Virgin Atlantic Cargo and Delta Air Lines (NYSE: DAL) Cargo have opened what they refer to as a "state-of-the-art export facility" at London Heathrow to future-proof the joint venture's growth plans in the U.K. market. The move to the new cargo terminal will ultimately double the size of the joint operation at the airport.The facility is supported by new technologies aimed at enhancing business continuity, as well as delivering significant improvements and transparency in the customer delivery process.
The two carriers operate a transatlantic network, offering 38 daily flights between the U.K. and U.S. which, in 2018, carried over a quarter of total transatlantic air cargo volumes. Delta is a member of the SkyTeam Cargo global alliance and participates in joint venture partnerships with Air France-KLM Cargo and Aeromexico Cargo as well as Virgin Atlantic Cargo, and in cooperation with Korean Air Cargo.
Heathrow currently accounts for more than 70% of the U.K.'s air cargo trade, totalling 1.7 million tons annually, a figure projected to grow to three million tons by 2040. By value, over 30% of U.K. trade moves through the airport, worth more than £100 billion ($123 billion) annually, with 95% carried in the bellies of passenger aircraft.
In May 2018 Air France-KLM, Delta Air Lines and Virgin Atlantic signed definitive agreements to combine existing transatlantic joint ventures. Closer cooperation between Delta Cargo, Air France KLM Cargo and Virgin Atlantic Cargo across the transatlantic is subject to regulatory approvals and receipt of anti-trust immunity from the U.S. Department of Transportation (DOT). Once ATI is received, the cargo divisions will be able to start working together to offer more choice across a network of passenger flights with joint trucking options and tailored products and services.
The new facility is the first phase of Virgin Atlantic Cargo and Delta Cargo's expansion program to double cargo handling capacity at Heathrow to meet projected growth.
Compared to Virgin Atlantic Cargo and Delta Cargo's former export operation at the airport, the new dnata City East facility features 18 customer delivery doors, double the previous number of delivery doors; an elevated transfer vehicle capable of full automation, with 245 pallet positions, up 20%, which enables the loading of flights in ‘trim order' to support on-time performance; high-rise racking with 1,350 positions for storing export freight, eliminating unnecessary movement of shipments; a dedicated pharma zone and increased capacity for temperature-controlled and perishables cargoes; dedicated facilities for dangerous goods and live animal shipments; new x-ray technology with enhanced imaging capability, reducing the need for secondary cargo screening; and advanced internal and external high-definition closed-circuit television (CCTV) systems to ensure a safe and secure working environment. Dnata is the joint venture's cargo handling partner.
The new facility also features the "gatehouse concept," meaning drivers arriving at the facility no longer need to leave their vehicles to complete documentation processes and are then immediately assigned to a cargo door to offload their cargo. Drivers also receive text message updates to help expedite cargo deliveries. Real-time acceptance using the operation's door management system and hand-held technology also provides instant freight status update messages for customers to confirm their cargo is being handled and flown as planned. Screens inside the facility, linked directly to the airlines' operations control centers, enable flight monitoring and the management of service level agreements.
The airlines will also move their existing joint warehouse for import cargo to a larger facility next to the dnata City East facility within 18 months.
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