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-   -   Jet Fuel and Cargo Companies (https://www.airlinepilotforums.com/cargo/2496-jet-fuel-cargo-companies.html)

ryane946 02-09-2006 01:43 PM

Jet Fuel and Cargo Companies
 
If you look at the large cargo companies (FedEx, UPS, and DHL), they all have "antiquated" aircraft. Some of them include DC-8, DC-9, DC-10, and the 727. Major airlines replaced these jets 5,10,15 years ago for many reasons, but I have to believe that the economics of operating these aircraft were a big reason why they were replaced. Since these cargo companies are making money right now, it seems logical that now would be a good time to invest and replace these aircraft with ones that are cheaper to operate, and have a more useful cargo load.

What do you think about this? Why haven't these been replaced even as jet fuel skyrockets? Should they or shouldn't they be replaced?
Thanks for your opinions.

FreightDawg2 02-09-2006 01:49 PM

You are somewhat right, except that almost all of these aircraft have been updated with new fuel efficient engines and glass cockpits. This greatly increases their efficiencies and the added efficiency wouldn't offset the higher cost of replacing them.

Pilotpip 02-09-2006 04:49 PM

Not to mention the fact that they fly far fewer cycles and hours than the average airliner which reduces costs further. The cargo carriers are also able to adapt to changes in fuel costs by raising rates or surcharges with little or no change in business.

koz2000 02-09-2006 05:00 PM

Plus you can buy a LOT of jet fuel for what it cost to replace one of these jets.

ultradrvr 02-10-2006 07:12 AM

DHL= ABX Air and AStar.....I cant speak for Astar but ABX Air is making an attempt to counter the rising cost of fuel...we have 767s that can almost carry twice the cargo to the west coast for about half of the fuel (easy men I said almost) as for the 8s and 9s we keep the 8s on shorter runs because of the fuel burn (KILN to KORD...all preparation and no H!) we are a cost plus business so we pass along the cost to DHL. It still is wise to conserve fuel based on the fact that it will affect us in the long run..Delta had a fire sale of 76s so we bought 11 and that will help our cause as well...KOZ2000 is right about the cost of a new jet vs buying fuel... one (someone smarter than me) has to take that into consideration when deciding which way to go

dckozak 02-10-2006 04:08 PM

Making money hand over fist
 

Originally Posted by ryane946
................. Since these cargo companies are making money right now, it seems logical that now would be a good time to invest and replace these aircraft with ones that are cheaper to operate, and have a more useful cargo load.

What do you think about this? Why haven't these been replaced even as jet fuel skyrockets? Should they or shouldn't they be replaced?
Thanks for your opinions.

Fedex has been talking about replacing the 727-100 for years, did get rid of a lot of them but still there still quite a few on the ramp. The airframes are worthless, probably couldn't sell them for the cost to transport to their new home.;) But being fully paid off and used as fill ins and standby, Fedex can justify keeping them because when they do fly they are saving the company lots of money due to the service failure's that would result if they didn't fly. I think when any heavy maintenance event is mandated, its put out to pasture.
Regarding the newer older fleet (727-200, DC-10-10) these aircraft would be marginal at best in pax operation due to the razor sharp yields of those operations. The integrated cargo carriers (Fedex, UPS, DHL) make a lot more money on a pound for pound and cube basis than even ordinary freight carreirs. There costs are less a function of the flight than the handling and other services provided to the customer. As a result, fuel, crew and other flight related costs are a smaller portion of the total costs.
That said, Fedex is looking to replace the 727, possibly with 737 or 757. We don't know which, if either, they really favor. My guess is they've been waiting for a major pax carrier to go belly up and buy a fleet at a bargain price. Since none had served its self up, Fedex continues with its fully paid for antiquated fleet of three holers.:D

Trash Hauler 1 02-11-2006 03:14 PM

Sometimes true, sometimes not...
 

Originally Posted by Pilotpip
Not to mention the fact that they fly far fewer cycles and hours than the average airliner which reduces costs further. The cargo carriers are also able to adapt to changes in fuel costs by raising rates or surcharges with little or no change in business.

I agree with the cycles/hours for the domestic birds. We are getting roughly 18 hours daily ute rate out of our md-lemons and 767. Low cycles, though. Used to be way up there on the whale also, but has decreased a little as the fleet draws down. YMMV

Ranger 02-13-2006 02:22 PM

Jack says that the 727-100's should (emphasis on the should) be parked by maybe as early as this summer.

Browntail 02-13-2006 04:07 PM

That's funny, UPS is bringing more 727-100s into service later this year.

Ranger 02-13-2006 06:30 PM


Originally Posted by Browntail
That's funny, UPS is bringing more 727-100s into service later this year.

I think that Fred would burn ours to the ground before he'd sell 'em to UPS. Unless he could make a personal buck off of them, that is.


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