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Cargo airlines ask DOT to block Mexican carrier from US market

Kalitta Charters leads group seeking protection from TUM Aerocarga

TUM Aerocarga wants to begin cargo service to the U.S. It's fleet includes smaller Bombardier CRJ200 aircraft. (Photo: TUM Aerocarga)

The nephew of famed airline entrepreneur Conrad Kalitta, founder of all-cargo carrier Kalitta Air, is asking the U.S. Department of Transportation to shield it from foreign competition by blocking a small Mexican cargo airline from entering the U.S. market.

TUM Aerocarga, based in Toluca, earlier this month made a routine request under the 2015 bilateral air services agreement between the U.S. and Mexico for permission to conduct cargo flights to and from the U.S. It also seeks an exemption from operating authority until the Federal Aviation Administration issues a permanent certificate, a process that can take several months and includes a White House review, so it can begin flights in May. TUM Aerocarga said it initally planned to fly about five ad hoc charter flights per month using Boeing 737-300/400 and smaller Bombardier CL600 freighters.

On Thursday, Doug Kalitta’s company, Kalitta Charters II, filed an objection centered on the argument that opening the domestic market to foreign carriers will cost U.S. carriers business needed to help overcome the financial hardships of the COVID-19 pandemic. 

The DOT is expected to approve TUM Aerocarga’s petition.

Kalitta Charters appears to have misinterpreted that TUM intends to operate some routes between U.S. destinations, which would violate cabotage laws that reserve transport services within the country to domestic operators. TUM’s petition actually states it intends to make intermediate stops in the Caribbean, or other locations, en route to the U.S., which is permitted under the bilateral air agreement.

But the Kalitta Charters letter makes a broader appeal for protectionism, citing the airline industry’s financial hardship during the pandemic even though cargo airlines have mostly flourished compared to their passenger counterparts because of the demand-supply imbalance for goods movement.

“It will take many months, perhaps years, for U.S. operators to recoup the losses forced upon them as a result of the COVID outbreak. It should be incumbent upon our U.S. regulators to make certain that these U.S. air carriers are first in line and have an opportunity to restore their revenue streams and try to get their businesses back on a normal path before any foreign air carriers would be allowed to come in and collect some of the revenue,” the letter said. 

The petition against TUM was also signed by  two small air charter companies, Fort Lauderdale, Florida-based IBC Airways, which serves the Caribbean, and IFL Group, a Waterford, Michigan, company that flies feeder routes for FedEx Express and provides air transport with a fleet of business jets, large turboprops and vintage Boeing 727s in North America and parts of Latin America.

“It is important to remember that the impact on the fabric and integrity of U.S. air carriers must also be part of the calculations in determining the outcome of the application,” the opponents said, claiming such a decision would be unfair since U.S. carriers can’t operate within Mexico.  

Kalitta Charters operates a fleet of Learjet and Falcon business jets configured for cargo as well as DC-9 and Boeing 727 freighters in the U.S. and Central America, including to and from Mexico. It is co-located at Willow Run Airport in Ypsilanti, Michigan, with Kalitta Air, a large international all-cargo airline that operates two dozen Boeing 747-400 jumbo jets and several other large freighters.

Kalitta Air’s customers include the U.S. Postal Service and Air Mobility Command. Last year, the U.S. government hired Kalitta to repatriate U.S. citizens stranded in Wuhan, China, during the coronavirus outbreak and to ferry personal protective equipment from China at the height of the health crisis. 

TUM, officially established in 2015 as MCS Aerocarga de México S.A., flies five CRJ200 and three Boeing 737 cargo aircraft. It plans to add four CRJ and three 737 freighters in the coming year, according to the filing.

The company had a net profit of $6.6 million last year compared with a $4.1 million loss in 2019. Its largest ownership stake is held by Avmax Aircraft Leasing in Canada. Mexican citizens have operating control.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch. 

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]