) By Gateway**

- 260,000

- 130,000

**  ****Type Of Lift**
- 	Main-Deck
- 	Belly

**Airlift Capacity To Asia/Pacific**
- Metric Tons In CY2004

*Source: MergeGlobal, Inc. Global Airlift Capacity Model*

**NCA Routes**

- LAX

- JFK

- SFO

- ORD

- A
- s
- i
- a

**NRT**

**ANC**

## One freighter equals the cargo capacity of 8-10 passenger flights – sometimes more!

**One freighter equals the cargo capacity of 8-10 passenger flights – sometimes more!**

**Passenger airlines typically view belly cargo as incremental revenue.  They decide where, when and what to fly based primarily on passenger demand.**
**In contrast, freighter airlines must cover the entire cost of the flight from cargo revenue.  ****“Base load”traffic commitments from freight forwarders are critical.**
**Freighters can go to airports near factories and warehouses, not just big cities with passenger hubs.**

**Boeing 747-200 Freighter**

**Boeing 747-400 Passenger**

**≈ ****100 Metric Tons**
**(Depending On Freight Density)**

**≈**** ****8-12 Metric Tons**
**(Depending On Flight Distance and Passenger Load)**

**Freighters Are A Different Business From Belly Cargo**

## Over the next five years, transpacific markets will generate the most new international air freight traffic to/from the U.S.

**Forecast Growth In U.S. Intercontinental Air Freight Demand**
**Thousands Of **_**Additional**_** Metric Tons Compared To 2004**

**Asia/Pacific**
**Europe**
**Latin America**

**+246**

**+1,042**

**+127**

**+271**

**+405**

**+698**

**+418**

**+568**

*Source: MergeGlobal, Inc.*

_**Exports From The U.S.**_

_**Imports Into The U.S.**_

**Asia/Pacific represents ****≈**** 60% of new import tons!**

## How could demand growth create new freighter gateways in North America?

**How could demand growth create new freighter gateways in North America?**

**There are dozens of strategically located, uncongested North American airports – e.g. Dayton.**
**But there is a “chicken-and-egg” problem: airlines will not launch freighter service without a strong**
**	****traffic base, and it’s hard to build ****a traffic base without service!**
**Some rules of thumb:**
- Minimum competitive
- 	frequency level for
- 	intercontinental freighters:
- 	at least 2 departures per week
- Minimum amount of traffic to
- 	justify a freighter stop:
- 	20-30 metric tons per departure

**ANC**

**DAY**

**IAH**

**FRA**

**BAK**

**TPE**

**Illustrative Round-The-World Freighter Routing**

## NCA intends to grow with its freight forwarder customers and to diversify its mix of geographic markets.

**The Market**
- Strong Local Production of Air-eligible Commodities
- Air Cargo Potential within a 400 Mile Radius
- A Strong Air Freight Forwarder/Broker Presence
- Both Inbound and Outbound Traffic Demand
- Interline Connecting Traffic

**The Airport**
**Adequate Cargo Facilities**
**Ability to Handle Special Cargoes**
**Quality Support Services**
**Excellent Links To National Highway Network**
**Absence Of Operating Restrictions**
**Competitive Rates & Charges**
**                 ****In a word: ****Access**

**What We Look For In Potential New Gateways**

## Thank You!

**Thank You!**