RAMPRAT980
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Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:34 am

I have a question. Why aren't the freighter company's (ie: fedex, ups) crying poverty like the domestic airlines are ?
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MD11LuxuryLinr
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:36 am

Because the freight industry continues to grow..
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luv2fly
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:41 am

Also because they run there business like a business and charge amounts to cover costs and allow for a profit.
You can cut the irony with a knife
 
flyinggizmo
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:43 am

A good reason why the freight companies are earning profit can be summed up in two words....EBAY and AMAZON.
 
MD11LuxuryLinr
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:48 am

Quoting Flyinggizmo (Reply 3):
A good reason why the freight companies are earning profit can be summed up in two words....EBAY and AMAZON.

Yup.. good point. Think of all the companies in the world that use UPS, FedEx, etc. for their internet sales...
Caution wake turbulence, you are following a heavy jet.
 
desertjets
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:50 am

And boxes don't complain about narrowbodies on transcons and no PTVs in coach.  laughing 
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commavia
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:55 am

That's simple:

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
 
AeroVodochody
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:56 am

Also because you don't have to feed the boxes, have F/A's to wipe the boxes' noses for them, boxes aren't afraid to fly like humans, therefore more of them fly , etc.
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Lono
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:03 am

3) their isn't a southwest of cargo, at least not yet

It is THERE for starters... and I don't think THERE is a market for drunk freight boxes who loose THEIR AWB and lot label..!!!
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PhilSquares
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:06 am

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.
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Cruiser
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:13 am

Also, labour costs are much lower for moving freight. Almost everything is fully automated.
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DLKAPA
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:13 am

Boxes go when people don't.
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padcrasher
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:29 am

Fed Ex and UPS are integrators. They basically have 90% of the overnight market. If AA and UA owned 90% of the passenger market they would not be crying poverty either.
 
padcrasher
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:30 am

But air freighter companies come and go like the wind.
 
dallas74
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:35 am

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
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:42 am

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
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 11:56 am

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."
 
CosmicCruiser
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 12:15 pm

Quoting PhilSquares (Reply 9):
And I'm not talking about the UPS/Fedex type of freight (packages). This is big dollar items such as computers, perishables, pharmacuticals

You might be surprised what we carry and it "aint" just packages.
 
FLY2LIM
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 12:20 pm

Also, airline companies sometimes fly with empty seats. Do freight companies ever leave with less than full loads?
FLY2LIM
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MidnightMike
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 12:34 pm

Quoting Ramprat980 (Thread starter):
I have a question. Why aren't the freighter company's (ie: fedex, ups) crying poverty like the domestic airlines are ?

Because the media does not pay to much attention to the Freighter dogs. UPS & FEDEX are kind of like Southwest, been turning a profit for years.

Atlas/Polar have been having financial problems over the years, Gemini has had it's problems over the years, but are getting better.

Don't forget Emery went belly up years ago.
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AirWillie6475
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 12:42 pm

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
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RE: Why Aren't "freighter" Company's Crying Povert

Sat May 07, 2005 12:42 pm

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.

[Edited 2005-05-07 05:44:14]
 
arkhem
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 1:24 pm

Because the last overnight envelope I had to send cost almost $20.  crazy 
 
atmx2000
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 1:37 pm

Quoting DesertJets (Reply 5):
es:
And boxes don't complain about narrowbodies on transcons and no PTVs in coach.

And they don't demand frequent flyer programs and upgrades to first class.

Quoting PhilSquares (Reply 9):
Finally, the European and Asian economies are expanding at a much better rate than the US.

Uh, the last I checked most of Europe was not expanding faster than the US.
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pilotpip
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 1:41 pm

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.
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PhilSquares
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 1:56 pm

Quoting CosmicCruiser (Reply 17):
You might be surprised what we carry and it "aint" just packages.

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 addition to the horses, we had 101 tons of freight to LHR.

I know Fedex doesn't ship horses and I am pretty sure UPS is out of that marked now!
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redflyer
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RE: Why Aren't "freighter" Company's Crying Povert

Sat May 07, 2005 2:27 pm

Quoting PhilSquares (Reply 9):
Finally, the European and Asian economies are expanding at a much better rate than the US.

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". There's actually fear of recession in Germany and France by the end of the year.

If European airlines are making money, it isn't because their economies are booming.
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Flyer732
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 2:29 pm

Quoting FLY2LIM (Reply 18):
Also, airline companies sometimes fly with empty seats. Do freight companies ever leave with less than full loads?

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 completly empty. They pay for the flight with the inbound freight alone.
 
FedEx
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 3:58 pm

Quoting PhilSquares (Reply 25):
I know Fedex doesn't ship horses and I am pretty sure UPS is out of that marked now!

We have around a half dozen aircraft (MD-11's) that we use for horse charters sporadically year round.
 
ltbewr
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 8:11 pm

Let us not forget the exponential boom in manufacturing in Asia, especially China, where high value to weight products such as clothing, electronics and computer parts are much of the freight business from there to Europe and the Americas. Just in time production methods such as with Dell and other computer companies along with the sudden demand for seasonable clothing and consumer goods requires that they be shipped by air to be in the market by a certain date. Due to that time demand, the price of air shipping can be recovered.
There is no doubt that there is competition for air freight and it's pricing, but there is less of a peak/off peak situation on a day to day basis so less need to have very cheap seats on Tuesdays, etc. With pax, you have peaks in the summer and weekends with leisure pax, and Mondays and Fridays with biz pax. You have short seasonial bursts around Christmas, New Years, Easter, USA Thanksgiving, where with freight, the business is more evenly spread out.
 
CosmicCruiser
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 9:49 pm

Quoting PhilSquares (Reply 25):
I know Fedex doesn't ship horses and I am pretty sure UPS is out of that marked now!

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 can't be carried on pax carriers as well as computer contracts, rare animals for zoos and about anything that you can imagine including BBQ and pizzas! We do this with and avg. 93% reliability. An MD-11 full of Priority 1 and Hazmat going to Europe or Asia reaps many times more profit than the same plane full of pax.
 
rabenschlag
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 07, 2005 10:04 pm

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.
 
luv2fly
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 1:17 am

Quoting Rabenschlag (Reply 31):
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.

Well SAID!
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texdravid
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 1:33 am

Quoting PhilSquares (Reply 9):
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.

You ARE kidding, right?

Europe's economies are in much worse shape than America's. It's not even close. Our economy is much more flexible, well run and better performing.

Just because LH or BA may be doing better than DL or UA has nothing to do with how strong the English or German economies are doing vis a vis America's.
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jeb94
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 1:42 am

As pointed out, Fed Ex and UPS have huge package and trucking operations. UPS just bought Overnight trucking company to compete with Fed Ex, who bought Roadway/Yellow trucking a few years ago. Fed Ex also carries the majority of the air mail in the USA. That contract has made a big impact on airline profits. I recall at one point that YX had a 6 am departure to Cleveland that usually flew with only 5 or 6 passengers but it made huge money because it carried the mail. Now that mail is carried by Fed Ex and passenger carrying airlines are restricted in the size of mail they can carry. Freight companies don't have to worry about long check in and security lines. They don't have to cover some of the government's charges for TSA screeners and new equipment. Old airplanes that are no longer useful to the passenger airlines are very cheap to buy outright meaning no lease payments. That's why there are massive frieghter fleets of DC8s and 727s. Its cheaper for the box haulers to reengine and rebuild these planes many times over than it is to buy new ones. The air freight world has always been cutthroat but it has been stable this way and continues to grow at a steady pace. DHL, being a German company, has a big European influence and has finally found its way into the US parcel market. Oh, expect the price of stamps to go up even more here in the US because these parcel companies take away from packages sent in the mail, ironic considering the previously mentioned Fed Ex contract with the US Postal Service.
 
patroni
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 7:15 am

Quoting Atmx2000 (Reply 23):
Quoting DesertJets (Reply 5):
es:
And boxes don't complain about narrowbodies on transcons and no PTVs in coach.

And they don't demand frequent flyer programs and upgrades to first class.

The boxes don't, but it can be assumed that a big global customer will not accept paying the same rates like a small agent who brings one 100kg shipment per year. He would certainly also demand priority treatment of his cargo in case a flight is fully booked.

And about "not complaining", wait till you hear an agent whose cargo was offloaded, delayed, mishandled, damaged etc. Boxes don't talk, but there are people who take care of that for them  Wink

Quoting FLY2LIM (Reply 18):
Also, airline companies sometimes fly with empty seats. Do freight companies ever leave with less than full loads?

When you look at a scheduled cargo airline, the aircraft flies as published, even when it is not full. You cannot make money with a 747 sitting on the ground, waiting for cargo to come. Especially on routes with a significant trade imbalance like Europe-Asia vv. and North America-Asia vv. it can barely be avoided to fly rather light to Asia, but then the full return load basically pays for the whole flight.

Cheers,
Tom
 
B744F
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 7:56 am

Specialized freight companies such as Atlas might be chartered to take X amount of goods to Y, and those X goods might not even fill up half the plane. But as long as the money is right, anything goes.
 
norcal
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 8:02 am

If airlines could charge people based on weight, then they wouldn't be bitching either. Think about how much money they would make off of our fat American asses.

Also as stated above, Boxes don't need comfortable seats or FAs to serve them. They also don't bitch about horrible service.
 
Alessandro
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 10:32 am

One reason is that cargo don´t mind being flown in Russian/Ukrainan planes, something some people who say "Boeing or I wont go" or something similar...
From New Yorqatar to Califarbia...
 
UPS Pilot
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 11:12 am

UPS has been in business longer than any airline. 2007 UPS will celebrate it's 100th anniversary. The key at making a profit was smart but aggressive growth. Innovation and diversity has maintained and increased those profits. Fed Ex has a diverse network but it isn't integrated together.IE Fed Ex ground and Fed Ex Express are 2 separate units that require 2 different drivers. UPS uses one driver for all. The Menlo and Overnight acquisitions were bought more for the book of business in the heavy freight market. At UPS an overnight package may not even go aboard an aircraft. A truck and driver cost a lot less than an aircraft. The ground and air are intergrated together. This allows higher profits. UPS is more than just a freight company. UPS has a financial company (UPS Capital) an insurance company the list goes on but one of the fastest growing segments in the company is supply chain solutions. Since UPS and Fed Ex are global service providers with Multiple routes around the world they are less likely to suffer like an American or US Airways that relies mostly on the US economy over a world economy.
 
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kc135topboom
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 11:39 am

Quoting Alessandro (Reply 38):
One reason is that cargo don´t mind being flown in Russian/Ukrainan planes, something some people who say "Boeing or I wont go" or something similar...

I think your are trying to say: "If it ain't Boeing, it ain't going"

But, boxes don't really care.
 
FLY2LIM
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 12:39 pm

Quoting Patroni (Reply 35):
Quoting FLY2LIM (Reply 18):
Also, airline companies sometimes fly with empty seats. Do freight companies ever leave with less than full loads?

When you look at a scheduled cargo airline, the aircraft flies as published, even when it is not full. You cannot make money with a 747 sitting on the ground, waiting for cargo to come. Especially on routes with a significant trade imbalance like Europe-Asia vv. and North America-Asia vv. it can barely be avoided to fly rather light to Asia, but then the full return load basically pays for the whole flight.

Cheers,
Tom

Thanks, I guess that was what I was asking. The economics of freight are obviously different. If one flight can pay for one round trip, then imagine how many flights there are that go full both ways, or every segment (assuming they don't necessarily return to the place of origin). No wonder they don't go bankrupt. Oh, and they don't have to feed anyone or serve them drinks.
FLY2LIM
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checkraiser
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RE: Why Aren't "freighter" Company's Crying Poverty

Fri May 20, 2005 12:47 pm

Quoting Pilotpip (Reply 24):
And there are enough cans to need 2 DC-10s for a 45minute flight from STL to IND and MEM respectively.

They actually fly that?? I'm really surprised STL wouldn't be trucked to either of those hubs. Several years ago I used to work with an air freight company (which will remain nameless) that stretched trucks as far as they possibly could.

On a side note, to save money about five years ago they stopped landing planes at ORD due to landing fees and use RFD instead (no fee.) Everything was then trucked to the ORD facility.
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UPS Pilot
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 21, 2005 6:31 am

Another note is we impose fuel surcharges. It's costing 20 grand more this year to fuel a 747 over last year.
 
patroni
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 21, 2005 7:50 am

Quoting FLY2LIM (Reply 41):
If one flight can pay for one round trip, then imagine how many flights there are that go full both ways, or every segment (assuming they don't necessarily return to the place of origin).

Well, this is of course the ideal scenario that one flight pays for the whole round trip and everything else is pure profit. Unfortunately it is rarely that clear, so every round trip has to be considered and monitored individually to avoid that it generates losses for a prolonged period. For example an airline can seek 5th freedom traffic rights and fly (random example for illustration) LAX-NRT-SIN-HKG-(HNL)-LAX. Outbound this flight can carry freight from LAX to NRT, SIN and maybe even HKG, on the return flight it would probably be a mix of SIN and HKG originated cargo, with the payload requiring a fuel stop in HNL. Say it is a 747-400F with 100 tonnes available payload. You could have LAX-NRT 40to, LAX-SIN 20to and LAX-HKG nil. On the way back SIN-LAX 30to and HKG-LAX 70to. If you look at the rotation now, the loads look as follows:

LAX-NRT 60to (to NRT and SIN)
NRT-SIN 20to
SIN-HKG 30to
HKG-(HNL)-LAX 100to (from SIN and HKG)

So apparently there is room for improvement on the first three legs. If the marlet does not provide any more export cargo ex LAX, 5th freedom rights NRT-SIN or SIN-HKG can help you to get another 10-20 or more tonnes on these regional segments which add to your revenue side (of course also at a certain cost, i.e. handling, higher fuel burn.)
At the end of the day you look at the sum of your revenues versus the sum of your costs and you see if your flight is doing well.

So definitely different than the passenger business, and I have not mentioned seasonality yet (Chinese New Year etc), day of the week plus many other factors. In my eyes a well-organised route management team is a key function to success or failure of an airline, especially in the cargo market.
 
L-188
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 21, 2005 3:39 pm

Quoting Dallas74 (Reply 14):
Tigers became a global carrier by merging with Seaboard World in 1980.

I have issues with that statement. Tigers was worldwide long before that, through virtue of their extensive MAC charter operation.

Of course at the trade show last week I had to pick on a couple of Fed-ex people by saying that I was really holding back saying, "Ted Smith killed Tigers"

Of course it wasn't him that was killed Tigers, Wolfe had a hell of a lot more to do with it.
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CaptOveur
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RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 21, 2005 4:07 pm

Boxes can't bitch.

Boxes don't get pissed off by moronic security procedures that do nothing for security

Boxes can fly whenever

Boxes can be moved with one big push of flights out of the hub in a night.

Boxes don't need flight attendants.
Things were better when it was two guys in a dorm room.
 
Oftwftwoab
Posts: 42
Joined: Sun Sep 05, 2004 4:53 pm

RE: Why Aren't "freighter" Company's Crying Poverty

Sat May 21, 2005 5:32 pm

Quoting RedFlyer (Reply 26):
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". There's actually fear of recession in Germany and France by the end of the year.

It's 1.7% in the EU, compared with 3.6% in the US. The EU isn't all of Europe, and growth rates are higher in the non-EU countries, but the weight of the EU means the average wouldn't go up much (even if you include Russia).

However, these figures are swamped by changes in the exchange rates. The EU measures GDP in Euros and the US in dollars. If you compare EU and US GDP measured in one currency or the other over the last ten years, the EU has grown much faster than the US (thanks to the appreciation of the Euro over the dollar). Which tells you something about statistics.

Quoting Texdravid (Reply 33):
You ARE kidding, right?

Europe's economies are in much worse shape than America's. It's not even close. Our economy is much more flexible, well run and better performing.

Just because LH or BA may be doing better than DL or UA has nothing to do with how strong the English or German economies are doing vis a vis America's.

The English economy is doing better than the US. However, the British economy is only growing at 2.8%, because the non-English parts aren't doing so well (mainly due to the influence of London). The difference though is entirely accounted for by the difference in population growth rates. In GDP per capita terms, Britain is outpacing the US.

It is true that the US economy is more flexible and (I would say because of) better performing. However, it's not run better. Monetary policy is much of a muchness. Fiscal policy is worse. The US is more heavily regulated than the UK, but less than France or Germany. The difference is down to the hard work and get-up-and-go of the American people, despite the best efforts of their Government.
 
LJ
Posts: 4112
Joined: Wed Nov 17, 1999 8:28 pm

RE: Why Aren't "freighter" Company's Crying Poverty

Sun May 22, 2005 5:44 am

One of the benefits of cargo airlines is that they don't have to offer a roundtrip and thus can adjust their schedule according to the cargo flows. For example Emirates flies DXB-JNB-NBO-AMS-DXB as the cargo flows from Johannesburg/Nairobi to Amsterdam (perishables) and from Amsterdam to Dubai. Martinair does the same (they sometimes make a detour jsut to mpick up some cargo from Nairobi) and KLM only flies cargo on its 747 freighter from Amsterdam to Almaty and not from Almaty to Amsterdam.

However, pax usually want to return to their home and thus need a roundtrip.
 
clipperno1
Posts: 641
Joined: Tue Jun 01, 1999 12:47 am

RE: Why Aren't "freighter" Company's Crying Poverty

Sun May 22, 2005 6:06 am

Please don't forget that "legacy" air cargo carriers, like AF Cargo and LH Cargo (I'm not talking about integrators...that's more or less a different ball game), have also suffered from a steep rate drop over the last five years.

Not only has the growing market power of forwarders contributed to that, but also LCC-Cargo carriers like i.e. MK Airlines and other cargo-market entrants like Dragon Air, EK etc. who could offer lower rates due to a better cost structure (read:less employees, way more out-sourced services).

To say they are not crying poverty is right.
They don't produce a loss at the size of Liberia's deficit each year like other carriers.
But if you take a look at the profitability.....well it is a aviation business and nothing to get rich with.
"I really don't know one plane from the other. To me they are just marginal costs with wings."� Alfred Kahn, 1977

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