Meredith Hypolite Derby of MGO Consult and Andrew King of ANA Aviation Services in discussion during a Financial Gleaner interview at the Hilton Kingston hotel February 16. ANA is building out a regional cargo hub in Montego Bay. MGO is one of its local partners. - photo by Susan Gordon

Susan Gordon, Business Reporter

London-based cargo handlers, ANA Aviation Services, has expanded to Jamaica with plans to build out a regional cargo hub in Montego Bay to transit goods from South and Central America into Europe.

ANA has partnered with Jamaican company MGO Consult and Training, run by aviation business consultant Meredith Hypolite Derby, on its cargo operations here and is in talks with a second local partner, said operations director Andrew King.

Through its newly registered local company, Montego Bay Cargo Hub Holdings Limited (MBCHH), ANAwill establish a cold storage facility for perishables at the Sangster International Airport for goods to be transited to the United Kingdom.

"There's so much cargo between here and Europe," said King, "around 60 to 80 tonnes per week."

Said Hypolite Derby: "We are hoping to generate 24,000 kilogrammes per week, as a start, which is significantly more than what Montego Bay is doing, especially since Montego Bay has been on the decline."

The target translates to just under 1.25 million kilogrammes per year.

Planning Institute figures support assertions of a depressed cargo market. In 2005, Sangster's moved 4.55 million kilogrammes of cargo, down from 2004's 5.49 million kg. Sangster and Norman Manley International together moved 19.4 million kilogrammes, down from 21.3 million in 2004.

King on a visit to Jamaica last week said the cold storage should be in place by October. He declined to specify the size of the investment, but said the two refrigerated units would have combined storage capacity of 12,000 kilogrammes.

Offices open for business

The MBCHH offices, located in proximity to the airport, is already open for business.

ANA, which handles international cargo for Thomsonfly and Jetairfly, carriers that already fly into Montego Bay, is also expected to set up operations in Dominican Republic in May.

Sangster International, Jamaica's largest airport with 140 flights per day, is currently without a cold storage facility, even with the ongoing multi-billion expansions by consortium MBJ Airports Limited. Such a facility however is zoned in the airport's land use plans.

The airport managers have designated space on the restricted air side of Sangster's for ANA's units, which are intended mainly for overnight agricultural cargo coming from Central America and destined for the United Kingdom, but the plan requires sign off by local regulators Civil Aviation Authority, said

MBJ's David Solloway, director of marketing and commercial development.

"We are renegotiating and looking at a cold storage facility but no decision has been made," Solloway told the Financial Gleaner. "We are talking to several people."

CAA's Flight and Safety Division told the Financial Gleaner that it would need to ensure that the facility won't compromise airport and airline safety and security.

The UK company, headquartered at London's Gatwick Airport, said it took over management of the Jamaican leg of Thomsonfly and Jetairfly's cargo movements just last week.

Thomsonfly and Jetairfly owned by TUI Group, the UK's largest holiday and tour company represent a number of Latin American carriers that fly San Juan, Puerto Rico; Dominican Republic; and San Jose, Costa Rica to Europe through Montego Bay.

The two operate passenger flights, but use their excess space for cargo, said Hypolite Derby.

King says ANA's regional hub will handle cargo coming from Guatemala, Chile, Nicaragua, Mexico, and even North America headed for Europe, possibly creating new synergies with its handling of Thomsonfly and Jetairfly that could lead to increased cargo business flowing through Sangster's.

For ANA, said King, Jamaica's advantages are its freight rates, number of flights taking off from Sangster's, its centralised location in the Caribbean and Latin America, and strong foreign policy that has sustained friendships with all its neighbours, in the region and the wider hemisphere.

"Jamaica is competing with the likes of Thailand and Kenya where aircraft cargo rates are two or three times more expensive," he said. To freight cargo from Thailand to Europe costs US$180 per kilogramme, but Jamaica's high flight rotations, in and out the island, he added, allows it to maintain more competitive rates.

As traffic grows through the MoBay hub, local exporters will likely be able to get their goods into Europe at lower prices. But the business needs support facilities, King said, in a bat for the cold storage plans.

"Jamaica is competing with Thailand, but people will not buy goods if the quality is not good," said the ANA director.

Thomsonfly flies twice per week and three times in winter and Jetairfly twice per week to Jamaica. The two carriers operate Boeing 767 aircraft, which has six tonnes of flying capacity for cargo.

"Hopefully what we are doing will generate more interest," said King. "More flights will bring more capacity to the market."

Hypolite Derby said MoBay will have competition from Panama, which also wants to be establish itself as an air cargo hub.

"They are making all types of proposals but they don't have the number of flights to England as we do," she said.

"There's always extra capacity to take cargo and Kingston can come on in the other phase of the operation."

Meanwhile a lobby is underway to lift 'fifth freedom' restrictions that now favour national carrier Air Jamaica on the Jamaica-London route. Fifth freedom is the right given an airline from one country to land in a second country, pick up loads and fly on to a third country.

More simply it allows for connecting flights.

"We are allowed to carry cargo but only transhipment cargo and it's only to Manchester England not London" said Hipolyte Debry.

Air Jamaica, and UK based Virgin Airlines and British Airways, are designated carriers of cargo to London. That restriction, she said, limits the business.

"We are targeting the cargo market and we are trying to lobby for change of that restriction," she said.

ANA is hunting other airline clients, but King suggested Air Jamaica would not be among them. The national carrier's cargo business segment has been declining to just under US$18 million per year.

susan.gordon@gleanerjm.com