Kalitta to diversify with 767 freighters

KalittaKalitta Air relies on a fleet of 747 freighters for the long-haul flights it is known for, carrying large payloads, including heavy machinery, delicate medical equipment, perishable foods and even livestock. So what’s with the 767s the cargo carrier is now purchasing? 767s may be the go-to freighters for the integrators, but they’re rare in the general freight world.

The answer is a combination of fleet maintenance requirements and a strategy shift at the Michigan-based carrier. The time is right for Kalitta to develop in the domestic market, said Pete Sanderlin, the vice president and general manager, and number-two guy behind CEO and owner Conrad “Connie” Kalitta. Right now, Kalitta Air operates thirteen 747 freighters, three of which are 30-year-old 747-200s. Sanderlin said it’s getting difficult to secure parts for the -200s, and since five of the 747-400s are tied up in DHL operations, Kalitta Air does not have many freighters available for other business.

That is changing. The airline recently purchased four 767-300 passenger aircraft, two of which it is having converted to freighter configuration by Bedek Aviation Group, the MRO arm of Israel Aerospace Industries, and two that will be used for parts only. The first of the freighter converted 767s is scheduled to begin operations in May 2016. The second 767 was scheduled to be ferried to the Bedek facility in Tel Aviv for conversion Feb. 1, and should enter service around mid-year. And more may be on the way. Connie Kalitta recently said the carrier was planning to acquire as many as five or six more 767s “in the near future.”

“We got them because we want to diversify,” Sanderlin said, adding that most of Kalitta’s work is on the international stage. “We do little in the U.S. domestic market,” he said, but the plan is to test the waters with the new 767 freighters.

The U.S. domestic freight market is dominated by UPS and FedEx, so where is the business potential that would justify Kalitta’s attempt to enter it? Sanderlin said the 767s could appeal to DHL, which uses 767s in the U.S. to support its international operation, and with which Kalitta already has a relationship. Or, perhaps the other integrators, or even Amazon – which is rumored to be planning a major U.S. domestic 767 operation – would be potential customers.

Of course, bringing in a new freighter type does not mean abandoning the old. In addition to acquiring the 767s, Kalitta Air also plans to expand its fleet with more 747s. In fact, Sanderlin said, they are in negotiations right now for the purchase of another 747-400 freighter.

Kalitta Air is not a huge airline, but with 1,500 employees and almost 20 freighters, it’s not small by any means. In addition to the airplanes, Kalitta Air has its own engine shop, airframe maintenance facility, and training facility with three simulators, which Sanderlin said is unmatched by carriers of its size.

Perhaps one reason Kalitta Air has continued to thrive is because it does so much in-house. Another reason is leadership. “Connie is very close to the business, very hands on,” Sanderlin said. He added that he and Kalitta make most of the decisions together.

Currently, Kalitta and Sanderlin have another challenge on their hands. The carrier’s pilots, who are represented by the International Brotherhood of Teamsters, Airline Division, Local 1224, authorized a strike in December 2015, stating that the company has delayed responding to union wage and benefit proposals for more than two and a half years.

“That’s usually what they do,” Sanderlin said. “We’re still negotiating. We have no difficulties with crew members at all.” He said the talks are slow, but amicable. The crews are working hard, and the hope is that the labor issues will be brought to a conclusion by the middle of 2016.

Sanderlin added that the union usually starts off by asking for the moon, and then they have to negotiate to a place somewhere in the middle. He feels that a mutual agreement can be found and they will continue operations without interruption.

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