Since the beginning of the year, one of the freighters in the fleet of Nippon Cargo Airlines (NCA) is out of step with the rest of the Japanese all-cargo carrier’s line-up. Under an agreement struck in early December, Atlas Air is flying an NCA Boeing 747-400 freighter across the Pacific on behalf of the Japanese airline. The deal marks a departure of sorts for NCA, which has so far maintained strict control over its operations.

In recent years, NCA has taken a number of 747-400F aircraft out of service as it took delivery of larger 747-8Fs, which were first fielded on the carrier’s trans-Pacific routes. Handing a 747-400 to Atlas on a CMI (crew, maintenance and insurance) lease to operate across the Pacific is a change from its previous stance.

According to Shawn McWhorter, president of NCA Americas, the arrangement is more complex than a typical CMI deal, inasmuch as it is not confined to one particular aircraft. Depending on aircraft availability, Atlas can fly a different 747-400 freighter from its own fleet for NCA when it makes sense.

“We lease them an aircraft, but it’s not exclusive to us. We are aircraft-neutral with them on the agreement,” he said.

For the Japanese cargo airline, the main benefit in this arrangement is a greater degree of flexibility which should enable it to pursue more charter opportunities.

“We have a good service, but we lack network flexibility. We can’t pick up an aircraft and fly where a customer needs ad hoc service. We are strong in major markets, but we are missing out on customers who need a one-off, urgent charter outside our route network. One strength of Atlas is the charter capability from its large fleet of freighters that are positioned in various markets. We overlay the NCA network with the flexibility of Atlas,” McWhorter said.

“This arrangement gives us new opportunities. For example, we can stop in Vancouver or in Seattle on the way to Asia. We can re-route flights on a short-term basis,” he continued.

According to him, the partnership with Atlas is initially focused on the trans-Pacific arena, but if NCA Americas spots an opportunity outside its network, it can approach Atlas about this.

“Our partnership is not exclusive to the Pacific, but it starts there,” he said, adding that the relationship could extend to more aircraft over time. “We could lease more planes to Atlas if demand continues to grow. This is much more of a partnership than a CMI deal.”

When the two companies unveiled their agreement, both sides signalled interest to expand it over time.

“We are delighted to begin this strategic arrangement with Atlas Air, and we look forward to having a long, mutually beneficial relationship,” declared Fukashi Sakamoto, president and CEO of NCA.

If the alignment works out, other all-cargo operators may be examining their own set-ups for possibilities to strike similar arrangements with freighter leasing firms.

Faced with downward yield pressure in its scheduled network, charter has become a stronger focus for NCA in recent years. “Charter is part of our core strategy, it is not an afterthought. We intend to run a certain number of charters per year. It’s in our budget,” said McWhorter. “On anybody who does charters, we make regular sales calls,” he added.

In line with this, NCA has changed its approach to dwell-time planning. Normally scheduled operations aim to reduce the time planes spend on the ground, but NCA purposely creates down times in its schedule to allow for room to accommodate charter requests. “We build in down time in key stations like Tokyo or Chicago,” McWhorter said.

The definition of charter is a relatively broad one. In many cases shippers or forwarders are better served with a part charter or a diversion of a scheduled flight than a full charter, as they are charged on a tonnage basis instead of a full charter rate. NCA tries to do about two such diversions in a month.

“I think we will see more of that,” McWhorter reflected.

For all the increased interest in charter, he is upbeat on NCA’s scheduled business in and out of the Americas, citing good growth in recent months. Chicago, which now hosts 16 weekly NCA flights, has been the fulcrum of the carrier’s US operations, but it has also built up its presence in Dallas, which McWhorter sees as a good point to pick up both business in the growing Texas economy and interline traffic from South America.

By Ian Putzger

Air Freight Correspondent | Toronto