A small all-cargo airline is taking a unique approach to add capacity without the risk of ownership by entering a joint venture with a leasing company for passenger aircraft with the seats removed and contracting with a third-party carrier to fly shipments on its behalf.
21 Air, based in Greensboro, North Carolina, has been flying under its own license for four years. It owns and operates two Boeing 767-200 converted cargo planes with a 42-ton payload.
Like any small business, it faces the challenge of trying to grow without deep pockets. The airfreight market is hot these days because a quarter of the global fleet is grounded by fallout from the coronavirus, so company officials came up with a plan to take advantage of strong shipper demand without taking on expensive assets.
21 Air expects to start transporting goods this month with an Airbus A330-200 passenger plane that has been temporarily reconfigured without seats to allow boxes to be loaded in the cabin, Chief Commercial Officer Roy Linkner said.
The arrangement stands out because nearly all of the 2,300 passenger planes being used since late March in dedicated cargo service are controlled and operated by passenger airlines. Of those, more than 150 have had their seats completely removed to increase cargo volume, according to data from the International Air Transport Association.
Puerto Rico-based Aircraft Engine Lease Finance (AELF) Inc. is contributing the plane, while 21 Air markets the capacity and directs commercial operations. In another twist, 21 Air is not flying the A330. Instead, it has outsourced that task to Maleth Aero, a company in Malta that offers extended passenger charter service with three A340s and is leasing the airplane from AELF.
The A330 is a large airplane with 50 tons and 232 cubic meters of available space, including 18 netted positions on the top deck.
Linkner said the initial partnership involves two aircraft, the first of which is expected to receive its aircraft operating certificate next week from Maltese civil aviation authorities. AELF has three more aircraft it can repurpose for cargo, as needed.
The A340 is similar to the A330, but Maleth Aero must still receive approval to add the plane to its operating certificate.
The arrangement is a way for 21 Air to test the A330’s capabilities as a potential candidate for its fleet, Linkner said.
“It gives us the ability to know the airplane because we’re Boeing. The A330-200 is the closest thing to a 767 200/300, and it gives us a no-risk way of trialing this aircraft for its market deployment characteristics, profile, and viability before we would commission or acquire a converted A330 ourselves,” he said.
Lessors have been stuck with grounded airplanes returned by cash-strapped airlines, and the arrangement gives AELF a chance to earn revenue from idle assets.
Growing with DHL
21 Air was founded by Adolfo Moreno, who for years ran an airfreight wholesaler in Miami that bought space from charter operators to serve the South American market.
Frustrated with all-cargo carriers that wouldn’t customize service for smaller customers, Moreno started his own airline that he envisioned as more attuned to 21st century practices. He acquired an aircraft and then rented crews until 21 Air received an operating certificate allowing it to fly on its own.
The company began operating quasi-scheduled service, but the extreme seasonality of shipments in Latin America led 21 Air to become a full-time provider of dedicated contract charters.
21 Air began flying two routes last summer for express delivery company DHL, including an indirect arrangement as a subcontractor to Canadian carrier Cargojet, Linkner said. It operates between DHL’s hub at Cincinnati/Northern Kentucky International Airport and Montreal and Orlando.
On weekends, when the planes aren’t in DHL service, 21 Air puts them to work hauling goods for charter-broker customers. Recent jobs included transporting seats for Boeing from a plant in the Southeast to Seattle, a shipment for Tesla, and 20 flights moving tobacco from South America to Canada, Linkner said.
21 Air flew cargo for Aeromexico for several months until March, when the airline ran into financial problems caused by the coronavirus crisis.
LATAM Airlines, another carrier in bankruptcy proceedings, also discontinued a contract under which 21 Air provided crews to fly LATAM’s 767-300 cargo planes. Providing flight services without the need to provide aircraft was another example of adding business without much capital investment.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch. / Contact: ekulisch@freightwaves
RELATED NEWS:
Airbus A321 embarks on second act in e-commerce