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14/04/2009 – Passenger Airlines & Cargo Revenue, Is Potential Income Being Ignored?
In the current economic state of global airlines, are many passenger airlines ignoring the significant potential in transporting revenue cargo along with passengers?
According to the International Air Transport Association (IATA), of the top 25 passenger airlines in the world, only 9 generate less than 20% of their air transport business revenue through air transport cargo distribution. Of these 9 airlines, 7 are North American passenger carriers. Air Canada generates the most air transport business cargo revenue of North American passenger airlines, with cargo accounting for 16% of their air transport business revenue.
In my review of the numbers I was surpirsed that Northwest Airlines (now merged with Delta Airlines), which operates its own fleet of cargo specific 747-200F aircraft, generates the second-to-least amount of air transport cargo business in comparison to the total air transport business of the the top 25 passenger airlines in the world. Northwest’s total cargo business only accounts for only 8% of the airline’s total air transport revenue, including cargo flown on both passenger flights and dedicated cargo flights.
In contrast to Northwest Airlines, Malaysia Airlines generates 41% of their air transport business revenue through cargo. While Malaysia Airlines operates dedicated cargo aircraft, like Northwest Airlines, the majority of their cargo business is generated through efficiently shipping cargo on-board passenger flights throughout their route network.
Overall, of the 16 top 25 passenger airlines in the world that generate 20% or more of their air transport business revenue from transporting cargo, 12 are airlines based in Asia.
Looking at the overall outlook of not only profitable airlines, but airlines that get high marks in passenger satisfaction and loyalty in both Asia and Europe, many also generate significant revenue from transporting cargo.
Is the relationship between passenger airlines generating a higher than average air transport cargo revenue yield in comparison to a having a higher than average passenger satisfaction level coincidental? It is highly unlikely.
As passenger airlines try and create new business models, restructure their image and advance forward to return to profitability and sustainability, they may want to explore maximizing the revenue potential of the cargo capacity their aircraft already have in available.