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GLOBAL CARGO IS LEAVING ON A JET PLANE

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GLOBAL CARGO IS LEAVING ON A JET PLANE

With the ongoing threat of COVID-19, airlines have seen a precipitous drop in passenger travel and are focused on the possibility of a voluntary or mandated halt to U.S. passenger flights. In response, major carriers are finding ways to keep flying during the global health crisis.

American Airlines and United Airlines, for example, have offered their passenger aircraft for charter cargo flights. Even in normal times, the lower deck of passenger aircraft carries cargo to maximize the utilization of space. With the sharp scale-back in passenger travel, however, the companies are offering dedicated cargo runs to deploy their assets and replace revenue while helping to keep supply chains moving and facilitate the shipment of essential goods.

Attention All Passengers:

Many air travelers don’t realize that it’s not just their own and fellow travelers’ luggage that checked in for their flights. The big passenger airlines generally have a lot of available space in their bellies. With operating costs covered by passenger tickets, the airlines often generate supplemental revenue by carrying packages, freight or mail for the U.S. postal service on board passenger flights.

In turn, cargo shippers secure relatively cheap space and can get goods close to their ultimate destination given the dense network of airports serving passenger flights around the world. Even logistics players like UPS and FedEx partner with passenger airlines, particularly in emerging markets where trade volumes may not justify the deployment of their own regularly-scheduled aircraft. Technology tools enable precise coordination to ensure goods off-loaded from a freighter aircraft make their departure on a passenger aircraft and vice versa.

Cargo split

The trend is taking off. The International Air Transport Association (IATA) has been cited as estimating the split between cargo carried by passenger airlines and freighter aircraft at 60/40 and forecasts that will grow to 70/30 in the coming years.

In 2018, American Airlines moved 2 billion pounds of cargo and raised $1 billion of cargo revenue despite not operating cargo aircraft. Airlines based in Asia such as Korean Air and Cathay Pacific do have freight fleets, but still carry more than half of their cargo in the bellies of passenger aircraft. McKinsey has noted that with the expansion of the major Middle Eastern passenger carriers and new aircraft designs with large belly-cargo configurations, the belly capacity of Middle Eastern carriers flying into Europe in 2016 equaled the capacity of more than 100 weekly Boeing 777 freighter flights.

Open Skies

“Open Skies” agreements governing the transport of people, pallets and packages are designed to enable market forces to guide decision-making about routes, capacity, and pricing. Critically, Open Skies agreements also provide both passenger and cargo flights unlimited market access to partner markets and the right to fly to all intermediate and beyond points. The United States now has Open Skies agreements with over 100 partners around the world, including both bilateral agreements and two multilateral accords. So-called fifth freedom rights – also called beyond rights – are a core element of Open Skies agreements, permitting a carrier to fly to a second country, offload passengers and cargo, pick up new passengers and cargo, and continue on to a third country.

Over 100 Open Skies

While Open Skies agreements provide benefits to both passenger and cargo carriers, cargo carriers to a large extent fly international packages and freight themselves, while passenger carriers utilize codeshare agreements and worldwide alliances. The different business models and complex tie-ups can produce a divergence in interests. A prominent example was the dispute between the “Big Three” U.S. passenger carriers – American, Delta, and United – and the governments of the United Arab Emirates (UAE) and Qatar, who the carriers alleged were providing billions of dollars in subsidies and other benefits to their state-owned carriers: Emirates, Etihad, and Qatar Airways. Among other serious concerns, this raised red flags about subsidized fifth freedom operations (e.g., Newark-Athens-Dubai) and the potential for their expansion, negatively impacting U.S. passenger airline service to the Middle East and India.

U.S. Airlines for Open Skies, a coalition that included FedEx, Atlas Air, the Cargo Airline Association and JetBlue (which has a code-sharing agreement with Emirates), opposed the call of the Big Three for restricted Gulf fifth freedom rights (a violation of the U.S.-UAE and U.S.-Qatar Open Skies agreements if restricted involuntarily). The cargo carriers expressed concern that challenges to the Open Skies accords with Qatar and the UAE put at risk the fifth freedom rights that cargo carriers depend on for their complex global networks. They discounted the view that the U.S. could breach passenger fifth freedom rights without setting a dangerous precedent for the equivalent all-cargo rights.

The dispute was ultimately resolved in 2018 through U.S. government agreements with the Qatar and UAE governments under which the parties acknowledged that government subsidies adversely affect competition and committed to financial transparency and business on commercial terms.

Air Cargo Players

In the Upright Position for Takeoff

As passenger carriers step up to support cargo at this extraordinary time, you may not know that from 1997-2001, UPS also ran passenger operations. For a period of years, the company had contracts with tour companies and cruise lines to offer vacation flights as well as charters for college and pro sports teams, politicians, the press corps and others. In under four hours, a 727-100QC could be ready to carry 113 passengers. See here for the UPS Quick Change process.

Air cargo capacity is critical at this time of crisis and the airlines’ role is deemed a critical infrastructure industry by the Centers for Disease Control and Prevention (CDC). American Airlines reports that its recent cargo-only charter carried medical supplies, mail for active U.S. military, and telecommunications equipment and electronics to support people working from home. United’s wide-body charter cargo flights are likewise getting critical goods into the hands of businesses and people in need. Stakeholders across the cargo and passenger industries look forward to a post-pandemic era where all can return to their respective roles in transporting people and cargo globally, described well by United’s slogan “Connecting People. Uniting the World.”

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Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

This article originally appeared on TradeVistas.org. Republished with permission.

AA Cargo Confirmed as Jettainer Customer

American Airlines is the latest customer to trust in the expertise of Jettainer’s “Cool Management” service following a successful test run, according to an announcement from the company this week. Jettainer will continue running all of the reefer containers for the airline at the Cool Center of Excellence in Abu Dhabi.

“The management of reefer containers is a very complex part of ULD management. With our expertise in global ULD management, we can help increase efficiency between all supply chain participants in this process as well. We are optimistic that we will be able to further expand this service,” says Carsten Hernig, Managing Director of Jettainer GmbH.

Through Jettainer’s expert management strategies, additional risks, such as overcapacity and increased costs are ultimately minimized.

“Cool Management is the newest of our services and complements our product range by an attractive field which is increasingly demanded within the market. With our flexibly combinable product modules, we also meet the demands of many customers for individual solutions,” said Martin Kraemer, Head of Marketing & PR at Jettainer.

“For many years, Jettainer has been a valuable partner in the management of our regular ULDs. Now, with the addition of Active temperature-controlled containers, we have comprehensive, end-to-end tracking and management of all ULD types used for our customers’ valuable cargo,” concludes Tom Grubb, Global Head of Pharmaceuticals and Healthcare.

Source: Jettainer

American Airlines Cargo to Utilize New Service Between DFW and Dublin

Starting this summer, American Airlines will offer a new nonstop flight from Dublin to Dallas Fort Worth, directly connecting the two for the first time in the history of the world’s largest carrier.
The seasonal flight, which will operate from June 7 through Sept. 28 of this year, will be flown on cargo-friendly, fuel-efficient Boeing 787-9 aircraft. That should make it a welcome addition for the cargo community wishing to serve Texas, the second largest importing state in America, where the manufacturing sector is projected to continue growing in the coming years.
Customers with a diverse range of commodities are already expressing interest in the flight, according to American Airlines, which adds potential commodities including computer parts, medical devices, machinery, oil industry equipment, aviation parts and pharmaceuticals.
 “This first, direct, scheduled service from Ireland to Texas will open up a number of new markets for both Irish and multinational exporters with freight destined for Dallas and beyond,” says Andy Cornwell, regional manager of AA Cargo-Northern Europe.
American also offers flights from Dublin to Charlotte, Chicago O’Hare and Philadelphia, as well as seasonal service from Shannon to Philly.

American Airlines Cargo Celebrates Record Volume and Revenue

American Airlines Cargo released an announcement confirming record-breaking numbers for 2018 across multiple initiatives including performance, revenue, and Flown As Booked (FAB) numbers. Records were made for six out of the last seven months in 2018.

The airline attributes the more than $1 billion in revenue to successfully implemented routes and strategic capacity planning. Additionally, the airline confirmed volumes for freight and mail were at record levels for 2018, with an impressive 2 billion pounds.

“Our Operations team set all-time performance records, while moving record volumes of freight and mail across our system this year, reaching our typical peak fall volumes month after month,” said David Vance, VP, Operations, American Airlines Cargo. “It’s impressive to say the least and makes me very proud to lead Cargo Operations.”

“We’ve had an incredible year,” said Rick Elieson, President, American Airlines Cargo. “We set out to break records and did just that. We achieved a major revenue milestone, but more importantly, our teams handled record volume and still delivered the best operational performance in the history of our company. Thanks to the daily effort of every single team member in this organization, 2018 was definitely a historic year.”

Source: AA Cargo

Making Spirits Bright

Beginning in early October, American Airlines has been diligently transporting over 10 tonnes of sweet chestnuts from Rome’s Fiumicino Airport to JFK each day to prepare Americans for the quickly approaching holidays.

The sweet chestnuts originate from mountain harvesting in the Naples, Italy region and have a high American demand right now due to limited localized production options, according to a release this week from the company. Due to this increase in demand, efforts to transport the holiday classic kicked off earlier in the month of October and continues on strong, going on six weeks.  During a normal season, it usually lasts for only a couple of weeks.

“Whether its chestnuts roasting on the streets of New York or families preparing a traditional stuffing to accompany their Turkey at Thanksgiving or Christmas, our team in Italy has worked hard with our shipper and forwarder partners to deliver record tonnages of chestnuts this year,” says Richard Hartmann, American’s Regional Cargo Sales Manager.

As the season of giving continues, American everywhere can be thankful for the hard working efforts of the American Airlines cargo team for supplying one of the most classical items enjoyed during this time of the year.

 

About American Airlines Cargo

American Airlines Group is the holding company for American Airlines. American provides one of the largest cargo networks in the world with cargo terminals and interline connections across the globe. Every day, American transports cargo between major cities in the United States, Europe, Canada, Mexico, the Caribbean, Latin America and Asia.

American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld alliance, whose members and members-elect serve nearly 1,000 destinations with 14,250 daily flights to 150 countries. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index. Connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.