Scanning the horizon
Just as shippers have become more efficient with their airfreight logistics, the best charter companies are also getting better at finding new niches when the steady business – such as oil and gas – dries up.
“There’s no question that the oil and gas business has dramatically affected the charter market,” Huff said. “We’re also in the scheduled service business, so we’ve seen it on both sides of the coin.” Much of the problem, at least in the Western Hemisphere, he said, stems from the near total collapse of the Venezuelan economy, which relied almost exclusively on petrodollars and has fallen along with the price of oil.
“This year has not produced the number of charters from years past, and we attribute it to a combination of a slow economy and better logistical planning from the manufacturing sector,” Laub said. However, the diversity of cargo handled by Northern Air Cargo in Alaska and Hawaii’s Aloha Air Cargo, in vastly different climates, he added, “allows us to reposition our assets to accommodate market demand if one heats up while another cools down.” Some other commodities carried by NAS when the petroleum business is slack include auto parts, aircraft parts, seafood, perishables or express packages.
Tony Bass, sales executive for Ohio-based broker Grand Aire Charter Services, said that flexibility is often the difference between the charter companies that survive and the “fly-by-night companies that are looking to make a buck” when the market is booming. His company operates a wide range of aircraft, including DC-9s, Falcons, Learjets, Metroliners, and Caravans.
Automotive parts are the main commodities sought in Grand Aire’s charter business, which makes up about 65 percent of the company’s revenue, Bass said. But when the auto market slows, as it has recently, Grand Aire is able to fall back on odd, time-sensitive commodities it has secured over the last 30 years, such as human organs, T-shirts and other apparel, trade show booth materials and pharmaceuticals.
At Kalitta, Joseph said the company is seeking out more of the express business via DHL. Kalitta has already dedicated a 727F to DHL and recently purchased two 737-400s for the same purpose. “So we’re definitely looking into other areas,” he said. “We’ve never really had all of our eggs in one basket. We do a lot of work for the government.” For example, Kalitta’s fleet of Learjets and Falcons are also used as air ambulances and also to take part in the U.S. Department of Defense’s “Fallen Heroes” program that ferries the remains of soldiers killed in action to various military cemeteries around the country.
“You’ll also get some other onesie-twosies, but you don’t count on them,” Joseph added. “We’re doing a goat charter to the Bahamas next month. We flew dogs on a seven-two out of San Juan to New York for this rich guy that wants his pick of dogs. We do all kinds of stuff like that – we can move ocean animals. We can fly every single day.”