Commavia From United States of America, joined Apr 2005, 13440 posts, RR: 62
Reply 6, posted (10 years 12 months 7 hours ago) and read 5506 times:
1) their "passengers" don't ever ask for more peanuts or a refund
2) their "customers" generally can't use orbitz
3) their isn't a southwest of cargo, at least not yet
4) as mentioned, freight demand, traffic and yields continues to grow
PhilSquares From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 12 months 7 hours ago) and read 5483 times:
Please don't limit this to just "freighter" companies. If you look at the airline industry out of the US and in Europe and Asia in particular, you will find a year of record profits coming.
This is due to several factors. The first is the stronger currency. Oil is priced in US $ and most currencies have appreciated a substantial amount. Thus the price of jet fuel has been dampened by this effect. Secondly, the carriers outside of the US have been very aggressive about fuel surcharges and hedging. Again, this has had a direct impact on the bottom line. Finally, the European and Asian economies are expanding at a much better rate than the US. Thus demand for air travel, both business and leisure, is higher than in the US.
One other reason is, and especially in Asia, most airlines here have a sizeable freight business. Look at airlines such as SQ, CX, KE, CI, BR, MH, they all have a booming freight business. And I'm not talking about the UPS/Fedex type of freight (packages). This is big dollar items such as computers, perishables, pharmacuticals. There is a tremendous demand for those items and people are willing to pay for the shipping.
Dallas74 From United States of America, joined Aug 2004, 95 posts, RR: 0
Reply 14, posted (10 years 12 months 7 hours ago) and read 5388 times:
The difference between freight and passenger carriers in the USA is simple.
Freight carriers are allowed to merge or go out of business without much government interference. For example - FedEx grew its global network by acquiring Flying Tigers in the late 1980's. Tigers became a global carrier by merging with Seaboard World in 1980.
UPS acquired Challenge Air Cargo to expand their reach in Latin America. They recently acquired the old Emery Worldwide and their Dayton Hub. This hub will be shut down some time in 2006 and the work transferred to the UPS hub in Louisville.
Airborne Express was recently allowed to merge into DHL. Again there was little interference from the US government.
Now look at the passenger side of the business. After 9/11 did the US Government allow America West and US Airways to go out of business? No! Instead of letting the free market dictate that these two carriers had to go (and reducing market capacity) the US Government creates the ATSB which offers each carrier government guaranteed loans in order for them to stay in business.
Can you imagine what the US airline industry would look like right now without AWA and US Airways? Here are two companies that haven't produced a profit between them in 5 years. (Please do not come back and tell me AWA had a profit in 2003. That profit was based on a government refund of security fees. It was not a profit from operations). America West and US Airways were not exactly world beaters for the past 10 years. In fact AWA has been a joke for most of its 20 plus years of existence.
So there you have it the freight carriers operate in the world of capitalism and the passenger airlines operate in the world of government supported capitalism.
I quote the late President Ronald Reagan, "the scarcest words in the English language are, I'm from the Government and I'm here to help".
One last point. Fed Ex and UPS pay wages that are higher than most airline workers enjoy today. It takes many people to move the freight these companies carry. This process - unlike envelopes - is not automated. In addition Fed Ex and UPS deliver their own cargo and parcels. This cost is included in the price. These companies are profitable because like Southwest Airlines they are efficiently run and maximize their return on assets. That concept is a lost art amongst most US major airlines.
Padcrasher From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 12 months 7 hours ago) and read 5370 times:
That's a good point about mergers in the air cargo business, but UPS/FED EX basically have the overnight business locked up. ( DHL may have recently made inroads) I think this explains the high profits high wages more than anything.
I've seen them screw up heavy cargo shipments (not their focus) worse than any US airline. I don't consider them any more efficient than airlines. Basically packages are a lot easier to deal with.
Padcrasher From , joined Dec 1969, posts, RR:
Reply 16, posted (10 years 12 months 6 hours ago) and read 5359 times:
I googled the current market share of Fed Ex/UPS. Not 90% but 79%.
"DHL's acquisition of Airborne would allow it to chisel into the 79 percent American market share of express delivery commanded by FedEx and UPS, company officials said. DHL officials said they would target underserved small- and medium-sized businesses for shipping needs."
AirWillie6475 From United States of America, joined Jan 2005, 2448 posts, RR: 1
Reply 20, posted (10 years 12 months 6 hours ago) and read 5258 times:
Because they charge what ever they want for the shipments of packages. People have no idea how much they should be paying but pay anyways because no body knows the ideal amount that should be payed. $15 bucks for a dvd on express, crazy. They make a lot of profit and their payload is guaranteed to be there for every flight unlike the airlines.
Sebring From Canada, joined Jul 2004, 1696 posts, RR: 14
Reply 21, posted (10 years 12 months 6 hours ago) and read 5268 times:
1. After the Sept 11 attacks, boxes weren't afraid to fly. The freight carriers never took the big hit that the passenger airlines absorbed. The same was true of SARS and the Iraq War. Indeed, freighter operators did very well flying freight for the US war effort in Iraq.
2. Even with the more favorable environment for freight carriers, Atlas Air, which also owns Polar Air Cargo, has just been through a Chapter 11 reorganization and has a significant number of its older freighters parked in the desert. And World Airways, a half passenger half freight charter and wetlease provider, also had severe financial difficulties after Sept 11. And a couple of other significant cargo operators - Tower Air comes to mind - have gone through Chapter 11. There are others. Their names escape me. One was flying overnight for Eagle Air Freight. Indeed, the US freight sector has been far from unaffected, and some carriers have availed themselves of government financial support.
3. Neither FedEx nor UPS are pure airfreight operators. Both have large sea freight and trucking operations.
Pilotpip From United States of America, joined Sep 2003, 3170 posts, RR: 9
Reply 24, posted (10 years 12 months 5 hours ago) and read 5193 times:
And there are thousands of those $20 envelopes in a single can. And there are a few of those cans on each airplane. Oh, and if fuel would require that package to be shipped for $30 you would still pay because it has to be there tomorrow.
And there are enough cans to need 2 DC-10s for a 45minute flight from STL to IND and MEM respectively.
And the other guys just upped 2 nighly DC-8s to LOU and RFD to an A-300 to LOU.
: Last freighter trip I flew 8 polo horses from SHJ-LHR. They were actually boarded in AKL. 5 horses alone would have paid for the entire trip. In addi
: Europe's economy is actually almost stagnant at around 1% growth (as compared with >3.1% in the U.S.). At least that's the numbers for "Old Europe".
: Yep. All the time, there are flights such as some of the Far-East to DFW/ATL that come in to Dallas and Atlanta completly full, but leave almost comp
: We have around a half dozen aircraft (MD-11's) that we use for horse charters sporadically year round.
: Let us not forget the exponential boom in manufacturing in Asia, especially China, where high value to weight products such as clothing, electronics a
: Someone beat me to it but yes we do horse charters too. I flew one SYD-HNL-JFK. We also carry F-1 cars, medical supplies, bacterial agents, DG that c
: and let us not forget that around the world there are a couple of pax airlines generating sound profits. so maybe its also a management issue.