Doing everything United Cargo can in the pandemic
The Covid-19 pandemic has made air cargo the life line of global trade and airlines world over. In fact air cargo has always been the life line of global trade; it is just that the current crisis has made it more prominent and more visible. The spotlight is certainly on air cargo today. The current crisis has made aviation and air cargo players to innovate and be creative at a pace that we have never seen before.
Until March 19, 2020, United Airlines had not operated a schedule of cargo-only aircraft since it ended its DC-10 freighter programme in December 2000. The Covid-19 crisis has created a new normal for United Airlines and for its cargo operations. In an interview to The STAT Trade Times, Jan Krems, President, United Cargo. Edited excerpts:
What are your thoughts on air cargo and its critical role in dealing with the Covid-19 pandemic?
I am in this industry for 33 years. I have never seen something like this before. But I am happy we are able to fly now. In the beginning of the crisis, we helped a lot of states in the US moving critical goods that were necessary for them. We got calls from our tem in China and they said it is important that we start flying soon so that these critical goods could be moved. So we did that. It was also good for us to keep our aircraft in the air. A major portion of our fleet was grounded because passenger traffic had just disappeared.
In the current pandemic, which is so uncertain and difficult to predict in any reasonable measure, how do you plan your cargo operations?
We have our daily call with the management team of cargo. We discuss to see what is happening. We used to get requests for cargo movement out of Asia. We discussed what goods we could move. Majority of them were medical. Over the last two months the Covid related cargo has come down. We were agile and flexible with the market demands and we had a good cargo team in key locations responding quickly to demands. We started our first cargo-only passenger flight on March 19 out of China. With lockdowns and work from home, my colleagues in the United Cargo made sure that everything went according to the plan. The China team did an amazing work to get everything done for a great start of our cargo-only passenger flights.
As this crisis began to unfold in early March and it was certain that we are in for a potentially dangerous new normal how quickly you began to plan your operations with multiple options to deal with new challenges coming up on a daily basis?
In principal you need wide-body planes to do these kinds of cargo operations. We got so many requests. And the questions in front of us were: Where are these planes parked? How do we get them quickly? What destinations do we operate? How do we get a contract with customers? Do we have a round-trip contract or is that a one way contract? We managed to line up everything from the cargo side supported efficiently by the United’s top leadership. We got B777-300ERs for this operation because that is one of the better planes for cargo. We also considered B787-900. We encountered several challenges on the way and we managed to find a solution to all of them along the way. These included permits to fly into destinations in China and pilots being quarantined in China. So to make things easy for our pilots, we found Narita in Japan as the hub we fly into and from there we fly with a different crew to China and back. We managed to make things happen because of the team we have. We are doing things very successfully now.
What types of cargo move from the US to Asia?
The berry season started in mid-May; automotive parts go out to Asia and there is the e-commerce. But there is an imbalance. There is very little that is going into the East; but with high PPE demand it is full flights coming back from China. But we manage to make deals with customers to make the rotation viable. We work with our inter-line partners to make things happen. From Asia, it has been booming but it is now changing. While we get good yield on one leg, we could go with lower rates on the other.
In the normal times you work with a lot of your key customers, how has that relationship changed in the new normal? How have you restructured your cargo operations for some of your key customers?
So we are always very close to our customers. We are always proactive. Our customers are the forwarders. We keep them informed regularly about what is happening. So when they come with a request, we quickly respond to them with a plan. With our big customers and partners, our relationship did not change much. I think the current crisis only made our relationship even better and stronger.
Going forward how quickly will you be able to add more destinations and increase the number of cargo-only flights?
We do about 1,100 cargo flights in May. Even in our June schedule we would be flying even more flights. When requests come in we put them to our network team to see whether planes are available. And if planes are available which aircraft type is best suited for the destination requested for. And then what is the best routing available to fulfil that request. So these things are looked into and discussed very quickly and today we are able to respond to our customers with agility and flexibility.
You have FAA approval to load cargo in the passenger cabin. Will you be loading cargo on seats or will you consider removing seats to accommodate more volume?
I will look at all the options. But I am always a bit hesitant to be a full freight operator. The reason is that with our B777-300ER aircraft we are able to lift up to 35 tonnes on long haul cargo-only flights. So it is a mini freighter in itself. We evaluated loading cargo in the cabin and on the seats. If it is not too heavy, like most of the PPE cargo, or mail bags then it is doable. Doing this also means that you end up doing a lot of manual loading which take a lot of time. Mostly we end up doing this to ensure the right weight and balance of the aircraft. I am not really convinced about the removal of the seats to load cargo. It is not very viable now.
Is it economically viable for United to operate the cargo-only passenger flights?
They are viable to do. Otherwise we would not have done it. You look into your variable cost and then you make a deal with a customer. However, you will not save the company with flying cargo-only passenger flights because in principal we are a large passenger driven airline. So if we look all our flights that we operated so far they are all viable or they are “cash positive”. Like I said earlier, it is not going to save the whole company. But at least we keep flying which means planes are in the air and pilots can get their flying hours.