NCA drops Big Apple

NIPPON Cargo Airlines is turning its back on the Big Apple. Instead, the Japanese carrier will focus more on Chicago.

In early August the all-cargo airline is going to suspend its flights to JFK airport, which it has served in tandem with Chicago. At the same time it will step up its frequency between ORD and Tokyo Narita from currently five to seven weekly services.

Shawn McWhorter, president for the Americas, stressed that the decision was based purely on operating costs as a result of sky-high kerosene prices. “This is simply a function of what it costs to fly an airplane. Customers are not paying a premium to get here,” he said, pointing to the longer stage length from NRT to JFK compared to NRT-ORD.

There is sufficient demand for lift in the market, he added. “We do not have a market demand problem, we have an operating cost problem. There’s not enough revenue premium to offset the higher operating cost,” he said.

According to McWhorter, New York accounts for about 30-40 percent of the cargo on NCA’s flights serving ORD and JFK, and about half of that share is replaceable. Management has not decided yet whether or not to maintain its sales office in New York. A decision should be made within the next 30-60 days, he said.

Over the past 30 months New York has lost several international freighter operators serving Asia with 747s. Northwest scrapped its JFK-NRT freighters at the end of 2005 and shut down its cargo station at JFK, and SIA Cargo stopped transpacific freighter flights to New York once it obtained traffic rights to fly across the Atlantic from Brussels.

Last year the combined cargo volume of JFK, Newark and LaGuardia grew 4.5 percent, lagging national growth of 7.9 percent. Imports barely budged (up 0.01 percent) while total US air imports went up 5.7 percent.

McWhorter said that NCA will review its New York strategy when the new 747-8 freighters come into its fleet late next year. The fuel economy of the 747-8 is almost 20 percent better than that of the 747-400.

For the time being, NCA confines its US flights to three gateways – ORD, LAX and SFO. The carrier is in the process of developing new trucking service from Texas to ORD, a strategy that McWhorter described as a first step to building up sufficient volume out of Texas to deploy aircraft at a later stage.

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