30.Jan.15

Assessment of lucrative corridors
and impact of belly & freighter
interplay
Final report
Confidential – not for third party distribution © Seabury Group 2014

Project objectives
Seabury has been engaged by the Ministry of Infrastructure and the Environment to conduct a
study on “lucrative corridors” and air cargo trends affecting Schiphol and the Netherlands

Key questions of the Ministry are:

A What are the “lucrative“ air cargo corridors to and from Schiphol?
1)
1a)

What are the key air cargo flows to, from, and via Europe? What was the position of
Schiphol and how did this develop since 2005?

2b)

What product types travel via these corridors? Which products are ‘high-yield’ or
‘footloose’? Where is most growth expected?

3c)

What are the effects of competition from ocean freight and express carriers?

B What are key developments regarding freighter and belly capacity and how do
2)
these capacity types interplay?
1a)

What is the share of belly / freighter capacity on the key corridors? What product
types typically travel with full freighter?

2b)

What factors influence these shares? Where is capacity growth expected?

3c)

What are the relevant capacity types required on the corridors and for the products
types that are considered as “lucrative”

Confidential – not for third party distribution © Seabury Group 2014

1

Agenda

Air cargo critically important for the Netherlands

Opportunities and risks in trade lanes and product groups
Highlights from shipper survey
Belly vis-à-vis freighter dynamics and position Schiphol
Appendix

Confidential – not for third party distribution © Seabury Group 2014

2

Air cargo industry is a critical enabler for the economy
Air cargo is a critical enabler for the economy and many industry sectors in Europe, as more
than 50% of its non-bulk imports and exports come and go by air
Total air trade weight to/from Western Europe

Total air trade value1 to/from Western Europe

Million tonnes

$ Bn

54% of all
value by air2

3.4% of all
weight by air1
1.2%

8.1

8.6

9.1

9.3

8.8

5.1%

9.6
8.9

8.9
1,001

7.6
829

2005 2006 2007 2008 2009 2010 2011 2012 2013

1,082

1,075

894

1,211 1,212 1,234

915

2005 2006 2007 2008 2009 2010 2011 2012 2013

The value of goods imported and exported by air has grown with >5% YoY
1) Considers air trade and containerized ocean trade; 2) Air trade value refers to value of the transported goods; Source: Seabury Global Trade Database, World Yearly dataset
Confidential – not for third party distribution © Seabury Group 2014

3

The Netherlands is key in the European air cargo market
The Netherlands is “punching above its weight” in terms of trade by air and has a very
strong market position in exports, and even more so in imports

4.9%
Netherlands share of
Western Europe GDP

The Netherlands
accounted for

7.1% of 2013
Western Europe air
export weight
(356,000 tons1)

Schiphol air
cargo market
share among
top 10
of the
European cargo
Western Europe total
airports is

With 694,000 tons air
imports, Netherlands
represented

17.6%

Netherlands represents

4.1% of total

These Netherlands
exports represented

Western Europe
population..

6.4% of Western

..while only covering

Europe’s total export
value (Bn $48)

0.9% of Western
Europe’s surface
area3

The Netherlands’
total import value
represented

16.2% of the
Europe total (Bn $80)

14%
(2013),
with a total of
1,531,000 tons
traffic2

In terms of air trade the market share of the Netherlands is
~7% on exports and ~17% on imports

1) Import and export figures for both weight (tons) and value ($) represent Netherlands trade in 2013; 2) includes double-counting of air-to-air transfer cargo; 3) Excludes Greenland;
Note: Growth expressed as Compound Annual Growth Rate (CAGR); Trade value represents value of the traded goods; Source: Seabury Global Trade Database; Seabury Ocean
trade database; EIU statistics (October 2014); Schiphol traffic statistics; ACI WATR 2013 airport ranking; CIA World Fact book , accessed on 22/10/2014

Confidential – not for third party distribution © Seabury Group 2014

4

Agenda

Air cargo critically important for the Netherlands

Opportunities and risks in trade lanes and product groups
Highlights from shipper survey
Belly vis-à-vis freighter dynamics and position Schiphol
Appendix

Confidential – not for third party distribution © Seabury Group 2014

5

Market share opportunities and risks in different sectors
Our strong market position in perishables and high-tech may need to be defended, whilst
volume growth may be achieved in the “low market share, high industry growth” segment

Western Europe air trade growth by commodity vs. Netherlands trade share
Europe trade growth (%, CAGR 2000-13)
Average

5
Automotive

4

Chemicals

Capital equipment

3

Industr.consumables
Perishables

2
1

Average

Machinery parts

0
-1

Consumer goods
High tech

-2

Fashion goods

-3
0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

NL trade share (%, 2013)
Note: Size of the bubbles indicates air trade volume to/from Western Europe
Source: Seabury Global Trade Database, World Yearly dataset
Confidential – not for third party distribution © Seabury Group 2014

6

Netherlands exports have outperformed imports
The Netherlands has a high market share to/from Latin America and Africa, and experienced
export growth to all regions, except for the Atlantic; imports from Asia have weakened
Air trade growth to/from the Netherlands, 2005-2013
x%

NL % share of total Western Europe Trade by Air (2013)

y

% trade lane growth (2005-2013 CAGR)

8%

-4

7

0

-1

-4
5
1

3

12%

5

9%

5

18%
15%

NL share of total W. Europe air trade (2013): 12%

Note: Growth in Compound Annual Growth Rate (CAGR) in terms of weight; thickness of the arrows indicates 2013 air trade volumes to/from the Netherlands in tons
Source: Seabury Global Trade Database, World yearly dataset
Confidential – not for third party distribution © Seabury Group 2014

7

Winners and losers…
In past years, the Netherlands gained market share in pharma, telecom and computers &
tablets, but are outperformed on capital equipment, automotive and consumer goods

Position of the Netherlands vs Western Europe by commodity and region
% Western Europe growth (CAGR 2005-13)

Regions

4

Chemicals - Pharma

Automotive

NL lost share of trade
Capital equipm.

Commodities

Industr.consumables
N.E.Asia

High tech - Precision machinery
Lat.America

2

S.E.Asia

Africa
Middle East

0

High tech - Semicon
N.America

Machinery parts
Perishables
High tech - Telecom

-2

Fashion goods

Consumer goods

-4

-6

NL gained share of trade

High tech - Computers & tablets

-6

-4

-2

0

2

4

6

8

10

NL growth (CAGR 2005-13)
Note: remaining regions and commodities, or ‘other’ categories, not visualized in this chart; Size of the bubbles indicates air trade volumes to/from the Netherlands in 2013
Source: Seabury Global Trade Database
Confidential – not for third party distribution © Seabury Group 2014

8

Three trade concepts relevant for Schiphol
There are three relevant but distinctly different trade concepts that each require a different
strategy from the Netherlands, for either defending or growing its market position
Netherlands trade data and traffic statistics
Thousand tonnes (2013)
Imported goods that
are destined for the
Netherlands or for
distribution centers
in the Netherlands

Goods that are exported via the
Netherlands, but which are
originating from manufacturers
and producers in other
(European) countries1

757

3

1,532

365
Outbound

2

392
775

1

Exported goods from producers and manufacturers in
the Netherlands1

764

Imports to
NL
(Customs)

Net import
difference

Schiphol
inbound
traffic

Exports from Net export
NL (customs) difference1

Inbound

Schiphol
outbound
traffic

Total
Schiphol
traffic

1) Net difference between air freight (traffic) from Schiphol airport and reported exports from the Netherlands; Exports from other countries via Schiphol may in reality be higher, if larger
volumes of Netherlands exports are exported via other country airports; Source: Seabury Global Trade database, world yearly dataset; Seabury Express database; Schiphol annual
traffic statistics
Confidential – not for third party distribution © Seabury Group 2014

9

Different trade concepts require different strategies
Imports into the Netherlands, exports originating from the Netherlands and exports originating
from other (European) countries, each ask for a different strategy
Trade flow

Flow size1
Tonnes (2013)

Description

Strategy

1

694,000
tons/year

 Products that are imported
by air into the Netherlands
and have a final destination
in the Netherlands or in
distribution centers that are
located in the Netherlands

 Develop an industry sector
specific approach to attract
distribution activities with value
add potential; learn from
success in high-tech and
perishables

356,000
tons/year

 Products that are exported
by air from the Netherlands
and that originate from
producers and
manufacturers in the
Netherlands

 Provide required connectivity,
quality infrastructure, ease of
customs processes, etc. etc. to
realistically satisfy needs of
Dutch exporters; important to
understand real requirements
and relative position of Schiphol

~365,000
tons/year

 Goods that are exported via
the Netherlands, but which
originate from producers
and manufacturers in other
(European) countries
 Critical trade concept as it is
required to balance limited
exports with the “excess” of
imports

 Promote consolidation at Schiphol
and facilitate trucking of goods
from European countries to the
Netherlands (work with forwarders
and airlines)
 Difficult to develop concept as the
Netherlands has least influence on
this; engage forwarders, airlines
and trucking firms

Imports
into NL

2
Exports
from NL

3
Exports
from other
countries2

Relevance for:
Air cargo NL
BV NL

1) Indicated air trade figures exclude low-value shipments and other customs exceptions; Net resultant of other country exports that fly via Schiphol, minus Netherlands exports that fly
via other airports; 2) Net difference between air freight (traffic) from Schiphol airport and reported exports from the Netherlands; Exports from other countries via Schiphol may in reality
be higher, if larger volumes of Netherlands exports are exported via other country airports; Source: Seabury Global Trade Database; Seabury Interviews and data analysis
Confidential – not for third party distribution © Seabury Group 2014

10

Value density gives an indication of attractiveness of goods
Chemicals and machinery parts show high value density and a relative low market share for
the Netherlands; market share perishables and high-tech need to be defended
Growth by commodity to/from Western Europe
Thousand tonnes
Industr.consumables

1,411

Machinery parts

1,342

High tech

-157

1,051

Chemicals

658 144

Capital equipm.
Consumer goods
Automotive
Other
2005 weight

319

233

$107/kg

-118

7.2%
$388/kg

168

NL share
% (2013)

8.7%

$30/kg

1,238

Perishables

Fashion goods

Commodity value density
$/kg (2013)

20.7%

$7/kg

26.0%
$268/kg

8.4%

738

$72/kg

7.2%

537 159

$98/kg

6.9%

$67/kg

7.0%

$48/kg

3.6%

-84 590
407

171

127

$1,569/kg

2.4%

2013 increment

The value density of an industry indicates attractiveness and value add
opportunities, but not per se as perishables add significant value to the economy
Source: Seabury Global Trade Database, World Yearly dataset
Confidential – not for third party distribution © Seabury Group 2014

11

European imports and market share of the Netherlands
Market shares from North America are below market shares of similar sectors from other
regions; an understanding of the rationale may be helpful for attracting new import volumes
Air cargo import commodities from Western Europe
Million tonnes, 2013
0.8

0.7

0.6

18%

23%
10%
9%

37%
19%

0.5

0.3

0.6

17%

8%
8%

Africa
MESA
N.Am

14%

8%

Other
Lat.Am

13%

10%
37%

0.5

11%

33%
13%

14%
10%
11%
23%
Perishables

APAC

9%
15%

High Tech
Machinery parts
Chemicals Other
Industr.consumables
Fashion goods

x % NL market share Western Europe air imports, 2013
Note: Size of chart indicates Western Europe total air trade exports (2013); percentages in labels indicate Netherlands’ share of Western Europe exports per commodity-trade lane;
weighted average Netherlands market over Western European exports in terms of air trade weight 17.6% (2013); Source: Seabury Global Trade Database
Confidential – not for third party distribution © Seabury Group 2014

12

Countries seem to “specialize” in industry sectors
Germany is the place to go for automotive and parts; the UK for fashion and perishables;
France for fashion, parts and industrial consumables; Belgium for perishables and parts…
Breakdown of country trade by commodity type
Thousand tons (2013)
100%

2,198

1,277

1,050

102

282

82

47

36
196

956

483

84

428

114

442

x $/kg, value density

260

153

6

161

5

5

566

354
458

332

106
104

130

30

26

31

Germany

UK

Netherlands

285

101

120

33

21

France

Belgium+Lux

Other
Fashion goods
Automotive
Chemicals
Perishables
High Tech
Machinery parts
Ind.consumables

Each country has a very distinct import and export profile
Note: Numbers in chart represent value density ($/kg) of that commodity per country; commodity types less relevant for listed countries have been grouped under ‘other’ category;
Germany trade contains 12% share of ‘Capital equipment’ commodity type which has been grouped in ‘other’ category for visual purposes; high value density for ‘other’ category UK
and BE+LUX driven by ‘Valuables & secure handling’ commodity flow; Source: Seabury Global Trade Database, Europe Yearly dataset
Confidential – not for third party distribution © Seabury Group 2014

13

Growth forecast per industry sector
Automotive, chemicals, machinery parts and capital equipment expected to show strongest
growth; fashion and perishables expected to show lower growth
Forecasted trade growth to/from W. Europe
Thousand tonnes

High tech commodity types

CAGR (2013-2018)
2018 increment (% CAGR)

Industr.consumables

1,738

2,053

3.4%

Machinery parts

1,575

1,982

4.7%

High tech

1,407

Perishables

1,222

Capital equipm.

1,681
1,364

697

3.6%

Fashion goods

621

674

1.6%

Chemicals

579

752

5.4%

Automotive

578

820

7.2%

Consumer goods

507 516

2013, commodities
2018 increment

437
3.1%

428
4.6%

2.2%
4.8%

883

2013

374

294

281
2.7%

3.9%

246

243

241
3.6%

342
202

Telecom
Semicon
Other
Precision
Computers
machinery
& tablets

0.4%

Source: Seabury Global Air Trade Forecast, May 2014
Confidential – not for third party distribution © Seabury Group 2014

14

Asia will continue to be the driver of growth
Europe’s largest trading partner, Asia Pacific, will continue to show the highest growth rates;
most other regions are expected to grow in the 3-4% range, with the US slightly below that

Western Europe air trade forecast per region, to/from (2013-2018)
North East Asia
Russia (5.0%)
5

2.6%

5.2%

Middle East

3.9%

3.8

North America
3.0

West Africa (3.0%)
Latin America

2013 air trade
2018 air trade
x % growth1

1.8

Indian Subcnt.

East Africa (1.8%)

4.1

South East Asia

4.3%
1.3

Southern Africa (1.3%)

1.6

Australasia (1.6%)

Forecasted Western Europe air trade growth: 3.9%

Note: Size of the bubbles indicate size of current and future trade between region and Western Europe; 1) Growth expressed in CAGR
Source: Seabury Global Air Trade Forecast, May 2014
Confidential – not for third party distribution © Seabury Group 2014

15

Conclusions
 Air cargo is a critical enabler for the economy and many industry sectors in Europe, as
more than 50% of its non-bulk imports and exports come and go by air
 The Netherlands is “punching above its weight” in terms of trade by air and has a
very strong market position in exports, but even more so in imports
 A collaborative sector-driven approach with relevant stakeholders in the Netherlands,
will help to grow imports and exports:
- Market share of the Netherlands in Perishables (especially from Latin America and Africa) and
High Tech (in particular from Asia) has to be defended
- Growth opportunities exist in a collaborative approach to attracting high value density sectors,
such as Chemicals (Pharma in particular) and Machinery Parts
- Interviewees indicate Fashion as an attractive sector due to size; focus should be on higher
end as value density and growth of entire sector are not very positive

 The “footloose” cargo volumes that the Netherlands attracts from other countries is
critical and asks for a different non-sector driven approach
 From a trade perspective, the Netherlands has lost market share in exports and imports
to North America and South East Asia that may need to be regained
- Market shares to Latin America, Africa and North East Asia are high and best approach may
be to defend the position of the Netherlands

Confidential – not for third party distribution © Seabury Group 2014

16

Agenda

Air cargo critically important for the Netherlands

Opportunities and risks in trade lanes and product groups
Highlights from shipper survey
Belly vis-à-vis freighter dynamics and position Schiphol
Appendix

Confidential – not for third party distribution © Seabury Group 2014

17

What shippers say about the air cargo market?
Performance on seven of the eight identified requirements is high with scores in the 7.0 to
7.5 range; connectivity and efficiency of clearance process are deemed most important
How important are the following elements to your business, and how would you rate
Schiphol's performance on these topics?
Score of Schiphol (scale 1-10)
8.0

Ease of doing business
& political stability

Proximity to and efficient
transit to/form major markets

7.5

Competence of
logistic providers

Efficiency of clearance process
Ground infrastructure
Avg.
Score

Security and quality levels
7.0

Price levels of logistic services
Air cargo connectivity
& capacity

6.5
7.5

8.0

8.5

9.0

Importance (scale 1-10)
Note: Total of 36 respondents to the Seabury shipper survey; Questions and answers listed in overview are paraphrased from exact questions in survey for visual purposes; results not
weighted according to volume via Schiphol per participating shipper; Source: Seabury shipper survey “Netherlands Air Cargo study - Shippers survey” (in cooperation with EVO)
Confidential – not for third party distribution © Seabury Group 2014

18

Barriers for attracting other airport freight to Schiphol
Shippers were asked about key barriers for attracting volumes shipped via other airports to
Schiphol and vice versa; connectivity and preference of the forwarder are key barriers
Importance:
# time barrier
was mentioned

Barriers for moving air freight volumes to
other airports, away from Schiphol:

1 SPL offers less connectivity than other airports

15

8

1 SPL offers better connectivity

2 My forwarder operates via other airport

10

11

2 My forwarder operates via SPL

3 The cargo handling at other airports is

8

2

3 Cargo handling at SPL is better

4 The fees/costs at SPL are not competitive

7

2

4 Fees/costs at SPL are competitive

5 There are no barriers

6

12

5 There are no barriers

6 Safety and efficiency at other airports are better

4

6

6 Safety and efficiency at SPL are better

7 My business requires proximity of other airport

3

7

7 My business requires proximity of SPL

8 Costs for re-locating are too high

2

3

8 Costs for re-locating are too high

9 Other airports have better ground connection

1

3

9 SPL has a better ground connection

Barriers for moving air freight volumes to
Schiphol from other airports:

Other barriers mentioned:

Other barriers mentioned:

 Insufficient (direct) maindeck capacity to Japan

 No. of airlines operating to/from Schiphol
 Good customs arrangements at SPL
 Location of (our) warehouses
 High flight frequencies from SPL

Note: Total of 36 respondents to the Seabury shipper survey; Questions and answers listed in overview are paraphrased from exact questions in survey for visual purposes; results not
weighted according to volume via Schiphol per participating shipper; Source: Seabury shipper survey “Netherlands Air Cargo study - Shippers survey” (in cooperation with EVO)
Confidential – not for third party distribution © Seabury Group 2014

19

Shipper rating of connectivity to and from Schiphol
Schiphol is rated relatively well in terms of connectivity, especially to core trading regions;
lowest scores are given to Africa, Australasia and Latin America
How would you rate the cargo connectivity offered to/from Schiphol to the various regions?
Schiphol connectivity
Regions

Very
0
poor

1
Poor

2
Sufficient

3
Good

# of
respond. Notes & comments

N.E.Asia

2.3

24

 High Tech, Automotive & Pharma

S.E.Asia

2.3

22

 Good score Life Sciences & Electronics

Australasia

1.7

17

Africa

1.7

22

2.2

Middle East
Indian subcont.

23

1.9

Russia & C.Asia

19

2.1

 Highest rating by Pharma & Electronics

20

2.5

North America

 ‘Sufficient’ rating among flower shippers

21

 Rated high by Automotive & Pharma
 Poor rating by Life Sciences & Pharma
shippers to Lat.America
(both sub-regions)

South America

1.8

20

Central America

1.9

15

Suggestions for connectivity improvement: Ethiopia, South America, Japan, West Coast USA
Note: Total of 36 respondents to the Seabury shipper survey; Rating scale adjusted for visual purposes, ‘Excellent’ rating category omitted from scale; results not weighted according to
volume via Schiphol per participating shipper; Source: Seabury shipper survey “Netherlands Air Cargo study - Shippers survey”
Confidential – not for third party distribution © Seabury Group 2014

20

Agenda

Air cargo critically important for the Netherlands

Opportunities and risks in trade lanes and product groups
Highlights from shipper survey
Belly vis-à-vis freighter dynamics and position Schiphol
Appendix

Confidential – not for third party distribution © Seabury Group 2014

21

Schiphol connectivity compared to competitor airports
Schiphol performs well on selected key indicators vis-à-vis benchmark airports in Europe,
and may be characterized as a rather large, open, maindeck oriented and growing airport
Growth
Share home
Uplift capacity
(tons/week1) (last 12 months) carrier(s)
Amsterdam
(AMS)
Benchmark

23

16

Maindeck % of Airlines with
total capacity2 full freighters

5.9%

37%

73%

3.5%

46%

46%

Frankfurt
(FRA)

28

-0.6%

41%

59%

London
(LHR)

24

4.9%

48%

4%

4.3%

54%

Paris
(CDG)

17

Luxembourg
(LUX)

9

12.0%

Brussels
(BRU)

4

-12.9%

76%

16%

Destinations
(number of)4

253

16

48

25

23

46

Full freighter
frequencies
(per week)

88

68

230

154

86

304

7

3

84

19

19%

10

10

84

72

100%

8

39 39

9

6 24

49%

Note: Benchmark calculated as weighted average of selected airports; International scheduled capacity only, integrators are excluded from analysis; 1) Average of
dataset spanning last 12 months ending Oct 2014; 2) Combi aircraft considered ‘Maindeck’ capacity; 3) Considers Air France/KLM/ Martinair single carrier; 4)
Destination with minimum frequency of 2/week for Maindeck, or 5/week for Belly service; destinations served sufficiently by both Maindeck and Belly are counted
under ‘Maindeck’; the number of destinations includes intra-Europe positioning flights; Source: Seabury Capacity Database
Confidential – not for third party distribution © Seabury Group 2014

186

34
Maindeck
Belly
22

Maindeck capacity dominates from Schiphol
The cargo capacity that is provided to/from Schiphol is largely maindeck and is driven by
KLM/Martinair and a selected number of Chinese and Middle Eastern Airlines
Available outbound cargo capacity from AMS1, last 12 months2
Thousand tonnes
Combi

304

Belly
Freighter

144

80

73

69
46

KLM

AirBridge
Martinair

Age of
maindeck
fleet3:

20

16

Delta
China
Southern

5

4

-

45

42

Emirates Qatar
Singapore

12

3

39

39

30

30

Air
China

China
Cargo

Saudia

Etihad

8

7

18

4

2

KLM and Martinair provide substantial share of available maindeck capacity
1) International widebody capacity, excludes integrators and charters; 2) 12 months ending July 2014; 3) Combi aircraft considered as maindeck capacity; Note: totals may not match
shown values due to rounding differences; Source: Seabury Capacity Database; Ascend database
Confidential – not for third party distribution © Seabury Group 2014

23

It is difficult to fly (old generation) freighters profitable
Freighters are however difficult to operate profitably by traditional airlines as breakeven load
factors are high; this is true for old and to a lesser extend new generation freighters
Estimated breakeven load factor, by aircraft type and O&D
LF (%)
Sector

Average yield

BH time

747-8F

777F

747-400F

MD-11F

747-400P2F

DXB-AMS

$

1.50

7.1

79%

83%

89%

91%

96%

ORD-LHR

$

1.40

8.5

101%

105%

112%

112%

117%

LHR-DEL

$

1.50

9.0

100%

104%

111%

111%

116%

FRA-JNB

$

2.70

11.5

71%

74%

80%

82%

87%

HKG-FRA

$

2.60

12.1

77%

82%

88%

90%

95%

FRA-VCP

$

2.70

13.0

80%

84%

91%

93%

98%

PVG-LAX

$

2.50

13.8

92%

96%

103%

104%

109%

PVG-ANC-LAX $

2.50

15.5

103%

106%

114%

114%

119%

Breakeven Load Factor:

Low

Short
sectors

Long
sectors

High/Above 100%

It is understandable that airlines are evaluating their freighter deployment
Notes: all aircraft assessed based on equal daily utilization of 11.5BH; theoretical profitability – some aircraft may not be designed to fly specified sectors; yields are average of
import/export (a month in 2013), estimated according to market conditions; BH time as average of both directions based on ESAD estimations (“Equivalent Still Air Distance”);
overheads assumed to be 5% of revenue; handling at $0.15 per kg; DOC according to standard Seabury Assumed; Source: Seabury analysis
Confidential – not for third party distribution © Seabury Group 2014

24

Announced retirements may impact Latin American and US
The announcement of KLM to retire MD11F (in 2015-’16) and 747-combis (in 2016-’20) is
not surprising and may impact maindeck capacity to Latin America and North America
Capacity types offered to Schiphol (inbound) per region

Belly

KL MD11F

Thousand tons uplift, last 3 months1

Other Freighter

KL 747F

KL combi
104

71

41

36

31

27%

26%

25%

16

11%

14
5%

312

100%

26%
41%

48%
30%

65%

44%
95%
29%

52%

66%
59%
45%

18%
7%

N.E.Asia

11%

31%

23%

5%

7%

North America Middle East

6%

Lat.America

Africa

S.E.Asia

Russia &
Central Asia

Total

1) Data spans last 3 months ending October 2014, widebody scheduled capacity only (integrators excluded); Note: Capacity per regions divided based on assumptions regarding key
cargo region per route; airports typical for technical stops are not considered for determining key region for each route; Intra-Europe (positioning) flights with individual flight number
excluded from analysis; difference in total inbound and outbound capacity over analysis period may exist due to intra-Europe flights, and schedule imbalances over the analysis period;
Source: Seabury Capacity Legs database, Seabury analysis
Confidential – not for third party distribution © Seabury Group 2014

25

Global freighter share of total capacity decreasing
Amsterdam and Frankfurt have until now been able to withstand the global trend that the
freighter share of total capacity is decreasing vis-à-vis belly capacity

Freighter share per (origin) region
% freighter share of total capacity
60

FRA
55
50

AMS

45

World

40
35

Western Europe

30
25

2008

2009

2010

2011

2012

2013

2014

Note: Capacity in Available Ton Kilometers (ATKs); scheduled full freighter capacity only (excluding integrators and charters)
Source: Seabury Capacity Database (legs)
Confidential – not for third party distribution © Seabury Group 2014

26

Passenger aircraft orders drive future capacity growth
The trend of a globally declining freighter share will not end as freighter deliveries peaked in
2013 and as 74% of new expected cargo capacity will be on passenger aircraft

Factory built freighter & belly1 capacity on firm order
Thousand tonnes
10

2014-2019:
74% of capacity
on order is belly

Freighter
Passenger
8

6

4

2

0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Without new freighter orders, capacity will be driven by widebody
passenger aircraft orders
1) Widebody passenger aircraft (incl. mixed passenger/freight combinations); only firm OEM orders considered; years represent build years
Source: Ascend Fleet Database (21 July 2014); Seabury analysis
Confidential – not for third party distribution © Seabury Group 2014

27

Middle Eastern airlines dominate passenger aircraft orders
Many airlines have passenger aircraft on order but the extend to which the three large
Middle Eastern airlines currently dominate outstanding orders is unprecedented

Widebody belly capacity on firm order for 2014-2029 delivery
Tonnes

Recent changes:

8,963

 Emirates cancelled 70 A350s and 3 A380s
and ordered 142 extra B777s
 Qatar Airways cancelled 2 B787s and 2 A380s
and ordered 49 extra B777s

Qatar

26%

Etihad

27%

Emirates

47%

Gulf
carriers

1,654

SIA

1,393

1,349

Cathay United

945

891

JAL

BA

798

727

695

Aeroflot
AA
Lufthansa

656

641

541

471

Air
Korean Turkish
France

KLM

Note: Only firm OEM orders from airlines considered, except those for which the buying carrier has not yet been announced; data excludes optioned aircraft or LOI to order aircraft, e.g.,
excluding Qatar (59 aircraft), Etihad (51 aircraft) and Emirates (20 aircraft); Source: Ascend Fleet Database (Oct 2014); Seabury analysis
Confidential – not for third party distribution © Seabury Group 2014

28

FedEx placed most freighter orders in the past 5 years
Among carriers with freighter orders, FedEx has by far placed the most orders since 2009
with the 767F making up the bulk of their orders (likely replacement, not additional capacity)
Freighter orders for delivery 2014-2019 placed since Nov 2009
# aircraft
51

FedEx total freighter order book
# aircraft
43

9

B767-300F
7

FedEx

CA

6

HX

5

QR

B777-200F

4

4

3

3

3

3

2

2

2

2

2

ET

CZ

LH

AV

EY

MB

KZ

KE

CV

EK

ZP

FedEx has ordered ~50% of all freighters in the past 5 years
Source: Ascend, Seabury Capacity Database; Seabury analysis (February 27th, 2014)
Confidential – not for third party distribution © Seabury Group 2014

29

Why does cargo require maindeck capacity?
There are different drivers for air cargo to travel on maindeck capacity but only a relatively
small portion requires freighter uplift due to physical size of the shipments
Reasons for cargo to travel on full freighter uplift
Size & nature of product

Consolidation by forwarders

Demand & supply imbalance

 Cargo with certain
dimensions and specific
dangerous goods cannot
travel on lower deck
capacity (Belly)

 Profitability of forwarders
largely driven by ability to
consolidate individual
(smaller) shipments onto
larger pallets

 In markets with high cargo
demand, but limited
passenger demand,
freighter uplift is required to
support the air cargo flows

 Interviewees estimate
share of this cargo type at
Schiphol at 5%-10%

 These pallets may require
maindeck capacity due to
size

 Shippers may be
accustomed to specific
types of capacity

Examples:

Examples:

Examples:

 Oil & Gas parts

 Consolidation centers of
Kuehne Nagel or DHL
Global Forwarding in
Amsterdam

 Flower markets
(Colombia/Ecuador, Kenya)

 Horses/Live animals
 Large capital equipment
(e.g. ASML machinery)

 High tech (China)

 No specific commodities

Source: Seabury interviews; Seabury analysis; Note: percentages indicative only based on interpretations from conducted interviews
Confidential – not for third party distribution © Seabury Group 2014

30

Conclusions
 Schiphol performs well on key indicators vis-à-vis benchmark airports in Europe, and
may be characterized as a rather large, open, maindeck oriented, and growing airport
 The cargo capacity that is provided to/from Schiphol is largely maindeck and driven
by KLM/Martinair and a selected number of Chinese and Middle Eastern Airlines
 Freighters are however difficult to operate profitable by airlines as breakeven load
factors are high; this is true for old and to a lesser extend new generation freighters
 The announcement of KLM to retire MD11F (in 2015-’16) and 747-combis (in 2016-’20) is
not surprising and may impact maindeck to Latin America, Africa and North America
 Amsterdam and Frankfurt have until now been able to withstand the global trend that the
freighter share of total capacity is decreasing vis-à-vis belly capacity
 The trend of a globally declining freighter share will not end as freighter deliveries
peaked in 2013 and as 74% of new expected cargo capacity will be on passenger aircraft
- Many airlines have passenger aircraft on order but the extend to which the three large Middle
Eastern airlines currently dominate outstanding orders is unprecedented
- Among carriers with freighter orders, FedEx has by far placed the most orders since 2009
with the 767F making up the bulk of their orders (likely replacement, not additional capacity)

 There are different drivers for air cargo to travel on maindeck capacity but only a
relatively small portion requires freighter uplift due to physical size of the shipments
Confidential – not for third party distribution © Seabury Group 2014

31

Agenda

Air cargo critically important for the Netherlands
Opportunities and risks in trade lanes and product groups
Highlights from shipper survey
Belly vis-à-vis freighter dynamics and position Schiphol
Appendix

Confidential – not for third party distribution © Seabury Group 2014

32

European exports and market share of the Netherlands
Outbound growth may come from “locking in” Dutch exports at Schiphol and from attracting
consolidations from other countries; analysis of high and low market shares will be insightful
Air cargo export commodities from Western Europe
Million tonnes, 2013
1.2

1.0

0.5

5%

4%

6%

7%
6%

9%

0.5

0.4

0.4

6%

3%

2%

7%

4%

9%
14%
16%

6%

8%

0.5

6%

4%

Other
Lat.Am
Africa
MESA

1%
4%

10%

Industr.Consumables

4%

5%

Machinery parts

2%

7%

4%

5%
N.Am

4%

2%

9%

APAC

Chemicals
High Tech
Other
Capital Equipm.
Automotive

x % NL market share Western Europe air exports, 2013
Note: Size of chart indicates Western Europe total air trade exports (2013); percentages in labels indicate Netherlands’ share of Western Europe exports per commodity-trade lane;
weighted average Netherlands market over Western European exports in terms of air trade weight 7.1% (2013); Source: Seabury Global Trade Database
Confidential – not for third party distribution © Seabury Group 2014

33

Announced retirements may impact Latin American and US
The announcement of KLM to retire MD11F (in 2015-’16) and 747-combi aircraft (in 2016’20) may impact maindeck capacity to Latin America and North America
Capacity types offered from Schiphol (outbound) per region

Belly

KL MD11F

Thousand tons uplift, last 3 months1

Other Freighter

KL 747F

KL combi
89

61

50

35

19

21

21
3%

297
100%

13%
24%
54%

29%

31%

34%
55%

62%

20%
97%
67%

62%

19%
46%
20%
5%
N.E.Asia

48%

45%
12%

27%
8%
North America Middle East

5%
6%

6%
Lat.America

Africa

S.E.Asia

Russia &
Central Asia

Total

1) Data spans last 3 months ending October 2014, widebody scheduled capacity only (integrators excluded); Note: Capacity per regions divided on basis of assumptions regarding key
cargo destination region per route; airports typical for technical stops are not considered for determining key region for each route; Intra-Europe (positioning) flights with individual flight
number are excluded from analysis; difference in total inbound and outbound capacity over analysis period may exist due to intra-Europe flights and schedule imbalances over the
analysis period; Source: Seabury Capacity Legs database, Seabury analysis
Confidential – not for third party distribution © Seabury Group 2014

34

Who reports what in terms of exports?
The “true” origin of a product; the location of its customs clearance; from which airport it is
flown; and the origin on the master airwaybill, define where a product is registered
Origin Netherlands

Origin of goods:
Point of
customs:
Airport:

Netherlands

Netherlands

Master AWB1:

Data coverage:
(reported as NL)

Origin other country

Other country

Other airport

Netherlands

AMS

Other airport

Netherlands

Netherlands

Other

Schiphol
statistics

Schiphol
statistics

Cargonaut
(partial)

World
Cargonaut
ACD

Other airport

Other country

Netherlands

AMS

Other airport

Other

Schiphol
statistics

Schiphol
statistics
Cargonaut

Cargonaut
(partial)

Seabury trade database

World
WorldACD
ACD

Definition:

Netherlands

WorldACD

Airline trucks
from NL to
other airport1

Expected to
be limited in
size

Forwarder
Forwarder
trucks from NL trucks to NL
to other airport from other

Expected to
be limited in
size

Carrier
trucks to NL
from other1

Majority of
global air
cargo

Source: Industry interviews; assumptions based on general industry practices and Seabury analysis, exceptions may occur; 1) bonded truck
Confidential – not for third party distribution © Seabury Group 2014

35

Who reports what in terms of imports?
The “true” destination of a product; the location of its customs clearance; to which airport it
is flown; and the destination on the master airwaybill, define where a product is registered
Destination of
goods:
Point of
customs:
Airport:

Destination Netherlands
Netherlands

Netherlands

Master AWB1:

Data coverage:
(reported as NL)

Other country

Other airport

Netherlands

AMS

Other airport

Destination other country
Netherlands

Netherlands

Other

Schiphol
statistics

Schiphol
statistics

Netherlands

AMS

Schiphol
statistics

Cargonaut
(partial)

World
Cargonaut
ACD

Other airport

Other country

Other airport

Other

Schiphol
statistics

Cargonaut

Cargonaut
(partial)

Seabury trade database

World
WorldACD
ACD

Definition:

Netherlands

WorldACD

Airline trucks
to NL from
other airport1

Expected to
be limited in
size

Fwdr trucks to
NL from other
airport

Fwdr trucks
from NL to
other airport

Theoretical;
expected to
be limited

Carrier trucks
from NL to
other airport1

Rest of
global air
cargo

Source: Industry interviews; assumptions based on general industry practices and Seabury analysis, exceptions may occur; 1) bonded truck
Confidential – not for third party distribution © Seabury Group 2014

36