Beti Ward: Navigating the Pacific
26 / 03 / 2018
Entrepreneur Beti Ward built her Hawaiian freighter operation from scratch in the 1990s and came out of retirement due to customer demand.
Ward’s chance meeting at a Phoenix women in business event in 1990 led to the creation of a freighter operation that has evolved into today’s Hawaii based Pacific Air Cargo (PAC).
“I was attending a lunch when I met a lady who owned a string of flower shops,” says Ward, adding: “I was a freight forwarder at that time and she was unable to get her fresh flowers out of Hawaii. The flowers were sitting there, rotting.”
Ward was asked to fly to Hawaii, to see if she could help.
“I had a free trip to Hawaii, of course I would go. It was a bad situation for cargo out of the Big Island, especially out of Hilo, so I came back, talked to a bunch of other people, and said okay we can run some charters in there.”
Ward originally began with a DC-8 freighter from Emery Worldwide on the weekends, a freighter that was acquired by Michigan-based US cargo carrier Kalitta Air – run by Connie Kalitta.
American International, the forerunner to PAC, took to the air, running a freighter service for perishables and flowers out of Hilo, where Ward lived for 18 months in the beginning.
“As the business grew I realised that we had to fly to Honolulu because that is where everything was, so we started flying from Hilo to Honolulu and then to Los Angeles, instead of Phoenix, because Los Angeles is more of a hub airport.”
PAC now flies a vast variety of cargo, including aircraft engines, e-commerce cargo, household pets, horses – including polo ponies and even giant Clydesdales – cattle and perishables.
In the mid-1990s a downturn in the Hawaiian perishables traffic forced a rethink of Ward’s business model.
“The route was Los Angeles-Honolulu, but the backhaul was still a big problem. I met the cargo team from Japan Airlines and we finally put together a deal to make Honolulu their hub, bringing in cargo that we then flew into Los Angeles. It took about three to four years to arrange, but Japan Airlines today still has six to eight flights a day into Honolulu.”
Japan Airlines had sold its freighter fleet and originally wanted Ward to serve Hong Kong but she convinced the Japanese team that Honolulu was a better option, and more carriers noticed it too: “We got ANA and Korean Air on board, and many others started using the service. The pricing is not as much as it is from LA to Honolulu, but it certainly helps not flying back empty.” The next stage was an aircraft upgrade, which started when Kalitta bought one of the Boeing 747-100 freighters from Japan Airlines.
“Connie Kalitta called me and said ‘I have another aeroplane for you’, and so I came down to LAX and walked on the aeroplane. I almost started crying, that is the girl thing to do, right, when you are excited, upset and scared all at the same time?
“I said, there’s no way I am going to fill this aeroplane, but he said ‘yes you will’, and so after six months we had a B747-100 going every day on the same route, Honolulu-Los Angeles.”
Some 12 years ago, the -100F was replaced by at B747-200F, and then in April 2017 by a B747-400F, the latter’s four temperature controlled compartments ideal for fruit and other perishable commodities requiring sensitive handling.
“We have an ACMI agreement with Kalitta, which is more like a lease and is not really a charter any more.
“We are committed to doing the 200+ hours a month with the aircraft, and then in the fourth quarter we always bump it up to six flights per week.”
Kalitta, with a total fleet of 15 B747-200 and B747-400 freighters, can perform light aircraft maintenance within 48 hours, or bring in another aircraft for PAC when heavier maintenance is necessary.
Says Ward: “I did all the sales in the beginning, and we sell just to the forwarders and have around 200 customers. We don’t do deliveries and we don’t do pick-ups, we just do airport to airport.”
It has not been a totally turbulence-free aircraft operating career for Ward. In 1997, Kitty Hawk bought American International Airways (AIA), founded by Connie Kalitta who resigned from the company to start Kalitta Leasing, an aircraft brokerage company. By April 2000 Kitty Hawk International ceased operations and filed Chapter 11.
Kalitta purchased the defunct carrier’s Aircraft Certificate and resurrected the airline he built.
Ward adds: “When Kalitta sold to Kitty Hawk, along with it went my partnership, and so I retired for 18 months. Kitty Hawk got into a bunch of trouble and my customers started calling me, saying ‘you have got to come back to work and straighten this out’.”
She returned and started PAC, leasing aircraft from Polar and then Southern before reuniting with Kalitta. Of the current market, Ward says that it has been “very strong” with 2016 being PAC’s best ever year, helped by a hotel construction boom in Hawaii.
“It’s all about value. If something is valued at more than four or five dollars a pound, then they can afford a dollar a pound airfreight, rather than $0.20 a pound on a ship.
“These days it is more a decision about being there overnight or being there in 10 to 12 days and that is a big gap. If you are thinking of sending something from Chicago to Los Angeles, it may be overnight airfreight or two or three days by truck, which is not that big a difference, but here you’re looking at the ocean or the air, which is a huge difference.”
There is also the issue about supermarket shelf life for perishables, which can be increased by up to two weeks if the goods are flown rather than shipped.
PAC currently operates a Boeing 757 freighter as a mail service for the South Pacific islands, but is also studying potential B757 or Boeing 767 freighter services to Samoa and Tonga, serving both the consumer demands of the tourist trade and fresh fish supply chains as deep sea trawlers are pushed further out into the Pacific by new regulations.
When asked about her plans for the future, the ever optimistic and cheerful Ward says with a chuckle: “Survive probably.”
Ward does not consider retirement as an option, just yet: “I’ve been doing this so long that I don’t know what else I would do. I have a really good staff and I have turned over a lot of responsibility to them.
“I don’t usually work the 12 hour days any more. I take it a little easier and oversee a lot of things that I used to be a bit more involved in. I try to get by with 8 to 10 hours nowadays.”