US reallocates Asia cargo routes to Kalitta and FedEx
Date: Thursday, June 11, 2020
Source: American Shipper
The U.S. Department of Transportation granted Kalitta Air and FedEx Express authorization Tuesday to operate between Hong Kong and Singapore on weekly routes relinquished by integrated logistics provider UPS.
Kalitta, a large all-cargo carrier based in Ypsilanti, Michigan, had applied for the three frequencies being returned by UPS, but FedEx (NYSE: FDX) jumped in with a request to operate scheduled freighter service on one of the available routes. The DOT also granted Kalitta’s request to convert its route authority between Hong Kong and Sharjah, the United Arab Emirates, to one between Hong Kong and Singapore.
In its filing, Kalitta offered the compromise for two UPS routes and a reallocation of its own Sharjah route to avoid a protracted carrier selection process that would delay the start of operations.
The aviation agreement between the U.S. and Hong Kong limits U.S all-cargo airlines to 64 weekly frequencies with the freedom to carry traffic between two foreign countries on a flight that either originates in or is destined for the carrier’s home country – known as “fifth freedom” right. Between Hong Kong and Singapore, U.S. carriers are only up to seven weekly round-trip routes.
Airlines aren’t supposed to keep traffic rights if they are not using them for revenue flights.
Prior to the decision, Kalitta could drop off cargo from Sharjah in Singapore, but couldn’t pick up cargo in Singapore for delivery to Hong Kong.
There are no remaining fifth-freedom frequencies available for U.S. freighter operators. Polar Air Cargo, the joint venture airline between Atlas Air Worldwide and DHL Express, holds the other weekly frequency between Hong Kong and Singapore and two remain unallocated. The DOT decision said it can’t allocate those traffic rights because the 64-frequency cap has been reached.
Under the decision, Kalitta and FedEx must inaugurate service on the allocated frequencies within 90 days or they revert back to the government.
Kalitta is celebrating its 20th anniversary this year. Founded by Conrad Kalitta, it ranks in the top 20 scheduled cargo airlines in terms of freight tonnage, according to the International Air Transport Association. The airline operates one of the largest fleets of Boeing 747-400 freighters (24), as well as several 777 and 767 aircraft, according to its website.
In January, the U.S. State Department hired Kalitta Air to help evacuate U.S. citizens from Wuhan, China, at the height of the coronavirus outbreak there. Kalitta temporarily installed passenger seats in one of its 747 freighters to carry out the missions.