American Airlines Cargo Connecting the world with innovative solutions
With innovations and hard work, AA Cargo has evolved to being one of the world’s leading air freight carriers. In the United States, it holds the record as having the youngest fleet, part of its conscious effort to help stave off the world’s growing environmental problems amid looming threats of climate change.
American Airlines Cargo prides itself in transporting approximately more than 100 million pounds of goods on a weekly basis to hundreds of cities across continents. That translates to nearly 7,000 flights every day to some 324 airports. Its global impact is undoubtedly very significant with countless lives and businesses intertwined in the process.
Formed in 1930 through the union of some 80 small airlines, the Dallas, Texas-based American Airlines traces its roots to having World War I surplus planes to having the most sophisticated aircraft in today’s modern world. It holds the global record as the first airline to introduce scheduled air cargo service and the first to apply air cargo tariff based on density, volume, value and perishability.
With innovations and hard work, AA Cargo has evolved to being one of the world’s leading air freight carriers. In the United States, it holds the record as having the youngest fleet, part of its conscious effort to help stave off the world’s growing environmental problems amid looming threats of climate change.
In an exclusive interview with Air Cargo Update in Munich, Germany on the sidelines of Air Cargo Europe 2019, the amiable AA Cargo President Rick Elieson shared his thoughts and insights on the company’s policies, products and services and its growing responsibility in connecting businesses around the globe amid a volatile political and economic environment.
A company veteran who rose from the ranks, Elieson began his career at the Japanese Desk of American’s DFW Reservations Office in 1994. He has been at the helm of running AA Cargo since 2017 and a year since then, the company reaped record growth.
Now, Elieson is steering the company’s more than 6, 000 employees to greater heights through innovations, new business strategies and goals as the company approaches its 90th year in the industry. Read on the rest of our interview in this Q&A.
American Airlines is considered the largest airline in the world and you obviously make a huge impact on the lives and livelihood of many people across the world that rely on your services. How is the company taking this role?
More than 50% of Americans fly each year. That i s a massive responsibility when you think about all of the business deals that are closed, the loved ones that are reunited, or holidays that are enjoyed. We make the world a smaller place, and bringing people together and caring for them on life’s journey is core to who we are.
The impact we have on the lives of the other 50% of people who do not get on an airplane is less apparent, but no less important. Our role in cargo allows us to care for them too. IATA estimates that 35% of the world’s trade as measured by value is moved via air cargo.
That means that beyond the thousands of jobs that American Airlines Cargo creates, we are helping to deliver the things that matter most in people’s lives. It ranges from simple things like the blueberries that were on my salad last night to more meaningful items like the vaccines that allow my children to safely congregate and attend school this week.
Joining me for dinner last night was a friend who lost his dear wife to cancer a little over a year ago. Advances in personalized medicine and the way in which medical research and development occurs is now crossing borders and dependent on reliable and speedy service that scheduled air cargo provides, increasingly similar to the way modern manufacturing crosses borders throughout its production. We are proud to be part of the changing shape of healthcare and the advances of that industry to improve and save lives.
It is a virtuous cycle as cargo is also a meaningful contributor to the bottom line at American Airlines. This is particularly true when you think about our international network. We closed 2018 with record operational performance, volume and revenue. We take our role very seriously and we are recognized as an integral part of the airline as a whole.
I am especially encouraged by the progress we’re making for the future in the foundational areas of our business—such as growing our fleet, modernizing our technology, investing in our team members and really listening to customers and making changes to meet their growing demands. That will pay dividends for years to come.
“We’re currently making significant investments in technology with the development and upcoming implementation of our new iCargo system. The first phase of this modernization journey will be introduced this fall, and will continue to roll out into 2020. The investment in iCargo and the accompanying evolution in how our team can serve customers is our organization’s largest investment in our history — allowing us to improve our products and increase our capacity for customers.”
– Rick Elieson, President,
American Airlines Cargo
As far as CSR is concerned, how do you reach out to communities on a global scale? Please elaborate.
As the world’s largest airline, we’re proud to give back in the communities where our team members and customers live and work. We focus our efforts in three main areas that our team members have said are most meaningful to them:
Our heroes: Supporting U.S. military members and honoring their devotion to the ideal of liberty and freedom
Our well-being: To improve safety and wellness, and bring hope to patients anywhere in the world
Our social good: Meeting the needs of global citizens by improving stability, sustainability, health and care
Our team members do great work in their communities through volunteering, charitable giving and community outreach. Last year, team members donated more than 155,000 volunteer hours and as a result we donated more than 20 million miles to local charities on their behalf.
American also proudly supports nonprofit organizations that work to make a difference in communities and provide assistance to eligible nonprofits.
Our customers also have a history of giving generously to the causes we support, and we are proud of our loyalty programs that allow customer to give with miles.
Within Cargo specifically, we focus on supporting Cystic Fibrosis Foundation and St. Jude Children’s Research Hospital. Our cargo team members organize fundraisers, participate in events, and donate funds to these charities.
AA Cargo is big into perishables. Please share with us some of the products that the company carry across continents as well as facilities and expertise used to keep them fresh en-route to their final destinations.
Perishables can cover a multitude of areas. One significant product we continue to see is fresh fish. Last year, I
had the opportunity visit a salmon farm in Chile for one of our key customers and learn first-hand about that business – from breeding to how they raise the fish, to how they are processed and how we can best partner with them to protect that investment and improve our services.
That was a fascinating and educational experience, and helped me appreciate what a privilege it is to be part of
transporting such a staple item.
In general, Latin America is a huge export market for perishables. From mangoes in Peru to papayas in Brazil,
worldwide demand continues to rise and we continue to seek new ways to provide this market segment with solutions that are valuable to them.
Perishables are a product that really benefit from our immense network, particularly during peak holiday seasons where we are well-equipped with our wide-body aircraft to handle the flux in demand.
We recognize that for perishable shipments like seafood, fruits, flowers and berries, time and temperature are of the essence, so we employ state-ofthe-art equipment to ensure the freshness of perishables along their journey.
On top of the temperature-controlled containers and refrigeration facilities we have throughout our network, we have a day-of-departure team that actively monitors flight times and temperatures along the way to make sure these sensitive shipments get delivered fresh off the plane.
Another key area is pharmaceuticals. We offer various cooling solutions to customers with our ExpediteTC° product, and we constantly review and evolve our offering based on input and demand. The product includes service features and benefits, dedicated infrastructure, enhanced tracking technologies, and temperaturecontrolled containers. Our goal is to ensure this product remains nimble enough to accommodate new
customer requirements while also meeting the demands of an increased regulatory environment. It is something in which our team takes great pride in helping to make possible.
In addition, we have a flagship, purpose-built pharma facility at Philadelphia International Airport (PHL) where we have made significant investments and commitments to the pharmaceutical and healthcare industries.
We also have infrastructures positioned across the world at many locations including Dallas-Fort Worth International Airport (DFW), John F. Kennedy International Airport (JFK), Miami International Airport (MIA), San Juan Luis Muñoz Marín International Airport (SJU), Heathrow Airport (LHR), Charles de Gaulle Airport (CDG), and Frankfurt Airport (FRA).
Please briefly describe to us the following markets in terms of importance for AA Cargo: United States, Middle East, Latin America, Canada, Africa, Asia-Pacific and Europe.
As the world’s largest airline with a vast global network, of course, all markets are important to us. One destination is no more important than another –rather, it is our ability to connect the world with fast, reliable service that makes us special. We’re here to serve our customers and meet their individual needs.
Obviously, the USA is home market, and we carry cargo on both wide body and narrow body flights within the
USA. Our narrow bodies and their frequency of service are ideally suited to accommodate the ever-growing eCommerce business which predominantly consist of small parcels.
Latin America is another important market for us as we operate the largest number of wide-body frequencies
from the U.S. to that region. Brazil and Argentina are particularly significant in this regard and we have remained committed to these markets throughout their economic ups and downs.
Europe has long been another key market for us with cargo operations at London Heathrow, Paris and Frankfurt,
and a growing range of other cities now served year-round or seasonally. We recently announced new direct routes from our U.S. hubs to locations including Krakow, Prague, Budapest, Tel Aviv and Casablanca beginning in
2020.
Asia is especially dear to my heart and I’m happy about our longstanding operations in China, Japan, Korea and Hong Kong. We’re encouraged by the two new slots at the Tokyo Haneda Airport (HND) for service beginning in 2020. Those slots include a daily DFW-HND flight using a 777-200ER, and a daily LAX-HND flight using a 787-8. That’s in addition to our more recent services from Los Angeles to Australia and New Zealand.
American has the youngest fleet in the industry and we understand the company is acquiring more planes. What’s the latest on this and its potential impact to your business?
In April 2018, we announced an order for an additional 47 B787-8 and – 9 aircraft which are scheduled for delivery between 2020 and 2023. They are designed to replace our A330-300 and B777-200 aircraft and provide a modern, fuel efficient addition to our fleet. These aircraft provide exceptional cargo capacity and will allow us to continue to expand our global network.
Please share with us new innovations and tech advancements recently introduced at AA Cargo. Please elaborate.
We continue to focus on improving our customer service. In such a fiercely competitive business it is sometimes
difficult to point to the returns of investing in the customer experience, but I’m convinced that is the right lens for anyone who wants to remain in business long term, and I think our customers should expect no less. We’re currently making significant investments in technology with the development and upcoming implementation of our new iCargo system. The first phase of this modernization journey will be introduced this fall, and will continue to roll out into 2020.
The investment in iCargo and the accompanying evolution in how our team can serve customers is our organization’s largest investment in our history allowing us to improve our products and increase our capacity for customers.
The advancements will include a revolutionized operating system and platform for innovation which will significantly enhance the customer experience so that our internal team and our customers can grow faster together. It is exciting to see how investments like this will help to shape the industry over the next several years.
There’s been a lot of talk about climate change, how serious is American in addressing this issue through the services it provides?
American is committed to safeguarding the environment, and we are doing all we can to proactively
minimize our impact – recognizing that the success of our efforts will affect future generations. That’s why we’re pursuing a goal to cut our CO2 emissions in half over the next 30 years, and Cargo plays a major part in the pursuit of this goal.
We are being aggressive and believe it is imperative that we can chart a course for success in what is increasingly a resource-constrained world. Our efforts in the air and on the ground to operate more sustainably are also in line with the expectations of our team members, customers and shareholders.
One example of this is with our aircraft. Our fleet renewal program is retiring older models for more fuelefficient aircraft, and we’ve brought on 500 new planes since 2013 making our fleet the youngest U.S. fleet in the industry. We’re burning less fuel, reducing emissions and cutting energy costs. The new models are also quieter, improving passenger comfort and reducing the impact of noise on communities near airports where we operate Another example is through optimizing arrival times, reducing aircraft weight and implementing sustainable and commercially viable alternative jet fuels (SAF) to achieve greater fuel efficiencies that reduce
emissions.
Over the past four years, American reduced emissions by nearly 6.4 million metric tons of CO2e compared to where we were in 2014. And while better air quality in our skies is improving, we’ve procured new ground support equipment that meets or exceeds emission guidelines on land as well. At the end of 2018, more than a
quarter of our GSE fleet was either electric or used lower emission propane.
Please tell us more about the company’s environmental initiatives and your goals relevant to this. The demand for air transportation is expected to nearly double by 2036, according to IATA. As this demand grows , so too will related environmental risks, costs, and externalities.
To combat this and prepare for the increase in demand, American has an environmental management system
(EMS) that provides a systematic approach for complying with environmental regulations and mitigating the risk for potential issues.
As part of our audit process, Environmental Coordinators at each location perform regular self-audit and inspections to ensure we are exceeding environmental regulatory standards. In addition, American’s Environmental Department performs much larger and more in-depth audits of our largest locations. In 2018, American performed 10 of these audits.
When we build a new facility, or upgrade existing facilities, we use environmentally friendly construction practices , including seeking Leadership in Energy and Environmental Design (LEED) standard certification.
From a cargo perspective more specifically, we are al so fully committed to the industry’s eAWB initiative. We’re actively working to achieving a 100 percent eAWB usage from all of our customers. We also of our aircraft, engines and related components. Most importantly, the global aviation industry as a whole needs continued support to develop low-carbon alternative fuels.
What sort of embedded image would you like AA Cargo to have in the public’s consciousness in terms of its services and environmental impact?
Many people are unaware of the significant impact that air cargo has on the quality of their life. They take it for granted. I’m OK with that. I actually believe that is a compliment and a testament to the smooth and efficient
way in which we serve the world’s needs.
Every time I walk through a cargo terminal, I swell with pride at the positive difference we make in the world. Not for me, not so that people give us any more credit for it – but I wish more people were more aware of the impact air cargo has only because I believe it would increase their gratitude for the things they consume, and appreciation for the way our lives are interconnected around the globe. deploy more than 7,500 reusable, l ightweight compos ite cargo containers that reduce weight and save more than 1 million gallons of fuel every year. Our stations recycle roughly 85,000 pounds of shrink-wrap every year — the equivalent to 1.2 million water bottles.
We understand that the company is also exploring the use of alternative fuels. Kindly share with us the latest on this initiative.
In October 2013, the United Nation’s International Civil Aviation Organization (ICAO) signed a landmark agreement to cap emissions from international aviation at 2020 levels, with carbon-neutral growth
thereafter. American supports this industry-wide goal and the collective process by which it will be implemented.
As we work toward ICAO’s vision of carbon-neutral growth post 2020, we also challenge our partners to help us
achieve this goal. Government investment in existing and NextGen air traffic control are vital, as is ongoing research and innovation by suppliers of our aircraft, engines and related components. Most importantly, the global aviation industry as a whole needs continued support to develop low-carbon alternative fuels.
What sort of embedded image would you like AA Cargo to have in the public’s consciousness in terms of its services and environmental impact?
Many people are unaware of the significant impact that air cargo has on the quality of their life. They take it for granted. I’m OK with that. I actually believe that is a compliment and a testament to the smooth and efficient way in which we serve the world’s needs.
Every time I walk through a cargo terminal, I swell with pride at the positive difference we make in the world. Not for me, not so that people give us any more credit for it but I wish more people were more aware of the impact air cargo has only because I believe it would increase their gratitude for the things they consume, and appreciation for the way our lives are interconnected around the globe.
