Originally Posted by
biggun
I've had a talk with the VP of cargo operations. He comes from KLM. He gets it.
For UAL, freight/cargo is simply "value added" to the end product. Think of it like this: when you go through the check out line at the grocery store, you got some extra room in your cart for some soda pop, gum, and candy. You pick it up.
Same goes for Cargo for us. Let's simply pick up the revenue and count that as value added. So, do we go head to head and compete with Fed Ex and UPS, Atlas, etc.? or do we simply spot the money, bend down and pick it up.
Could we add some cargo only airplanes? Yes. it fits within our ops specs. I recall Continental having a very successful freight operation out of Manila.
I would be curious to know what Kirby's and Jar's plans are on freight/cargo. More value added, or go after the revenue? There are some aspects of our operation that lend itself well to hauling the freight. The more diversified our operation is, the more we may be immune to retractions and contractions in other parts of international commerce. If domestic is sucking, we need more international. If international is sucking we need more domestic. If passenger revenue is down, we need more freight.
Perhaps we take in 20 percent of our revenue from freight? That gives us some degree of immunity from fuel price increases and may protect our RASM's and PRASM's during low periods such as Sept/Oct, and Jan/Feb. time frames.
When the international quarantine restrictions come down and when demand comes back, the long haul passenger flights will will resume and the available cargo space will dramatically increase. This of course will drive bulk cargo rates back to their normal levels. I’d love to see something like Northwest had with their freight operation, but I suspect that the margins are too thin to go through the expense. We have a bunch of 767-300’s that would make excellent freighters, but there is no way that United pilots would accept the normal crew configuration, or that the company would spend the money to install the UPS crew rest pod (basically a ULD position converted into a bunk room). The normal freighter configuration used by everyone else has the lav moved into the cockpit, and your rest seat is the reclining jumpseat. Our pilots complain about a lie flat first class seat and a curtain, they wouldn’t accept the standard configuration. Bulk freight has definitely increased in volume, but intense competition and the ACMI whipsaw has made it a lower yielding business. Bezos would likely contract us to fly for Amazon, but he’d only pay Atlas rates. The freight conversions are also pretty expensive. There is a bunch of work cutting a big hole in a plane for a cargo door and beefing up the floor to handle the weight in turbulence. Most of my background prior to this place was various freight outfits. I’m always amazed about how little most passenger pilots know about the freight world. They see UPS and Fed Ex pilots making good money, but they don’t understand that those companies are just global shipping companies and that airplanes are just one of the tools that they use. The money is generated from the time of the order to the delivery of the package, not the time that the box went for an airplane ride. You seem to get it though.