Cargo Qualifications

SH&E Experience in Cargo Marketing
SH&E provides cargo services to airlines, airports and
equipment suppliers. The firm’s services range from
assisting in fleet and route planning to hub site expansion to
marketing and airport-facility planning. SH&E assists cargo
airlines on strategic planning matters such as fleet selection,
hub/site selection and final lease negotiations, as well as
detailed cost and revenue comparisons. Of particular note,
SH&E has worked with service providers in all segments of
the industry, including integrated express carriers such as
UPS and DHL, traditional heavy cargo carriers such as
Evergreen, Volga Dnper, and Polar and ACMI carriers such
as Atlas.
SH&E has worked with airports all over the world to improve
their services for airfreight users. SH&E helps airports
prepare traffic forecasts, formulate strategy and marketing
plans, as well as develop cargo facilities requirements.
Various airports around the world have relied upon SH&E to
help build their cargo traffic. SH&E also assists in
developing and implementing marketing strategies to attract
new cargo traffic, service and industrial activity to airports,
as well as cargo development strategies for converted
military bases.
Cargo Services Clients Have Included:
Active Aero/U.S.A. Jet
Airborne Express
Air France
American Airlines
Anchorage Int’l Airport
Atlas Air
Bankers Trust
Bank of Montreal
Cathay Pacific
DHL Airways
Emery Worldwide
Garuda Indonesia
Gulf Investment Corp.
Hartsfield Atlanta Int’l Airport
Japan Airlines
KLM Royal Dutch Airlines
Massport-Logan Int’l Airport
McDonnell Douglas
Mexicana Airlines
Northwest Airlines
O’Hare International Airport
Royal Jordanian
State of Veracruz, Mexico
United Parcel Service (UPS)
World Bank
Cargo Qualifications
Ontario Int’l Airport
Pacific Gateway
Cargo Center
SH&E advised a private company bidding for a third party cargo development
concession at Ontario International Airport. The assignment involved conducting a
cargo market study of the greater Los Angeles basin and forecasting potential cargo
growth at ONT. We interviewed cargo carriers at LAX and evaluated their issues related
to moving all of their operations to ONT and/or splitting operations between the two
airports. SH&E analyzed long-term cargo trends in LA, studied cargo capacity
constraints at LAX and the potential and timing of cargo “spill” to ONT. We evaluated on
and off airport rents for cargo warehouse space in both the LAX and ONT markets,
projected absorption rates for warehouse space, modeled the financials of the operation,
projected lease revenues and forecast the revenue potential available to share with the
airport. Our analysis was used as part of the successful winning bid package for the
JFK International Airport
Feasibility Assessment of
Cargo and Maintenance
On behalf of a client seeking a 15-year lease agreement with the Port Authority of New
York and New Jersey for cargo and maintenance facilities, SH&E evaluated the cargo
market at the airport and requirements for cargo and maintenance space. The facilities
in question included a 268,000 s.f. main hangar, a warehouse with 500 thousand s.f. of
leaseable space, and an adjacent airside ramp with parking space for 5 widebody
cargo aircraft. SH&E examined the dynamics of cargo demand at JFK and the
probable requirements for cargo warehouse space at the airport. In order to identify
parties that might be interested in using these facilities, SH&E analyzed the demand for
both on-airport and off-airport facilities, “market” rents, and estimated the “all-in” level of
rent which might reasonably attract companies to consider using these properties.
Finally, SH&E identified critical issues and risk factors related to the proposed client
Cargo Qualifications
Dallas-Ft. Worth
International Airport
Air Cargo Development
As part of a major air service development engagement, SH&E put together an air
cargo development strategy for DFW. SH&E profiled DFW’s cargo operations and
throughput relative to other major cargo facilities in the United States, and prepared
comprehensive evaluations of DFW’s domestic and international cargo markets. In each
case, SH&E evaluated strategic developments at the major integrated air cargo carriers,
as well as at major airport-to-airport freighter operators, and examined the implications
of these developments for DFW. The study included an estimate of origin-destination
international cargo volumes – both imports as well as exports – for DFW’s primary
catchment area, by international partner region.
The evaluation concluded with an identification of priority growth opportunities for DFW
within Asia, Europe and Latin America, based on projected trade developments and
growth initiatives by specific carriers serving these markets.
Airport Authority of
Hong Kong
Strategic Land Use Plan
As part of a consortium of planning and engineering consultancies, we undertook the
analysis and development of a new strategic land use plan for the airport. Among the
tasks undertaken were a market analysis of the Hong Kong air cargo network, future
demand for the regional manufacturing industry, assessment of the competitive
situation versus other Asian airports, evaluation of the likely long-term aircraft fleet
plans of cargo carriers and the development of a long-term traffic forecast. We also
undertook the feasibility of implementing a Free Trade Zone and establishment of a
new cargo facilities land use plan along with its integration into the overall strategic
master plan which will form the basis of the airport’s long-term development strategy.
Cargo Qualifications
Cargo Airport
Feasibility Study
Huntsville Intermodal
Market Study
SH&E served as an advisor to the state of Louisiana, studying the feasibility of a major
new airport/multimodal transportation center project proposed to be located between
New Orleans and Baton Rouge. SH&E developed long range forecasts for air, surface,
port and rail cargo, analyzed project development costs, existing and forecasted
operating costs and revenues, prepared a capital improvement plan, developed a
financing plan which structured GARB's and LOI bond financing, and developed long
term cash flow projections for the project
On behalf of Huntsville International Airport and Huntsville Intermodal Tradeport, SH&E
developed a market study and marketing documents for the airport to use in attempting
to attract all cargo airlines to serve Huntsville. The market assessment study reviewed
recent trends in the air cargo industry, evaluated cargo market characteristics primary
and secondary catchment areas in the southern United States, and examined HSV’s
position versus competing airports. SH&E developed targeted marketing presentations
for specific Asian and European carriers presenting the carrier benefits of operating at
Cargo Qualifications
Belgrade Cargo and
Logistics Center
Feasibility Study
SH&E, jointly with a consortium of lawyers , bankers and engineers, advised the Serbian
government on the concessioning of the several projects at Belgrade International
Airport to the private sector. The first project is the development of an 86,000 square
meter cargo/logistics/industrial project at a minimum cost of US$ 55 million. SH&E
developed a detailed market study of Serbia and Southeastern Europe identifying
possible cargo flows and forecasting growth in the region. We then developed a
financial feasibility study that was used to framed the investment and the parameters of
the concession. SH&E assisted in the development of the tender documents,
structuring the technical terms of the TOR and identified potential international bidders
for the project.
Chicago O’Hare
International Airport
Demand Forecasting
and Noise Analysis
SH&E has worked on various cargo assignments at O’Hare International Airport for the
City of Chicago Aviation Department. These have included long-term cargo traffic and
facility demand forecasts and analysis of the noise impacts of all-cargo operations.
SH&E also prepared an analysis of air cargo facility demand at O’Hare for the private
developer of the O’Hare Express Center cargo project.
Cargo Qualifications
Boston Logan
International Airport
Business Plan
SH&E prepared a cargo business development plan for Massport, operator of Boston
Logan International Airport. This included a detailed analysis of domestic and
international cargo traffic trends and the outlook for all-cargo and passenger belly freight
at Logan. The report also focused on cargo facility demand including aircraft parking
requirements for all-cargo operators.
San Jose Int’l Airport
Demand Forecasting
and Financial Analysis
SH&E prepared a demand and financial analysis for an air cargo facilities study at San
Jose International Airport which included an analysis of available development options,
and the preparation of specifications and evaluation criteria for a cargo facility RFP.
Development of a Bay Area air cargo database included traffic at the three major airports
and economic data for the Bay Area. The accompanying financial analysis addressed
the feasibility of developing a cargo facility; and comparison of costs/benefits associated
with a municipally developed facility to one developed by an air cargo carrier or third
party developer under a B.O.T. (build, operate, transfer) concept.
Cargo Qualifications
International Airport
Business Plan
With SH&E’s assistance, the State of Alaska and Anchorage International Airport
successfully applied to USDOT for expanded cargo transfer authorities. This expanded
authority allows foreign air carriers to expand their cargo operations at ANC to include
online freight transfer between aircraft, inter-line transfer between foreign and US
carriers and change-of-gage service.
Additionally, SH&E developed an ongoing international air cargo marketing program for
Anchorage. The program included the use of a detailed analysis of the Northern Pacific
air cargo market in order to develop strategies for promoting cargo activity at the airport,
and participation in presentations to prospective clients.
Cargo Qualifications
Int’l Airport
Air Cargo Development
For Baltimore-Washington International Airport, SH&E performed a market assessment
of cargo opportunities for the airport as well as a number of follow-on initiatives aimed at
attracting direct international air freighter service.
The market assessment study reviewed recent trends in the air cargo industry and their
implications for BWI, evaluated cargo market characteristics in BWI’s primary and
secondary catchment areas in the eastern United States, and examined BWI’s position
vis-à-vis competing airports. The study also identified service gaps and important
regional partner market opportunities. Based on the foregoing analysis, the study
concluded with an action plan for attracting direct international air freighter services.
As a follow-on to its initial study, SH&E was again retained by BWI to evaluate freighter
operators in the United States, Europe and Asia and identify key target cargo carrier
prospects to pursue. In this study, SH&E screened the top 20 freighter operators in the
U.S.-Europe and U.S.-Asia markets and selected a subset of 9 carriers for further
evaluation. Each of the 9 carriers was profiled in detail, with a comprehensive
assessment of strengths, weaknesses, opportunities and threats and evaluated against
a number of important selection criteria including financial condition, potential gaps in
their U.S. networks, demonstrated rapid growth and evidence of willingness to serve
“non-traditional” U.S. destinations. The study concluded with a prioritized list of target
carriers to pursue, and an action plan for attracting scheduled freighter service from
these operators. Since this study was completed, SH&E has continued to work with
BWI on its cargo air service marketing initiatives, including putting together tailored
information and presentation materials aimed at specific target carriers.
Cargo Qualifications
Technical Business
Strategy Reviews
Hub Study
Working for the International Finance Corporation, SH&E conducted due diligence in
respect of a potential IFC financing for two AN-124 aircraft to be acquired and
operated by Volga-Dnepr. SH&E’s assignment included a comprehensive evaluation
of the operational and marketing capabilities of Volga-Dnepr, the technical capability
of the AN-124 aircraft and the future market prospects for heavy and outsize
airfreight. Based on SH&E’s favourable recommendations, Volga-Dnepr became the
first Russian airline to obtain aircraft financing from the IFC. In a subsequent
assignment SH&E developed a comprehensive business strategy review of
launching of new cargo division called Air Bridge, cargo market review, marketing
plan review, revenue plan review, fleet review, operating cost review.
SHE worked for AirUnion as part of a multi-firm project on a feasibility of developing
Krasnoyarsk (KJA) Airport as a major passenger and cargo hub. Our study analyzed the
potential of KJA as a domestic and international transit hub for AirUnion using our
proprietary “Networks®” airline route modeling tool. We used this analysis to develop
the required route network for AirUnion and forecasted the level of passengers that could
be accommodated through the KJA hub. We also analyzed the performance of Air
Bridge Cargo (“ABC”) and the potential of other cargo airlines to use KJA, in order to
project the level cargo volumes at the airport. SH&E’s analysis was the basis for
application to the Russian Investment Fund (“RIF”) as well as a business plan to present
to private investors.
Cargo Qualifications
Air Malta
Cargo Development
Air Malta has been an SH&E client for many years. Most recently, SH&E assisted in
creating a cargo development strategy, conducting a pre-feasibility study for Air Malta
and Lufthansa Cargo on the possibility of developing an air-sea cargo hub in Malta.
Hub Selection Study
The integrated freight carrier DHL chose SH&E to conduct a hub site selection study,
in order to identify potential alternatives to its existing US domestic hub, measure the
operating cost and service characteristics of alternative sites -- including factors such
as weather and taxi-time – and manage the process of obtaining competitive bids for
economic assistance in developing new hub facilities.
Cargo Qualifications
Due Diligence
Due Diligence
SH&E conducted a due diligence evaluation of TAM S.A. in 2005. The project included an
overview of the airline industry in Brazil and South America; assessment of TAM’s existing
route network; review of its existing and proposed passenger and cargo businesses;
benchmarking of TAM against other, similar size carriers; commentary on TAM’s fleet and
fleet plans; review of TAM’s existing and forecast cost structure; review of TAM’s business
plan; evaluation of TAM’s financial projections and underlying assumptions; commentary
on TAM’s organizational structure, management practices and operations; commentary on
its security and safety record, as well as aircraft condition and maintenance practices; and
evaluation of the effectiveness of TAM’s sales, distribution, reservation, yield management
and other IT practices.
A New York private equity firm hired SH&E to advise on potential investments in
bankrupt VARIG assets, including cargo carrier VARIG LOG and maintenance and
engineering organization VEM. SH&E provided expertise on turn-around and risk
considerations, as well as management suitability. SH&E’s analyses directly
contributed to MatlinPatterson’s acquisition of VARIG LOG in 2006.
Cargo Qualifications
Atlas Air
Demand Forecasting and
Financial Analysis
SH&E advised investors who own equipment trust certificates for 12 747-400 freighters
operated by Atlas Air and Polar Air Cargo as part of a Chapter 11 restructuring. A large part
of the analysis for this assignment focused on the future demand for Trans-Pacific all-cargo
SH&E has also assisted Atlas in bidding for scheduled route authority between the U.S.
and Mexico. Our support included detailed traffic forecasts, based on an assessment of
overall market growth, as well as estimates of market share in each major origin-destination
freight market accessed by the proposed services.
Northwest Airlines
Route Valuation
SH&E was retained by Northwest to assess the asset value of Northwest’s Pacific
route network. Given the importance of Northwest’s trans-Pacific 747 freighter
operations, much of this assignment involved an understanding and valuation of the
contribution provided by air cargo service.
Cargo Qualifications
Polar Air
Slot Valuation
Royal Jordanian
Fleet Analysis
SH&E was retained by Polar to provide a value opinion on its slot holdings at Narita Airport.
This assignment required a full understanding of how slot value differs by type of use
(passenger vs. freighter) and time of day – and in particular the drivers of heavy slot
demand by all cargo operators during certain peak
SH&E was retained by Royal Jordanian in to advise it on options for replacing its
aging fleet of Boeing 707 freighters. We explored 11 aircraft options in total, ranging
from status quo – continuing to maintain the 707’s in service - to acquiring 757’s,
767’s, A310’s, A300’s, DC-10’s, Tu-204’s and other types or variants. SH&E found
that the most cost-effective solution was to convert several of the carrier’s otherwise
under-utilized passenger Airbus A-310-300’s into freighter configuration. Royal
Jordanian has implemented this solution, and returned two such modified aircraft to
service in 2003.

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