Explosive progress

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On 5 May, 1987, a British Aerospace 146-200QT "Quiet Trader" freighter operating between Prestwick in the UK and a hub at Nuremburg, Germany, launched the European freight operations of Australia's TNT Transport group, which now trades as TNT Express Worldwide. In the ten years since then the company has established a dedicated fleet of some 17 146s and five Boeing 727s plying its growing European express-parcels network every night.

Those ten years have also seen TNT establish an Asian hub in Manila, Philippines, and the company is poised to enter a new era in 1998 with the launch of its own dedicated, purpose-built European "super-hub" in Liège, Belgium.

TNT was formed in Australia in 1946 as Thomas Nationwide Transport, and established itself as a major player in that nation's transportation market over the next 40 years. Having established itself in the UK in 1978, TNT began to consolidate its European presence during the early 1980s with the acquisition of the European arm of courier IPEC, and small, Brussels-based freight airline SkyPak.

Following its decision to launch a European air network, TNT provided BAe with its launch order for the then newly developed all-freight "QT" version of the BAe 146. Luton, UK-based Air Foyle was signed up to provide the required air-operator's certificate and crews and, by the end of 1987, had three 146s being flown on its European air network from TNT's Nuremburg hub.

After the initial acquisition of the prototype 146QT from the manufacturer (with which it launched services), TNT concluded the much-trumpeted deal to take on BAe 146QT production for the ensuing five years, expected to amount to "up to 72 aircraft". Although that target was not achieved, TNT has been nevertheless the prime customer for the 146 freighter, taking a total of 19 146-200 and -300 freighters, but the rapid growth in the market in recent years has forced it to focus on larger aircraft.

"When we took over SkyPak in 1985 we were moving 70,000 consignments a week," says John Fannon, TNT Express Worldwide vice-president of network operations. "That figure now stands at 650,000. We had low growth to begin with, but recently we've been seeing annual compound rates of 25-30% on our air network in Europe," he adds.

A year after launching services, TNT acquired express-parcels company XP Parcels and, in 1992, it took over FedEx's European distribution when the US carrier withdrew its own dedicated operations from the region. TNT's expansion in Europe saw it establish its central hub in Cologne during 1988, and create other operating bases. The company now has 17 ten- or 11t- payload 146-200/300QTs, with eight aircraft based in the UK and operated by Air Foyle, two flown by Eurowings and based in Germany, two operated by Italian company Mistral Air, and five flown by Pan Air of Spain.


Larger aircraft

In 1994, market growth forced TNT to seek aircraft with greater capacity than that of the 146, and the company introduced its first 23t payload, Stage 3-hushkitted 727-200Fs. Five 727s are now operated exclusively on TNT's European network, by Hunting Cargo (four) and Sterling European Airlines (one). TNT also uses other freighters under aircraft, crew, maintenance, insurance or sublease contracts, including a 727-200F, a Boeing 737-300QC (Lufthansa), two Lockheed Electras, two Fairchild Dornier Metros, and two Shorts 330s.

At the end of 1996, TNT Express Worldwide was purchased by Dutch postal service KPN. The group, the European operation of which is based in Amsterdam, employs some 14,500 people and operates in more than 200 countries, with revenues in excess of DFl3 billion ($1.6 billion). As well as it aviation division, TNT has major trucking networks around the world served by some 3,700 vehicles, the vast majority of which (2,250) serve its European operations. TNT's aviation division employs some 350 people worldwide.

It is happy with the size of the BAe 146 fleet, but TNT expects to be operating "at least another three 727s in Europe within the next 12 months", says Fannon, who adds that TNT is undertaking a strategic analysis of the high-capacity side of the market, which could see it introduce large freighter aircraft in 1998 (Flight International, 12-18 March, P10).

"We have a need for a larger, more-economical aircraft to replace the 727," says Fannon, who adds that the carrier aims to retire the 727s by the year 2002.

The company has shortlisted the Airbus A300B4 and Boeing 757, and expects to conclude the feasibility study before the end of 1997. If the decision is positive, the first aircraft could be added in 1998, to coincide with the launch of the Liège hub. Fannon sees TNT introducing one large freighter in 1998, and then possibly up to three a year.

The decision to move into the large-freighter market is dependent upon various issues. "The larger aircraft would be more suited to high-volume, single-sector routes," says TNT aviation-division managing director Tom Storey. TNT has not ruled out chartering other carriers' capacity for its expansion. "It would be nice to try it out before we commit to our own fleet," adds Storey.

Fannon underlines the fact that it is not TNT's policy to own all the aircraft it operates. "If we can avoid acquiring aircraft, we will," he explains. "For example, we subcharter a Lufthansa 737-300QC for our daily Nuremburg-Cologne service."

Fannon says that the company's growth plans will mean that the 146s will be kept for the foreseeable future. "We plan to continue our policy of expansion in two dimensions, both in geographical terms, and through increased capacity on existing routes," he explains.

The combination of the acquisition of more 727s, and the introduction of a larger type, will take care of the capacity growth. "Some multi-stop routes will develop into direct flights," says Fannon. Geographic expansion will see an increase in the number of "ports" served. "We serve 51 ports nightly in Europe, and the network development continues," he adds. Fannon sees a possible future requirement for additional smaller freighters, such as Fokker F27s, to feed new, remote ports as they are added.

With its UK-based BAe 146s flying from the Stansted hub, TNT has established an important maintenance operation at the airport which is Joint Aviation Requirements 145 approved, and employs 60 people. The base provides spares support, and has an AlliedSignal ALF502 engine shop, which also undertakes subcontract work for the engine manufacturer.


Liège preparations

TNT is now gearing up for the opening of its purpose-built European hub in Liège, which is to begin operations in 1998. The company is investing DFL100 million ($52.3 million) in the project, which it claims will result in the most advanced air-cargo hub in Europe.

"With about 300-350t of TNT freight going through Cologne every night, we needed to relocate to somewhere that could cater for the expected long-term growth," says Fannon, who adds that the growing congestion, plus the strong environmental lobby at Cologne, dissuaded TNT from developing its existing hub.

The Liège site was chosen, after a four-year evaluation progress, for a combination of reasons. "The local Walloon Government has already invested a considerable amount to upgrade the infrastructure of this ex-military airfield," says Fannon. The airport is also in a sparsely populated, uncongested area which is better suited to cope with TNT's expansion.

TNT's plans for Liège envisage a 20% compound annual growth rate and, with scope for expansion of buildings, Fannon expects the new hub will be able to "-take us though until at least 2015, and be able to cope with upwards of 30 A300s".

Meanwhile, TNT has steadily been building up its second air network, in Asia, using Manila as a hub. The Asian network was set up in 1993, as a joint venture with the Philippine Government, which is the major shareholder.

Operations began with two BAe 146s, flown by Pacific East Asia Cargo (PEAC), between Manila, Singapore, Taipei, in Taiwan, and Hong Kong. In 1994, Tapei-Seoul, in South Korea, was added, with services to Jakarta, Indonesia, via Singapore added in 1995.

After initially subleasing a 737-200F from Euralair, PEAC now operates a 727-200F flown by Kitty Hawk Airways, alongside its two 146s. Fannon sees the Asian air network growing by around one aircraft a year, pointing out that the lower emphasis placed on environmental issues in the region gives TNT "-plenty of opportunity to continue with the 727". New Asian destinations could include points in China, Thailand, Japan and Malaysia.

The company also has some presence in the Middle East/Africa, and North and South America, but the focus in these regions is on road transport at the moment. Fannon is not specific about the company's plans to establish air networks in these regions, but does reveal that "something in South America" might be on the agenda at some stage.