Copyright 2008, Traffic World, Inc.
Kalitta Air''s proposed forwarder-centric air cargo service is inching along - as long as forwarders can ante up.
The company recently bought enough equipment at the auction of now-defunct Kitty Hawk Aircargo to handle between 10 and 12 planes, said Robert Hunter, a retired air cargo industry executive who would serve as the president for the first year of the proposed new airline, Kalitta Air Freight.
Hunter is preparing a tariff for forwarders who have expressed verbal support - and interest in financial backing - of the new air service. Hunter expects that to be done within the coming weeks.
If the tariff gets the nod from the forwarders, KAF will move forward, Hunter said.
Forwarders, however, have said privately they are concerned the average overnight rate will be higher than what Kitty Hawk had charged. Kitty Hawk shut down operations in November, soon after it filed for bankruptcy protection as red ink mounted in the face of rising costs and a stagnant domestic expedited market.
The prospects for a prospective carrier now appear to hinge on the willingness of forwarders to assume some of the risk.
Hunter contacted about 200 forwarders on Kalitta''s behalf late last year about a prospective replacement carrier. About 90 percent he said, favor the plan - but not enough backed it up financially for Kalitta to fully commit.
Forwarders say they want an airline that caters to their needs - especially with UPS and FedEx taking more of their own plane space for their cargo and with the demise of Kitty Hawk. Their other common carriage choices come from the passenger airlines and on BAX Global freighters.
But forwarders are uncertain whether the market will support such a venture - and many are reluctant to gamble cash on its success.
The airline will cost about $15 million to launch, Kalitta estimates and nightly operating costs should run about $500,000. Kalitta is asking for an initial commitment for each interested forwarder of $10,000 and a monthly fee of $200 for each office of any participating company.
The money is meant to help defray some startup and operational costs - but the financial commitments won''t buy investors a stake in KAF.
The money would be held in escrow and returned if KAF is not operational by Aug. 15. And even if KAF does take off, there''s no guarantee the forwarders will recoup their investments.