Northern Air Cargo, the company serving communities in Alaska from its Anchorage base, has made a strategic decision in response to market dynamics by taking delivery of two widebody freighter aircraft this year and promptly placing them in storage. Despite the improved outlook for the global airfreight market, business conditions have not proven profitable enough to operate them efficiently, as reported by FreightWaves.
This move highlights the challenges faced by all-cargo airlines in calibrating their fleet expansion plans amidst evolving market conditions. During the height of the COVID crisis, when shipping capacity shortages drove rates skyward, freighters became valuable assets. However, the current scenario reflects a more nuanced reality, with companies like Northern Air Cargo opting to throttle back on expansion efforts due to insufficient business volume.
Data compiled by the U.S. Bureau of Transportation Statistics reveals that Northern Air Cargo reported a loss of $12 million in the 12 months ending Sept. 30. The decision to idle the cargo jets, branded for sister companies Aloha Air Cargo and Miami-based StratAir, underscores the careful strategic planning required in the air cargo industry.
Northern Air Cargo, Aloha Air Cargo, and StratAir are all part of the Saltchuk Resources conglomerate, a privately held entity based in Seattle with interests in freight transportation, logistics, and energy distribution. Saltchuk’s leasing subsidiary, NAS Aircraft Leasing Co. LLC (NALC), had procured seven used Boeing 767-300 passenger jets in 2021 and 2022. These jets were slated for modification into main-deck freighters for the cargo airlines.
NALC received two 767-300 converted freighters from Boeing in January and April and subsequently moved them to a storage facility. April Spurlock, Saltchuk Aviation spokeswoman, explained in an email that the decision to store the aircraft until market conditions improve reflects a prudent approach to fleet management.