American Airlines eyes opportunities to expand in Asia
In the first step to co-locate operations across the combined network, US Airways Cargo has recently joined American Airlines Cargo’s operations at New York’s John F. Kennedy International Airport.
American Airlines parent AMR Corporation and U.S. Airways Group officially announced their $17 billion merger on December 9 last year. Under the merger, U.S. Airways Group became a subsidiary of AMR Corporation, which changed its name to American Airlines Group. The merged entity is expected to provide stiff competition to other large global U.S. airlines such as United Airlines and Delta Airlines. The merger also marked an end to the wave of consolidation in the airlines sector. The sector has seen large-scale mergers aimed at streamlining operations and creating profitability despite concerns of lower competition leading to higher fares.
While the two carriers continue to operate independently, the co-located facility allows American and US Airways customers to tender and recover both 001 and 037 airway bill shipments in one location. The cargo facility co-location in New York Kennedy is the first of 155 across American’s combined network. On April 1, American will relocate its cargo operations to US Airways’ facility at Phoenix Sky Harbor International Airport.
Right now, the number one question customers have is: How is the integration going? “The answer is that we are making progress, but we fully recognize that hard work lies ahead.
The great news is that we have the right team in place. And that team is committed to making the integration seamless for all of our customers – including our cargo customers and partners.
And cargo will lead the way with our total integration. We expect to be on a single air way bill well before the FAA approves our Single Operating Certificate,” said Robert Isom, chief operating officer at American Airlines while addressing the World Air Cargo Symposium 2014 in Los Angeles.
For American, cargo is an essential part of its success, believes Isom. The airline generates over $800 million in cargo revenue, and a significant portion of that falls directly to the bottom line – a bottom line that hasn’t been in the black that often in the past. While everyone knows that passenger airlines’ primary business is flying people to the places they need to go, American is also committed to the role that it plays in the global supply chain and logistics industry.
According to a recent Reuters report, air cargo is often viewed as an important barometer for the global economy. Experts estimate that approximately 40 percent of world trade by value goes by air.
“As an operations guy at heart, I love to hear those sorts of numbers, because they demonstrate the opportunity for all of us to deliver real value. The opportunity for us in cargo is to provide incremental revenue for the airline without significant additional costs. But to do so means that we have to consistently find new ways to meet changing customer needs – becoming more efficient, faster and offering the products our customer require,” Isom added.
One of the great things about this merger is that we’re bringing together two complementary networks – which means we can fly people and products to more locations than ever before.
Together with American Eagle and US Airways Express, our two airlines operate an average of nearly 6,700 flights per day to 339 destinations in 54 countries from our hubs – including ourhub here in Los Angeles, informs Isom.
American provides more service than any other airline between the United States and Latin America with more than 900 weekly flights to more than 51 destinations in 18 countries. Thismarket remains its strongest performing region and is expected to continue to grow.
The airline now looks to focus on building its presence in Asia. “As we look to the future, we are excited about the opportunities to expand in Asia, a key component in the company’s long-term network strategy. We continue to see strong demand for Asian manufactured goods across the globe, and increased demand for fights to China – and the rest of Asia,” he added.
The new American has embarked on the most ambitious fleet renewal plan ever. Combined we’re bringing in more than 150 widebody aircraft. At the moment, we’re taking delivery of almost two new aircraft a week. And by the time we finish with the program, we’ll have the largest and youngest fleet in the business, cited Isom.
American is bringing in 11 widebody jets this year to fly to long haul destinations. In 2014 and beyond, it plans to take delivery of nine more B777-300ERs, three more A330-200s, 42 787s and 22 A350-900s (beginning in 2017). All of those will open up some exciting opportunities for cargo.
According to Isom, movement of pharmaceuticals will play an increasingly important role for American Airlines Cargo. He talked about the recent investment in a new controlled-room temperature facilities at JFK and Heathrow. American will also soon break ground on a 30,000 square foot dedicated cold chain/pharma facility in Philadelphia to handle temperature-sensitive products in one of the most strategic markets in the US.
“We know that pharmaceutical cargo is one of the fastest growing markets – as economies evolve, they require vaccines and medicines,” Isom said. Isom also mentioned American’s efforts in pushing forward the e-Air Waybill. “We’ve been working to support our forwarders on the path to paperless operation. Last year, we signed the IATA Multilateral e-Air Waybill agreement, and we’ve been partnering with IATA to host workshops for our forwarders on the e-air waybill education and implementation.”