Rounding up capacity

Rounding up capacity
      Listed here are some of the latest fleet developments from around the industry:

Delta      
      Delta, the world's largest airline, has enough capacity in the field to serve its customers and fleet growth will stay flat this year, said Neel Shah, vice president of cargo.
      Delta last year terminated the freighter fleet it adopted with the acquisition of Northwest Airlines and now strictly moves cargo in the bellies of its passenger jets. The cargo division's second quarter revenue rose 22 percent on higher volume and yield.
      'We're just being very strategic about how we go about it because at the end of the day we do not want to leave ourselves vulnerable should we fall back into a crisis like this where we have a lot of orders for aircraft, a lot of commitments for capital. What we're doing is putting money into our existing fleet in order to upgrade them for both better passenger and cargo utilization,' Shah said.
      Capacity is the only leverage airlines have to get back to equilibrium on the pricing side, and airlines will be much more disciplined in how they reinstall capacity, Shah added.
      Delta's strategy this year is to level out rate, surcharge and volume volatility by entering into more block space agreements with customers, he said. Manufacturers eventually will opt to rely less on air transport and produce locally if they can't get more stable pricing, he warned.
      Shah also did not rule out getting back into the freighter business, noting the decision to exit was made at the height of the financial crisis when falling volumes, aging aircraft and high fuel prices made the planes unprofitable to operate.
      'It doesn't mean that we're in any way opposed to getting back into main deck flying the future. It's something we continue to evaluate all the time. But until we can see some stability in the distance we'll continue to preserve cash' and utilize the existing fleet to maximum productivity, he said.

Lufthansa Cargo
      Higher volume and yields led Lufthansa Cargo in recent months to abandon reduced working hours and bring back two of four MD-11 freighters it parked in the desert during the height of the recession so it could conduct special maintenance to prepare them for use during the autumn peak season. A third decommissioned freighter will be returned to service in the third quarter, spokesman Michael G'ntgens said. Lufthansa also added Tianjin, China, to its route network. Frequencies to Hyderabad and Mumbai, India, and Viracopos, Brazil, were increased as a result of greater demand, according to the company's mid-year report.
      In the second quarter, the airline transported 830,000 tons of freight and mail, up 20 percent from the first half of 2009. Volume growth was especially strong in and out of Asia (plus 24.6 percent), and into the United States (31.1 percent), it said. The load factor grew 13 percent to 72.3 percent even as capacity only edged upward 2.3 percent during the January-to-June period. First half freight volume increased 19.6 percent and ton-kilometers transported rose 24.9 percent. Lufthansa Cargo said it expects substantial profits for the full year.

TNT
      Express carrier TNT increased its air freight capacity between China and Europe in early July by adding a 747-400 freighter to its fleet, citing a significant increase in customer demand for freighter service, in particular from the high-tech and fashion industries. The extra plane increased service from Shanghai and Hong to six times and five times per week, respectively. Planes are operating at full capacity, it said.
      The Chinese General Administration of Customs reported that China exports to Europe increased almost 50 percent during the first five months of 2010 from a year ago.

FedEx
      FedEx added a ninth scheduled daily transpacific frequency to its hub in Memphis, Tenn., in January with a Boeing 777 to provide shippers extra capacity and later cutoff times. In April, the express carrier also added a third, non-stop daily flight from Hong Kong to Memphis, and a direct service from Hong Kong to Paris. And in June, FedEx converted an MD-11 route from Osaka, Japan, to Memphis to a non-stop B777 flight to meet growing demand.

UPS
      UPS has added a number of Asia flights to its network as volumes have increased, spokesman Mark Mangeot said. The integrated logistics provider carried 20 percent more international volume in the second quarter than the previous year period, led by 40 percent growth in Asia traffic. U.S. and European export volumes were up 10 percent.

Cathay Pacific
      Cathay Pacific brought back all five aircraft sidelined last year and in July launched its first round-the-world freighter service. The twice-weekly 747-400 service extends the existing route to Chicago onward to Amsterdam and then Dubai before returning to Hong Kong. It marks the first time the airline has ever operated a transatlantic service. The combination carrier also boosted service to Houston and Miami. It will start to take delivery of 10 next-generation Boeing 747-8s next January and has restarted construction of a cargo terminal of its own in Hong Kong set to enter operation in 2013.
      In addition to extra deck space, the 747-8s also provide much needed improvements in fuel efficiency, said James Woodrow, general manager for cargo.
      Cathay said its cargo load factor increased 11.8 percent in the first half on an annual basis, reaching a record 78 percent. Freight carried by Cathay Pacific and sister airline Dragonair increased 24.4 percent to 872,000 tons in the first half, while cargo revenue and yield increased 63.1 percent and 36.1 percent, respectively.

British Airways Cargo
      British Airways Cargo will add capacity in 2011 when it replaces three leased 747-400 freighters with larger Boeing 747-8s, undergoing final airworthiness tests in preparation for initial delivery later this year. Fiscal first quarter yield improved 34 percent per cargo ton kilometer with the carriage of more premium freight and improved market conditions supporting stronger prices, even though volume was only up 2.1 percent over the same 2009 period. June cargo traffic was up 5.4 percent.

AeroLogic
      AeroLogic, the joint venture between Lufthansa Cargo and DHL Express, is scheduled to receive three more Boeing 777 cargo aircraft by year's end, taking its total fleet to eight.

AirBridge Cargo
      AirBridge Cargo, the Russian scheduled cargo airline, added three 747-400 freighters since April and has continued to expand its network. It plans to enter the North American market for the first time in 2011, said Wolfgang Meier, executive senior vice president for sales and marketing.

Air France
      Air France is another carrier that is not experiencing much cargo resurgence with June cargo traffic about flat versus last year.

Asia Airfreight Terminal
      Asia Airfreight Terminal, the Hong Kong airport's other cargo handler, reported June volume improved 56 percent year-over-year and first half cargo increased 51 percent.

Cargoitalia
      Cargoitalia added a third freighter to its fleet in July. The leased MD-11 operates twice per week between the airline's Milan hub and Shanghai. The airline, which relaunched under new ownership in April 2009, plans further expansion in 2012.

Japan Airlines
      Japan Airlines, struggling to restructure itself through bankruptcy, said earlier this year it will stop operating a dedicated freighter fleet in the fall. Unless other operators purchase or lease JAL's aircraft there will be nine fewer freighters operating in the Asian long-haul market.

Qatar Airways
      Qatar Airways said it will begin scheduled Boeing 777 freighter service to Chicago on Aug. 18, its first dedicated freighter operation to the United States. Qatar recently started freighter operations to Hong Kong, Mumbai, Cairo, Kolkata and Riyadh, with increases in frequency also planned. The airline's services to Hong Kong will be boosted to five times a week from Aug. 16, from the initial three weekly flights that began two months ago.
      The airline said it is midway through an expansion drive that includes opening 13 new routes over a 12-month period. Seven new routes have been launched since February: Bangalore, Copenhagen, Ankara, Tokyo, Barcelona, Sao Paulo and Buenos Aires. Six further routes ' to Phuket, Hanoi, Nice, Bucharest, Budapest and Brussels ' will be added over a four-month period from October.

Virgin Atlantic Cargo's
      Virgin Atlantic Cargo's tonnage grew 25 percent in the fiscal first quarter, along with healthy yield improvement.

World Airways
      World Airways will double its 747-400 fleet with the addition of two leased 747-400 freighters in December and February.