American Airlines has made “significant progress toward rebuilding” since parent company AMR Corp. was forced to file for Chapter 11 bankruptcy protection in November 2011, says Kenji Hashimoto, president of the carrier’s cargo operation.
“The vast majority of the work needed on the financial restructuring of the company is complete, and for Cargo, specifically, we are done,” Hashimoto told Air Cargo World. “Our goal was to develop a competitive cost structure with customer focus and operational integrity, and we have achieved that.”
Appointed to his new position in May of this year after three years as VP strategic alliances, Hashimoto has presided over a steady loss of freight volumes–in part resulting from AA’s reduction of capacity.
The ton-miles total shrank to 136 million in September, an 8.3 percent decrease year-over-year. For the first nine months of 2012, cargo revenue was down 6.2 percent, with yield falling by 5 percent and traffic by 1.2 percent.
“There is less capacity but that is reflective of a softer market,” Hashimoto says. He points out that all are suffering equally from macro-economic conditions and yield pressure. “According to Airlines for America data, we are outperforming our competitors on unit revenue and unit revenue growth. Relative to U.S. peers, our company is doing fine.”
Peak season did not bring the traditional surge in demand, he admits. “While we have seen some improvement in volumes in the fourth quarter, we have not experienced the normal push for yearend and the holidays.”
One of the bright spots, however, is Latin America. “On both the passenger and cargo sides of our business, the region has been growing in traffic and revenue,” Hashimoto says.
This year, AA has added Manaus, its seventh destination to Brazil, started a second frequency between JFK and São Paulo in October, and began flights to three new regional destinations in November with the addition of Puebla, Mexico from DFW, and Roatan, Honduras and Asuncion, Paraguay from Miami.
When final data for 2012 is collated, it is thought that Miami will have moved into the U.S. top 10 districts in terms of its import-export trade, thanks to its proximity to emerging Latin American markets.
“The region will continue to flourish with upcoming major sports events, the booming oil and gas business in Brazil, recently signed free trade agreements with Panama and Colombia, the growth of the middle class, increased consumption driven by increased availability of consumer credit, investments in infrastructure and political stability,” Hashimoto says.
American will begin operating its first B777-300 early next year, initially from Dallas-Fort Worth to Sao Paulo. Despite recent OECD data suggesting that Brazilian airfreight traffic is weakening, Hashimoto is confident about a market he feels has been under-served in cargo terms in the past.
• American Airlines’ chairman, president and CEO Tom Horton has said it will soon become clear whether the carrier can make it out of Chapter 11 on its own, or will merge with US Airways. His comments followed a new collective bargaining agreement reached with the airline’s pilots via the Allied Pilots Association, which backs a merger as the most secure route to a strong, competitive American Airlines.
“We have been evaluating the merits of a combination under a non-disclosure agreement with US Airways,” Horton said. “While we are confident the new American will be very strong, we are evaluating whether such a combination could create value for our owners and a positive outcome for our people and our customers. We expect to have a conclusion on this soon.”