UPS turns to wet lease aircraft to bridge the growth gap

UPS has turned to wet leased aircraft as it tries to keep up with express and cargo demand growth ahead of new aircraft deliveries.
The express giant said that it is adding 35 aircraft to its fleet over the next four years, including nine in 2018.
This fleet expansion will add more than 9m lbs (4,000 tonnes) of cargo capacity to its network of more than 580 owned and leased aircraft.
However, the company told Air Cargo News that is was turning to wet leases in the meantime, although it did not reveal more details. Reports suggest UPS is wet leasing seven aircraft from Western Global Airlines and 21 Air.
A spokesperson said: “New aircraft purchases and dry leases have lead times, and the market for used aircraft is tight, so we are bridging the gap with wet leases.
“Those arrangements are governed by confidentiality agreements, so we won’t discuss the specifics of them.
“These purchases are part of UPS’s ongoing strategic capital investments for increased global operating capacity.
“These expenditures, from aircraft to facilities, support continued customer demand, which in turn fuels the company’s profitable growth.
“Beyond the new jets, UPS is pursuing a multi-phased approach to increasing lift that also includes dry leases (aircraft owned by other companies but operated by UPS personnel); wet leases (aircraft owned and operated by other carriers); and purchasing used airplanes.”
According to Bloomberg, the news of the wet lease aircraft has been met with dismay by the Independent Pilots Union, which accused the airline of poor planning and insufficient investment.
Blomberg said the union has referred the case to an industry arbitrator as it alleged the move breaches labour contracts by outsourcing flying that should be carried out by UPS’ own pilots.
Earlier this year, UPS ordered an additional 14 Boeing B747-8F cargo jets and four new Boeing 767F aircraft to provide additional capacity in response to demand growth.
All of the new aircraft will be added to the existing fleet and no existing aircraft are being replaced. 
The aircraft will be delivered on an expedited schedule, building on the company’s 2016 order of 14 Boeing 747-8 freighters.
As well as the order for new aircraft, UPS this year announced more than $12bn in investments to expand the company’s Smart Logistics Network, significantly increase pension funding, and position the company to further enhance shareowner value.

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