United studying all-cargo service United studying all-cargo service By David Kesmodel, Rocky Mountain News
August 22, 2003
Bankrupt United Airlines is exploring launching an all-cargo service on international routes by leasing wide-body jets from ailing Atlas Air, sources said.
United, which today carries freight only in the bowels of its passenger planes, is studying the move as a way to boost revenues on its robust route network.
The airline has talked with Purchase, N.Y.-based Atlas about "wet leasing" Boeing 747 jets for a service that initially would focus on U.S.-Asia routes, sources said.
Under a wet lease, Atlas, the largest shipper of freight for other carriers, would provide planes, crews, insurance and maintenance. United would market the service and load and unload freight.
United spokeswoman Chris Nardella said the airline is exploring re-entering the all- freighter market, which it abandoned in 2000. But she would not say whether United has talked with Atlas Air.
Chicago-based United had plans to enter the market before September, when the cargo season swings into high gear, she said, but "we haven't found a viable option."
Atlas Air spokesman Thomas Becher declined to comment.
Atlas Air, whose clients include British Airways, was based in Golden until 1999. The company said last month that it might file for bankruptcy to complete a debt restructuring.
Leaders of United's pilots union are opposed to a cargo operation in which United wet-leases planes, Scottie Clark, a union spokeswoman, said.
"We'd like it to be flown with United pilots," which would be a dry lease, Clark said.
United and the union continue to discuss the issue, Clark and Nardella said.
Cargo today accounts for 5 percent of revenues at United, the second-biggest U.S. carrier and Denver's dominant airline.
United's powerful route network in Asia provides a good opportunity to haul more freight and boost sales, analysts said.
"It's a revenue stream they should be looking at," said Joshua Marks of the George Washington University Aviation Institute.
The landing slots that United controls at Tokyo Narita International Airport "are the critical element," said John Pincavage, a financial adviser to airlines in Westport, Conn.
United also could benefit from a tie-in with its partners in the Star Alliance network of international carriers, he said.
Latin America is another potential growth area, analysts said.
Today, Northwest, the No. 4 U.S. carrier, is the only major U.S. airline with its own all-cargo fleet. United and Northwest are the main U.S. operators in Asia.
Northwest's freighter fleet consists of 12 Boeing 747 jets.
The cargo business has suffered since the 2001 terrorist attacks. But Northwest's cargo revenues, which account for about 8 percent of its business, rose 7.4 percent in the first six months of 2003 to $348 million.
United's cargo revenues rose 3 percent to $318 million in the first half of 2003.
UAL Corp.'s United filed the industry's largest bankruptcy last December. It hopes to emerge from Chapter 11 next spring.
August 22, 2003
Bankrupt United Airlines is exploring launching an all-cargo service on international routes by leasing wide-body jets from ailing Atlas Air, sources said.
United, which today carries freight only in the bowels of its passenger planes, is studying the move as a way to boost revenues on its robust route network.
The airline has talked with Purchase, N.Y.-based Atlas about "wet leasing" Boeing 747 jets for a service that initially would focus on U.S.-Asia routes, sources said.
Under a wet lease, Atlas, the largest shipper of freight for other carriers, would provide planes, crews, insurance and maintenance. United would market the service and load and unload freight.
United spokeswoman Chris Nardella said the airline is exploring re-entering the all- freighter market, which it abandoned in 2000. But she would not say whether United has talked with Atlas Air.
Chicago-based United had plans to enter the market before September, when the cargo season swings into high gear, she said, but "we haven't found a viable option."
Atlas Air spokesman Thomas Becher declined to comment.
Atlas Air, whose clients include British Airways, was based in Golden until 1999. The company said last month that it might file for bankruptcy to complete a debt restructuring.
Leaders of United's pilots union are opposed to a cargo operation in which United wet-leases planes, Scottie Clark, a union spokeswoman, said.
"We'd like it to be flown with United pilots," which would be a dry lease, Clark said.
United and the union continue to discuss the issue, Clark and Nardella said.
Cargo today accounts for 5 percent of revenues at United, the second-biggest U.S. carrier and Denver's dominant airline.
United's powerful route network in Asia provides a good opportunity to haul more freight and boost sales, analysts said.
"It's a revenue stream they should be looking at," said Joshua Marks of the George Washington University Aviation Institute.
The landing slots that United controls at Tokyo Narita International Airport "are the critical element," said John Pincavage, a financial adviser to airlines in Westport, Conn.
United also could benefit from a tie-in with its partners in the Star Alliance network of international carriers, he said.
Latin America is another potential growth area, analysts said.
Today, Northwest, the No. 4 U.S. carrier, is the only major U.S. airline with its own all-cargo fleet. United and Northwest are the main U.S. operators in Asia.
Northwest's freighter fleet consists of 12 Boeing 747 jets.
The cargo business has suffered since the 2001 terrorist attacks. But Northwest's cargo revenues, which account for about 8 percent of its business, rose 7.4 percent in the first six months of 2003 to $348 million.
United's cargo revenues rose 3 percent to $318 million in the first half of 2003.
UAL Corp.'s United filed the industry's largest bankruptcy last December. It hopes to emerge from Chapter 11 next spring.
