Quote:
Originally Posted by Hedley
The problem with freight is that we’d be competing with Atlas and Kalitta, not Fed Ex or UPS. Freight prices now are artificially high due to reduced volume from the normal long haul airlines carrying freight. Our revenue from flying freighters would be in line with the ACMI companies, and they would kill us on cost. Purple and brown are completely different operations. They are global shipping companies that just use airplanes to fill their own trucks and make deliveries. We can’t compete with that. I wish that it would work though. Flying freight is better than dealing with flight attendants or passengers in every way.
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.