American Airlines officials are making significant progress toward the integration of American and US Airways, and cargo “will lead the way” in the process, according to Robert Isom, chief operating officer of American Airlines.
Pushing cargo forward, he said, will mean connecting to new markets in Asia, Europe and South America with an upgraded fleet at the same time as officials focus on customer service.
Calling cargo “an essential part of our success,” Isom gave an update on the integration and cargo’s importance to the new American Airlines Wednesday during the World Cargo Symposium in Los Angeles, hosted by the International Air Transport Association.
At American, Isom said cargo generates more than $800 million in revenue each year. In American’s latest results release, the carrier showed an 11.2-percent improvement in cargo ton miles in February, finishing the month at 173,529 miles. Its year-over-year comparison included results from US Airways, as well. For the first two months of the year, American has achieved a 12.6-percent cargo growth rate when compared to the same period in 2013.
“The opportunity for us, in cargo, is to provide incremental revenue for the airline without significant additional costs. But to do so means that we have to consistently find new ways to meet changing customer needs -- becoming more efficient, faster and offering the products our customers require,” he told the audience.
“We want to be known as the best airline in the business,” Isom continued, “whether we are flying a person or a pallet. And we know that requires delivering on the promise of our integration and continuing to innovate our product/service offerings.”
As far as network expansion goes, Isom said Latin America is American’s strongest cargo market, and he predicted that the region’s importance to American will keep growing. Asia is also important, and American is weighing increasing demand for flights to China and other cities throughout the continent. In June, American will launch nonstop flights from Dallas to Shanghai and Hong Kong.
“In addition to Asia and Latin America, once our networks are connected, the additional wide-body capacity will increase our ability to transport cargo to almost every major commerce center in Europe. In total, we will offer more than 50 daily wide-body flights to 10 countries,” he said.
Starting this year, American will take delivery of 11 wide-body planes, which Isom said will have a direct impact on the carrier’s cargo business. The carrier will take three A330-200s; nine more B777-300ERs, for a fleet-wide total of 20; 22 A350-900s; and 42 787s, an order that can be expanded to include 58 more planes.
“These investments are allowing us to carry more cargo to more places,” he said. “The fuel efficiency of these aircraft doesn't just help the bottom line. They also help our commitment to the environment and support IATA’s voluntary initiatives to address environmental impact in our industry.”
American is also focusing on pharmaceutical cargo, Isom said, with new temperature-controlled facilities in New York, London and Philadelphia.
Isom said a lot has changed in the industry since he served as director of cargo strategy for Northwest; the airline was one of the last domestic airlines to operate freighters, so the lack of a domestic freighter operator has shifted the landscape significantly. But, Isom added that technology has played a key role in moving the industry forward. American, he said, is committed to the e-air waybill and pushing forward IATA's 2014 goal of reaching 22 percent global penetration.
“Twenty years ago, no one could have foreseen how technology would have changed the global economy, and increased the dependence on efficient and reliable air transport for high-value cargo,” he said. “And fortunately, cargo will play a significant role in the strength of the new American.”