Originally Posted by
777Brian
Let’s talk about cargo; I bring it up because everyone always talks about how important it is. There is no UA route in the network that exists solely for cargo. Cargo is the icing on the cake that may help the profitability of a route as passenger loads ebb and flow but won't make a flight make financial sense. Money making cargo is heavy and adds to the fuel expense of a flight so a balance between cargo and passengers is required. During the 1st quarter of 2010 UA generated $157 million in cargo revenue. I’m going to assume the 1st quarter has 91(13*7) days, this means each day UA cargo takes in only $1.7 million in revenue (chump change) . I think we can comfortably say that routes like SYD, HKG, NRT, HNL, OGG, PEK, PVG, LHR, KWI, FRA carry the bulk of Cargo, maybe 30 flights. So let’s say the 30 flights split the $1.7 million each day that means the IAD-PEK might be carrying as much as $57K although I bet the actual number is less than 25% of that.
Cargo really varies widely from route to route. A few years ago, I recall hearing that one of the reasons CO upped their TLV frequency to twice daily was that there's enough high value cargo that the flight can break even on just the cargo fees. (Keep in mind that much of the cargo coming out of TLV will be produce and Intel processors. The produce is extremely time sensitive, but not outrageously heavy. The processors are not terribly bulky, but extremely valuable.)
With China routes, the dynamic may be very different, because much of China's industrial production is built around special trade zones that allow for preclearance of US customs before loading directly onto FedEx and UPS aircraft. So the most valuable cargo is not going to the commercial passenger airlines...
-JMP