AA and USAir countdown to cargo merger

American Airlines and US Airways are counting down the days to a complete cargo merger on October 20, the date when the two carriers become one for freight bookings.
From then on, customers will start using the same airwaybill to access an integrated airline network that has surprisingly little overlap, just 12 routes out of thousands on offer.
But there is more to the transition than numbers, more than just switching to a single airwaybill using the American Airlines prefix 001 rather than the 037 of US Airways (USAir).
AA may be four times larger than USAir in terms of cargo revenue – mainly because the latter had only 26 wide-bodied aircraft – but USAir is no junior partner.
Jim Butler, president of American Airlines Cargo, says: “US Airways cargo did a very good job with the assets it had, and with a very extensive domestic network that is extremely strong in some specialty products.”
USAir has a partnership with the US Postal Service that Butler hopes to continue, and a varied product range that includes small shipments but also human remains.
Butler adds: “While American was clearly larger at Heathrow, the US Airways network in Europe actually hit more points.
“From that perspective, AA Cargo now has a much more expansive network across Europe then we did prior to the merger. It brings together two cargo organisations focused in slightly different areas because of the assets they had.”
Part of the integration process since the merger was formally signed nine months ago has been the co-location of 152 cargo stations that will see the freight operations placed under one roof. The programme is now more than two-thirds complete.
Says Butler: “While we are locating under the same roof, we are still running two totally separate airlines from a cargo perspective, and that is the big change. On October 20 we will do all that under 001.
He adds “American clearly had great locations in all of our major international destinations, but there were a number of destinations throughout the US where American did not have a freight operation.
“Prior to the merger, American was expanding its footprint in the US. Now we have a pretty significant expansion of the number of places where we can accept freight.”
The AA Cargo product range will form the backbone of the merged freight business – Priority Parcel Service, ExpediteFS, ExpediteTC and ConfirmedFS for example –
One exception is the USAir human remains product (TLC), which will be available on AA.
Other important changes include an increase in the maximum piece weight for a narrow body aircraft, which goes up to 350 lbs (159kg) from 300 lbs pre-merger, and the availability of the temperature-controlled C-Safe container, a unit which was a legacy USAir product.
The latter fits in well with AA Cargo’s emphasis on pharmaceutical and perishable products, which have seen upgrades to terminal facilities in Philadelphia and London-Heathrow, for example.
“These are new offerings to our customers and which we will be operating across the entire network,” says Butler.
On the question of freight rates, will two become one? Butler says: “We are working on rates right now and will be getting back to customers in advance of October 20.
“Given the topic, I cannot say too much more on that, but obviously we work with our customers, and part of our success is our competitive pricing and making sure we offer an overall product, of which rates is only one part.”
He continues: “The American [AA Cargo] customer had the ability to book online, had access to a robust online tracking tool and a number of other things that USAir did not offer. When we move to 001, all of those benefits become available to every customer.
“From a cargo customer’s perspective, it is one network. When a cargo customer either calls or goes online to book, they will see all the flights.”
A new winter schedule will add a daily A330 flight between the legacy USAir hub of Philadelphia and the legacy AA hub in Miami. In doing so, it adds the USAir destinations in Europe to the extensive Latin American network that AA offers.
“It will be a full integration, and so the exact same service on one airline as on the other,” adds Butler.
The new cargo unit will share a similar customer base, but not in terms of the services provided to each of them.
Explains Butler: “There is a decent amount of crossover in the forwarders and customers we do business with. But if you take our wide-bodied network, there was not one market where AA and US Airways offered the same service.
“Those networks are completely complementary and across the entire network, be it regional, domestic, wide body or narrow body, there were only twelve routes out of the thousands we offer, that overlapped.
As a passenger executive who transferred to cargo less than one year ago, Butler has a clear enthusiasm for the division.
“Cargo is an incredibly strategic part of the new American Airlines. We consider it that way, we will run it that way and we will invest in it that way.
“As you grow your revenue footprint it makes it easier to justify investments. I have been spending time with the top leadership team and explaining the value that cargo has to American. The reception we are getting is fantastic.”
But pure freighters are not on the shopping list. However, wide-bodied passenger planes with sizeable belly hold capacity are, including the B787, A350 and even a few more B777-300ERs for network expansion. There are also a number of interline agreements with carriers that operate both passenger and freighter aircraft.
Says Butler: “I already have 16 mini-freighters in the fleet, the B777-300ER. It is a fantastic plane from a cargo perspective. People ask me why I don’t have freighters and I answer: because I have that fleet of B777s.”
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