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What Is The Cargo In The Belly Worth?  
User currently offlineYu138086 From , joined Dec 1969, posts, RR:
Posted (9 years 5 months 1 week 5 days 5 hours ago) and read 4427 times:


Greetings,
I've long thought that the cargo in the belly of a long-haul aircraft, revenue wise, is worth far more than the passenger revenue on any given flight. I read that each time a 747 heavy takes off it has a minimum of US$800,000 is its belly when full. Care to shed some light on this?

Cheers.

26 replies: All unread, showing first 25:
 
User currently offlineJetjeanes From United States of America, joined Oct 2004, 1429 posts, RR: 1
Reply 1, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4396 times:

and Md11 for klm flys from ams to mem and is packed with freight in the lower bins.... they could turn a profit with just 10 pax siting upstairs on the plane..The fly fresh flowers,meats,and cargo is high.


i can see for 80 miles
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4384 times:

Let's not get crazy now.

Many widebodies fly across the Atlantic with empty spaces below.
A full PMC can go as for around $1000. Maybe space for 4 or 5 five PMCs per aircraft. PMCs are the largest flat cookie sheets that you see cargo nets attachted to. This is referred to as lowe deck freight.

That's called lower dech freight below 62 inches. Freighter carry cargo that exeeds this height and charge much more for the service.


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 3, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4378 times:

sorry for the spelling errors. I didn't mean to hit post..LOL

User currently offlineJetjeanes From United States of America, joined Oct 2004, 1429 posts, RR: 1
Reply 4, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4356 times:

Yes ive built my share of those cookie sheets in my day...i stumbled across some on the dock about 2 years ago,,and found some pan am cookies...all the sheets are made of aluminum and have a number on them and the airline they belong to...im surpirised those are not collectors items... I was 20 miles from an airport and in mississippi,and found a JAL ld3 or one of the bins sitting out in the woods...Like Jal doesnt fly within 2,000 miles of here..lol,,,


i can see for 80 miles
User currently offlineWidebodyphotog From United States of America, joined Jun 1999, 917 posts, RR: 67
Reply 5, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4347 times:

Sorry my friend but someone has steered you a bit wrong.

An example:

At current market rates of $1.40/Kg including a hefty $.35/Kg fuel surcharge tacked on for good measure. A 747-400 going from JFK to NRT, with an avg 13t of cargo would get you $18,200 (13,000 x 1.40) of additional revenue. While not $800k it's still nothing to sneeze at. Cargo revenue is a good way to offsetting the operating cost of the aircraft to some degree. The Eastbound example is a bit better. an avg of $3.00/kg could be expected ex NRT and more payload, (weight), could be carried, 20t vs 13t, for a gross revenue of $60,000 (20,000 x 3.00). Again not your $800K figure but there is something interesting about this figure. At that cargo rate you are coming close to the avg net $ yield per kg of passenger weight on that segment. So it becomes a balancing act of carrying another 90KG of passenger weight or loading up another 90 or more kg of cargo for a similar amount of revenue. Not that it's thought of in those terms though.

Those loads are exemplar of a 747-400. You could expect cargo loads of up to 35t or more on a Western Europe to Asia bound 777-300 or A340-500 at nearly the same cargo rates in each direction

Also something to note is that after baggage containers for say 340 pax are loaded,(a typical trans pac pax config for a non-US 747-400), there's room for 6 pallets of freight. And these pallets can weigh from 1,000 to 5,000Kg dependin on their size, loading restriction, and commodity loaded on them. A 777-300 or Airbus A340-600 has space for 10 or 11 cargo pallets after passenger bag container space is used. None of these examples get's you to that magic $800k figure but cargo is a significant source of revenue to long-range operators.

-widebodyphotog



If you know what's really going on then you'll know what to do
User currently offlineGARUDAROD From United States of America, joined Apr 2000, 1503 posts, RR: 1
Reply 6, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4340 times:


$800,000????? on one flight. Not hardly, unless the cargo was
computer chips or bullion. In general most cargo shipped on passenger
flights Transatlantic or Transpacific is well under $1 per kilo. Some
speciality items as mentioned above or small packages will have a
higher cost. Typical yield for a wide body passenger flight is probably
in the range of $50,00-$100,000.



Cargo doesn't whine, moan, or complain
User currently offline767-332ER From United States of America, joined Mar 2001, 2030 posts, RR: 11
Reply 7, posted (9 years 5 months 1 week 5 days 4 hours ago) and read 4340 times:


About 10% of the revenue for Delta.



Twinjets...if one fails, work the other one twice as hard!!!
User currently offlineWidebodyphotog From United States of America, joined Jun 1999, 917 posts, RR: 67
Reply 8, posted (9 years 5 months 1 week 5 days 3 hours ago) and read 4312 times:

$800,000????? on one flight. Not hardly, unless the cargo was
computer chips or bullion. In general most cargo shipped on passenger
flights Transatlantic or Transpacific is well under $1 per kilo. Some
speciality items as mentioned above or small packages will have a
higher cost. Typical yield for a wide body passenger flight is probably
in the range of $50,00-$100,000.


At less than a $1/KG that $50-$100,000 figure is more than 50-100t of cargo! Which airline is carrying that much cargo on a passenger flight? Not possible. Current Westtbound trans pac rates are averaging near $1/kg/flight on pax flights and nearly the same for freighters. Add on the $.35/kg fuel and a $.10 or $.15/kg security charges that ALL Asian carriers are levying now. and you come to a good total figure of $1.40/kg. US domestic carriers rates trans pac are in the dumps but they are not the ones I'm referring to.

Please don't steer this fellow further off course here.

-widebodyphotog



If you know what's really going on then you'll know what to do
User currently offlineGARUDAROD From United States of America, joined Apr 2000, 1503 posts, RR: 1
Reply 9, posted (9 years 5 months 1 week 5 days 3 hours ago) and read 4290 times:


Widebodyphotog,

I did not say all cargo was under a $1kg. Each flight has a mix and
match of yields. I said most cargo was at those rates. However,
if you factor in higher yields for time definite or certain perishable
cargos, you will get a higher breakdown. Now if you have 35,000kgs
on a flight, which is quite possible with the B777s, A340-600s,
B747-400s etc you will see that you can get an average of approx
$50.000 more or less. Now many carriers offer flat rates for both Fuel and
security surcharges as well as ULD rates. I have done cargo sales for
both Domestic and International carriers for over 20years,so I think I
am aware of what the pricing breakdowns are.



Cargo doesn't whine, moan, or complain
User currently offlineM404 From United States of America, joined Nov 2003, 2220 posts, RR: 5
Reply 10, posted (9 years 5 months 1 week 5 days ago) and read 4218 times:
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I've heard that myth about the AMS-MEM flight. I know it seems bulked out more westbound due flowers but would love to actually know if it's true that freight makes more than passenger loads or just what the ration real was. A lot of stories get passes as facts here with little basis.


Less sarcasm and more thought equal better understanding
User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 10
Reply 11, posted (9 years 5 months 1 week 5 days ago) and read 4202 times:

I read some where that for every 400lbs of priority mail we ship(ual) is equal to one "full fare" pax on that flight........


bus driver.......move that bus:)
User currently offlineBehramjee From Canada, joined Aug 2003, 4716 posts, RR: 44
Reply 12, posted (9 years 5 months 1 week 4 days 22 hours ago) and read 4157 times:

For CX, cargo contributes an overall 30% of its annual revenue.

I expect cargo to contribute at least 25%-35% of the annual revenue for other major Asian airlines such as JL-CI-BR-KE-OZ-NH-SQ due to their large freighter fleets as well as high useage of belly cargo space on board its large widebodied aircraft on regional routes.

According to Airliner World magazine, Emirates's multiple daily flights with A 332s and B 777s to DOH-MCT-BAH-KWI from DXB rely more heavily on cargo revenue than pax !!!


User currently offlineWIDEBODYPHOTOG From United States of America, joined Jun 1999, 917 posts, RR: 67
Reply 13, posted (9 years 5 months 1 week 4 days 19 hours ago) and read 4075 times:

GARUDAROD,

While my experience has not spanned the length of yours I do have a few years working with the cargo departments of several international airlines in the fields of, market analysis, systems development and operations management. Based on my experience, data, and the specific sectors I was speaking of, I think your figure of $100,000 being "typical" is too far out there. I do understand the graduation of rates and the yield characteristics of express products offered by various airlines. However, I used 35t as a figure representing the high-end of cargo tonnage loaded on a passenger carrying aircraft which is not typical by any means, especially not on a 747. Having "typical" $100K cargo revenue flights would be a dream for the carriers I've been involved with weather it be Trans-Pacific, Trans-Atlantic or Europe to Asia. There is also a great disparity between the import and export rates from any point you may want to pick which may be as high as 3 or 4 to 1(import to export). That alone mitigates against citing your $ range as a typical figure for international cargo.

As for mail. Uadc8contrail you are very much correct. International mail rates are very high relative to general cargo, and those contracts are very lucrative for the airlines. USPS mail contracts set strict conditions for carriage and require the air carrier to transport mail without fail with few exceptions, (There are penalties if mail is failed to be transported as scheduled). The USPS has a fixed rate system that is a sliding scale based on distance and type of mail. So the longer a distance you carry that mail the higher the rate/lb the USPS pays the carrier. Those rates can be the equivilent of the mid $1+ to $4 or more per kg with tonnages ranging from a few hundred kilos to a tonne or two or more (especially around the holidays).

Yu138086,

You can see from the responses to your inquiry that it's not really a simple cut and dry set of figures or expectations. A good way to sum it up is to say that under a variety of conditions, cargo and mail is a very important revenue source for international air carriers.

-widebodyphotog



If you know what's really going on then you'll know what to do
User currently offlineRJ100 From Switzerland, joined Nov 2000, 4114 posts, RR: 30
Reply 14, posted (9 years 5 months 1 week 4 days 19 hours ago) and read 4066 times:

I know someone that booked two labrador dogs and 3 cats on a British Airways A-319 flight from LHR to BSL last week. It cost around 3000 Swiss Francs which is around 2550 US Dollars.
Cargo can be quite important for airlines. 2550 USD extra revenue on such a short flight is always welcomed!

Regards,
RJ100



none
User currently offlineWIDEBODYPHOTOG From United States of America, joined Jun 1999, 917 posts, RR: 67
Reply 15, posted (9 years 5 months 1 week 4 days 18 hours ago) and read 4045 times:

Behramjee,

I have the most recent annual reports for the airlines you mentioned with the exception of CI and OZ. You are basically right on, though I would expand the low end of that range down to 20% for international operations.

Also Emirates is a good example of the disparity of import/export rates I mentioned. There's quite a difference in the rates they are getting ex DXB than on flights into DXB.




If you know what's really going on then you'll know what to do
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 5 months 1 week 4 days 18 hours ago) and read 4042 times:

Cargo comprises 10% of revenue at Delta?

More like 4%.


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 17, posted (9 years 5 months 1 week 4 days 18 hours ago) and read 4026 times:

Another example:

RG decided to extend its daily GRU-CDG flight to AMS solely on cargo basis. The extension CDG-AMS operates with very load factor (about 10-20%), but the belly of the a/c is always full. It shows that cargo is indeed important!

Rgs,
Hardi


User currently offlineXXXX10 From United Kingdom, joined Jan 2000, 777 posts, RR: 0
Reply 18, posted (9 years 5 months 1 week 4 days 16 hours ago) and read 3958 times:

A couple of points

I would imagine that rates vary a lot, Excess baggage carried as cargo can be al least £10 per KG although I understand that airlines give huge discounts to bulk customers.

I believe BA used to charge around £25 per Kilo for freight on Concorde.

Perhaps the original question was about the value of the freight rather than the revenue it generated.


User currently offlineYu138086 From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 5 months 1 week 4 days 4 hours ago) and read 3354 times:

I understand the difference between the real value of goods carried and the cost to carry those goods. About cargo revenue, i think US$60K is the magic number for "belly" profitablity on any particular flight. About the dollar value of goods carried, well the sky is the limit I'm sure. Are there limits as to the dollar value of any commodity that can be carried? I would think not since airlines carry GOLD bars from country to country. A friend once placed $75K of merchandise on United and they lost it! He got nothing in recompense although they did acknowledge fault. What happes when a carrier "loses" cargo or if the cargo gets destroyed? Good luck trying to make a claim and get a judgement in a timely manner.

Thanks for all the knowledgeable responses.


User currently offlineBoeing nut From , joined Dec 1969, posts, RR:
Reply 20, posted (9 years 5 months 1 week 3 days 18 hours ago) and read 3266 times:

I recall several years ago that British Airways stated that they could fly a 767-300 trans-atlantic with full cargo and no passengers and still pull a profit.

User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 5 months 1 week 3 days 18 hours ago) and read 3236 times:

There is no magic number for cargo. In 99% of the cases the plane is going there regardless of what cargo is onboard. Revenue Mgt at the airline I work for does not even take into account cargo revenue when determining route feasibility. It''s just seen as icing on the cake. Your profit from cargo is in the 40% range after expenses and burdening the operation.

Just to give you an idea of rates. I've seen a flat 35 cent a KG from the US to London, I've seen $4 a kg from the US to remote parts of Africa. You will get huge swings depending on the amount of freight you need moved. A small package or 140 tons of paper products on pallets?


User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 5 months 1 week 3 days 18 hours ago) and read 3222 times:

It depends on the cargo. I worked at Cargo at SAA a long time ago, and perishable cargo was a HUGE money spinner. Fresh fruit and flower to Europe, and especially live seafood to the Far East. SAA would regularly block 30 seats on the weekly JNB-HKG flight to accomodate live crayfish and abalone being flown up from CPT to the Far East - it was worth way more than pax travelling on APEX tickets. SA bought two 74Ms in the 80's, one for flights to TPE carrying seafood and bringing back hi-tech goods, the other to fly to FRA/AMS with fresh flowers and fruit, bringing back industrial machinery and cars.

Speaking of gold, we used to ship gold bullion out to London once a month, the security vans would come from the Reserve Bank in Pretoria - we'd have to put spreaders into the forward cargo hold of the 747 to accomodate the weight - I'm trying to remember the weights of gold we'd send, maybe 2000kg at a time (I could be wrong, it was a long time ago).


User currently offlineDABZF From Germany, joined Mar 2004, 1200 posts, RR: 0
Reply 23, posted (9 years 5 months 1 week 3 days 17 hours ago) and read 3167 times:

In 99% of the cases the plane is going there regardless of what cargo is onboard. Revenue Mgt at the airline I work for does not even take into account cargo revenue when determining route feasibility. It''s just seen as icing on the cake.

I think it's a big problem for most of the airlines - they don't put enough focus on cargo! I don't know many airlines that would've change pax a/c type because of cargo demand!

Of course you also have costs to move and handle the cargo so it is not just "icing on the top". It needs proper planning to achieve the "icing". Normally airlines cargo department has their own revenue management to calculate the revenue of cargo separate from the pax reveune.

When it comes to rates of cargo it varies a lot depending the kind of goods you're transporting - if you're handling special products that require some sort of extra or special handling the rate is also higher because the airline probably also has more costs for the extra/special handling in form of extra processes/equipments/facilities/staff etc.

Rates also varies a lot between origin/destination you might have EUR4/kg from Asia to Europe but from Europe to Asia rate for same piece of cargo could be EUR2/Kg on the same a/c (this is just an example not realistic figures!). It's all simply because of the market differences and the "demand".

"High yield" or "premium" cargo is of course what the airlines want the most because the profit is better than from the "general" cargo. This could be Express, Dangerous Goods, Valuables, Vulnerables, Perishables, Live Animals etc. where the rates are higher than for "general cargo" - and there is lot of specials flying around!
It's bit like that every airline would love to fly only First or Business class passengers if there would be demand for it!

In general, a well organised cargo department is a good profit maker for airlines, problem is that many airlines (specially in US) handle cargo with their "left little finger" and don't put attention to it that it needs!



I like driving backwards in the fog cause it doesn't remind me of anything - Chris Cornell
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 5 months 1 week 3 days 16 hours ago) and read 3155 times:

No I agree with you about putting greater emphasis on cargo. I think the exit US traffic is driven much more by passenger considerations, US imports are where the need is greater so yes for an airline like SAA cargo is vital.

A little story about SAA. They tendered all these cotton bails on our airline once they arrived into the USA. Tens of thousands of pounds. They were samples of cotton grown in South Africa, for potential buyers. We thought we were doing well until they refused to pay the bill after the freight was moved.
That was the end of their credit with us.


25 DAirbus : I agree with JHGPA1's comment that it depends on the cargo. On most passenger aircraft, cargo tends to be an afterthought, no more than bin filler. Th
26 Bobnwa : I really doubt that BA ever said it could fly full of cargo and empty of passengers across the Atlantic and make money. That is one of those stories t
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