Given its rapid growth, observers would be forgiven for thinking that Atlas Air is alone in providing wet-lease freighter capacity and that the business is a "new fashion".
In fact, this type of enterprise, (described variously as supplemental, contract, wet-lease and chartering), has existed since the Berlin Airlift of 1948. It centred on commercial carriers which were born and existed primarily to support the needs of the US Air Force's Military Airlift Command (since renamed Air Mobility Command) for civilian lift, to transport either troops or supplies, particularly in times of crisis as well as during the height of the Cold War.
While many disappeared, particularly after the end of the Vietnam War, others, such as the US-based Southern Air Transport (SAT), Evergreen International and World Airways, are today still battling on in the commercial arena, while maintaining some degree of operations on behalf of the US military through the Civilian Reserve Air Fleet (CRAF). All three offer heavy-freighter equipment to other airlines under wet-lease terms but, as part of a mix of business which includes, in World's case, McDonnell Douglas (MDC) MD-11 charter-passenger services. SAT and Evergreen, however are like any traditional charter cargo carrier - having a range of capabilities and a varied fleet.
Asa Hemperley, senior vice-president for corporate affairs at SAT, describes its fleet as versatile. For example: "We have 15 Lockheed L-100s, including combi models, as well as bulk and palletised freighter-configured L-100s."
Mix of operations
Operations include local supply flights in Alaska, hub-and-spoke services for KLM around Europe, one serving a domestic feeder service in the USA for Japan Airlines (JAL), as well as relief operations with a Nairobi, Kenya-based aircraft. Between two and four L-100s fly with the USAF in Europe and Japan, while the rest of the fleet moves from various charter assignments in the Americas, Africa and Europe, and even Antarctica.
Aside from having the largest civil Hercules fleet in the world, SAT also has a small fleet of MDC DC-8-70 freighters all active in the aircraft, crew, maintenance and insurance (ACMI) market. "This year, we've had full-time contracts with Singapore Airlines, Qantas and DHL/European Air Transport with the DC-8s," states Hemperley. SAT also operates Boeing 747-200 freighters - three aircraft are dedicated to three contracts, one each with JAL, South African Airways and Frontier de Colombia (one of the largest cut-flower exporters from Colombia to the USA.) The mix of business is typical of these operators, which are collectively known as the supplementals.
Hemperley sees this as a strength, as SAT is not reliant solely on one market niche, but a variety, with different types of equipment, each one serving a variety of roles. He does admit, however, that SAT could do with more 747 freighters, and envisages a fleet of nine by 2000. "We are definitely looking to add, but only aircraft with the proper power," he states, referring to SAT's choice of the Pratt & Whitney JT9D-7Q-engined variant, "-and then only pure production freighters, and they are very scarce at present", he adds.
A decision on a DC-8 replacement is some way off, but candidates include the Airbus A300 and Boeing 767.
Ron Lane, vice-chairman of Evergreen International, once the dominant 747 wet lessor, also highlights the differences between Evergreen's mix of business and a pure ACMI-orientated operation such as that of Atlas Air. "We not only offer full-time utilisation of an aircraft, but partial - or sector - contracts on our 747 freighter fleet," he says, adding that Evergreen commonly contracts "weekly rotations" as opposed to full wet leases. "Our operations for Qantas, which have been ongoing for eight years now, are typical of this. We operate from the USA to Australia and then ferry up to Hong Kong, from where we operate return legs to New York JFK and Columbus, Ohio."
Lane describes this type of operation as "market matching" and adds that "-it works for all the parties in the arrangement". Aside from Australia's Qantas, which can occupy up to three of Evergreen's nine current 747s - a mix of -100Fs and -200CFs (convertible freighters), Evergreen also has full-utilisation wet leases with Transbrasil and Saudia and operates charters for Air New Zealand. In recent years, the carrier has also had "partial" wet leases with British Airways and has dry-leased 747s to parcels-carrier UPS.
Like Atlas, Gemini Air Cargo is a relative newcomer to the cargo-contract operation stage. The airline is headed by chairman and chief operating officer Bill Stockbridge, formerly of Potomac Capital - a small leasing company. In 1994, having failed to place on dry or operating leases his six ex-Lufthansa MDC DC-10-30s, which were undergoing conversion at Italian conversion specialist Aeronavali to full freighter configuration, Stockbridge took the plunge and formed Gemini.
Difficult decision
"It wasn't an easy decision, but I'm now very happy we did it," he says, adding that a seventh DC-10 has just been acquired and will be operational by July. Stockbridge describes the pedigree of the DC-10s, like those of the Atlas 747s, as excellent.
"They really were in fabulous condition. Our whole fleet is one common standard, all built for Lufthansa; all are pure freighters, and all at the same high-gross-weight option of 259,500kg," he says.
That is where the similarities with the Atlas strategy end, however. Stockbridge is keen to point out that, while Gemini is keen to fly ACMI wet-lease operations, "-we have basically two DC-10s dedicated to Swissair, and we've flown in the past for Finnair, Alitalia, Fast Air, British Airways and KLM, both on part time wet-leases, series and ad hoc charters - we want to have the comfort of not having all our eggs in one basket." Stockbridge says that he will also welcome becoming part of the CRAF, once the carrier's own certificate has existed for over a year, and he describes the ACMI business as being "in vogue", adding that "-the future might not be like that".
Gemini has also started scheduled services under its own authority, six times weekly to Seoul from New York JFK. "We have some customers which have contracted for space on-board and we are actually doing quite well," Stockbridge says.
He adds that, eventually, he would like to see a fleet of a dozen DC-10s for Gemini, but he also cautions that "-we want to grow on a managed scale, not too fast". In the meantime, Stockbridge re-affirms what all the carriers active in this increasingly competitive niche market are learning that "-reliability and dependability on the part of the service provider are the key to success or failure".
Source: Flight International
