Saturday, March 17, 2012

New Lease of Life for Project Freight Forwardings Biggest Favourite?

Heavy Lift Aircraft May Be Built Once More
Shipping News Feature

UK – RUSSIA – UKRAINE – We at the Handy Shipping Guide make no bones about the fact we always like to write about special projects and the more spectacular side of freight forwarding, and these shipments rarely come much more impressive than the cargoes carried aboard the largest aircraft in the world – the Antonov An-124.

Now Ruslan International, the UK headquartered company which markets and manages the combined Antonov An-124 fleets of its shareholders Russian Volga Dnepr and Ukrainian Antonov Airlines, has reported its provisional performance for 2011 showing a 21.5% year on year uptick on contract movements to 712 with the seventeen giant aircraft under its management flying a total of 9720 hours (up 13% on 2010).

Going against a general trend Ruslan International’s estimated overall revenue for 2011 was up 28%, compared to its 2010 audited accounts produced by Ernst and Young. The provisional 2011 figures also reveal an increase of 23.5% in operating costs, of which fuel was the largest element accounting for 34% of the total (up 6% compared to the final accounts for 2010). The company is estimating a multi-million Pound pre-tax profit for 2011, compared to a marginal loss in the previous year.

Analysis of Ruslan International’s operations for 2011 reveals that its customer base remained broad, while the range of cargo narrowed. The company attributes this to rising fuel costs widening the gap between the cost of the An-124 and more conventional shipping methods; the imposition of the EU Emissions Trading Scheme (ETS) - unlikely to be echoed by similar taxation on other shipping methods in the foreseeable future - is set to exacerbate this situation.

At the same time, the downturn in global cargo levels and increase in passenger numbers, especially in the Middle East and Asia, kept general cargo rates relatively low. This meant that the An-124 increasingly reverted to carrying the heavy and outsized cargoes for which it was designed, rather than the general cargo often carried in the past.

Additionally, rationalised aircraft utilisation resulting from Ruslan International’s management of the combined fleets of Antonov and Volga Dnepr aircraft reduced the amount of empty flying, and the need to fill empty legs with marginally-rated general cargo. This increased yields, and also reduced chartering costs for Ruslan International’s customers. The increased turnover and profit was analysed by company Vice President Valery Kulbaka thus:

“The provisional results for 2011 reveal a number of interesting points when compared to the Ernst and Young figures from 2010. The 2011 performance was much stronger than projected, largely as a result of the withdrawal of some NATO forces from Afghanistan, and also the Tsunami in Japan - in the aftermath of which Ruslan International was able to provide significant assistance.

“Looking forward, and despite the current uncertainty in many world markets, there is no reason to believe that 2012 will be less than positive for us and our shareholders. It is very clear, six years after the launch of Ruslan International, that it has been extremely effective in rationalising the capacity and utilisation of its shareholders’ aircraft. This has frequently improved response times because operating the two fleets under one management means we are more likely to have an available aircraft near to where it is needed. We have also been able to pass back efficiency savings to our customers.

“The fact that we are based in London improves international communications with our key markets. And, as our company is incorporated in the UK, audited by one of the world’s largest and most reputable accountancy firms, and subject to stringent UK company laws, it provides an added measure of assurance for our clients.”

The concept of the Ruslan operation was born from a cross between necessity and practicality to market the fleets of the two main shareholders rather than compete for what is after all a pricey but restricted business sector. Volga Dnepr and Antonov worked together on the 'Ruslan Salis' operation, a joint project that continues to provide NATO with a dedicated aircraft from each fleet. The cooperation was further driven by the need more efficiently to serve the ad-hoc charter market, as well as satisfy existing long-term contracts requiring the allocation of significant portions of both carriers' fleets.

Ruslan was therefore formed in 2006, a full two years after the last Antonov 124 rolled off the production line and twenty two years after the first military format plane took to the skies. The most exciting news for heavy lift fans is the proposal to build more of the huge aircraft to replace what is now an ageing fleet. The original planes were manufactured in parallel by the Russian company Aviastar-SP and by the Kyiv Aviation Plant AVIANT, in Ukraine.

Externally, the An-124 is similar to the American military Lockheed C-5 Galaxy, but has a 25% larger payload. An-124s have been used to carry a wide variety of loads including railway locomotives, ocean yachts, aircraft fuselages, B777 engines, and even the occasional elephant. The An-124 is able to kneel to allow easier front loading. The cargo compartment of the An-124 measures 36.5m x 6.4m x 4.4m and the maximum payload is 120,000 kg.