United Airlines ditches cargo-only flights as passengers return
July 22, 2021
By Eric Kullisch, FreightWaves
United Airlines has mostly phased out use of jets for dedicated cargo service, returning them to full-time passenger operation as long-haul travel demand rapidly snaps back from the COVID plunge, Chief Commercial Officer Andrew Nocella said Wednesday.
The temporary freighters were a big reason that United’s cargo revenue shot up 105% in the second quarter to $606 million and 89% in the first half of 2021. The flights made money even though the widebody aircraft deployed have less than half the heavy-freight capacity of a pure freighter because an overall supply shortage pushed rates much higher than normal.
“We are not going to be able to do more cargo-only flights. We’re obviously disappointed by that, given where yields currently stand. The reason for that is the aircraft can be better deployed in passenger markets,” Nocella said during a conference call to discuss the company’s quarterly results.
A very limited number of passenger-freighter flights remain and they will wind down in the next few weeks, he indicated.
United (NASDAQ: UAL) was one of the most aggressive airlines in adjusting its network to accommodate dedicated cargo customers since the start of the pandemic last March. It has flown more than 13,400 auxiliary freighter flights during the past 15 months, spokesperson Rachael Rivas said. But the number has begun to taper in recent weeks, after finishing March with more than 11,200 such flights.
It remains to be seen whether United can maintain its cargo momentum from the past year with the traditional model of sharing assets with passengers and baggage. United Cargo chief Jan Krems last year said the division was being given greater input on determining destinations and flight schedules because of cargo’s impact on margins.
But Nocella said many of the passenger markets widebody planes will be allocated to “are not exactly optimal cargo markets.”
A contributing factor behind the disbanding of cargo-only operations is the grounding of 52 777-200s since February, Nocella added.
In February, United pulled two dozen Boeing 777-200 passenger jets from service after an uncontained engine failure rained debris over the Denver area. Boeing (NYSE: BA) urged airlines to stop flying the 777 aircraft with Pratt & Whitney 4000-112 engines, while the Federal Aviation Administration ordered immediate stepped-up inspections of aircraft with those power plants.
United eventually plans to return the aircraft to service but is still working with Boeing, Pratt & Whitney and the FAA on potential solutions, spokesman Charles Hobart said.
“If those aircraft are flying, we clearly would continue our program missions because we’d have the ability to do both,” Nocella said, adding that he remains optimistic about future cargo growth because more planes overall will be flying in the rehabilitated network.
The “capacity available to fly is still really significant as we put all these passenger planes back in the air, and we think we’ve got this properly accounted for in our forecasts and we think we’re going to have another great cargo quarter in Q3 and it’s already gotten off to a really good start,” the top sales executive said.