Watch Now

US reallocates Asia cargo routes to Kalitta and FedEx

Kalitta Air and FedEx jockeyed for the right to operate cargo planes between Hong Kong and Singapore. (Photo: Flickr/Bruno Geiger Airplane Pictures and Collection)

The U.S. Department of Transportation granted Kalitta Air and FedEx Express authorization Tuesday to operate between Hong Kong and Singapore on weekly routes relinquished by integrated logistics provider UPS.

Kalitta, a large all-cargo carrier based in Ypsilanti, Michigan, had applied for the three frequencies being returned by UPS, but FedEx (NYSE: FDX) jumped in with a request to operate scheduled freighter service on one of the available routes. The DOT also granted Kalitta’s request to convert its route authority between Hong Kong and Sharjah, the United Arab Emirates, to one between Hong Kong and Singapore.

In its filing, Kalitta offered the compromise for two UPS routes and a reallocation of its own Sharjah route to avoid a protracted carrier selection process that would delay the start of operations.

The aviation agreement between the U.S. and Hong Kong limits U.S all-cargo airlines to 64 weekly frequencies with the freedom to carry traffic between two foreign countries on a flight that either originates in or is destined for the carrier’s home country – known as “fifth freedom” right. Between Hong Kong and Singapore, U.S. carriers are only up to seven weekly round-trip routes. 

Airlines aren’t supposed to keep traffic rights if they are not using them for revenue flights. 

Prior to the decision, Kalitta could drop off cargo from Sharjah in Singapore, but couldn’t pick up cargo in Singapore for delivery to Hong Kong.

There are no remaining fifth-freedom frequencies available for U.S. freighter operators. Polar Air Cargo, the joint venture airline between Atlas Air Worldwide and DHL Express, holds the other weekly frequency between Hong Kong and Singapore and two remain unallocated. The DOT decision said it can’t allocate those traffic rights because the 64-frequency cap has been reached.

Under the decision, Kalitta and FedEx must inaugurate service on the allocated frequencies within 90 days or they revert back to the government. 

Kalitta is celebrating its 20th anniversary this year. Founded by Conrad Kalitta, it ranks in the top 20 scheduled cargo airlines in terms of freight tonnage, according to the International Air Transport Association. The airline operates one of the largest fleets of Boeing 747-400 freighters (24), as well as several 777 and 767 aircraft, according to its website. 

In January, the U.S. State Department hired Kalitta Air to help evacuate U.S. citizens from Wuhan, China, at the height of the coronavirus outbreak there. Kalitta temporarily installed passenger seats in one of its 747 freighters to carry out the missions. 

(Click for more FreightWaves stories by Eric Kulisch)

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]