||UNITED PARCEL SERVICES
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UPS-2005 9 MTHS
UPS-2005 INTNL 9 MTHS
UPS-2005-01 A380 ORDERS
UPS-2005-07 1ST6MTHS 05
UPS-2006-02 INCDT A
UPS-2006-02 INCDT B
UPS-2006-02- INCDT C
UPS-2008-01 2007 TOP-WLD-CARGO
UPS-2008-WORLD TOP 10 CARGO
UPS-2009-02-ATW CARGO AIRLINE OF THE YEAR AWARD
UPS-2012-04 - 747-400F
UPS-2012-04 - A
UPS-2012-04 - B
UPS-2013-04 - UPDATE
UPS-2013-08 - ACCDT A300-600F
UPS-2013-08 - ACCDT B
UPS-2013-08 - ACCDT-A300-600F-B
UPS-2013-08 - FLEET STATUS
UPS-2013-08 DOHA ACCDT UPDATE
UPS-2014-12 - CARGO FC CREW REST
UPS-2017-02 - UAV Drone Truck.jpg
STARTED OPERATIONS IN 1929. INITIALLY OPERATED BRIEFLY IN THE AIR-EXPRESS BUSINESS UNTIL 1931 ON THE USA WEST COAST. IT BEGAN OPERATIONS IN 1981 WITH ITS OWN AIRPLANES, CREWED BY OTHERS AND BEGAN ITS OWN OPERATION IN 1988, REPLACING CARRIERS WHO WERE PREVIOUSLY CONTRACTED TO PERFORM THESE ACTIVITIES. DOMESTIC, REGIONAL & INTERNATIONAL, SCHEDULED & CHARTER, CARGO AND PACKAGE/MAIL, JET AIRPLANE SERVICES.
1400 NORTH HURSTBOURNE PARKWAY
LOUISVILLE, KENTUCKY, KY 40223, USA
USA (United States of America) was established in 1776, it covers an area of 9,363,123 sq km, its population is 280 million, its capital city is Washington DC, and its official language is English.
SEPTEMBER 1995: 757-24A (NS605) DELIVERY.
OCTOBER 1995: INCDT: RADOME DAMAGE, AFTER BIRD STRIKE ON APPROACH TO NEW YORK (JFK), AFTER DELIVERY FLIGHT OF (UPS) 767-34AF FROM BOEING (TBC), EVERETT.
(UPS) BECAME THE FIRST AIRLINE TO OPERATE THE 767-300F FREIGHTER.
NOVEMBER 1995: $70 MILLION ORDER FOR +7 727-100F'S, WITH ROLLS ROYCE (RR TAY) ENGINES, 15,400 LB THRUST, TO BE COMPLETE BY THE END OF 1996.
TENTATIVE (FAA), EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) 180 MINUTES APPROVAL FOR 767-300ER (CF6-80C2) AIRPLANES.
JANUARY 1996: 1995 = +$29.63 MILLION (+$40.79 MILLION) (NET PROFIT).
MARCH 1996: (http://www.ups.com).
APRIL 1996: BUD RICH, HEAD 757/767 FLEET OPERATIONS; & DENNIS SUBIK, HEAD 727/747 FLEET OPERATIONS.
1 747-100F (22063) DELIVERY, (KLM) DID "C" MAINTENANCE CHECK. LETTER OF INTENT (LOI) 2 ORDERS 747-200'S (RD058; RD059), EX-SINGAPORE AIRLINES (SIA).
MAY 1996: DEAL WITH BOEING (TBC) FOR DIRECT DELIVERY OF SPARES TO AIRLINES FOR -10 TO -40% DISCOUNT.
TO CONVERT 5 727-100F'S TO QUICK CHANGE (QC) TO ALLOW (QC) TO 113 PAX IN 4 HOURS. PEMCO IS DOING WORK, & AIRPLANES WILL BE USED FOR PASSENGER AT WEEKENDS TO SHUTTLE CRUISE SHIP PASSENGERS.
OZ NELSON, CEO (UPS), ANNOUNCES RETIREMENT = NEW CEO, JIM KELLY, IN NOVEMBER 1996.
335,000 EMPLOYEES (INCLUDING 1,832 FLIGHT CREW (FC)).
RETURNED 747-100F TO EVERGREEN INTERNATIONAL (EVR). 2 747-200'S MODIFICATIONS TO FREIGHTER BY BEDEK ISRAELI AIRCRAFT INDUSTRIES (IAI). AIRPLANES WERE EX-SINGAPORE AIRLINES (SIA) & ARE TO BE USED FOR ONTARIO TO TAIPEI.
JUNE 1996: BEDEK $30 MILLION CONTRACT TO CONVERT 2 747-200'S TO FREIGHTERS, INCLUDING SIDE CARGO DOOR. 2 747-200'S (21943; 21944) (JT9D-7Q), EX-SINGAPORE AIRLINES (SIA), BEDEK (IAI) TO DO CARGO CONVERSION, STARTING AUGUST 1996 FOR EARLY 1997 REDELIVERY.
JULY 1996: TO KANSAI, OSAKA.
2ND QUARTER AVERAGE DAILY VOLUME = +14.2% (1.6 MILLION EXPRESS PACKAGES & DOCUMENTS; DOMESTIC +14.4%, INTERNATIONAL +11.6%).
2 727-200 (21979/22759), EX-ETHIOPIAN AIRLINES (ETH) DELIVERIES, WITH PEMCO TO CONVERT TO CARGO. 6TH 767-300F (N306UP) DELIVERY.
AUGUST 1996: TO FLY EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) TO HONOLULU FROM ONTARIO, REPLACING DC-8 ON ROUTE.
1 767-300F (N307UP) DELIVERY.
SEPTEMBER 1996: FLEW 747, KANSAI TO TAIWAN FOR INAUGURAL 5TH-FREEDOM RIGHTS, 1ST BY JAPAN AWARDED SINCE 1952.
1 747-200B (JT9D-7Q), EX-SINGAPORE AIRLINES (SIA) DELIVERY. 2 757F'S & 2 767F'S DELIVERIES.
OCTOBER 1996: ALLIANCE WITH NIPPON CARGO (NCA), OSAKA TO ONTARIO.
OZ NELSON, CEO, WANTS TO DISPEL THE MYTH THAT (UPS) IS "A STODGY, UNHIP COMPANY - THE LAWRENCE WELK OF THE PARCEL DELIVERY BUSINESS." PLANS TO HEAVILY PROMOTE ITS GRASP OF THE MARKETPLACE, AND ITS INVESTMENTS IN LATEST INFORMATION TECHNOLOGY (IT).
PLANS TO OPERATE 5 757'S, IN APRIL 1997, TAIPEI, BANGKOK, KUALA LUMPUR, SINGAPORE. 767'S TO OPERATE ONTARIO, PORTLAND, ANCHORAGE, SEOUL, TAIPEI, AND MANILA.
767 (VW710) & 757 (NS608) DELIVERIES. +2 767 DELIVERIES.
NOVEMBER 1996: CODE SHARE WITH NIPPON CARGO (NCA).
1 757-200 DELIVERY.
JANUARY 1997: 4TH QUARTER = +$27.67 MILLION (+$5.25 MILLION). 1996 NET INCOME = $1.2 BILLION ($1.0 BILLION).
"FORTUNE" MAGAZINE RATED UNITED PARCEL SERVICES (UPS) 4TH "MOST ADMIRED OPERATOR" (25TH).
TO BUILD $59 MILLION 535,000 SQ FT, SORTING FACILITY AT MEMPHIS AIRPORT, TO OPEN NOVEMBER 1998, TO PROCESS >250,000 DOCUMENTS, & PACKAGES/DAY, & EMPLOY 2,000 EMPLOYEES (ALREADY EMPLOYS OVER 1,400 IN MEMPHIS AREA).
BECOMES 1ST USA OPERATOR TO COMPLY WITH WHOLE FLEET AT STAGE 3, NOISE LIMITS. LAST OF 51 BOEING 727-100QF'S ARE 3 YEARS AHEAD OF DECEMBER 1999 DEADLINE. RE-ENGINEING THE 727'S COST $500 MILLION, REQUIRED BECAUSE MAINLY USED FOR NIGHT OPERATIONS. 4 727-100QF'S CONVERTIBLE INTERIORS FOR PASSENGER USE.
MARCH 1997: 1ST PASSENGER (PAX) CHARTER OF 727-100QC, 113 PAX, N946UP, PITTSBURGH TO ORLANDO.
FROM MID 1995 TO MID 1996, (DHL) HAD 40.7% OF 1.02 MILLION, AVERAGE DAILY INTERNATIONAL EXPRESS SHIPMENTS; FEDEX (FED) 20.5%, AND UNITED PARCEL SERVICES (UPS) 15.2%.
1996 = 3.351 BILLION (FTM) FREIGHT TRAFFIC (3.377 BILLION).
ALL 727-100'S, RE-ENGINED WITH ROLLS ROYCE (RRC) FOR 1ST USA OPERATOR, AT 100% STAGE 3. IN 1997, TO TAKE DELIVERY OF 10 757'S, AND 7 767'S (MAY TO NOVEMBER 1997).
APRIL 1997: 335,000 EMPLOYEES (INCLUDING 1,832 FLIGHT CREW (FC)).
NEW DC-8 SERVICE TO MANILA, FROM UNITED PARCEL SERVICES (UPS)' TAIPEI CARGO HUB, EN ROUTE TO SINGAPORE.
NEXT WEEKEND, 727-100, 113 PASSENGER, SERVICE, HAS CONTRACT FOR CHICAGO (ORD), DETROIT, ORLANDO, TAMPA, PITTSBURGH, LOUISVILLE, ARUBA, CINCINNATI, SAN JUAN, AND CANCUN.
1ST QUARTER = +$11.06 MILLION (-$8.19 MILLION).
MAY 1997: 1ST QUARTER = +9.6% VOLUME, 1.8 MILLION PACKAGES & DOCUMENTS/DAY. INTERNATIONAL +8.7%, DOMESTIC 9.8%.
EXPANDING LOS ANGELES (LAX) WITH CHALLENGE AIR (CHA), UNITED PARCEL SERVICES (UPS) LEASED AIRPLANES.
CONSIDERING $400 MILLION, NEW ASIAN HUB AT CHIANG KAI SHEK AIRPORT, TAIPEI (HAS 24 HOURS, 365 DAY CUSTOMS SERVICE).
1ST OF 2 747-200F, EX-SINGAPORE AIRLINES (SIA), MODIFIED BY (IAI) BEDEK, FIRST FOR DOMESTIC USE, BUT WHEN 2ND ARRIVES, ONTARIO TO TAIPEI.
JUNE 1997: EXTENDED CHALLENGE AIR (CHA) AGREEMENT TO 8 FLIGHTS/WEEK, FOR (CHA), WITH 757'S MIAMI TO EL SALVADOR, & HONDURAS, & 767'S MIAMI (MIA)/SAO PAULO. TO TOKYO FROM CHICAGO (ORD), VIA ANCHORAGE (5 747-100F/WEEK), REPLACING 767 SERVICE, IN COLLABORATION WITH NIPPON CARGO (NCA), FOR LINK TO OSAKA.
$15.8 MILLION FOR SAFETY UPGRADE TO ALL AIRPLANES, FOR ENHANCED GROUND PROXIMITY WARNING SYSTEM (EGPWS), & IMPROVED OXYGEN MASK/SMOKE GOGGLES.
PLANS TO FLY ITS 30 YEAR OLD 727-100'S FOR ANOTHER 15 TO 20 YEARS! 757-24APF (28266) DELIVERY. 7TH 767 (N316UP) IN 1997.
JULY 1997: IN 1996, HAD WORLD OPERATORS' MOST EMPLOYEES.
1996 = +$30.14 MILLION (+$29.63 MILLION).
757 DELIVERY. 1 767F (N317UP) DELIVERY.
AUGUST 1997: TEAMSTERS WENT ON STRIKE - SHUTDOWN OF ALL OPERATIONS. CONTRACT NEGOTIATIONS WITH 2,000 FLIGHT CREW (FC) EMPLOYEES.
NEW ROUTE SAN ANTONIO - MEXICO CITY SCHEDULED CARGO.
SEPTEMBER 1997: 2 757'S (N466UP & NC467UP) & 1 767 (N319UP) DELIVERIES.
OCTOBER 1997: PILOTS REJECT CONTRACT OFFER (PROPOSAL THROUGH 2002 FOR AVERAGE CAPTAIN $153,000 < $202,000, CO-PILOT $84,700 < $132,000, FLIGHT ENGINEER $48,000 < $94,000.
AVIATION DIVISION = 4,111 EMPLOYEES.
747-200F (N521UP) ENTERED SERVICE, AFTER CONVERSION BY (IAI) BEDEK. 2 757'S DELIVERIES (N468UP/N469UP). 767 (N320UP) DELIVERY.
NOVEMBER 1997: BOB LEKITES, AIRLINE OPERATIONS MANAGER, REPLACES JOHN BEYSTEHNER.
3RD QUARTER = -$6.06 MILLION (+$9.49 MILLION) DUE TO TEAMSTER STRIKE. 9 MONTHS = +$558 MILLION (+$900 MILLION).
DECEMBER 1997: 7TH 727-180QF (19874) TO STAR AIR (SDK) FOR EUROPEAN OPERATIONS. WILL WET-LEASE +45 AIRPLANES FOR PEAK SEASON, FOR >265 MILLION PACKAGES. ESCALATES 747 "C" CHECK FROM 15 TO 18 MONTHS. 2 767 (N322UP, N323UP) DELIVERIES. 767-34AFER (N320UP) FUSELAGE IS PAINTED IN "OLYMPIC GAMES" THEME, TO PROMOTE ITS SPONSORSHIP OF 1998 WINTER GAMES, NAGANO, JAPAN, & SUMMER GAMES IN SYDNEY 2000.
JANUARY 1998: PURCHASE OF SHANNON REPAIR STATION (SRS), SUBSIDIARY OF AER LINGUS (ARL), FOR HEAVY MAINTENANCE. 747 HEAVY MAINTENANCE SWITCHED FROM (KLM) TO (ARL).
FEBRUARY 1998: 5 YEAR EXTENSION OF MAINTENANCE CONTRACT FOR 727, 757, 7 767'S, TO BF GOODRICH AEROSPACE (TRAMCO), FOR "C" & "D" MAINTENANCE CHECKS, INCLUDING 66 AIRPLANES IN 1998.
REPLACED DC-8'S WITH 767'S, TO EUROPE.
1 747-200F (JT9D-7Q) (RD593), WHIRLPOOL FINANCE CORPORATION, EX-PHILIPPINE (PAL).
MARCH 1998: 767 APPROVED FOR (RSVM), (ETOPS) TO EUROPE.
DEPARTMENT OF TRANSPORT (DOT) OK'S SCHEDULED CARGO SERVICE TO TOKYO, & BEYOND TO TAIPEI & SINGAPORE + TO OSAKA & BEYOND TO TAIPEI & MANILA.
SELECTS LOUISVILLE, KENTUCKY, AS "HUB 2000," FOR AUTOMATIC SORTING FACILITY, FOR 500,000 PACKAGES/HOUR - FACILITY COST IS $860,000, FOR 2.7 MILLION SQ FT.
BUYS 747-237B (21446), EX-AIR INDIA (AIN), FREIGHTER MODIFICATIONS AT BEDEK (IAI).
APRIL 1998: 3,350 EMPLOYEES (INCLUDING 1,832 FLIGHT CREW (FC)).
1ST QUARTER MAINTENANCE EXPENSES = $108.73 MILLION (23.32% OF TOTAL OPERATIONS EXPENSES).
1ST 4 MONTHS = 1.76 BILLION (FTK) FREIGHT TRAFFIC (+5.7%).
MAY 1998: ALLIANCE WITH QANTAS AIRWAYS (QAN) TO EVENTUALLY LEAD TO CODE SHARE TO SYDNEY. TRANSPACIFIC CARGO CODE SHARE WITH NIPPON CARGO AIRLINES (NCA), CHICAGO TO TOKYO NARITA & OSAKA KANSAI.
1ST QUARTER = +$351.6 MILLION (+$227.7 MILLION) DUE TO COST CONTAINMENT EFFORTS & FAVORABLE FUEL PRICES.
TONY MCBRIDE, MANAGER QUALITY ASSURANCE IS AWARDED AIR TRANSPORT ASSOCIATION (ATA) ENGINEERING MAINTENANCE & MATERIEL COUNCIL'S (EMMC) "NUTS & BOLTS" AWARD.
JUNE 1998: APPLIES TO DEPARTMENT OF TRANSPORT (DOT) FOR SERVICE TO +48 COUNTRIES, WHICH IT ALREADY SERVES WITH CHARTER, COMMON CARRIER ARRANGEMENTS. STARTS INTRA-ASIAN ROUTES WITH 2 757'S BASED IN ASIA, TO REPLACE DC-8'S, TAIPEI - SINGAPORE, AND TAIPEI - SINGAPORE - KUALA LUMPUR - PENANG - TAIPEI.
JULY 1998: UNITED PARCEL SERVICES (UPS) 767, TO REPLACE SUBSIDIARY, STAR AIR (SDK)'S 727, INTO PARIS CHARLES DE GAULLE (CDG) IN SEPTEMBER 1998.
SELECTS A300-600F, FOR WIDE BODY, FREIGHTER REGIONAL PROGRAM, WITH 20 TO 40 NEW AIRPLANES, WORTH >$3 BILLION, AND 60 USED (1999).
1997 WORLD OPERATOR COMPARISONS:
(FTK) (FREIGHT TRAFFIC) (B): 1 FED 9.3; 2 GRC 6.5; 3 KAL 5.7; 4 UPS 5.4; 5 AFA 5.0; 6 SIA 4.8; 7 JAL 4.2; 8 BAB 3.9; 9 KLM 3.9; 10 CAT 3.6.
DEPARTMENT OF TRANSPORTATION (DOT) ALLOCATES 2 SLOTS AT NARITA, JAPAN.
757-24APF (28842) DELIVERY.
AUGUST 1998: TOTAL COMPANY = 293,868 EMPLOYEES (307,807).
JERRY COYLE, VP LINE MAINTENANCE (EX-VP ENGINEERING); DAVE THOMPSON, HEAD WIDE BODY REGIONAL FREIGHTER PROGRAM (EX-VP LINE MAINTENANCE); LEE WALLACE, VP ENGINEERING & ASSET MANAGEMENT.
757-24APF (28843) DELIVERY.
SEPTEMBER 1998: CHARTER PASSENGER BUSINESS, WITH 5 727'S, 33 INS, PITCH SEATING, & HOT MEALS HAS BEEN A SUCCESS, AND MAY BE EXPANDED. (UPS) PILOTS (FC) ARE USED, BUT FLIGHT ATTENDANTS (CA) ARE OUTSOURCED. 2 OF 5 727-100'S, 113 PASSENGERS, ARE CONVERTED IN LOUISVILLE, AND 3 IN PHILADELPHIA, & CONVERSION TAKES UNDER 4 HOURS. CRUISE LINE CONNECTIONS WITH LOUISVILLE 727'S + CINCINNATI, TO CANCUN. ALSO, PHILADELPHIA TO BERMUDA & THE CARIBBEAN.
AT FARNBOROUGH AIR SHOW, UNITED PARCEL SERVICES (UPS) ANNOUNCES $2.5 BILLION, 30/30 ORDERS A300-600F'S (PW), INCLUDING SOLID CARGO BULKHEAD, INSTEAD OF A 9-G NET, INSTALLED FURTHER FORWARD, TO ACCOMMODATE AN EXTRA CONTAINER, LARGE AFT CARGO DOOR, FOR LDS CONTAINERS, CARRIES 109,600 LBS, WITH 2,500 NM RANGE.
INCDT: (UPS) 767-34AFER RAN OFF RUNWAY AT HOUSTON, ON LANDING, AND RIGHT MAIN GEAR COLLAPSED = ALL OK.
1 757 (28846) DELIVERY.
OCTOBER 1998: LEASE TO PURCHASE, BY END OF 1998, 253 ACRES, AT LOUISVILLE AIRPORT, FOR CONTINUED EXPANSION OF "HUB 2000."
3RD QUARTER = +$12.65 MILLION (+$36.18 MILLION): MAINTENANCE COSTS = $112.7 MILLION (23.07% OF OPERATING EXPENSES). 1997 = +$15.31 MILLION (+$30.1 MILLION).
4,349 EMPLOYEES (TOTAL FULL +1/2 PART).
767-34AFER DELIVERY (27550).
NOVEMBER 1998: POSITION SWAP: TONY MCBRIDE, NOW DIRECTOR LINE MAINTENANCE, WITH IAN WATSON, DIRECTOR QUALITY ASSURANCE.
767F'S NOW ROUND-THE-WORLD SERVICE, LINKING UP WITH HUBS: COLOGNE - SHARJAH - MUMBAI - TAIPEI.
3RD QUARTER = +$11 MILLION (-$6 MILLION). 1ST 9 MONTHS = +$1.3 BILLION (+126%) ($558 MILLION).
UNITED PARCEL SERVICES (UPS) PASSENGER CHARTER SERVICES HAVE BEEN SO POPULAR, THAT (UPS) IS CONSIDERING EXPANDING BEYOND 5 727-100'S, 113 PASSENGERS, NOW USED. (UPS) OFFERS 33 INS, SEAT PITCH, VS 29 INS, FOR STANDARD ECONOMY (Y) CLASS, AND SERVES MEALS ON ALL FLIGHTS. USES (UPS) FLIGHT CREWS, AND OUTSOURCES CABIN ATTENDANTS. 2 727-100'S ARE CONVERTED IN LOUISVILLE, & 3 IN PHILADELPHIA, IN <4 HOURS. THE LOUISVILLE AIRPLANES FLY TO CANCUN, & OTHER RESORTS FROM LOUISVILLE, & CINCINNATI, AND THE PHILADELPHIA ONES FLY TO BERMUDA, & THE CARIBBEAN. MAJOR CUSTOMERS ARE CRUISE LINES: RCI/CELEBRITY, PREMIER CRUISE LINES, & PRINCESS CRUISES, AND THE TOP TOUR OPERATORS ARE: TNT VACATIONS, VACATION EXPRESS, AND APPLE VACATIONS. CAPACITY EXCEEDENCE BY BUSINESS OPPORTUNITIES, MEANS ADDING MORE 727-100'S, OR UPGRADING TO 727-200'S, AND 747'S.
2 767-34AFER'S (27751; 27752) DELIVERIES.
INCDT: 767-34APF (27744), DAMAGED BEYOND ECONOMICAL REPAIR & WRITTEN OFF (W/O), IN LANDING AT HOUSTON AT NIGHT, IN HEAVY RAIN.
DECEMBER 1998: $1.5 MILLION CONTRACT TO TRAIN FLIGHTCREWS OF C-32 (757), FROM ANDREWS AIR FORCE BASE (AFB).
2 767-34AF (27753; 27754) DELIVERIES.
JANUARY 1999: ORLANDO - SANTO DOMINGO, WEST PALM BEACH, TO SAN JOSE (COSTA RICA).
1998 = 3.81 BILLION (FTM) FREIGHT TRAFFIC (3.47 BILLION).
FEBRUARY 1999: AFTER 20% GROWTH IN ASIA IN 1998, (UPS) DEVELOPS ITS SHIPPING, & LOGISTICS, MANAGEMENT SYSTEMS, TO +21 OF 108 CHINESE CITIES, NOW SERVED BY ITS JOINT VENTURE PARTNER, SINOTRANS OPERATING UNDER AEGIS, OF CHINA NATIONAL, FOREIGN TRADE TRANSPORTATION CORPORATION. TO OPEN OFFICES IN +9 CHINESE CITIES, INCLUDING XIAN, CHENGDU, & SHENGSEN. DIRECTLY SERVES BEIJING, SHANGHAI, & GUANGZHOU, WITH 64 OTHER CHINESE CITIES, UNDER ITS 10 YEAR RELATIONSHIP WITH SINOTRANS.
FORMS (UPS) DE ARGENTINA, BY ACQUIRING UNION PAK, AN ARGENTINE PACKAGE DELIVERY COMPANY.
4TH QUARTER = +$482 MILLION (+$351 MILLION). 1998 = +$1.7 BILLION (+$909 MILLION).
$3 BILLION CONTRACT TO (P&W) FOR (PW4158) ENGINES, FOR 30/45 A300F4-600R'S.
APRIL 1999: 1ST USA CARRIER TO RECEIVE APPROVAL FOR EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) OVER FAR EAST, AND RUSSIAN AIRSPACE.
1ST QUARTER = +$499 MILLION (+$352 MILLION).
3,350 EMPLOYEES (INCLUDING 1,832 FLIGHT CREW (FC)).
JUNE 1999: DEPARTMENT OF TRANSPORT (DOT) OK'S CODE SHARE WITH NIPPON CARGO (NCA) TO JAPAN.
ACQUIRES ALL ASSETS OF CHALLENGE AIR CARGO (CHA) TO BECOME LARGEST, AIR CARGO AND EXPRESS CARRIER IN LATIN AMERICA.
1ST 5 MONTHS = 2.34 BILLION (FTK) FREIGHT TRAFFIC (+6.7%).
JULY 1999: 2ND QUARTER = +$588 MILLION (+$458 MILLION): MAINTENANCE COSTS $118.02 MILLION (24.41% OF DIRECT OPERATING COSTS (DOC)).
MAKES STATEMENT TO SECURITIES & EXCHANGE COMMISSION (SEC) TO OFFER 10% OF (UPS) TO PUBLIC.
757-200F DELIVERY. PLANS TO WET-LEASE 3 DC-10-40F'S (JT9D-59A) FROM CHALLENGE (CHA) IN LATE 1999.
AUGUST 1999: 12 747-100F'S AVIONICS UPGRADE DONE AT FLS AEROSPACE (ATD), COPENHAGEN, INCLUDING INSTALLATION OF NEW (TCAS), (GPWS), (RVSM), AND SMOKE DETECTION SYSTEM.
75TH 757-200 (N475UP) AND 767-34AF (27756, N330UP), DELIVERIES.
SEPTEMBER 1999: LAST 767-33AFER (27757, N331UP) DELIVERY.
OCTOBER 1999: 3RD QUARTER = +$557 MILLION (+28.5%) (+$449 MILLION): AVERAGE DAILY OVERNIGHT AIR DELIVERY VOLUME +14.6% & INTERNATIONAL EXPORT VOLUME +22.1%.
1ST 9 MONTHS = +$222 MILLION (+$1.2 BILLION): DUE TO 2ND QUARTER TAX ASSESSMENT CHARGE.
NOVEMBER 1999: STARTS $S38 MILLION, 280,000 SQ FT, ASIA PACIFIC HQ, & WAREHOUSE FACILITY AT SINGAPORE, NEAR CHANGI AIRPORT, TO BE COMPLETED 2ND QUARTER OF 2001.
3RD WEEKLY "AROUND THE WORLD" (767) LOUISVILLE - COLOGNE - SHARJAH - MUMBAI - TAIPEI - ANCHORAGE - HOME BASE.
ESTIMATES "NO TROUBLE FOUND," LINE REPLACEABLE UNITS (LRU'S), ARE COSTING (UPS), $2.9 MILLION/YEAR.
HANGAR EXTENSION AT LOUISVILLE TO BE COMPLETED IN OCTOBER 2000, ADDS 45 FT, FOR +1 747 & 767, OR A300, IN EXISTING, NARROW-BODY ONLY, BAY.
GOES "PUBLIC," AND RAISES $5.47 BILLION, IN ITS INITIAL PUBLIC OFFERING (IPO) (LARGEST EVER IN USA).
AT PEAK ON DECEMBER 22ND, EXPECTS 4.3 MILLION PACKAGES (1.8 MILLION) PER DAY, WITHIN 4 WEEKS: THANKSGIVING TO XMAS >52 MILLION PACKAGES!
DECEMBER 1999: 338,000 EMPLOYEES (INCLUDING 2,158 FLIGHT CREW (FC).
ACCELERATES DELIVERIES OF A300-600F'S TO RECEIVE 7 IN 2000, INSTEAD OF 4.
JANUARY 2000: DEPARTMENT OF TRANSPORT (DOT) OK'S SERVICE TO ITALY, MEXICO, CARIBBEAN, +CENTRAL & SOUTH AMERICAN SERVICE INCLUDING ARGENTINA, BELIZE, PANAMA, GUADELOUPE, MARTINIQUE, GUYANA, PARAGUAY, URUGUAY, AND SURINAME, VIA INTERMEDIATE POINTS.
1999 = +37.1% ($MILLION): +20.5% DOMESTIC; +121.6% INTERNATIONAL. 4TH QUARTER MAINTENANCE COST = $132.63 MILLION (23.46% OF DIRECT OPERATING COST (DOC)).
MARCH 2000: JERRY COYLE, VP MAINTENANCE RETIRES. RICHARD BARR, VP FLIGHT OPERATIONS & LINE MAINTENANCE. BUD DEWEES, DIRECTOR LINE MAINTENANCE REPLACES TONY MCBRIDE WHO MOVED TO CORPORATE TRAINING, ATLANTA.
TOP 10 CARGO OPERATORS AT MIAMI IN 1999 TONS:
1. TLS 260K (+13.7%); 2. AAL (-6.5%); 3. CHA 141K (-1.9%); 4. ARW 119K (+9.4%); 5. TMP 118K (+8.3%); 6. FNE 112K (-29.7%); 7. CKF 92K (-34.1%); 8. UPS 70K (+20.3%); 9. UAL 58K (-6.4%); 10. AMJ 44K (-46.5%).
727-180C (19874, N921UP) RETURNED FROM STAR AIR (SDK).
APRIL 2000: EDITH STEIN, MANAGER WEEKEND LINE MAINTENANCE; LEE RYSDEN, MANAGER 757/767 FLEET OPERATIONS; JIM FOUCAULT, DIRECTOR HEAVY MAINTENANCE.
ADDS 5TH DESIGNATED ENGINEERING REPRESENTATIVE (DER) TO ENGINEERING DEPARTMENT. NOW HAS 2 STRUCTURES, 2 SYSTEMS, & 1 AVIONICS (DER)'S.
2,156 FC EMPLOYEES.
1ST QUARTER = +$813 MILLION (+62.9%): +$139 MILLION FROM NON-RECURRING ITEMS, & +23% IN INTERNATIONAL, EXPORT PACKAGE VOLUME.
16 747F'S HEAVY MAINTENANCE, 3 YEAR CONTRACT TO BEDEK (IAI). 1 747-237F (21446), EX-TOWER (TOW)/AIR INDIA (AIN), CONVERTED TO FREIGHTER BY ISRAELI INDUSTRIES (IAI), BEDEK, TRITON (TIA) LEASED.
MAY 2000: MITCH NICHOLS, VP ENGINEERING & ASSET MANAGEMENT, REPLACES LEE WALLACE, WHO RETIRED. MITCH IS STILL HEAD OF (UPS) AVIATION TECHNOLOGIES.
DEPARTMENT OF TRANSPORTATION (DOT) OK'S 2 YEAR EXEMPTION, LOS ANGELES (LAX) TO GUADALAJARA.
1 747-237F (21446), EX-TOWER (TOW)/AIR INDIA (AIN), CONVERTED TO FREIGHTER BY ISRAELI INDUSTRIES (IAI), BEDEK, TRITON (TIA) LEASED.
JUNE 2000: CONTRACT TO JOUVE DATA MANAGEMENT TO CONVERT PAPER AND MICROFILM INFO TO DIGITAL DATA WRITTEN IN SGML FORMAT, INCLUDING ALL MANUALS, BOEING AND AIRBUS.
SUBSIDIARY, CHALLENGE AIR'S (CHA) ROUTES ARE TRANSFERRED TO (UPS), INCLUDING COSTA RICA, DOMINICAN REPUBLIC, AREGENTINA, BRAZIL, BOLIVIA, COLOMBIA, ECUADOR, EL SALVADOR, GUATEMALA, HONDURAS, NICARAGUA, PANAMA, PERU, & VENEZUELA.
JULY 2000: 2ND QUARTER = +$695 MILLION (+18.2%): GLOBAL PACKAGE DELIVERY VOLUME +6.7% (13.2 MILLION PIECES/DAY), DOMESTIC +8.4%.
1999 = +$66.28 MILLION (+$7.95 MILLION): 287 MILLION (RPK) (+5.2%); 81.9% LF LOAD FACTOR; 6.02 BILLION (FTK) FREIGHT TRAFFIC (+8%); 124,000 PASSENGERS (PAX) (+2.5%).
1999 TOP WORLD OPERATORS COMPARISONS:
EMPLOYEES (K): 1 UPS 308; 2 FED 150; 3 UAL 96.7; 4 AAL 86.1; 5 DAL 72; 6 DLH 66.2; 7 DHL 60; 8 AFA 55.2; 9 BAB 53.1.
(FTK) FREIGHT TRAFFIC (BILLION): 1 FED 10.31; 2 LUB 7.07; 3 UPS 6.02; 4 KAL 6.96; 5 SIA 5.48; 6 AFA 4.73; 7 BAB 4.54; 8 JAL 4.42; 9 KLM 4.15.
WHILE 2 (UPS) 747'S IN FOR HEAVY MAINTENANCE, INCLUDING UNEXPECTED AIRWORTHINESS DIRECTIVE (AD) COMPLIANCE WORK, (UPS) TAKES 6 MONTH WET-LEASE OF 747 FROM EVERGREEN (EVR), AND 1 MD-11 FROM GEMINI (GMN). 1ST A300-622F DELIVERY.
AUGUST 2000: 1 747-212F (21939, N525UP), FINOVA (GRB) LEASED.
SEPTEMBER 2000: 2 A300F4-622R'S (806, N121UP; 807, N122UP) DELIVERIES.
OCTOBER 2000: 3RD QUARTER = +$1.2 BILLION (+$990 MILLION).
ADDS COLOGNE - LEEDS AND BRADFORD, UK. REPLACES 727'S WITH 757'S ON COLOGNE - MADRID/BARCELONA/VALENCIA.
NEGOTIATIONS RE-$1.5 MILLION CONTRACT TO BOEING AIRPLANE SERVICES (BAS), TO CONVERT 30 MD-11'S TO FREIGHTERS, CARGO JETS, + CONVERSION 747'S TO FREIGHTERS. 2 A300F4-622R'S (808, N124UP; 809, N125UP) DELIVERIES.
NOVEMBER 2000: (DOT) SELECTS UNITED PARCEL SERVICES (UPS) FOR USA - CHINA (6 OF 10 AVAILABLE FREQUENCIES (2 TO UNITED AIRLINES (UAL), 1 TO NORTHWEST AIRLINES (NWA) AND FEDEX (FED). IN APRIL 2001, ONTARIO - SHANGHAI (747, 6/WEEK). PROJECTS CHINA OPERATIONS TO GROW +300%, BY MID-2002.
1 ORDER (JANUARY 2001) 747-212 (419-21937, /79 N618FF), EX-TOWER (TOW), TRITON (TIA) LEASED, CONVERT TO FREIGHTER BY (IAI). $2 BILLION, 13/22 ORDERS MD-11'S, FOR CONVERT TO FREIGHTERS BY BOEING AIRPLANE SERVICES (BAS). 1 A300B4-605F (810, N126UP) DELIVERY.
DECEMBER 2000: PLANS MID-2001 TO OPEN $30 MILLION, 205,954 SQ FT, AMERICAS INTERNATIONAL HUB (ABLE TO SORT 30,000 PACKAGES/DAY AND 12 AIRPLANES), AT MIAMI.
1 A300F4-622R (811, N127UP) DELIVERY.
JANUARY 2001: 4TH QUARTER = +$478,000 (+$74 MILLION). 2000 = +$2.9 BILLION (+$91.2 MILLION): SHIPMENTS +10%.
UNITED PARCEL SERVICES (UPS) AVIATION TECHNOLOGIES DEVELOPS (GPS) NAVIGATION RECEIVER, TO USE SIGNALS FROM THE WIDE AREA AUGMENTATION SYSTEM (WAAS), FOR INSTRUMENT APPROACHES.
RUMORS OF ACQUISITION OF EMERY WORLDWIDE (EAF).
(UPS)/(BAS), SELECT SINGAPORE TECHNOLOGIES AEROSPACE (ST AERO) SUBSIDIARY, ST AVIATION SERVICES, TO MODIFY 13 MD-11 PASSENGER (PAX) AIRPLANES TO FREIGHTERS, INCLUDING CONCURRENT MAINTENANCE.
EXERCISES OPTIONS TO ORDER 60 A300-600F'S, THAT CAN CARRY 22 A2H CONTAINERS ON THE MAIN DECK, & 7 LD9 CONTAINERS ON THE LOWER DECK, WITH STRUCTURAL PAYLOAD OF 109,600 LBS, AND A RANGE OF 2,500 NM.
MARCH 2001: CODE SHARE WITH VIETNAM AIRLINES (VIE), FOR HO CHI MINH CITY - TAIPEI (757-200F, WEEKLY), CAPABLE OF CARRYING 35 TONS OF FREIGHT ON SATURDAYS.
1 727-180C (534-19874) LEASED TO STAR AIR (SDK). 1 747-256B (699-24071, N528UP), EX-IBERIA AIRLINES (IBE), TRITON (TIA) LEASED, ISRAELI AIRCRAFT INDUSTRIES (IAI) TO CONVERT TO FREIGHTER. 1 757-200PF, WET-LEASED TO VIETNAM AIRLINES (VIE). 1ST MD-11, EX-VASP (VSP), FLOWN TO (SASCO) FOR CONVERSION TO FREIGHTER. 2 A300F4-622R'S (PW4168) (812, N128UP; 813, N129UP) DELIVERIES.
APRIL 2001: 1ST (UPS) 747 FLIGHT TO BEIJING, CHINA, WITH 6 FLIGHTS/WEEK, 4 FROM ONTARIO, 2 FROM NEWARK. NEW SERVICE IS EXPECTED TO GENERATE +$100M IN REVENUE, IN ITS 1ST YEAR. PLANS TO SET UP AN INTRA-ASIA, CARGO HUB IN THE PHILIPPINES, SO THAT ITS FREIGHTER AIRPLANES CAN REACH ALL MAJOR ASIAN CITIES IN <4 HOURS, PROBABLY AT THE FORMER, CLARK, (USAF) BASE IN PAMPANGA, NOW CALLED CLARK INTERNATIONAL AIRPORT.
STARTS BUDAPEST (BUD) - VENNA (VIE) - COLOGNE (CGN) (DAILY, MON-FRI).
MAIN BASE: LOUISVILLE INTERNATIONAL (STANDIFORD FIELD).
HUBS: HAMILTON; MIAMI; TAIPEI (CHIANG KAI SHEK).
PLANS TO END ITS CHARTER 727 PASSENGER SERVICE, CITING DOWNTURN OF ECONOMY, & NONCOMPETITIVE FLEET OF 727-100'S. 2ND MD-11 (48744), FOR CONVERSION TO FREIGHTER.
MAY 2001: ACQUIRES FRITZ COMPANY INC, FOR $437 MILLION.
LOCAL AIRPORT TO SECURE A LEASE FOR LAND TO BUILD 323,000 SQ FT FACILITY.
TONY MCBRIDE, DIRECTOR QUALITY ASSURANCE (QA). IAN WATSON, DIRECTOR AIRCRAFT MAINTENANCE. BUD DEWEES, MANAGER MD-11 IMPLEMENTATION.
2 A300F4-622R'S (814, N130UP; 815, N131UP) DELIVERIES.
JUNE 2001: $100 MILLION CONTRACT WITH BONN/COLOGNE KONRAD-ADENAUER, FOR PACKAGE SORTING FACILITY, ESSENTIALLY DOUBLING ITS CAPACITY, AFTER 1ST QUARTER = +25% VOLUME. ON COMPLETION IN 2005, IT WILL PROCESS UP TO 135,000 PACKAGES/HOUR, COMPARED TO PRESENT 60,000 CAPACITY.
1 A300F4-622R (816, N133UP) DELIVERY.
JULY 2001: 1 A300F4-622R (817, N134UP) DELIVERY.
AUGUST 2001: MICHAEL ESKEW, CHAIRMAN ELECT AND CEO, EFFECTIVE JANUARY 2002 WHEN JIM KELLY RETIRES.
3 MD-11'S (48744; 48768; 48769), EX-VASP (VSP)/BOEING (TBC), FOR CONVERSION TO FREIGHTERS BY BOEING AIRPLANE SERVICES (BAS). 2 A300F4-622R'S (818; 819) DELIVERIES.
SEPTEMBER 2001: 727-31C (19230), WET-LEASED TO STAR AIR (SDK). 1 757-200PF (PW2040) (25462) WET-LEASED TO (SDK), FOR (UPS) EUROPEAN OPERATIONS. A300F4-622R (820, N137UP) DELIVERY.
OCTOBER 2001: IN 3RD QUARTER, POSSIBLE 300 LINE PILOTS (14% (FC), COULD BE CALLED TO ACTIVE DUTY FOR USA MILITARY BUILDUP. ALSO, 375 (MT) ENGINEERING & MAINTENANCE EMPLOYEES FOR MILITARY RESERVES.
3RD QUARTER = +$568 MILLION (+$702 MILLION).
2 767-34AF (CF6-80) DELIVERIES. RECEIVES ITS 1ST MD-11F 0F 13/22, CONVERTED BY BOEING, & SINGAPORE TECHNOLOGIES AEROSPACE. 2 A300F4-622R (821, N138UP; 822, N139UP) DELIVERIES. 15TH A300F DELIVERY.
NOVEMBER 2001: $60 MILLION CONTRACT FOR HEAVY MAINTENANCE ON 49 DC-8F'S, & 90 A300-600F'S, AT (TIMCO), GREENSBORO, NORTH CAROLINA, AVIATION SALES CORPORATION (ASC).
PLANS TO RETURN 747-212B (21939) TO FINOVA (GRB). 1 767-34AF (32844, N334UP), AND 2 MD-11'S (CF6-80C2) (48744, /95 19 04; 601-48768, /96 17 04) DELIVERIES.
JANUARY 2002: AIR CARGO MANAGEMENT GROUP STATES GLOBAL AIR FREIGHT TRAFFIC GREW +8% IN 2000, BUT DECLINED -5% IN 1ST 6 MONTHS OF 2001, AND EVEN FURTHER AFTER "9/11" TO REACH -7 TO -10% FOR 2001, BUT PROJECTS 2002, TO REGAIN 1999 LEVELS.
4TH QUARTER = +$5.55 MILLION: MAINTENANCE COSTS $157.71 MILLION (+39.3%).
PLANS TO MOVE 15 757'S TO EUROPE, TO OPERATE INTRA-EUROPEAN ROUTES, AND REPLACE 727'S.
CAPTAIN E J CARLTON, 747 FLIGHT STANDARDS MANAGER. FRANK HEMKO, FLIGHT SAFETY MANAGER.
19TH A300-600F DELIVERY. 727-27C (19532) & 727-108C (19503) WFU AT KELLY (AFB). 1 A300F4-622R (823, N140UP) DELIVERY.
FEBRUARY 2002: 2001 = +$2.4 BILLION (+$2.9 BILLION). DAILY VOLUME = -.4%.
COLOGNE - MALMO (STURUP) - OSLO (A300). ADDS AROUND-THE-WORLD, FLIGHT OPERATIONS IN THE PHILIPPINES, AND SERVICE TO STOCKHOLM WITH HELSINKI (HEL) - ARLANDA (ARL) - COLOGNE (CGN) - (ARL) - (HEL) (757), IN APRIL.
HAS STORED 7 OF 8 727-200'S. 2 A300F-622R DELIVERIES (N141UP; N142UP). PLANS TO USE A300F-622R'S IN EUROPE IN APRIL.
APRIL 2002: 2,156 FLIGHT CREW (FC) EMPLOYEES.
MAIN BASE: LOUISVILLE INTERNATIONAL AIRPORT (SDF).
HUBS: MIAMI INTERNATIONAL AIRPORT (MIA); HAMILTON AIRPORT (HLZ); TAIPEI - CHIANG KAI SHEK INTERNATIONAL AIRPORT (TPE); AND COLOGNE/BONN - KONRAD ADENAUER AIRPORT (CGN).
INTRODUCES 2 A300-600F'S INTO ITS EUROPEAN NETWORK, FROM ITS MAIN HUB IN COLOGNE, GERMANY. 1 AIRPLANE REPLACED A 757-200PF ON SERVICES TO MADRID, WHILE THE OTHER OPERATES BETWEEN COLOGNE, MALMO (SWEDEN) AND OSLO (NORWAY).
MEANWHILE, (UPS) HAS OPENED ITS INTRA-ASIA AIR HUB IN THE PHILIPPINES AT DIOSDADO MACAPAGAL INTERNATIONAL AIRPORT, THE FORMER CLARK, US (AFB). HAS BASED 3 757'S, 1 767'S, AND 1 A300, MNG (MCG) WET-LEASED AT CLARK, THE LATTER FOR OPERATIONS TO HONK KONG, A ROUTE (UPS) DOES NOT HAVE AUTHORITY TO OPERATE, WITH ITS OWN AIRPLANES. OTHER PLANS FOR CLARK, INCLUDE A MAJOR CONSTRUCTION PROJECT BY UK CONSULTANT, MACE TRANSPORT INTERNATIONAL (MTI), UNDER GARY WALKER, MANAGING DIRECTOR, WHO ARE SETTING UP A $850 MILLION AIRPLANE MAINTENANCE AND FLIGHT TRAINING FACILITY, INCLUDING 4,390,000 SQ FT, HANGARS, EACH WITH 3 BAYS, TO CATER FOR 3 747-400'S, TO BE COMPLETED IN 2-3 YEARS.
1ST QUARTER = 1.52 BILLION (FTK) FREIGHT TRAFFIC (+1.44%).
MAY 2002: TO BUILD MAJOR FACILITIES IN VANCOUVER TO MAKE IT THE 3RD LARGEST HUB IN CANADA AFTER MONTREAL, AND TORONTO. WILL OPEN 125,000 SQ FT, FACILITY IN 2004, WHICH WILL HAVE 3X THE SORTING CAPACITY OF CURRENT VANCOUVER OPERATIONS.
MD-11 (48439) TO SASCO, FOR CONVERSION TO FREIGHTER.
June 2002: (UPS) 2001: +$13.95 MILLION (+$37.24 MILLION): 211 MILLION (RPK) PASSENGER TRAFFIC (-30.2%); 78.8% LF; 87,000 PAX (-35.1%); 5.96 BILLION (FTK) FREIGHT TRAFFIC (-6%).
2001 Top World Cargo Operators Billion (FTK) Freight:
1 FED 11.05; 2 LUB 7.08; 3 UPS 5.96; 4 SIA 5.88; 5 KAL 5.57; 6 AFA 5.12; 7 KLM 4.64; 8 JAL 4.19; 9 BAB 4.033; 10 CHI 4.030; 11 NCA 3.93; 12 CAT 3.89; 13 CLX 3.77; 14 EVA 3.28; 15 UAL 2.80; 16 NWA 2.79; 17 AAL 2.56; 18 MTH 2.40; 19 AAR 2.38; 20 DAL 2.31; 21 MAS 1.84; 22 SWS 1.79; 23 TII 1.67; 24 QAN 1.57; 25 AHK 1.55.
757-24APF (25463, OY-USB), wet-leased to Star Air (SDK) for European (UPS) operations. MD-11 (574-48576) for conversion to freighter.
July 2002: 6 months = 3.13 Billion (FTK) freight traffic (+1.69%).
MD-11 (48406, N254UP) for conversion to freighter. 727-31C (19230, N925UP) returned from Star Air (SDK).
August 2002: 2 727-247F's (21697; 21698) sold to Transmile (TML).
September 2002: FedEx (FED) and (UPS) have continued their allegations to the (DOT), that rival (DHL) is controlled by the German post office (Deutsche Post) and should not be classified as a USA certificated carrier.
2 727-247F's (21699, N207UP; 21701, N208UP) sold to Transmile (TML). 4th MD-11F (48439, N253UP) delivery of 15 MD-11F's converted to freighter at (SASCO) modification facility at Singapore. On delivery flight, it flew revenue on its 2nd (HKG) - (ANC) & 3rd (ANC) - (SDF) legs. 727-2A1F (21341), sold to Platinum Holdings. 727-22C (19102) leased to (SDK). 727-22C (19094) & 727-180C (19874), returned from (SDK).
October 2002: Completed 7-year, $1 Billion expansion of its air hub at Louisville, Kentucky (now called (UPS) Worldport); facility is now 4 million sq ft, and can handle 304,000 packages/hour (84/second), with room to expand to 500,000/hour.
(UPS) Group 3rd Quarter = +$578 Million (+$568 Million). International operations were strong. Expects struggling USA economy to result in a weak holiday season.
Sold 4 727-200's. 757-2APF (25465) leased to (SDK). 1 MD-11 (48576, N270UP), ex-Boeing (TBC). MD-11F (46406, N254UP), converted. In 2003, (UPS) plans to change its airplane fleet as follows: -10 727's; -4 747's; +4 MD-11's; -4 DC-8's; & +8 A300F's.
December 2002: In 2003, Hong Kong to Pampanga (Clark) (6/week).
Is considering the (FANS) upgrade on its MD-11 fleet to accommodate enhanced navigational requirements.
Citing an average of 12 diversions annually due to poor NavAids at Houston (EFD) airport, affecting delivery of 18,000 packages/flight and increase operating costs, (UPS) moved to Houston (IAH), by disassembling and moving the (EFD) sorting equipment to the new (IAH) East Cargo Area.
727-31C (19929) returned from Star Air (SDK).
January 2003: (UPS) Aviation Technologies (UPSAT), Salem, Oregon, receives its first (FAA) certification for a wide-area augmentation system (WAAS) (GPS) satellite navigation receiver. The Raytheon developed (WAAS) is scheduled to become operational over continental USA in 2003, initially providing lateral and vertical navigation to minima as low as 250 ft (75 m).
(FAA) has granted approval to the (WAAS) (GPS) receiver used in (UPS)'s AT9000-series link and display processing unit (LDPU), the heart of the firm's automatic, dependent surveillance-broadcast (ADS-B) system for commercial transport airplanes.
The (WAAS) "engine" can track 15 (GPS)'s simultaneously with up to 3 geostationary satellites broadcasting the (WAAS) signal, which improves (GPS) accuracy from 100 m to about 7 m.
At (WAAS) commissioning, expected later in 2003, the system is expected to support approaches with vertical guidance down to minima ranging from about 350 ft and 1 nm (1.8 km) visibility, down to as low as 250 ft in optimum terrain. The capability will cover about 50% of the continental USA.
Later phases will expand approach capability throughout mainland USA, and into Alaska, Canada, and Mexico. Plans call for minima to be lowered until a (WAAS) approach "is essentially the same" as a Category 1, instrument landing system approach.
(WAAS) also supports required navigation performance (RNP) operations, providing a precision navigation capability down to (RNP) 0.02 (an accuracy of 0.02 nm). The (FAA) is progressing with plans to establish (RNP) airspace and procedures over the USA within the next year.
(UPS)'s (ADS-B) (LDPU) works with its AT7000 Mode-S datalink transponder and AT2000 cockpit traffic information display, which is being installed in over 100 (UPS) 757's & 767's, while the transponder has been certificated in a (UPS) 757.
4th Quarter = +$670 Million (+$645 Million). International operations benefitted from the West Coast Ports shipping strike. 2002 = +$2.35 Billion (+$2.39 Billion).
MD-11 (48574, N273UP), ex-(JAL), for conversion to freighter.
February 2003: Plans to furlough -100 pilots (FC) by September.
Starts operations Hong Kong to its Clark Air Base hub in the Philippines.
MD-11F (48572, N271UP), converted. 2 A300F4-622R's (829, N146UP; 830, N147UP), deliveries.
April 2003: Jovita Carranza, VP Air Operations.
1st Quarter = +$611 Million (+$491 Million): +3.9% Next Day Volume.
3,590 employees (including 2,530 Flight Crew (FC)).
1 727-25C (19858), 8 727-27C's (19114; 19115; 19117; 19118; 19119; 19246; 19532; 19533), 1 727-30C (19310); 1 727-31C (19230); 2 727-62C's (19244; 19245), 1 727-172C (19808); 1 727-180C (19874), and 1 DC-8-71F (46014) stored at Roswell. 747-259BF (21730) returned to Polar (PAO).
May 2003: Introduces new look with theme "Synchronizing the World of Commerce" with removal of bow-tied package parcel atop its shield. The logo currently appears on more than 88,000 vehicles, 257 large jet airplanes, 1,700 facilities around the world, 70,000 drop off & retail access points, greater than 1 Million uniform pieces, and more than >3 Billion packages annually.
2 A300F4-622R's (832, N149UP; 833, N150UP) deliveries.
June 2003: 3,350 employees.
2002 TOP 25 WORLD FREIGHT CARRIERS - Billion - (FTK) Freight
1 (FED) 13.20; 2 (LUB) 7.16; 3 (UPS) 6.62; 4 (KAL) 6.25; 5 (SIA) 6.08; 6 (AFA) 4.87; 7 (CAT) 4.85; 8 (CHI) 4.60; 9 (JAL) 4.39; 10 (CLX) 4.16; 11 (BAB) 4.12; 12 (KLM) 3.99; 13 (EVA) 3.28; 14 (NWA) 3.24; 15 (AAL) 2.93; 16 (UAL) 2.79; 17 (AAR) 2.75; 18 (NCA) 2.21; 19 (POA) 1.97; 20 (EAD) 1.96; 21 (MAS) 1.92; 22 (BEJ) 1.88; 23 (TII) 1.824; 24 (DAL) 1.823; 25 (ACN) 1.58.
A300F4-622R (834, N151UP) delivery.
July 2003: (DOT) selected 6 carriers to operate cargo services between Hong Kong and 3rd country cities in conjunction with USA - Hong Kong services: Fedex (FED), United Parcel Services (UPS), Evergreen International (EVR), Kalitta Air (KAC), Northwest Airlines (NWA), & Polar Air Cargo (PAO).
6 months = +$1.3 Billion (+18.2%) (+$1.1 Billion).
(UPS) sells its UPS Aviation Technologies, Salem, Oregon, to Garmin International for $38 Million. It will be renamed Garmin AT, Inc.
727-25C (19857), 727-31C (19231), 727-51C (18945), 727-180C (19873), WFU at Roswell. 747-123F (20325, N673UP) sold to Kalitta Air (KAC). A300F4-622R (835, N152UP) delivery.
August 2003: MD-11F (49871, N272UP), ex-(JAL), bought from Boeing (TBC). A300F4-622R (839, N153UP) delivery.
September 2003: 2 727-247F's (21700, N211UP; 21392, N212UP) sold to Transmile (TML).
October 2003: The European Commission (EC) asked the Danish government to investigate the ties between United Parcel Services (UPS) and Star Air (SDK). This was instigated by a complaint from Deutsche Post. It wants the Danish authorities to make sure (SDK) is a European-controlled entity. Although (SDK) is a subsidiary of Danish shipping group, Moeller-Maersk, the (EC) cites complaints claiming almost all of its economic activities are generated by (UPS), which allegedly is responsible for (SDK)'s fleet, crews, technical support and maintenance. Should the Danish government or the (EC) decides this relationship constitutes effective control, the authorities could revoke (SDK)'s operating license. The Deutsche Post action is viewed as retaliation for efforts by (UPS) and FedEx (FED) to have Astar Air Cargo (DHL), formerly DHL Airways, decertified as a USA carrier because all of its flying is done on behalf of Deutsche Post's DHL Worldwide Express unit, which used to own 25% of (DHL). The USA Dept of Transportation (DOT) is still in the midst of the investigation to determine whether Astar (DHL) complies with USA citizen requirements.
December 2003: FedEx (FED) announces its 2004 rates will increase an average of +1.9%. However, for the 1st time, FedEx (FED) will be charging less than United Parcel Services (UPS) for express service.
727-247F (21392) sold to Transmile (TML). MD-11 (48579, N276UP) bought from Boeing (TBC) for conversion to freighter.
January 2004: Tom Weidemeyer, President & COO, (UPS) Airways retired and was succeeded by John Beystehner. Allen Hill, replaced Joe Moderow, General Counsel, Corporate Secretary & Head of Global Public Affairs & Public Relations.
(UPS) is now based at its Worldport facility in Atlanta, which at a cost of $1.1B went operational in 9/02, and is essential to the delivery of >13M packages daily.
February 2004: 2 A300F4-622R's (840; 841) deliveries.
March 2004: Wants to cancel 20 orders A300F4-622R but as 4 of these are already being built, may have to settle on 16 cancellations.
A300F4-622R (845, N156UP) delivery.
April 2004: 1st Q = +$759M (+24%) (+$611M): due to the general economic recovery and more imports, particularly from China; 1.72M FTK (+11.2%).
727-31C (19233) returned from Star Air (SDK). 727-22C (19102) & 727-25C (19717) WFU. 2 DC-8-71F's (313-45897; 400-46014), sold to AeroTurbine (AUB).
May 2004: MD-11F (568-48575, N274UP), converted to freighter. A300F4-622R (846, N157UP) delivery.
June 2004: USA and China have signed a landmark air services agreement that will more than double the number of US airlines that may serve China and will permit a nearly 5-fold increase in weekly flights between the 2 countries over the next 6 years.
The agreement allows for +5 airlines from each country, the US may name +1 additional all-cargo carrier, while China may name either a passenger or cargo carrier, to start service later in 2004. The other 4 new-entrant airlines may be either passenger or cargo carriers, with 1 new carrier entering the market in each of the years 2005, 2006, 2008, & 2010. United (UAL), Northwest (NWA), FedEx (FED), & United Parcel Services (UPS) currently serve China.
The agreement allows +195 weekly flights for each side, +111 by all-cargo carriers, & +84 by passenger airlines, resulting in a total of +249 weekly flights at the end of a 6-year phase-in period. A total of +14 of these flights will be available for new passenger services later this 2004.
Each country's carriers are now allowed to serve any city in the other country. Currently, Chinese carriers are limited to 12 US cities, and US passenger carriers may fly to only 5 Chinese cities. The agreement allows unlimited code-sharing between US and Chinese carriers, thus expanding the current agreement which only allows code-sharing only to a limited number of cities.
The agreement also provides that when carriers establish cargo hubs in the other country, they will be afforded a high degree of operating flexibility, and expands charter opportunities beyond those provided by the existing agreement.
Trade between the countries has grown dramatically fromn $4.8B in 1980 to >$170B in 2003. The USA is China's largest export destination, and China is the US's fastest-growing market.
727-21C (19135), 727-27C (19117), 727-51C (18947), & 727-108C (19503) WFU at Roswell. MD-11 (48578) bought from Boeing (TBC). A300F4-622R (847, N158UP) delivery.
July 2004: 2nd Q = +$818M (+$692M). 2003 = +$39.92M (+$46.62M): 6.75B FTK (+2%).
727-22C (341-19103, N944UP) returned from Star Air (SDK). 2 727-27C's (19115; 19117) sold to Stewart Industries. A300F4-622R (848, N159UP) delivery.
August 2004: 727-25C (360-19357, N948UP), returned to service (RTS). 727-31C (425-19232, N927UP) returned from Star Air (SDK). 727-62C (342-19245, N913UP) sold to Stewart Industries. 747-256B (24071) returned to Triton (TIA), leased to Air Atlantic (AID). MD-11F (599-48579, N276UP) converted.
September 2004: (DOT) named Polar Air Cargo (PAO) as a new entrant in the US-China market and will distribute 39 new weekly all-cargo routes among (PAO) and 3 US airlines: FedEx (FED), Northwest Airlines (NWA), & (UPS). (PAO) will receive initially 9 weekly flights, 6 available now, and +3 in 3/05. (FED) & (UPS) each would be awarded +12 weekly flights, and (NWA) +6. Of these flights, half would be available now and the other half in 3/05.
A300F4-622R (849, N160UP), delivery.
October 2004: Purchases Menlo Worldwide Forwarding business for $150M in cash plus assumption of approx $110M of debt, including Menlo Worldwide Forwarding's air & ocean forwarding operations, North American services & facilities, its operations hub in Dayton, Menlo Worldwide Expedite! & Menlo Worldwide Trade Services. It does not include Menlo Worlwide Logistics, Menlo Worldwide Technologies, Vector SCM, nor Con-Way Transportation Services.
727-62C (338-19244) sold to Stewart Industries. MD-11 (583-48577, N278UP), BF (TBC). MD-11F (588-48578, N277UP), CONVERTED. A300F4-622R (850, N161UP), delivery.
November 2004: 10-year, $438M airplane maintenance contract with Singapore Technologies Aerospace for (UPS) DC-8's, MD-11's & A300's at any ST Aero airplane repair station (MRO) around the globe.
757-24APF (577-25464), returned from Star Air (SDK).
January 2005: For the full year ended Dec 31, 2004, consolidated revenue increased +9.2% to a record $36.6 billion, while operating profit rose +12.2% to $5 billion. Net income for the year totaled +$3.3 billion, up +15% compared to the +$2.9 billion reported in 2003.
11 orders MD-11's, ex-Swiss International (CSR) to convert to freighters (F) by Boeing (TBC). 10/10 orders (2/09) A380's. As part of deal, will cut order of A300F's from 90 to 53, of which 40 have been delivered.
February 2005: To hire +200 pilots (FC).
Opens new warehouses and distribution centers in Shanghai, Suzhou, & Futian, expanding to >40 the number of logistics centers in China by UPS Supply Chain Solutions. Designed to primarily distribute textile/apparel, high-tech, automotive, & consumer goods for both export and import.
In 2006, will close its package sorting hub at Dayton International Airport, its only sorting hub for heavy airfreight, which will result in -1,400 job losses. A new hub for heavy freight will be constructed at another (UPS) facility with a goal of improving efficiency.
Plans to add an $82.5M, 700,000 sq ft heavy freight facility to its existing Louisville Cargo operations. The new complex will bring +720 jobs to Louisville.
March 2005: A300F4-622R (853, N164UP) delivery.
May 2005: United Parcel Services (UPS) plans to build five new regional freight hubs at USA airports in Ontario, California; Rockford, Illinois; Philadelphia; Dallas; and Columbia, South Carolina; next year supporting a new main freight hub to be constructed at Louisville. Will cost approximately $24M and create +200 new jobs.
727-27C (19246, N914UP), 727-30C (19310, N917UP), & 727-31C (19230, N925UP), parted out by Stewart Industries. MD-11F (48404, N255UP) bought from Boeing Aircraft Holding (TBC). A300F4-622R (854, N165UP), delivery.
June 2005: A300F4-622R (861, N166UP), delivery.
July 2005: United Parcel Services (UPS) is the world's largest package-delivery service, providing scheduled & charter services to nearly 400 domestic and 220 international airports. It operates nearly 1,000 domestic and over 500 international flights/day.
(IATA) Code: 5X - 406. (ICAO) Code: UPS - UPS.
3,570 employees (including 2,469 Flight Crew (FC)).
Parent organization/shareholders: Publicly held (53%); & employee owned - previous and existing managers and supervisors (47%).
Main Base: Louisville International (SDF).
Hubs: Cologne/Bonn Konrad Adenauer (CGN); Hamilton (HLZ); Miami International (MIA); Ontario International (ONT); & Taipei Chiang Kai Shek International (TPE).
2nd Q = +$986M (+20.5%) (+$818M): with domestic volume climbing well above expectations and international segment performance outstanding with export volume growth exceeding +18%. 1st 6 months = +$1.87B (+18.5%) (+$1.58B).
MD-11 (48452, N74WF), bought from Central Air Leasing. A300F4-622R (853, N164UP; 862, N167UP), deliveries.
August 2005: Liuting International Airport, Qingdao, in China's Shandong Province, to South Korea (5/week).
+8 orders (6/07) 747-400F's (CF6-80C2B1F). A300F4-622R (863, N168UP), delivery.
September 2005: China Airlines (CHI) joined with Cargolux (CLX) to take a 49% stake in Shanghai-based Yangtze River Express (YTH). The cargo carrier (YTH) operates four 737-300QCs and transports cargo within China for (UPS). According to a statement to the Taiwan Stock Exchange, China Airlines (CHI) will pay 312.5 million yuan/$38.6 million for its 25% stake. Hainan Airlines (HNA) has a 15% holding.
December 2005: (UPS) signed a contract for 10 A380 freighters, firming a commitment it made in January. At that time, (UPS) cut its A300F order from 90 to 53 and committed to 10 A380s and 10 options. Deliveries are scheduled between 2009 and 2012. No engine has been selected. The order is worth approximately $2.9 billion at list prices. (UPS) currently operates 47 A300Fs. The A380F will carry a freight load of 330,000 lbs on three decks with a capacity of 40,000 cu ft and a range of 5,600 nm, according to Airbus, which has received commitments for 27 freighter airplanes.
2 MD-11's (48484, N283UP; 48541, N284UP), bought from Central Air Leasing. MD-11F (48538, N281UP), converted to freighter. A300F4-622R (864, N169UP), delivery.
February 2006: United Parcel Services (UPS) opened its expanded package sorting hub at Cologne/Bonn Airport after 2.5 years of construction. The new $135 million, 813,000-sq-ft facility can handle 110,000 packages per hour, nearly double the original hub's capacity. It represents (UPS)'s largest facility investment outside the USA.
INCDT: Smell smoke? Better land NOW as the three gentlemen did who were piloting (UPS) DC-8-71F (45948, N748UP) from Atlanta to Philadelphia at around midnight on February 8, 2006. The crew first smelled smoke twenty-three minutes prior to scheduled landing and declared an emergency. The "SMOKE/FIRE" warning light illuminated three minutes prior to landing. The airplane burst into flames upon emergency landing in Philadelphia. The crew evacuated through cockpit windows using escape ropes, were examined for smoke inhalation and released. This resulted in a total hull loss with zero reportable injuries. Two known pieces of HAZMAT aboard: amyl methyl ketone and tire repair kits. These guys did a brilliant, by-the-book job of saving their own lives.
Later, (December 2007): The USA National Transportation Safety Board recommended that the (FAA) require installation of fire suppression systems in all cargo airplanes operating under Part 121, following its investigation into a fire that destroyed a (UPS) DC-8 in February 2006 in Philadelphia. Fire started "from an unknown source within one of the containers in the main cargo compartment," the (NTSB) said, concluding "that the threat from cargo fires could be mitigated by the installation of fire suppression systems."
MD-11 (48477, N806DE), bought from Delta Airlines (DAL). A300F4-622R (865, N170UP), delivery.
March 2006: Boeing and (UPS) said that the package delivery company will retrofit 107 of its 757s and 767s with Boeing's Class 3 Electronic Flight Bag (EFB). In addition, (EFB) will be installed on eight new 747-400F freighters ordered last year by (UPS) and slated for delivery beginning in 2007.
A300F4-622R (866, N171UP), delivery.
April 2006: (UPS) announced the start of direct air service from Shanghai to Europe along with the addition of three new flights connecting Shanghai to the USA and another new flight between Qingdao and Incheon, Korea. "(UPS) now flies to more points in China than any other USA airline, freight or passenger," said David Abney, President, International Operations. "These new flights are part of our strategy to expand our service options, stay ahead of customer needs and solidify our position as the leader in the world's fastest growing market." (UPS) will utilize MD-11F airplanes to fly from Shanghai to Cologne five times a week. In addition to the new service to Europe, (UPS) has added three new frequencies on its Shanghai - USA route, increasing to nine times per week the number of non-stop flights on that lane. The number of (UPS) flights into Qingdao, a major port and manufacturing center, now has increased to six per week.
(UPS) operates a fleet of 268 airplanes.
May 2006: (UPS) unveiled a $1 billion-plus investment in expansion of its air hub at Louisville International Airport, the global headquarters of the company's express package delivery airline operations. The upgrade, to be completed by 2010, will increase sorting capacity at (UPS)'s high-tech Worldport facility by +60% to 487,000 packages per hour and include construction of new ramp space to accommodate A380s and 747-400s. The carrier has 10 A380Fs on firm order to be delivered in 2009 - 2012.
"We anticipate strong growth in global trade to continue for years to come," (UPS) Chairman and CEO, Mike Eskew said. "Expanding the centerpiece of our worldwide infrastructure is absolutely necessary to support the long-term needs of our customers."
About 100 freighter airplanes - - more than a third of the carrier's total fleet - - descend on Louisville nightly as part of a high-volume package sort in which an automated system of sensors and 197 mi of conveyers move and organize as many as 2 million parcels. While Louisville is (UPS)'s biggest air hub, it recently doubled capacity at its Cologne/Bonn hub and plans to open a massive air hub in Shanghai next year. The Louisville expansion will increase Worldport by 1.1 million sq ft to 5.1 million sq ft. Construction will begin in July.
Rival FedEx (FED) announced earlier this month, that it plans expand its air hub in Indianapolis, its second-largest USA hub after Memphis, to boost processing capacity by +30% to 99,000 packages per hour by late 2008. Additionally, it is building a major air hub in Guangzhou, also to be completed by late 2008.
MD-11 (48451, N257UP), bought from ALG Transportation. A300F4-622R (867, N172UP), delivery.
June 2006: Rolls-Royce (RR) signed a 15-year Total Care engine services agreement with (UPS) covering 40 (RB211-535)s powering 757 freighters. The pact "covers work which would not be performed by (UPS)'s own maintenance program," according to Rolls.
Aerosim Technologies said (UPS) extended a contract for Web-based Flight Management System (FMS) training for MD-11 pilots (FC). The extension covers a two-year term following an initial term of three years.
(UPS) won a three-year contract from the USA Postal Service to provide domestic air transport of mail to and from 98 cities, greatly expanding an arrangement under which it furnishes airmail services for 16 cities. The agreement, which covers mostly first-class and priority mail, takes effect July 1 and includes a two-year option.
A300F4-622R (868, N173UP), delivery.
July 2006: (UPS) stock plunged more than -10% following its release of below-expectation second-quarter results. Positive results are relative for the highly profitable express delivery company, which posted net income of +$1.06 billion for the quarter, up +7.6% from a +$986 million profit in the year-ago quarter. But analysts had predicted $1 per share earnings; the results came in at 97 cents a share for the quarter and triggered a steep drop in share price. Total international package volume lifted +16.5% in the quarter and Chairman and CEO, Mike Eskew said the "global small package market continues to expand and we are seeing significant opportunities." Revenues for the quarter totaled $11.74 billion, up 15.2%. Operating profit grew +9.7% to +$1.7 billion from +$1.55 billion last year.
United Parcel Services (UPS)'s 2,700 pilots (FC) are being briefed by Independent Pilots Association leaders on a tentative labor agreement reached late last month, that will be put to a vote in September. The five-year deal reportedly provides increased pay and improved work rules, including a +20% raise in a captain's average salary to $300,000 annually. Negotiations lasted three years.
The proposed deal puts pressure on FedEx (FED), which has been negotiating with its pilots on a new labor contract since 2004. "There is no way we are going to accept less than what the (UPS) pilots have accomplished," David Webb, Chairman of the FedEx (FED) unit of the Air Line Pilots Association, told the Memphis Commercial Appeal. "It is an absolute that (UPS) is our number one competitor. If (UPS) feels it can remain competitive with the pay and benefits it has offered its pilots, FedEx (FED) should know we are not going to accept less."
(UPS) selected Engine Alliance (GP7200)s to power its fleet of 10 firm A380F freighters. It has options on 10 additional A380Fs. Value of the engine order was not disclosed. Aircraft deliveries are scheduled to begin in 2009.
August 2006: (UPS) pilots (FC) began casting ballots on ratification of a tentative labor contract agreed to June 30. The five-year deal reportedly provides increased pay and improved work rules for the 2,700 pilots, including a +20% raise in a captain's average annual salary to $300,000. Voting will continue until August 31.
A300F4-622R (869, N174UP), delivery.
September 2006: (UPS) pilots (FC), represented by the Independent Pilots Association (IPA), ratified an eight-year labor agreement covering 2,775 captains, first officers and flight engineers. The 2,623 members voting approved the deal 56.5% to 43.5%. The vote ended nearly four years of negotiations.
"From the beginning of the process, our pilots wanted a comprehensive contract and the union wanted a contract that could keep pace with the global expansion of (UPS)," (IPA) President, Tom Nicholson said. "What resulted is a contract that increases pilot compensation, retirement and benefits along with comprehensive work rule improvements and a scope clause that guarantees our pilots the international flying in the (UPS) system." He said the deal, along with the one announced Monday at FedEx Express (FED), sets both "the pattern for the cargo business" and the "standard for the aviation industry."
MD-11 (48453, N286UP), bought from Central Leasing.
October 2006: (UPS) earned $1.04 billion in net income in the third quarter, a +8.9% rise over $953 million earned in the same period last year, on a +10.5% increase in revenues to $11.66 billion.
International package revenues, a good measurement of (UPS) Airlines' services, grew +17% to $2.25 billion as international package volume climbed +19%.
(UPS) reached a five-year deal with Italian Post to deliver its international express mail. The company also said it has established a team of executives to reevaluate its order for 10 A380s, the first of which won't be delivered until May 2010, and emphasized that all options are under consideration, including a possible cancellation.
November 2006: (UPS) will open a pilot (FC) base in Anchorage next May. Initially, it will be staffed by 80 MD-11 pilots.
MD-11F (48457, N285UP), converted.
January 2007: (UPS) named President International, David Abney, as COO of the company and President of UPS Airlines (UPS), replacing John Beystehner, who retired. Alan Gershenhorn, formerly head of (UPS) Supply Chain Solutions in Europe, the Middle East and Africa, was tapped to replace Abney as President of (UPS) International.
February 2007: (UPS) reported 2006 net income of +$4.2 billion, a +8.6% increase over a +$3.87 billion profit in the prior year, on a +11.7% rise in revenue to $47.55 billion. Expenses grew +12.3% to $40.91 billion, leading to an operating profit of +$6.64 billion, up +8%. "We anticipate another good year in our global small package business [in 2007] despite a slowing USA economy," Vice Chairman & CFO, Scott Davis said. "We're encouraged by the opportunities we see for our company around the globe."
$3.8 billion, 26 orders (2/09) 767-300ERFs, which (UPS) says are necessary to keep pace with international traffic demand and for fleet renewal. (UPS) was the launch customer for the first 767 freighter in 1995. The 767-300ERF can carry 24 containers on its upper deck and seven in the lower cargo compartments, according to the airline. It has a maximum payload of 132,200 lbs and a range of 3,000 nm. The airplanes will be powered by (CF6-80C2) engines.
(UPS) said the order "is not related" to its review of its order for 10 A380 freighters, for which it is the only customer. "The A380s are planned to be utilized on specific long-haul routes currently serviced by 747 and MD-11 freighters," it said.
Later, (UPS) and Airbus (EDS) signed an agreement, that delays delivery dates for 10 A380Fs the cargo carrier has on order, and gives both companies the option of terminating the order later this year. (UPS) is the last remaining customer for the freighter version of the airplane. The original delivery schedule ran from 2009 through 2012. The revised delivery schedule was not disclosed, and (UPS) indicated it may follow rival FedEx (FED) and cancel its order. "(UPS) has been carefully evaluating various options since Airbus (EDS) announced production delays late last year," VP Airline & International Operations, Bob Lekites said. "This agreement will provide us additional time to evaluate our network requirements and make a decision once and for all as to how best to ensure service to our customers."
MD-11 (48540, N288UP), delivery, bought from Wells Fargo (as trustee). MD-11F (48453, N286UP), conerted to freighter.
March 2007: (UPS) said it will cancel its order for 10 A380Fs, expressing doubt that Airbus (EDS) can maintain the delayed delivery schedule agreed to last month, and leaving the manufacturer with no orders for the freighter version. (UPS) and Airbus (EDS) had reached an agreement in February, that pushed delivery of the first airplane from 2010 to 2012, and specified that either company could terminate the order later this year. The parcel delivery giant said it would take time to evaluate the order, but it reversed course last week and announced it will cancel the deal as soon as the agreement with Airbus (EDS) permits. (UPS) ordered the airplanes in January 2005 and at the same time, cancelled commitments for 37 A300-600Fs. It originally had been scheduled to receive its first A380F in 2009. The company "had intended to complete an internal study of whether it could wait until 2012 for the airplane, but now understands Airbus (EDS) is diverting employees from the A380F freighter program to work on the passenger version of the plane," it said. Added COO & (UPS) Airline President, David Abney: "We had felt that 2012 was a reasonable estimate of when Airbus (EDS) could supply this plane. We no longer are confident that Airbus (EDS) can adhere to that schedule." The cancellation casts doubt on the future of the A380F, on which work reportedly has been suspended. Airbus (EDS) originally touted the freighter version as a key driver behind development of the large airplane, pushing its potential to transport high volumes of cargo between major international trading centers. "Freight operations will be on a different scale, with new levels of range and efficiency, when the A380F freighter enters service," it said.
FedEx (FED), Emirates (EAD), and ILFC (ILF) all previously ordered the A380F, but subsequently cancelled or switched freighter orders to passenger versions.
April 2007: (UPS) reported a -13.5% decrease in first quarter profit amid slower economic growth and after it incurred charges for shedding fuel-hogging 727s and 747s. Excluding the charges, (UPS) saw sales rise +3.3%. Earnings dropped to +$843 million. or 78 cents per share, for the three months ended March 31, down from +$975 million, or 89 cents per share, in the same period a year ago. Revenue grew to $11.90 billion from $11.52 billion a year ago. Revenue from the company's USA package segment rose +1.2% to $7.55 billion, while international package revenue climbed +10.4% to $2.38 billion. Those figures represent a slowdown from the first quarter of 2005, when sales jumped +16.5% to $11.52 billion. Revenue from the company's USA package segment rose +9.6% to $7.46 billion, while international package sales climbed +17.3% to $2.16 billion. Shares of (UPS) rose +$1.07, or +1.5%, to $73.
(UPS) hired 31 pilots (FC) in March, and expects to hire 25 this month.
(UPS) and the Shanghai Airport Authority formally signed a lease agreement yesterday enabling the parcel delivery giant to establish a long-planned air hub at Pudong International Airport.
(UPS) has been touting the Shanghai hub for some time and yesterday's signing ceremony, attended by USA Transportation Secretary, Mary Peters, set the parameters for its construction. The new hub will be built on 1 million sq ft of land, with "rapid expansion" likely to follow, the company said in a statement. The hub's sorting capacity is projected to reach 17,000 pieces per hour by 2012.
(UPS) plans to increase capacity into Shanghai, where it already is operating MD-11 freighters to and from Europe and the USA, by "up-sizing" to 747-400Fs when the hub opens. It currently operates 76 weekly takeoffs and landings in Shanghai, with all-cargo carrier, Yangtze River Express providing support flights for domestic services.
The airport authority said it is building a new runway near Pudong's west cargo terminal, where the (UPS) hub will be located, to support the carrier's operations. Rival FedEx (FED) plans to open a hub in Guangzhou next year.
Teledyne Controls will install its integrated Data Management Unit on (UPS)'s new fleet of 747-400Fs.
USA Transportation Secretary, Mary Peters said during a Chinese tour that the USA is seeking an "open skies" agreement with the world's most populous nation similar to the recently agreed USA - (EU) accord and hopes to have "the basic framework" for a deal in place next month. "I do believe that we can reach a meaningful agreement by May [when Chinese Vice Premier, Wu Yi and USA Treasury Secretary, Henry Paulson are scheduled to meet in Washington] . . . and then consummate that agreement, we would hope, by the end of the calendar year," Peters said. She expressed the sentiments both in speeches and at press briefings during a tour that took her to Shanghai for the signing of an agreement establishing (UPS)'s new China air hub and to Beijing for talks with transport officials. The two nations reached an accord in 2004, that expanded passenger services and cleared the way for USA cargo carriers such as (UPS) and FedEx (FED) to establish air hubs in China without being subject to restrictions. Both plan to have hubs operational next year, with FedEx (FED) based in Guangzhou, and (UPS) in Shanghai. Peters said she wants to see regulatory barriers for passenger services lowered as well. "Demand for nonstop USA - China service is there, but unfortunately the supply is not," she said. Pointing to gains resulting from the 2004 agreement, she noted that "the number of passengers traveling between China and the United States [in 2006] was more than double the 2003 level. Airfreight volumes also have taken off dramatically, rising from about 270,000 tons in 2003 to almost 400,000 tons in 2006." She said a broader agreement would have benefits for both nations. Her comments last week came in the wake of growing tension between the USA and China in other economic sectors, signaling that air transport is an area where USA officials believe headway can be made despite other points of dispute.
747-44AF (35667, N570UP), delivery.
July 2007: United Parcel Services (UPS) took delivery of its first (CF6-80C2B5F)-powered 747-400F, which it plans to deploy on international services to the Asia/Pacific. The airplane is based out of its new Anchorage, Alaska domicile. The company will take delivery of two more 747-400Fs this year, and five in 2008. In addition, it will acquire five of the type from other carriers by 2010, bringing its total 747-400F fleet to 13. The 747-400F has a payload of 273,300 lbs with a range of 4,400 nm. It has 30 load positions on its main deck and can carry 32 smaller containers on the lower deck. It will be the first freighter in the (UPS) fleet with a hinged nose.
MD-11F (48540, N288UP), converted to freighter.
August 2007: (UPS) and the Shanghai Airport Authority broke ground on construction of the cargo carrier's new hub at Pudong. The facility is expected to open next year.
Focus Aviation (FOS), acting on behalf of Central Air Leasing, managed the sale to (UPS) of an MD-11 formerly operated by Varig (VAR).
2 727-25Cs (19722; 19857) & 2 727-31Cs (19232; 19234), sold to Stewart Industries.
September 2007: USA and Japan reached an expanded air services agreement, according to United Parcel Services (UPS), which said it won authority under the deal to operate six daily freighter flights between the USA and Nagoya. Neither nation issued a statement, but (UPS) released one, saying that the USA "Departments of State and Transportation reached an agreement, that will allow (UPS) and other air carriers to expand air operations to and from Japan." (UPS) International Operations President, Alan Gershenhorn said negotiators from the two countries had achieved a "landmark agreement." (UPS), which currently operates daily service to Tokyo and Osaka, said it will be permitted to connect flights from Nagoya to its new Shanghai hub.
(UPS) hired 36 pilots (FC) in July, 12 in August and is hiring 3 this month.
727-22C (19196) AND 727-31C (19233), sold to Stewart Industries. 747-44AF (35688, N571UP), delivery. MD-11F (48418, N260UP), converted to a freighter.
October 2007: (UPS) reported third-quarter net income of +$1.08 billion, up +3.7% over a net profit of +$1.04 billion, in the year-ago quarter, as a strong performance in the international sector compensated for a slowing USA market. "Once again, (UPS)'s balanced network around the globe, produced solid results even in the face of a lackluster USA economy," Vice Chairman & CFO, Scott Davis said. "Fourth-quarter results will be driven by good performance in our international operations." Revenue rose +4.7% to $12.21 billion, while expenses grew +4.1% to $10.5 billion, producing operating income of +$1.71 billion, up +8.4% over $1.58 billion last year. Export volume in its international package business, which relies heavily on (UPS) Airlines operations, increased +9.3%, fueled by "double-digit gains in both Europe and Asia." The company noted that it won authority to operate six daily flights between the USA and Nagoya, during the quarter, and plans to connect those flights to its air hub in Shanghai, that is under construction.
(UPS) is hiring 25 pilots (FC) this month.
(UPS) Chairman & CEO, Mike Eskew will retire at the end of the year and be succeeded by Vice Chairman & CFO, Scott Davis, the parcel delivery giant said. Davis, 55, joined (UPS) in 1986, when it acquired technology company II Morrow, of which he was CEO. He served in positions of increasing responsibility in Finance & Accounting, before assuming the role of CFO in 2001. He was named Vice Chairman and elected to the (UPS) board in 2006. "Over the past several years, Scott has worked closely with Mike Eskew as an architect of the (UPS) strategy, helping the company expand through acquisitions and investments in new products and technology," board member Victor Pelson said. Eskew's six-year tenure as chief executive has been marked by the company's expansion into new lines of business, with a particular focus on developing multimodal transportation services, international trade management and supply chain consulting, all driven by an increasing reliance on advanced technologies that enable it to track and manage the movement of goods and information throughout a growing global network. He pushed (UPS) to expand its presence in emerging markets such as China, where it is building a massive air hub at Shanghai Pudong. "Commerce is changing at an unprecedented pace and we're operating in a new competitive landscape," Eskew said in a speech earlier this year. "Emerging economies from Asia to the expanded (EU), new trade lanes, disruptive technologies, innovative business models and growing consumer expectations are forcing us to rethink some basic notions." From 2002 through 2006, (UPS)'s overall revenue grew by nearly +57% to $47.5 billion, and its international package revenue more than doubled to $9 billion. Replacing Davis as CFO will be Kurt Kuehn, currently Senior VP Global Sales & Marketing. Replacing Kuehn will be Alan Gershenhorn, currently President (UPS) International. Dan Brutto, currently President Global Freight Forwarding, will become (UPS) International President.
November 2007: 1st 6 months = 4.64 billion (FTK)s (+7.4%) fright traffic.
(UPS) hired 25 pilots (FC) in October, and expects to hire 10 in November.
747-44AF (35669, N572UP), delivery. MD-11F (48456, N290UP), converted and redelivered.
December 2007: (UPS) hired 9 pilots (FC) in November. (UPS) is recruiting ground school instructors, simulator technicians and Flight Training Schedulers for their new Training Center located in Anchorage, Alaska. Applicants can apply online. The (UPS) Pilot (FC) Application Window closed on November 15th. Everyone who applied in 2007 or any previous year, will need to re-apply after (UPS) opens the window in 2008. Anyone who interviewed in 2007 and received a "Pool" Letter does not need to re-apply. Anyone who interviewed in 2007, and was "rejected," can re-apply six months after the date of interview.
The USA National Transportation Safety Board recommended that the (FAA) require installation of fire suppression systems in all cargo airplanes operating under Part 121, following its investigation into a fire that destroyed a (UPS) DC-8 in February 2006 incident (INCDT) in Philadelphia. Fire started "from an unknown source within one of the containers in the main cargo compartment," the (NTSB) said, concluding "that the threat from cargo fires could be mitigated by the installation of fire suppression systems."
January 2008: (UPS) reported a 2007 net profit of +$447 million, down -89.4% from +$4.2 billion in 2006, owing mainly to a $6.1 billion pension payment related to a new labor contract agreed to in the fourth quarter with the International Brotherhood of Teamsters representing 45,000 of its employees. But Chairman & CEO, Scott Davis did note that the "economic environment" is "increasingly challenging" and warned of a "sluggish USA economy." Full-year revenue rose +4.5% to $49.69 billion, driven by a +13.1% lift in international package revenue, which relies heavily on (UPS) Airlines, to $10.28 billion. USA domestic package revenue, which still makes up more than half of (UPS)'s overall business, grew a modest +1.7% to $30.99 billion. In terms of operating profit, however, the international package business led the way with +7.1% growth to +$1.83 billion.
(UPS) is launching a "simplified global portfolio for shipping airfreight" that appears to leverage the company's position as both a cargo airline and a freight forwarder. In recent years, (UPS) has built up its express delivery airline operation and its supply chain management business significantly, attempting to become a wide-ranging service provider for all forms of time-sensitive cargo transport. The new air cargo portfolio includes "a greatly expanded international express service" called "(UPS) Express Freight."
"By combining the capabilities of the world's 9th largest airline with (UPS)'s position as a global freight forwarder with access to other airlines, (UPS) becomes the only transportation and supply chain provider offering guaranteed integrated air freight services in a single portfolio," the company said. Added (UPS)-International President, Dan Brutto: "Because (UPS) operates as both an integrator and airfreight forwarder, we have a unique vantage point and understand the nuances of the two very different networks. We have designed an industry-leading suite of services that plays to the strengths of each air network and produces a higher degree of choice and predictability."
(UPS) earlier this month, for the first time, operated two revenue flights simultaneously using Aviation Communication & Surveillance Systems (ACSS)'s ADS-B-based SafeRoute program aboard 757-200Fs, and plans to conduct such flights about once a week over the next two months as it gradually equips airplanes and trains pilots (FC). "SafeRoute" uses ADS-B to provide automatic merging and spacing, as well as on-ground situational awareness assistance for pilots (FC). (UPS) and (ACSS) said that they gained operational certification from the (FAA) for "SafeRoute" on 757s late last month. The cargo carrier currently has four 757-200Fs equipped with "SafeRoute," and plans to have six more equipped by the end of February. It plans to equip 75 757Fs and 32 767Fs by the end of 2009. Director Flight Operations, Karen Lee said that during the inaugural revenue flights, a 757-200F departing from Long Beach, and another from Ontario, California, "came into ADS-B range of each other over Albuquerque" and used the technology to move within 150 seconds of each other. They maintained that spacing "all the way," until landing at (UPS)'s Louisville hub, she said. "The tail of the leading airplane was on the nose of the other airplane and [the spacing] never deviated." (FAA) observers were onboard the airplane to watch "SafeRoute" in action, she noted. Lee said (UPS) is moving "slowly" in operating flights using ADS-B owing to pilot (FC) training and equipage. "Matching up trained pilots (FC) with equipped airplanes [means it will be] two months before we get to more than once a week," she said. The carrier wants to build "confidence with controllers (ATC) and crew (FC). We don't want to do too much, too fast, because we'll risk things not going well, if we move too quickly. With this kind of technology, you always have things you need to tweak or massage, so it's much better to take it slow." She said the technology has the potential to increase greatly, the efficiency of (UPS)'s time-sensitive cargo flights, by allowing airplanes to safely fly and land close together, and will save fuel by ensuring that they fly the most direct routes.
727-25C (19856, N932UP), and 727-1AYC (20143, N935UP), sold to Stewart Industries. 747-45E (27154, N578UP), ex-(EVA) Air (B-14641), bought from GECAS (GEF) for conversion to freighter. MD-11 (48472, N801DE), returned from World Airways (WLD).
February 2008: MD-11 (48475, N804DE), returned from World Airways (WLD). MD-11F (48477, N291UP), converted to freighter and redelivered.
March 2008: 747-44AF (35663, N573UP), delivery.
April 2008: (UPS) lowered its first-quarter earnings forecast to $0.86 to $0.87 per diluted share from $0.94 to $0.98. "The USA economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products. Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results," the company said. It will release first-quarter earnings on April 23.
747-44AF (35664, N574 UP), delivery.
May 2008: (UPS) will transfer its intra-Asia air hub to Shenzhen from Diosdado Macapagal (Clark) in the Philippines, in order "to improve customer service by reducing transit times across Asia," it said. The 89,000-sq-m hub will be operational in 2010, and will "slash at least a day of shipment times-in-transit for Asian customers." (UPS) will invest $180 million at Shenzhen, which will include a sorting hub with five times the capacity of Clark - - up to 36,000 pieces per hour - - and employ 400. (UPS)'s new hub at Shanghai Pudong will open in November. It will continue to operate at Clark as well.
(UPS) announced the addition of five weekly MD-11F flights to Nagoya. Flights will originate in Anchorage, and continue to Shanghai.
(UPS) is currently not hiring pilots (FC), however, the carrier is recruiting ground school instructors for their new Training Center located in Anchorage, Alaska. Applicants can apply online.
DHL unveiled a $2 billion restructuring of its loss-making USA express business that includes shifting its air lift capacity in the market to rival (UPS), a potentially devastating blow to (ABX) Air and Astar Air Cargo (DHL), which currently provide the German express giant's USA lift. Parent, Deutsche Post World Net (DPWN) said it no longer can tolerate massive annual losses in DHL's USA business, which it estimates will post negative (EBIT) of -$1.3 billion in 2008. While DHL's signature yellow ground delivery vehicles still will operate in the USA, its airport-to-airport flying will be handled by (UPS) Airlines, beginning later this year, (DPWN) said. Additionally, it will close 34% of its package sorting facilities, particularly those in smaller markets, relinquishing blanket USA coverage in favor of higher-yield major markets. The USA restructuring is expected to generate cost savings of -$800 million in 2010 and around -$1 billion annually going forward from 2011, (DPWN) said. A finalized DHL-(UPS) contract will be signed later this year, the companies said.
The fate of (ABX) and Astar (DHL) is unclear, but DHL air hub activities presumably will be shifted from Wilmington, Ohio, to Louisville, where (UPS)'s WorldPort sorting facility is undergoing a $1 billion expansion to be completed in 2010.
(ABX) President & CEO, Joe Hete said DHL has informed it that (UPS) likely will take over "substantially all of the services that (ABX) Air currently provides to DHL," adding: "We are disappointed that DHL has chosen not to pursue alternative means to improve its competitive position in the USA." (ABX) generates about 75% of its revenue from DHL operations. Astar (DHL) did not comment.
The DHL-(UPS) announcement marks a stark contrast from 2004, when DHL entered the USA market, following a lengthy regulatory battle in which (DPWN) and (UPS) exchanged heated public barbs. DHL has been unable to gain more than a 6% share of the USA express delivery market. (DPWN) CEO, Frank Appel said it was time to take "a more pragmatic approach . . . to be a smarter player in the challenging USA express market."
(UPS) said the contract with DHL is expected to last 10 years and will produce up to $1 billion in annual revenue. The deal, however, is not a cease-and-desist between the longtime global rivals, COO, David Abney said, explaining that it "would be a relatively straightforward air lift agreement and that (UPS) and DHL will continue to compete."
DHL's plan to shift its USA air lift from (ABX) Air and Astar Air Cargo (DHL) to rival (UPS) leaves the fate of both airlines and the DHL-owned Wilmington, Ohio, air hub in limbo, with thousands of job losses and dozens of airplane sales possible. The transition from (ABX) and Astar (DHL) to (UPS) likely will take 12 to 18 months. DHL hopes to finalize a contract with (UPS) within the next three months and likely won't be able to make any definitive moves until the exact language is determined. Ohio's "Wilmington News Journal" reported that (ABX) has informed its 10,000 employees that more than >6,000 could lose their jobs. David Ross, President of Airline Professional Assn/Teamsters Local 1224 representing (ABX) pilots (FC), said management "was caught flat-footed by DHL's decision" and warned that "massive job loss" is possible.
But (ABX) spokesperson Beth Huber said, "We don't know how the [DHL-(UPS)] negotiations will come out. Until we know, it's business as usual. We still have planes coming in tonight." (ABX) already had been moving to diversify its business, forming a new parent holding company, Air Transport Services Group (ATSG), following its acquisition last year of several smaller cargo operators. "We don't want to be in a position where we have 90% of our business from one customer," (ATSG) President & CEO, Joe Hete said last year. Still, DHL-related business comprised $280.8 million of its total $382.1 million in revenue for the first quarter.
DHL Americas Communications Director, Jonathan Baker confirmed that all USA air package sorting would be handled by (UPS) at its Louisville hub and that Wilmington would cease to be used "as a domestic air hub." He left open the possibility that DHL could operate international flights to the airport, which it owns. Its largest USA ground sorting facility is adjacent to the airport and "we'll need that going forward," he said.
(ABX) operates 55 DC-9Fs and 30 767Fs on DHL services, with 11 additional 767Fs used for its other operations, including two that support (ANA) cargo operations in Asia. (ABX) said its agreement with DHL includes a provision that would allow it "to sell back to DHL any airplanes removed from DHL's network at . . . fair market value." It values its DC-9Fs at $19 million each.
As for Astar (DHL), DHL last year acquired a 49% minority equity interest and a 24.9% voting interest in the airline. Baker confirmed that all of Astar (DHL)'s air lift would be moved to (UPS), but said that no decision "as yet" has been made regarding DHL's stake. Astar operated 29 727-200Fs, nine DC-8Fs and six A300B4-200Fs, as of year-end 2007.
747-45EC (26062, N579UP), bought from GECAS (GEF), ex-(EVA), ex-(B-16465).
June 2008: (UPS) issued a profit warning, projecting earnings per share for the second quarter of $0.83 to $0.88, down from the $0.97 to $1.04 per share originally anticipated. It cited "slow USA economic growth and an unprecedented increase in the cost of fuel," resulting in lower USA package volume than expected, and an "accelerating contraction in the use of premium air products."
(UPS) reported a -20.9% drop in second-quarter net income to +$873 million from +$1.13 billion last year. Revenue rose +6.7% to $13 billion, but expenses lifted +10.8% to $11.55 billion, producing an operating profit of +$1.45 billion, down -17.6% from $1.77 billion in the same period last year. Total international package revenue, which is tied heavily to air operations, rose +17.9% to $2.95 billion, but international package operating margin fell -5.2 points year-over-year to 13.8%. "International results were negatively impacted by higher fuel costs, declining USA import volume and slower growth in premium services in the major regions of the world," (UPS) said.
USA domestic next-day air revenue declined -2.1% to $1.65 billion. "Although operating conditions in the second quarter were challenging, (UPS) firmly believes the long-term growth fundamentals for our company and for our industry are very favorable," Chairman & CEO, Scott Davis said. The company predicted that "the second half of 2008 will generate modestly better results than the first half, assuming business conditions do not worsen."
(ABX) Air parent, Air Transport Services Group said that it has received formal notice from DHL that the express delivery giant will remove -39 of (ABX)'s 55 DC-9Fs dedicated to DHL USA air lift over the next 12 to 18 months. DHL is negotiating with (UPS) on details of an agreement reached last month to transfer its USA air lift from (ABX) and Astar Air Cargo (DHL) to its rival (UPS).
747-44AF (35665, N575UP), delivery.
August 2008: The Air Line Pilots Association (ALPA) filed a lawsuit on behalf of Astar Air Cargo (DHL) pilots (FC) against DHL for "breach of contract and fraudulent inducement" relating to the delivery giant's decision to shift its USA flying from Astar (DHL) and (ABX) Air to (UPS). "By proposing to shift its North American flying work away from [Astar (DHL)] to (UPS), DHL is breaching job security commitments it agreed to provide to Astar (DHL) pilots (FC) in return for various benefits it received under the current labor contract," (ALPA) said. It is asking the court to enjoin DHL from moving its USA air lift to (UPS) and also is seeking compensatory and punitive damages.
USA Senator, John McCain (Republican-Arizona), the Republican presidential candidate, called the proposed (UPS) takeover of DHL's North American air lift a "train wreck" and vowed to "do everything in my power to avert it," while two prominent senators raised antitrust concerns with the USA Department of Justice (DOJ). DHL and (UPS) are negotiating the final details of a proposed agreement reached in May in which the German delivery giant would shift all of its USA air lift from (ABX) Air and Astar Air Cargo (DHL) to its USA rival. The deal, which (UPS) estimates could generate +$10 billion in revenue over 10 years, effectively would shut down DHL's USA air hub in Wilmington, Ohio, since its USA air cargo operations would move to (UPS) Airlines' Louisville hub. (ABX) has warned the deal could force it to cut up to -6,000 jobs in Wilmington, and another -2,000 workers employed in Ohio by Astar (DHL) and DHL also are in jeopardy. McCain met with thousands of (ABX) and Astar (DHL) workers in a town-hall meeting. "I am deeply troubled by the specter of job losses," he said. McCain's comments came just days after Senators Herb Kohl (Democrat-Wisconsin) and Orrin Hatch (Republican-Utah), Chairman and ranking member of the Senate antitrust subcommittee, jointly wrote to the (DOJ) stating that a shift of DHL's USA air lift to (UPS) "raises the question if DHL will still be able to effectively compete against (UPS) . . . some critics of the proposed agreement contend that DHL will become a captive of (UPS) rather than an independent competitor." The deal, they added, essentially cedes the USA air package delivery market to just (UPS) and FedEx (FED). "Having only two airlines providing national airlift capacity for overnight package delivery could raise the risk of serious economic disruption, should service on one of these two airlines be reduced due to unforeseen difficulties," they wrote, calling for an immediate antitrust review.
Deutsche Post World Net CEO, Frank Appel defended subsidiary DHL's proposed plan to shift its US air lift from (ABX) Air and Astar Air Cargo (DHL) to rival (UPS), saying criticism from USA politicians over potential job losses at DHL's USA air hub in Wilmington, Ohio, misses the bigger picture and that there are no grounds for an antitrust review. Speaking to "The Wall Street Journal," Appel noted that the air lift shift was initiated owing to sizable DHL losses in the USA market, including an estimated -$1.3 billion deficit in 2007. "I can't afford to take losses of -$1.3 billion forever," he said. He added that there are 43,000 DHL-related jobs in the USA, most of which will be preserved under the (UPS) deal. Without the shift to (UPS), he explained, greater cuts would be necessary than the -8,000 (ABX) and Astar (DHL) workers likely to lose their jobs. Regarding antitrust concerns, he pointed out that the deal will take the form of a "contract" in which DHL will simply be a large client of (UPS) Airlines. DHL still will handle pickup and ground delivery of its packages in the USA. "I can't imagine what would be the legal position" justifying a review since the two companies are not merging and will continue to compete in the USA and globally, he argued.
(UPS) opened a 27,000-sq-ft flight training center at Anchorage International (ANC), which it is building into its "gateway to Asia." Currently, 402 (UPS) Airlines pilots (FC) are based in (ANC) and 30 airplanes, including its entire 747-400F fleet and some MD-11Fs, will be domiciled there by 2010. The new facility houses two flight simulators including the carrier's only 747-400 simulator, classrooms and offices. "Established to support all phases of flight training, the new facility will make it unnecessary for Anchorage-based pilots (FC) to fly to Louisville for training," (UPS) said. "Anchorage is a pivotal part of our growth in the Asian market," (UPS) Airlines President, Bob Lekites.
September 2008: Singapore Technologies Aerospace (SASCO) said it redelivered the 38th MD-11BCF to (UPS) Airlines following conversion at its (SASCO) facility. (SASCO) began conversions for (UPS) in April 2001.
(UPS) is currently not hiring pilots (FC), however, the carrier is recruiting ground school instructors for their new Training Center located in Anchorage, Alaska. Applicants can apply online.
October 2008: (UPS) posted third-quarter net income of +$970 million, down -9.9% from +$1.08 billion in the year-ago period, and CFO, Kurt Kuehn warned, "We anticipate a challenging environment for a number of quarters going forward." Revenue increased +7.4% to $13.11 billion, while expenses lifted +9.4% to $11.48 billion, producing an operating profit of +$1.63 billion, off -4.4% from $1.63 billion last year.
International package revenue, which is highly dependent on (UPS) Airlines, rose +16.6% to $2.95 billion. "Export volume per day increased +7% . . . despite decelerating economic growth in most areas of the world," (UPS) said. "The company's broad global network and unique products . . . helped drive this gain. All major regions of the world posted solid volume increases although USA imports continued to decline. Revenue per piece was up +11.6%, aided by higher fuel surcharges and favorable foreign currency exchange rates."
(UPS) started construction on its new intra-Asia air hub at Shenzhen International, a $180 million investment. The airport additionally will provide 150,000 sq m of ramp space, dedicated to the delivery giant's operations. The 89,000-sq-m facility is slated to open in 2010 and initially employ 400. It will replace (UPS)'s current intra-Asia hub at Diosdado Macapagal (Clark) in the Philippines.
"The repositioning of the air hub will slash at least a day off shipment times-in-transit for Asian customers, while offering a new level of service to the manufacturing region, located just north of Shenzhen, not far from Hong Kong," (UPS) said. China, Hong Kong, Japan, Korea, and Taiwan currently account for more than half of the company's total intra-Asia volume, with "a sizeable proportion of package export volume" originating in southeast China and Hong Kong. Package sorting capacity at Shenzhen is targeted at 18,000 pieces per hour, with 36,000 pieces per hour possible, if demand ultimately warrants. (UPS) also is set to begin operations at a new Shanghai Pudong hub in December, that will be dedicated to international shipping.
November 2008: 1st 6 months = 4.91 billion (FTK)s freight traffic (+5.65%).
DHL pulled the plug on its five-year push to become the "third alternative" to (UPS) and FedEx (FED) in the USA express shipping market, announcing that all domestic USA services will cease early next year, as it focuses exclusively on international operations to/from 15 - 20 USA metropolitan areas. "The basic reason is that the USA is a highly concentrated duopoly market and the reality is . . . (UPS) and FedEx (FED)'s scale, market reach and brand awareness have made it impossible for us to make it economically viable," DHL Express CEO, John Mullen told reporters in a conference call.
Mullen estimated that DHL lost around -$10 billion over the last five years on its USA venture, including its original investment in purchasing Airborne Express (ABX) and its Wilmington, Ohio, air hub. The company estimates it lost about -$1.3 billion annually on USA operations, "a level of loss that cannot be sustained," he said. He explained that Airborne (ABX) was a "small niche player of low quality," and despite DHL's best efforts, it "never became big enough and never had enough reach to be able to compete with the two incumbents." DHL is "more than willing" to donate the Wilmington airport to the state of Ohio, he added.
The German delivery giant still is conducting negotiations with (UPS) to turn over the domestic line-haul flight portion of its international shipments to/from the USA to its rival. But the volume carried by (UPS) will be far lower than what originally was envisioned when the two announced their intent last spring to negotiate an agreement under which (UPS) would take over DHL's US air lift from (ABX) Air and Astar Air Cargo (DHL), dropping from about 1.2 million daily shipments to 100,000.
Mullen said he hoped the DHL-(UPS) deal will be finalized by year end. Total job losses at (ABX), Astar (DHL) and DHL owing to the domestic services shutdown are expected to top -9,500. Those cuts are in addition to -5,400 DHL USA jobs already slashed this year.
DHL envisions operating international flights into five USA gateways, likely including New York, Los Angeles and Louisville, and using line-haul contract flights operated by (UPS) Airlines to reach 15 to 20 markets that cover about 80% to 90% of its international shipping in the USA. It will contract smaller cargo operators to reach the remaining 10% to 20%, Mullen said. DHL generates about $4.5 billion annually in USA revenue, about $1 billion of which comes from international services.
SEE ATTACHED - - "UPS-2007-TOP-WLD-CARGO."
2 DC-8-71Fs (45902; 45938), returned to service.
December 2008: United Parcel Services (UPS) launched service at its new international air hub at Shanghai Pudong, a major component of its ongoing Asian expansion. (UPS) plans to operate flights from Shanghai both to the USA and Europe. "The facility is strategically located . . . right in the heart of the Yangtze River Delta area, and now becomes the key gateway linking China to (UPS)'s global network," the company said. The 1 million-sq-ft facility features 117 conveyor belts and 47 docking bays, and boasts package sorting capacity of 17,000 pieces per hour. It also is designed for "rapid processing of heavy freight." Traditional airfreight makes up an estimated 11% of (UPS)'s revenue, a figure that is expected to rise. The facility includes an on-site customs area at which (UPS) and Shanghai Customs share information to expedite clearance. It is equipped with technology enabling automated import and export inspection. (UPS) also is building an intra-Asia air hub at Shenzhen.
(UPS) added its first 747-400F to its European fleet, replacing an MD-11F freighter. The airplane is powered by (CF6-80C2B5F)s and will operate a five-times-weekly, Cologne - Hong Kong service.
DC-8-73F (45936) sold to FossCo Inc and parted out.
January 2009: 747-44AF (35666, B577UP), delivery.
February 2009: (UPS) reported full-year 2008 net income of +$3 billion, widened significantly from a +$447 million profit in 2007 when its results were skewed by a one-time $6.1 billion pension payment, but nevertheless said it must make "tough decisions" to cope with a "severe decline in economic activity around the world." In what is perhaps a more telling comparison, 2008 income was down -28.6% compared to $4.2 billion in 2006.
To counter the difficult financial environment, (UPS) announced that it has "consolidated operating districts, reduced air segments and eliminated some package handling operations." (UPS) additionally froze management salaries and suspended matching retirement account payments. The moves were prompted in part by a fourth quarter that disappointed Wall Street, with adjusted earnings per share down -22%. Full-year revenue rose +3.6% to $51.5 billion.
(UPS) President, Bob Lekites received the "Cargo Airline of the Year" Award. "It's certainly an honor for me to accept this award on behalf of its 20,000 employees . . . It's through their efforts over the past 21 years that we have been so successful," he said.
SEE ATTACHED - - "UPS-CARGO AIRLINE OF THE YEAR AWARD-FEB09."
4 DC-8-73Fs (46051, N851UP; 46073, N803UP; 46074, N874UP; 46089, N811UP), WFU at Roswell.
April 2009: (UPS) posted first-quarter net income of +$401 million, down -55.7% from a +$906 million net profit in the year-ago period, and revealed that it retired its entire fleet of 44 DC-8F freighters during the three months ended March 31. It said the fleet grounding was "earlier than expected" but reflects the current weak demand environment and its desire to become a "leaner, more efficient enterprise." It took a $181 million charge in the quarter to retire the airplanes.
Despite the steep profit decline, (UPS) sees hopeful signs down the road. "Economic indicators tell us recovery in the USA might begin later this year, but more likely not until 2010," CFO, Kurt Kuehn said. He warned that the current quarter "will be another difficult one." First-quarter revenue fell -13.7% to $10.94 billion, while expenses lowered -8.6% to $10.22 billion, producing an operating profit of +$718 million, down -51.9% from +$1.49 billion last year. International package revenue, heavily dependent on (UPS) operations, was down -18.8% to $2.24 billion with revenue per piece -9.3% lower at $18.34. International package total operating profit slipped -30.2% to $294 million.
May 2009: Last (UPS) DC-8F flight made by DC-8-71F (45952, N752UP). All WFU. 45900 WFU at Roswell.
June 2009: (UPS) and its pilots (FC) represented by the Independent Pilots Association (IPA) have identified savings targets of $40 million for this year, $38 million for 2010 and $53 million for 2011, a company spokesperson said. (UPS) and (IPA) have agreed to allow pilots (FC) to sign up for "voluntary options including leaves of absence, early retirements, reduced-pay-guarantee routes, job sharing and a sick-time giveback." (UPS), which already has cut -$1 billion in annual costs, estimated that it has 300 more pilots (FC) than necessary. "Since we are balancing our flight network with the reduced demands of our customers, we are doing less flying," the spokesperson said, adding that the company hopes pilots (FC) agree to sufficient concessions to avoid furloughs: "We have gone well beyond the letter of our labor agreement to attempt to protect them."
Later, (UPS) and its pilots (FC) (IPA) union announced an innovative agreement that averts the immediate furlough of 300 (UPS) pilots (FC). (UPS) and the (IPA) agreed on cost-cutting targets totaling -$131 million over the next three years. Using a variety of voluntary steps, the (IPA) to date has identified savings totaling approximately -$90 million dollars, pending final calculations. Although the full three year goal was not reached by the original June 2 deadline, (UPS) and the (IPA) have agreed there will be no furloughs through April 1, 2010, and that the (IPA) will have another opportunity later this year to produce additional savings. Voluntary pilot (FC) savings generated later this year could eliminate the proposed layoffs entirely. The savings identified by the (IPA) have been produced through voluntary programs such as pilots (FC) taking short- and long-term leaves of absence; military leaves; job sharing; reductions in flight pay guarantees; early retirement, and sick bank contributions. (UPS) and the (IPA) are confident they can achieve the total savings goal.
”This is another example of (UPS)’s commitment to its employees and their families,” said Bob Lekites, (UPS) Airlines President. “It also shows how a company and its union can work together to achieve a mutually beneficial outcome. We applaud our pilots (FC) for making the voluntary commitments necessary to help us protect our business and (UPS) jobs in this uncertain global economy and we thank the (IPA) for their leadership in this process.” "This is a remarkable achievement," said Bob Miller, President of the (IPA). "First of all, I'd like to thank our pilots (FC). None of this would have happened if they hadn't stepped up to volunteer from every fleet, seat and domicile. It shows tremendous solidarity and compassion for our fellow pilots (FC). Second, I want to thank (UPS). They didn't have to go down this road with us. We appreciate their openness to new ideas and their willingness to work with us in finding an alternative solution."
FltOps.com, an assistance service for professional pilots (FC), recently released a report of what each major USA carrier pays its captains and first officers. For the eleven largest USA airlines, including freight carriers FedEx (FED) and (UPS), the average annual pay for a first-year first officer flying the smallest mainline airplane is about $36,000. But the range between the best and worst paying airlines is large, with (FED) paying $51,000 and US Airways (AMW)/(USA) just $22,000. Southwest Airlines (SWA) is the second highest paying at the entry level ($50,000), while Continental Airlines (CAL) and United Airlines (UAL) are tied for second last at $27,000. At the other end of the scale are long tenured captains flying the largest airplanes, who earn an average of $165,000 per year. Again, the cargo carriers are tops with (UPS) and (FED) paying $231,000 and $211,000, respectively. The best paying passenger airline is (SWA) ($181,000), quite remarkable considering its pilots (FC) only fly narrow body 737s. The worst is JetBlue (JBL) ($123,000). Flt.Ops.com notes that pilots (FC) can earn considerably more than their base pay through international overrides, overtime work, per diems and other items.
Recently released federal government employment figures for airline pilots (FC) and mechanics (MT) run counter to data compiled by private organizations and the personal stories of highly-trained pilots (FC) standing in unemployment lines. FltOps.com recently held a pilot (FC) recruiting conference in Dallas-Fort Worth in which only a handful of airlines were on hand to interview pilots (FC). Last year’s event drew 35 airlines, spelling out how drastic the drop in pilot (FC) hiring has been, as air carriers quit hiring and in many case furlough pilots (FC). FltOps.com says the 15 largest USA airlines it tracks hired 2,300 pilots (FC) in 2006 and 2,440 in 2007. But last year, only 1,300 pilots (FC) found jobs. Through the first four months of 2009, only 28 new pilots (FC) joined the 15 air carriers. FltOps.com’s figures jive with that of AIR Inc, the aviation career information service, that for two decades served as a reservoir of data on pilot (FC) hirings. But if anyone needed more evidence of the worsening condition of the airline industry, Air Inc in February this year, shuttered its operation as a result of the sorry state of the economy worldwide, which has produced a dearth of new commercial pilot (FC) jobs as legacy airlines shed capacity, implementing pilot (FC) furloughs and layoffs while also putting off new flight deck crew (FC) hiring.
By the end of 2008, as the recession deepened, it became clear that the future would be bleak for newly minted flight school graduates. Air Inc said airline pilot (FC) hiring totals for 2008 were less than half of what they were the previous year, 6,479 compared to 13,157 in 2007.
However, the federal government says USA scheduled passenger airlines employed +2.3% more pilots (FC) and +5.9% more maintenance (MT) workers in 2008 than in 2007, while total industry jobs declined by -3.0%. According to the USA Department of Transportation (DOT)’s Bureau of Transportation Statistics (BTS), the seven large network carriers employed +1.1% more pilots (FC) and +8.6% more maintenance (MT) workers in 2008 than in 2007. The seven largest low-cost carriers (LCC)s employed +5.2% more pilots (FC) and -6.8% fewer maintenance (MT) workers from 2007 to 2008.
Delta Air Lines (DAL) had the largest increase in pilots (FC) of any network airline from 2007 to 2008,K while Alaska Airlines (ASA) had the greatest percentage decrease in pilot (FC) employment of the network airlines. United Airlines (UAL) had the largest increase in maintenance workers of any network airline from 2007 to 2008, while Northwest Airlines (NWA) had the smallest increase.
All of the low-cost carriers (LCC)s except Frontier Airlines (FRO) added pilots (FC) from 2007 to 2008. Spirit Airlines (SPR) had the largest increase in pilot (FC) employment followed by Allegiant Airlines (WJE). (WJE) had the largest increase in maintenance (MT) workers of any low-cost airline from 2007 to 2008, while (SPR) had the largest reduction. The seven network carriers employed 13.2 pilots per airplane in 2008, down from 13.5 pilots (FC) per airplane in 2007. The (LCC)s employed 11.2 pilots (FC) per airplane in 2008, down -1.8% from 11.4 pilots (FC) per airplane in 2007.
Alaska Airlines (ASA) had 12.0 pilots (FC) per airplane in 2008, down from 12.9 (FC) per airplane in 2007, the fewest of any network airline. Delta (DAL), with 14.9 per airplane, up from 14.3 per airplane in 2008, had the largest increase in the number of pilots (FC) per airplane from 2007 to 2008 and had the most pilots (FC) per airplane of any network carrier.
Allegiant (WJE) had 9.3 pilots (FC) per airplane in 2008, the fewest of any (LCC), compared to 9.6 pilots (FC) per airplane in 2007. Spirit (SPR), with 15.5 (FC) per airplane, up from 12.6 (FC) per airplane in 2007 had the most pilots (FC) per airplane in the (LCC)s group.
As regards airline mechanics (MT), the (BTS) said the passenger airlines had 8.9 maintenance (MT) workers per airplane in 2008, up from 8.3 per airplane in 2007. The network airlines had 12.9 maintenance (MT) workers per airplane in 2008, up from 12.3 (MT) per airplane in 2007. Spending by network airlines for outsourced maintenance increased from 42.5% of total maintenance spending in 2007 to 42.8% in 2008. The (LCC)s had 3.2 maintenance (MT) workers per airplane in 2008, down from 3.7 (MT) per airplane in 2007. Spending by (LCC)s for outsourced maintenance increased from 52.1% of total maintenance spending in 2007 to 54.6% in 2007.
(NWA) had 0.8 maintenance (MT) workers per airplane in 2008, the fewest of any network airline and unchanged from the 0.8 employees per airplane in 2007. (NWA)’s spending for outsourcing maintenance declined from 71.0% of total spending in 2007 to 65.9% in 2008. American Airlines (AAL) had 22.4 maintenance (MT) workers per airplane in 2008, the most of any network airline. (AAL)’s spending for outsourcing was 23.6% of total maintenance spending in 2008, the lowest percentage spending share of the network carriers.
Virgin America (VUS) had 1.7 maintenance (MT) workers per airplane in 2008 the fewest of any (LCC). Of the (LCC)s, Spirit (SPR) spent the smallest portion of its maintenance expense on outsourcing at 22.6%. Southwest (SWA) had the highest percentage share for outsourcing at 61.3%. Frontier (FRO) had 3.9 maintenance (MT) workers per airplane in 2008, the most of any (LCC) but down from 7.7 (MT) employees per airplane in 2007. (FRO)’s spending for outsourcing increased from 20.5% of total maintenance spending in 2007 to 24.9% in 2008.
In the news, Alaska Airlines (ASA) and its mechanics (MT) union produced a tentative agreement on a two-year contract extension, through October 17, 2011. The Aircraft Mechanics Fraternal Association (AMFA) represents 655 airline technicians (MT). (ASA) and the union announced that they expect the results of the ratification vote by late July. (AMFA) is the largest craft union representing airplane maintenance technicians (MT) and related employees and serves members at (ASA), Mesaba Airlines and (SWA).
But (SWA) pilots (FC) rejected a tentative five-year contract that would have increased their salaries and retirement benefits. Work to reopen contract talks with (SWA) will begin immediately, said Carl Kuwitzky, President of the (SWA) Pilots’ Association. Almost 51% of pilots (FC) voted against the agreement, which was reached in January after >2 years of talks. In the interim, the existing contract remains in effect. >95% of pilots (FC) voted. "We are naturally disappointed and acknowledge it was a very close vote," said Chuck Magill, VP Flight Operations for (SWA). "We reached a tentative agreement in good faith, and both sides put a lot of effort into getting to this point. We have an outstanding and highly productive group of Pilots (FC), and we appreciate their active involvement in the voting process. We welcome the opportunity for our negotiating teams to re-engage and work toward an agreement that best meets the needs of our company and our outstanding pilots during these challenging economic times."
Meanwhile, it is reported that the skies aren’t so friendly for Steffan Schmidt and Chris Campbell. They were recently found on a street in Seattle, at rush hour, holding signs more often used by panhandlers. “Two laid-off pilots (FC)” read Schmidt's sign. “Will Fly for Food” Campbell’s sign said. It’s a small industry, and there aren’t a lot of pilot (FC) gigs on Craigslist or Monster, said Campbell, who lost his job flying a corporate airplane. Schmidt was laid off from his job flying a corporate plane three months ago, and figured they would get some “exposure” by standing at a busy freeway ramp. “The normal way to find employment didn’t cut it,” he said. Schmidt said he wanted to get off unemployment, and not “waste any more tax dollars.” They're seeking pilot (FC) jobs, not handouts, but passersby offered them money and books, which they politely declined.
July 2009: (UPS) reported second-quarter net income of +$445 million, down -49% from +$873 million in the year-ago period, on a -16.7% reduction in revenue to $10.8 billion. Chairman & CEO, Scott Davis said that while weak global economic conditions have "pressured" (UPS), "(UPS) remains financially very strong" and "can weather this recession." CFO, Kurt Kuehn added, "Declines in both our domestic and international business appear to be stabilizing but volumes will remain significantly below last year's levels . . . Questions remain as to when business activity will begin to strengthen." International package revenue, which relies heavily on (UPS) Airlines activities, decreased -23.8% year-over-year to $2.25 billion. USA domestic next-day air revenue lowered -20.2% to $1.32 billion.
(UPS) said it has adopted a plan to cut the carbon dioxide emissions of (UPS) Airlines by an additional -20% by 2020 to bring its cumulative reduction to -42% compared to 1990 levels. (UPS) said its jet airplanes "are the source of 53%" of (UPS)'s total CO2 output. The delivery giant also operates fleets of trucks and vans and manages warehouses. It added that it intends to achieve the 2020 goal "by investing in more fuel-efficient airplane types and engines, fuel-saving operational initiatives, and the introduction of biofuels."
Separately, (UPS) completed the first phase of expansion on its Worldport sorting facility at its Louisville hub. The complex's hourly sorting capacity has been increased +15% to 350,000 packages per hour. The expansion, to be fully completed by next year, will ramp up the high-tech building's hourly capacity to 487,000 pieces. (UPS) said that the project is progressing under budget and "(UPS) will spend less than the anticipated $1 billion for the expansion."
2 747-123Fs (20324; 20390)), 747-212B (21936), 747-283B (22381), all sold to Stewart Industries and 3 767-34AF (37856, N335UP; 37860, N340UP; 37861, N341UP), deliveries.
September 2009: 747-4R7F (25866, N581UP), bought from Cargolux (CLX), ex-(LX-FCV).
October 2009: (UPS) reported third-quarter net income of +$549 million, down -43.4% from a +$970 million profit in the year-ago period, and stated that economic recovery is still at a very early stage. "I'm encouraged by the signs of economic recovery that are becoming apparent, although we still have a long way to go," Chairman & CEO, Scott Davis said. CFO, Kurt Kuehn added that (UPS)'s prospects in the upcoming holiday season, normally the package delivery giant's strongest period, are uncertain, with "forecasters predict[ing] USA consumers will spend conservatively . . . Our customers have widely differing views on their outlook for the holiday season."
Much like the passenger side of the airline industry, (UPS) carried solid volumes in the quarter on its air-intensive services but suffered significantly from not being able to charge traditional rates owing to market conditions and/or consumers and businesses shipping lighter-weight packages compared to the prior-year period.
Daily volume on its air-reliant international package business was up +4% year-over-year but average revenue per piece sank -21% to $17.97 and international package revenue lowered -17.9% $2.42 billion. Similarly, USA domestic next-day-air volume lifted +2.4% but revenue per piece fell -23.6% to $18.13 and revenue from their service declined -20.5% to $1.35 billion.
Total third-quarter revenue dropped -14.9% to $11.15 billion, while expenses decreased -10.9% to $10.22 billion, producing an operating profit of +$929 million, down -43.1% from $1.63 billion last year. (UPS) also paid $93 million in interest and $293 million in taxes during the period.
"(UPS) is poised for the recovery when it comes," Kuehn said. "We've initiated cost initiatives that will approach $1.4 billion this year, making (UPS) more efficient than ever. In addition, we will reduce our 2009 capital expenditures to $1.7 billion, down -$500 million from our initial budget."
(UPS) has no pilots on furlough. (UPS) is not accepting Flight Crew (FC) applications, nor hiring pilots (FC).
747-34AF (37857, N336UP), delivery.
December 2009: The USA Air Transport Association (ATA) announced that 15 airlines have signed Memos of Understanding (MOU)s with either AltAir Fuels, Rentech or both expressing nonbinding commitment to support future biofuel supply. Air Canada (ACN), American Airlines (AAL), Atlas Air (TLS), Delta Air Lines (DAL)/(NWA), FedEx Express (FED), JetBlue Airways (JBL), Lufthansa (DLH), Mexicana (CMA), Polar Air Cargo (PAO), United Airlines (UAL), (UPS) Airlines, and US Airways (AMW)/(USA) signed with both providers. Alaska Airlines (ASA) and Hawaiian Airlines (HWI) went with AltAir only and AirTran Airways (CQT) signed with Rentech. The (ATA) said discussions with additional fuel producers "about other projects" have started. "This agreement is a significant step forward, establishing a framework for a large group of diverse carriers to negotiate a definitive fuel purchase agreement," Rentech President & CEO, D Hunt Ramsbottom said.
AltAir is working on producing some 75 million gallons of jet and diesel fuel derived from camelina oils or comparable feedstock per year at a new plant in Anacortes, Washington, USA. Rentech plans to produce around 250 million gallons per year of synthetic jet fuel derived principally from coal or petroleum coke near Natchez, Mississipi, USA with the resultant carbon dioxide sequestered and the carbon footprint potentially further reduced by integrating biomass as a feedstock. Last summer, eight airlines operating at Los Angeles International (LAX) signed a deal with Rentech for the supply of a renewable synthetic diesel fuel for use in ground service equipment (GSE).
January 2010: (UPS) said that it is "streamlining" its USA domestic management structure, leading to elimination of -1,800 management and administrative jobs this year. (UPS) said it is "leveraging technology" to simplify its domestic small package business, which uses both air and ground, by dividing the USA into 3 regions from April instead of the current 5. It said 1,100 of the workers to be cut will be offered a "voluntary separation package." Chairman & (CEO) Scott Davis said the new structure and smaller management workforce "will allow us to sharpen our focus on profitable growth."
(UPS) also said that its fourth-quarter earnings will be stronger than previously expected, with a profit in the range of +$0.73 to +$0.75 per diluted share instead of the formerly projected +$0.58 to +$0.65 range. "The stronger earnings stem from better-than-expected results in both domestic and international operations and savings through cost management," (CFO) Kurt Kuehn said. "However, we still anticipate a gradual economic recovery with improvement more evident as 2010 progresses." (UPS) will announce its 4th-quarter and full-year earnings on February 2.
The USA (FAA) announced that air traffic controllers in Houston have started using (ADS-B) for flights over the Gulf of Mexico. Administrator, Randy Babbit called it a "significant, early step toward NextGen" for an area that has lacked radar coverage. Controllers previously "had to rely on an airplane's estimated or reported, not actual, position," the (FAA) said. Commercial airplanes at high altitude were kept as much as 120 miles apart to ensure safety. (ADS-B) will allow the separation to be reduced to 5 nm. (ADS-B) also is in use in Louisville in partnership with (UPS). Philadelphia will begin using (ADS-B) next month and Juneau will come online in April.
767-34AF (37858, N337UP), delivery.
February 2010: (UPS) reported significant 4th-quarter improvement and closed out 2009 with a +$2.15 billion profit, down -28.3% from the +$3 billion earned in 2008. Full-year revenue fell -12% to $45.3 billion against a -10% cut in costs to $41.5 million. (UPS)'s operating profit slipped -29.4% to +$3.8 billion to +$5.38 billion.
"(UPS) ended 2009 on a high note by leveraging network changes implemented throughout the year and executing flawlessly during the peak holiday shipping period, which was stronger than we had anticipated," Chairman & (CEO) Scott Davis said. "(UPS) demonstrated its ability to manage effectively in changing market conditions. (UPS) has emerged from the worst recession in decades leaner, more focused and better positioned to take advantage of increased global trade." Last month, (UPS) announced that it would eliminate -1,800 management and administrative jobs this year.
Full-year domestic package revenue declined -10% to $28.16 billion and operating profit on its domestic services was down -45.3% to +$2.14 billion. International revenue slid -14.1% to $9.7 billion, leading to a -13.5% fall in operating income to $1.37 billion.
But strong performance from (UPS)'s international operation in the 4th quarter helped boost net profit for the period by +198% to +$757 million. Overall package volume was up +1.4% year-over-year to 1.1 billion pieces, while international packages per day climbed +9.1% to 2.4 million pieces. International operating profit for the quarter soared +27.6% to +$467 million.
The European Commission (EC) said it issued charges against "a number of companies concerning their alleged participation in price-fixing cartels in the airfreight forwarding business" and major air cargo players including (UPS) and (DHL) confirmed they were included. Other companies confirming receipt of a formal "statement of objections" from the (EC) included Panalpina, Kuehne & Nagel, and (DSV).
(DHL) claimed it has been granted immunity by the (EC) in exchange for cooperating with the probe. (UPS) said it would "vigorously defend ourselves in this proceeding against any allegations of wrongdoing."
The (EC), the USA Department of Justice and other regulators around the world have been probing price-fixing in the air cargo industry for several years and a host of carriers have pled or been found guilty and paid fines. The (EC)'s latest charges appear to open a new front by implicating the forwarding side of the business.
"The (EC) is investigating allegations that these companies fixed prices by colluding on the imposition, level, timing and application of various surcharges," the (EC) said. "The allegations concern four separate infringements involving the provision of freight forwarding services from the UK to outside the [European Economic Area (EEA)], from the (EEA) to the USA, from China to the (EEA), and from southern China/Hong Kong to the (EEA)."
Companies receiving a statement of objections can reply in writing or request an oral hearing. The (EC) emphasized that the issuing of formal charges does not "prejudge" whether findings of guilt will be rendered.
AerSale of Florida announced the acquisition of 44 DC-8-71F/-73F freighters, the accompanying (CFM56-2C1) engines, spare parts and tooling and a Level D, DC-8-70 series flight simulator from an unnamed seller thought to be (UPS) Airlines, which retired its fleet of 44 DC-8s last year. AerSale (CEO) Nicolas Finazzo said it "is only the 1st of several large-scale multi-fleet acquisitions included in our 2010 forecast." According to (COO) Robert Nichols, AerSale now "can effectively service the remaining DC-8-70 fleet despite its limited future. However, strategically the real value comes from the parts value of the engines." AerSale said it is "positioned to become the leading provider of aftermarket (CFM56) material."
(UPS) Airlines said it will begin furloughing "at least" 300 pilots (FC) in phases beginning in May unless it can "find a solution with the pilots (FC)'s union that would avert or mitigate the layoffs before they take effect." (UPS)'s 2,800 pilots (FC), represented by the Independent Pilots Association (IPA), agreed with (UPS) last June to take "a variety of voluntary steps" to cut -$90 million in costs in exchange for a promise from management that there would be no furloughs through April 1, 2010. (UPS) stated at the time that it had around +300 more pilots (FC) than necessary. (UPS) said it has engaged in discussions with the (IPA) regarding "additional cost-cutting initiatives that would eliminate the threat of layoffs entirely," but those talks "have failed."
(UPS) Airlines President Bob Lekites said, "Even though the economy has begun to turn around, (UPS) anticipates a very gradual recovery and a continued need for belt-tightening. This is a painful decision for our people, but one that is right for the ongoing health of our business." He added, however, that (UPS) hasn't "given up" on finding alternatives to the job cuts and will "go well beyond our contractual obligation" to try to reach a cost-cutting agreement with the (IPA) to avert furloughs.
March 2010: 767-34AF (37944, N338UP), delivery.
April 2010: 767-34AF (37859, N339UP), delivery.
May 2010: (UPS) Airlines will furlough 54 pilots (FC) and may cut around 250 additional pilots (FC) by year end, according to both the company and the Independent Pilots Association (IPA) representing the cargo carrier's 2,800 pilots (FC).
(UPS) said in February that it would begin furloughing "at least" 300 pilots (FC) in phases beginning this month unless it could "find a solution with the pilots (FC)'s union that would avert or mitigate the layoffs before they take effect."
Last year, the company and (IPA) reached agreement on "a variety of voluntary steps" to cut -$90 million in costs, in exchange for a promise from management that there would be no furloughs through April 1 of this year. But (UPS) said that lower demand, a more modern fleet requiring fewer pilots (FC) and raising of the pilot (FC) retirement age from 60 to 65 in December 2007, necessitates its 1st-ever pilot (FC) furloughs.
"At a time when the number one issue for most Americans is creating jobs, (UPS) is creating unemployment," (IPA) President Robert Thrush said. "What makes this furlough truly unfortunate is that our pilots (FC) took it upon themselves to give up pay and benefits to produce…guaranteed savings for (UPS), enough to keep these 300 pilots (FC) employed well into 2011." He charged that management earlier this year "mockingly [held] out hope that the furloughs may be mitigated, averted or eliminated" so that it could "shamefully attempt to place blame on the pilots (FC) for somehow failing to act."
June 2010: (UPS) and PosLaju, the leading Malaysian courier company, announced they have formed an alliance and jointly launched PosLaju International Premium, which they described as "a day-definite, international express delivery service with a money-back guarantee serving >215 countries. The new service is available at all 52 PosLaju outlets in Malaysia and will, on average, shorten the international transit time of packages and documents by half." The move is in line with (UPS)'s continuing strategy of spreading its reach in Asia. In May, it teamed with P&T Express of Vietnam to establish (UPS) Vietnam as a joint stock company. And in late April its new intra-Asian air hub at Shenzhen became fully operational. The Shenzhen facility totals 89,000 sq m and initially is processing up to 18,000 pieces per hour, up +140% compared to sorting capacity at its former intra-Asian hub in the Philippines. (UPS), which invested $180 million in the facility, said it "can be easily expanded" to a capacity of 36,000 pieces per hour.
2 747-212Bs (21943, & 21944) sold to Stewart Industries. 767-34AF (37860, N340UP), delivery.
July 2010: (UPS) posted 2nd-quarter net income of +$845 million, up +89.9% over a +$445 million profit in the prior-year period, and noted that "strong export growth in all regions" with Asia leading the way helped to boost the bottom line.
Chairman & (CEO) Scott Davis said the impressive quarter was achieved despite "a mixed global economic environment." He credited "superb execution" throughout its global delivery network and "the USA domestic reorganization" for allowing it to achieve "better than expected results." (UPS) in January announced a "streamlining" of its USA domestic management structure, leading to the elimination of -1,800 management and administrative jobs this year. He said the USA reorganization, which included dividing the country into 3 delivery/shipping regions instead of five and "giving more autonomy to local operations," has been completed and already is yielding "significant network synergies."
(UPS) is considered a harbinger of the global economy's direction, and company executives did not paint an overly rosy picture in a conference call last week with analysts. Consumer confidence remains weak, but business confidence is rising and particularly manifesting itself in growth in high-yield, air-reliant international shipping that benefits (UPS), they said. "We don't expect robust economic recovery," (CFO) Kurt Kuehn explained. "But we think even in this modest environment we can prosper and raise profits substantially." (UPS) lifted its full-year earnings guidance +45% to +50% to $3.35 to $3.45 per share. The guidance accounts for "slow economic growth in the USA" and "uncertainty" in Europe, Kuehn noted.
Much of the company's confidence is based on its growing strength in Asia, where it continues its expansion via alliances with local operators, a strategy Davis said is working well and will continue. International package revenue jumped +23% year-over-year in the quarter to $2.77 billion, as export growth rose +15% with Asian export growth up +40%. Average international volume per day increased +19.8% to 2.18 million pieces. "We've seen international volume exceed >2 million per day for three straight quarters," Kuehn said, noting that business-to-business shipping is growing faster than business-to-consumer shipping.
Davis commented, "There's a pretty good consensus that this will be a business-led recovery and you'll continue to see industrial production lead the way." (UPS)'s total 2nd-quarter revenue heightened +12.7% to $12.2 billion, while expenses climbed +8.7% to $10.8 billion, producing operating income of +$1.4 billion, up +56.6% over a +$895 million operating profit in the year-ago period.
(UPS) Airlines signed a 10-year agreement with (GE) Aviation (GEC) relating to Maintenance Repair & Over4haul (MRO) of 142 (CF6-80C2) engines powering its MD-11, 747-400 and 767-300 airplanes. The agreement is valued at approximately $1 billion over its life and extends an existing 15-year service agreement.
(UPS) launched the most aggressive campaign to date by an express operator to promote "alternatives" to domestic airline baggage carriage, unveiling a "luggage box" through which passengers can ship bags in advance of flying rather than checking them at the airport.
The delivery player long has counted airline passengers' shipped baggage as a small part of its business. But it never directly promoted it as a service and most bags actually are shipped through (UPS) via niche businesses that offer door-to-door baggage handling and essentially act as freight forwarders for passenger bags. However, (UPS) said in a statement that an increasing number of customers have been shipping luggage, particularly items such as skis and golf clubs, since airlines started charging for checked bags, prompting it to offer a tailored service.
It said it is offering 2 sizes of luggage boxes shaped like standard suitcases at select (UPS) Store locations throughout the USA. According to the delivery giant, the boxes have "a sturdy handle for easy carrying and [are] made of recyclable corrugate. Because it weighs less than an empty suitcase, packing directly into the box can help lower shipping costs. Travelers also can include packaging tape and a return (UPS) shipping label for use when returning home."
The company said that when shipped via its (UPS) Ground service, "the luggage box is competitively priced with the airlines' baggage fee." It noted, however, that those using "a less expensive shipping option like (UPS) Ground" should plan ahead as the service option is not generally overnight.
(UPS) touted its tracking capabilities and noted that customers will be able to get e-mail updates on the location of their luggage. While pushing the luggage box as an option for domestic travel, the company "does not recommend shipping luggage internationally…[owing to] the duties and taxes associated with international shipments."
It also warned that those shipping luggage through (UPS)'s express air network are subject to the same (FAA) restrictions as traditional airfreight and cannot include in their baggage "hazardous materials including colognes and perfumes, aerosol sprays, nail polish and cigarette lighters."
According to USA Department of Transportation statistics, USA airlines generated $769 million in revenue from baggage fees in the 1st quarter, up +33% year-over-year.
2 747-123F (20324; 20390), 767-34AF (37861, N341UP), delivery.
August 2010: United Parcel Services (UPS) operates the world's largest package-delivery service, providing scheduled & charter services to >400 domestic and 435 international airports, operating nearly 2,000 flights each day.
Employees = 6,080 (including 2,469 Flight Crew (FC)).
(IATA) Code: 5X - 406. (ICAO) Code: UPS (Callsign - UPS).
Parent organization/shareholders: Publicly held (58%); & employee owned - previous and existing managers and supervisors (42%).
Main Base: Louisville International airport (SDF).
Hubs: Bradley International airport (BDL); Clark Diosdado Macapagal International airport (CRK); Cologne/Bonn Konrad Adenauer airport (CGN); Columbia Metropolitan airport (CAE); Dallas Fort Worth International (DFW); Greater Rockford airport (RFD); Hamilton airport (HLZ); Hong Kong International airport (HKG); Miami International airport (MIA); Ontario International airport (ONT); Philadelphia International airport (PHL); Shanghai Pudong International airport (PVG); Singapore Changi airport (SIN); & Taiwan Taoyuan International airport (TPE).
Citing improving economic conditions, (UPS) will reduce its ongoing furlough program by 70 pilots (FC), effective in 2011. The decision will decrease the earlier planned 300 furloughs to 230, officials said. The cutback, announced in February, began in May and has resulted in furloughs for 108 flight crew (FC). (UPS) is operating 48 fewer airplanes, 214 vs 262, than it was in 2003. (UPS) is operating -10% fewer block hours than in 2007 before the recession.
Major influences on the 2,800-pilot (FC) roster are the retirement
of three-crew airplanes that accounted for 400 flight engineers
who are no longer needed and the (FAA)’s decision in 2007 to permit pilots (FC) to fly commercially until 65 years of age.
(UPS) Airlines, which furloughed 54 pilots (FC) in May and had planned to furlough a total of 300 flight deck crew by year's end, said it will reduce the number of furloughs this year by 70 to 230. "There continues to be mixed economic signals and we believe that the recovery will be gradual," said (UPS) spokesperson Mike Mangeot. But the reduction in pilot (FC) cuts is possible owing to "our improving economic conditions as reported in our 2nd-quarter earnings." The company posted a +90% increase in 2nd-quarter net income to $845 million.
"If our 2010 growth continues, the furlough could be reduced even more in the future," he added. (UPS)'s pilot (FC) workforce numbers about 2,800. Mangeot noted that "the business conditions driving the furloughs still exist," namely the fact that (UPS) is flying 214 airplanes currently, compared to 262 in 2003 and all older airplanes requiring a flight engineer have been "permanently retired."
(UPS) said it is flying approximately 10% fewer flight hour today compared to 2007. "The bottom line is that we still have more pilots (FC) than we need to operate our airline," Mangeot said. "On average, the employment cost for each pilot (FC) in the furlough group is $185,000 per year in wages and benefits. Today’s economic environment prevents our company from carrying hundreds of excess employees at such a high cost."
September 2010: ACCDT: Flight crew (FC) members from Kentucky and Florida were identified as the 2 (FC) killed when a (UPS) 747-44AF (CF6-80C2B1F) (1393-35668, /07 N571UP) cargo plane crashed shortly after takeoff outside Dubai.
The crash killed Captain Doug Lampe of Louisville, Kentucky, 48, and First Officer Matthew Bell, 38, of Sanford, Florida, (UPS) said in a news release. Lampe has been with (UPS) since 1995. Bell has been with the company since 2006. Both flew out of (UPS)'s Anchorage, Alaska, pilot (FC) base.
The (UPS) 747-400F freighter that crashed 50 minutes after takeoff from Dubai International Friday attempted to return to the airport after its pilots (FC) reported "smoke in the cockpit" and that they were "unable to maintain altitude," according to a preliminary report issued by crash investigators.
"This is a terrible tragedy, and all of us at (UPS) extend our deepest sympathies to the families and friends of both of these crew (FC) members," (UPS) (CEO) Scott Davis said in a statement. "Our thoughts and prayers will continue to be with them during this difficult time."
(UPS) said the 2 pilots (FC) were flying a 747-400F en route to Cologne, Germany, when it crashed near Dubai International Airport shortly after takeoff.
The National Transportation Safety Board (NTSB) was sending an investigation team to assist United Arab Emirates (UAE) authorities.
(UPS) said the airplane was three years old, was up to date on all maintenance and underwent an inspection in June. (UPS) also sent representatives to Dubai to cooperate with authorities in the investigation. "We established an internal command center within minutes of learning of this tragedy. It will be staffed around the clock with experts from every part of our operation," said (UPS) Airlines President, Bob Lekites.
In later reports, it was stated that the (UPS) 747-400F freighter that crashed had attempted to return to the airport after its pilots (FC) reported "smoke in the cockpit" and that they were "unable to maintain altitude," according to a preliminary report issued by crash investigators. Both pilots (FC) were killed when the airplane went down in an "unpopulated area between the Emirates Road and Al Ain Highway" near the airport, said the (UAE) General Civil Aviation Authority (gcaa), which led the crash investigation. The airplane was en route to Cologne but its pilots (FC) sent a message that they were returning to Dubai about 7:15 pm local time, or 22 minutes after takeoff.
"The (UAE) Air Traffic Control (ATC) Center issued a clearance [for the returning 747 to land] when the airplane was approximately 40 km from touchdown," the (GCAA) stated. "The airplane was high on the approach and was at 8,500 ft at 24 km from touchdown. It passed overhead the airfield very high and made a right turn. The airplanet tracked southwest and rapidly lost altitude. At approximately 7:42 pm local time, radar contact was lost." The (GCAA) said it had recovered the Cockpit Voice Recorder (CVR) and was searching for the Flight Data Recorder (FDR).
A later report in November 2011 stated:
United Arab Emirates (UAE) investigators have detailed how a (UPS) 747-400F freighter flight crew (FC) struggled with the oxygen supply and battled against a loss of flight control following the outbreak of fire, before the jet crashed in Dubai. The latest interim inquiry report into the September 3 2010 crash showed that the flight crew (FC) experienced decreased manual elevator and rudder control, consistent with a loss of column and pedal cable tension, while attempting to return to the (UAE) hub.
There was "nil to marginal" elevator deflection in response to large control column inputs, the General Civil Aviation Authority (GCAA) stated. But it also highlighted the apparent difficulties the flight crew (FC) experienced with using breathing apparatus as the cockpit was filled with smoke. As the 747 reached a cabin altitude of 21,000 ft/6,400 m, while carrying out an emergency descent, the captain made "several comments concerning the supply of oxygen into the mask", said the (GCAA).
While both pilots (FC) had donned their oxygen masks after an initial fire warning sounded, the captain indicated (about 5 minutes later) that oxygen was not being supplied to the mask. He asked the first officer to "get me oxygen" but the first officer responded that he did not know where to find it, at which point, the captain handed him control of the aircraft and left his seat.
Cockpit-voice recorder (CVR) analysis indicated that both pilots had "some unidentified issues with the crew oxygen system", said the (GCAA). About 2 minutes after the captain left his position, the first officer said, during a radio transmission: "I'm looking for some oxygen." While his breathing was audible until the end of the cockpit recording, the first officer transmitted, about 10 minutes before the crash, that he was "running out of oxygen". The 747F, having missed its emergency approach to Dubai, attempted to divert to Sharjah but entered a descending turn and crashed.
The USA National Transportation Safety Board (NTSB) has already issued new guidelines on the proper donning and use of selector switches on oxygen masks following the accident, in which both pilots (FC) were killed. Investigators believe the source of the fire to have been on the forward main deck, below and behind the cockpit, and are examining the potential effect on the oxygen supply system from a fire in this vicinity.
October 2010: (UPS) posted 3rd-quarter net income of +$991 million, up +80.5% from a +$549 million profit in the year-ago period, on a +9.3% rise in revenue to $12.19 billion. "These are impressive results considering the slow recovery of the USA economy," (CFO) Kurt Kuehn told analysts and reporters. He added that only "modest growth" is expected during the upcoming peak holiday season but emphasized, "I am confident in (UPS)'s ability to generate strong cash flow and continued earnings." Chairman & (CEO) Scott Davis said the company has "great balanced momentum across all of our businesses."
Air-reliant International Package revenue lifted +10.5% year-over-year to $2.68 billion in the quarter ended September 30 while USA Domestic Package Next Day Air revenue increased +8.8% to $1.47 billion. Average daily International Package volume grew +13.4% to 2.2 million and (IP) average revenue per piece fell -1.2% to $17.75. USA Domestic Next Day Air average daily package volume rose +3.2% to 1.2 million, as average revenue per piece heightened +7% to $19.40.
November 2010: (UPS) said the rates on all of its air express and USA-origin international shipments will rise by a net average of +4.9% from January 3, 2011. It said the rate increase is based on a +6.9% heightening of the base rate less a -2% reduction of an index-based air and international fuel surcharge. Rival FedEx (FED) is increasing USA domestic and USA export shipping rates on its air-reliant Express services by a net average of +3.9% from January 3. (UPS) posted 3rd-quarter net income of +$991 million, up +80.5% year-over-year.
December 2010: United Parcel Service (UPS) announced it is expanding its policy to require customers who ship packages from retail shipping locations to present a government-issued photo (ID) for verification of identification. The directive will apply at The (UPS) Store and Mail Boxes Etc locations as well as authorized shipping outlets worldwide.
(UPS) said that consumers who tender a shipment through any retail access location, and do not already have a pre-printed shipping label attached, will have to present a government-issued photo (ID) or they will not be allowed to use (UPS) services. The (ID) policy has been in place at (UPS) Customer Centers since 2005.
(UPS) has 108 pilots (FC) on furlough. (UPS) has announced that it will not furlough additional flight crew (FC) members in January as originally planned.
January 2010: (UPS) reported 2010 net income of +$3.49 billion, up +62.1% over a +$2.15 billion profit in 2009 and surpassing its 2008 net profit of +$3 billion. Chairman & (CEO) Scott Davis signaled that the (UPS) is optimistic about the global economy, particularly in developing regions, citing "opportunities we see in 2011 as (UPS) continues to expand into emerging markets."
4th-quarter net income was +$1.12 billion, up +47.8% over a +$757 million profit in the 2009 December quarter, on a +8.4% lift in revenue to $13.42 billion. (UPS)'s air-reliant International Package segment posted a 4th-quarter operating profit of +$537 million, up +15% from a +$467 million operating profit in the prior-year period, as revenue grew +9% to $3.05 billion.
Segment operating margin for the quarter rose +0.9 point to 17.6% "as a result of volume growth, yield improvement and excellent cost management," (UPS) stated. Daily export volume heightened +8.7% during the quarter including a +30% increase in China exports.
"For 2010, international volume increased +13.6% to a record 2.3 million packages per day," (UPS) stated. "Throughout the year, (UPS) significantly increased its global network capacity to take advantage of opportunities in the marketplace. For example, airlift out of Asia increased by +40%."
Full-year company wide revenue grew +9.4% to $49.55 billion, while expenses climbed +5.2% to $43.67 billion, producing operating income of +$5.87 billion, up +54.5% compared to an operating profit of +$3.8 billion in 2009. USA domestic next-day air revenue lifted +6.9% year-over-year in 2010 to $5.84 billion.
(CFO) Kurt Kuehn said (UPS) expects "to exceed previous peak earnings" in 2011, and projects that full-year earnings per share will rise +16% to +22% compared to 2010 to +$4.12 to +$4.35.
(UPS) Airlines President Robert Lekites announced his retirement, ending a 13-year tenure during which he oversaw the rapid international expansion of (UPS)'s airline unit, particularly to China. He will be replaced by UPS Air Group Operations VP Mitch Nichols, who has served as Lekites's top deputy since 2007. Lekites, who began his career at (UPS) as a delivery driver in 1974, took over (UPS) in 1997 that featured an impressive domestic network but operated DC-8Fs to just 2 international destinations: Cologne and Tokyo Narita. Now (UPS) has extensive reach worldwide, including a heavy footprint in Europe and throughout Asia. "Under Lekites's direction, (UPS)'s global air network expanded considerably with the introduction of several new airplane types, numerous new flights and the opening or expansion of multiple gateways and air hubs around the world," (UPS) said in a statement.
(UPS) (COO) David Abney added, "Bob's leadership was instrumental as (UPS) Airlines made the transition from being primarily a domestic carrier to a global logistics leader with the most comprehensive integrated transportation network on the planet." In a 2008 interview, Lekites said his "biggest challenge" was inaugurating (UPS) 747F flights to China in 2001. "That was a big, big move for us," he explained. "The China expansion was historical for the airline." Nichols since 2007 has been responsible for the day-to-day operations of (UPS) Airlines. "With his background in technology, strategy, quality and operations, Mitch brings a depth of insight and experience that will be invaluable in his new position," Abney said.
Nichols is known for displaying a world atlas during staff meetings. "I ask [(UPS) Airlines' employees] to find Louisville," he once explained. "Then I tell them to look at the rest of the world: 'This is our service map,' I say "It's really 24/7 that we have product up in the air."
February 2011: Though the Japanese government has taken steps toward aviation market liberalization over the past year, evidenced most prominently by the new USA/Japan "open skies" air services accord, Tokyo will need to go further if Japan's airports are to remain competitive in attracting international air cargo traffic, several observers of the Japanese air transport market said. "I think the Japanese government has changed its thinking" and wants liberalization regarding air transport including cargo, Hirotaka Yamauchi, a professor from Hitotsubashi University's Graduate School of Commerce & Management, told the Japan International Transport Institute (JITI) Air Cargo Transportation Seminar in Washington. "The necessary conditions for liberalization are now being set. More and more Japanese manufacturers are manufacturing their goods in places other than Japan, such as China and southeast Asia, so there is no doubt there will be more [air cargo] demand" to/from Japan.
Yamauchi noted that Tokyo Narita's cargo growth has "stagnated," and others warned that the few restrictions that do exist in the new open skies pact relate to cargo and could hinder airfreight growth at Japanese airports. According to former USA State Department Deputy Assistant Secretary for Transportation Affairs John Byerly, the lead USA negotiator when the "open skies" agreement was reached, the pact contains two stipulations concerning cargo. First, Japan refused to allow seventh freedom cargo rights to be included in the deal, meaning that USA carriers such as FedEx (FED) and (UPS) are not allowed to operate direct cargo flights between Japan and other countries. Second, while international scheduled passenger flights are now operating at Tokyo Haneda (HND), the Japan - USA accord disallows HND slots being used for all-cargo services.
"Does Japan want its airports to become cargo hubs?" Byerly asked, noting that "there are some who say Japan missed its opportunity with [its] previously restrictive policies on air cargo. They feel most cargo operators have chosen to fly over Japan. I, for one, am not so sure that's the case." Given Japan's location and large high-tech sector, it can still attract cargo traffic, he asserted, adding that revisiting seventh freedom rights and opening up more all-cargo slots will be keys. Even post-USA/Japan open skies, "the Japanese government still places tight restrictions on slots at Narita and [cargo] operations at Haneda," FedEx Express (FED) Senior Counsel, Bailey Leopard told the (JITI) conference. He added that seventh freedom rights are "enablers of cargo hubs" and will be critical if Japan is "to remain competitive" in the express cargo industry.
Nevertheless, Byerly said the open skies accord will lead to "impressive" new access to the Japanese market for USA cargo carriers. Before the new deal, there was essentially a "caste system" in which non-incumbent carriers encountered "a straight-jacket of restrictions" in operating cargo flights to Japan, he commented.
Boeing (TBC) announced that (UPS) will expand its Boeing’s Airplane Health Management (AHM) coverage to include its MD-11F Freighter fleet, in addition to the 747-400F Freighter fleet, which already utilizes (AHM). (AHM) is an information-driven system that helps airlines better prepare and manage unscheduled maintenance events.
The expanded agreement covers 38 MD-11F Freighters and 13 747-400F Freighter and Boeing Converted Freighter airplanes.
“(AHM) allows airplane maintenance personnel to be prepared to work unexpected airplane exceptions when the airplane arrives and will greatly streamline our operation,” said Warren Johnson VP Maintenance & Engineering (UPS) Airlines. “This will help increase the fleet’s on-time performance which is a great benefit to our customers,” said Mitch Nichols (UPS) Airlines President.
The large (UPS) freighters will feature the (AHM) Real Time Fault Management Module, which communicates in-flight information to ground stations for diagnosis and real-time operational decisions, using troubleshooting and historical fix success data. (UPS) uses this information to organize any needed maintenance operations and position the necessary people, parts and equipment.
“Airlines need to have their airplanes generating revenue, so maintenance efficiency is an important initiative,” said Dennis Floyd VP Fleet Services for Commercial Aviation Services, Boeing Commercial Airplanes. “(AHM) delivers relevant information whenever and wherever it is needed while the airplane is still en route.”
Airplane Health Management (AHM) works through the MyBoeingFleet.com portal. Alerts and notifications are delivered to airline personnel through the Internet, fax, personal digital assistants, e-mail and pager services.
(AHM) is a key component in Boeing (TBC)’s larger vision of the e-enabled airline, where information technology (IT), connectivity and strategic integration promise greater efficiency and improved airline operations.
(UPS) is the world’s largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, (UPS) is a leading global trade expert equipped with a broad portfolio of solutions. The company is headquartered in Atlanta, Georgia, and can be found on the Web at http://www.UPS.com.
(UPS) has 108 pilots (FC) on furlough and has announced that it will not furlough additional flight crew members. However, (UPS) has current openings for Flight Management Supervisor as well as Airline Ground Training Instructor; the latter for both its Louisville Flight Training Center as well as the Anchorage Flight Training Center. Detailed job descriptions and minimum requirements are posted on their employment website http://www.upsjobs.com. These positions are listed under the "Professional" category, under Airline Operations, or by searching Louisville or Anchorage locations. (UPS) asks that all interested and qualified candidates apply on-line as they do not accept resumes via mail, fax, or e-mail.
March 2011: (UPS) launched 4x-weekly, 747-400F freighter flights between Hong Kong (HKG) and Cologne (CGN)(operating once daily, Monday - Thursday). The new flights are in addition to the 7x-weekly, (HKG) - Dubai - (CGN) services already offered (UPS). (UPS) stated that shipments can now "be delivered in one day to 18 countries and 39 cities across Europe." The new direct flights "significantly reduce the transit time between Hong Kong and Europe," added (UPS) Asia/Pacific President Derek Woodward.
April 2011: (UPS) Airlines airplane mechanics (MT), represented by the International Brotherhood of Teamsters (IBT), voted to ratify a new labor agreement that will run through November 1, 2013. The contract, which brings >4 years of often contentious back-and-forth to a conclusion, covers >1,200 mechanics (MT).
(UPS) said 1,136 mechanics (MT) participated in the ratification balloting with 69% voting in the affirmative. "We are pleased that our mechanics (MT) have agreed to this contract offer," said (UPS) Airlines President Mitch Nichols. He said the contract follows in the (UPS) "tradition of rewarding our people while managing our business effectively."
The contract with the mechanics (MT) became amendable on November 1, 2006, but years of talks failed to bear fruit. Last year, the workers sought USA National Mediation Board (NMB) release from negotiations to begin a 30-day countdown to a strike, but the (NMB) denied the request.
According to (IBT), the ratified contract maintains existing health care coverage, which requires no employee contribution, and provides for an average wage increase of +17% over the life of the contract, retroactive to November 2006. "This has been a difficult and long battle with (UPS), but we didn't back down and our resolve paid off," (IBT) Local 2727 President Bob Combine said. "This is a big victory for (UPS) airplane mechanics (MT)." (UPS) has long maintained that the mechanics (MT) are the highest paid in the industry.
May 2011: (UPS) Airlines named 34-year veteran, (UPS) executive Matt Capozzoli VP Flight Operations, replacing Captain Rick Barr, who is retiring after 23 years.
June 2011: (UPS) Airlines said it will retrofit the cockpits of its cargo airplanes with "quick-donning, full-face oxygen masks with integrated smoke goggles" produced by France's Zodiac Aerospace.
"Safety is an absolute priority for our employees, our customers' shipments and our airplanes," (UPS) President Mitch Nichols stated. Installation of the new masks on (UPS)'s 747-400Fs, MD-11Fs, 767Fs and 757Fs is expected to occur over the next 2 years, beginning with the MD-11 and 747 fleets, (UPS) said, noting that its A300Fs are already equipped with integrated masks.
"The new one-piece face masks can be put on with one hand in just three seconds, five times faster than the separate oxygen mask and smoke goggle units currently on most airplanes," (UPS) explained. "The new masks meet performance standards for protective breathing equipment established by the [FAA] and offer a better fit for flight crew (FC) members who wear eyeglasses." Most (UPS) airplanes are currently fitted with Zodiac's Eros oxygen equipment.
SEE ATTACHED "FLIGHT INTERNATIONAL" ARTICLE - - "UPS-2011-07-FACE MASKS."
Former (UPS) Airlines President Robert Lekites was named Airbus (EDS) Americas' Executive VP Customers, effective August 1, giving him responsibility for North American sales.
October 2011: United Parcel Service (UPS) posted 3rd-quarter consolidated net income of +$1.04 billion, up +5% from +$991 million year-over-year.
(UPS) Chairman & (CEO) Scott Davis attributed the results to a “deceleration in exports from Asia and a challenging global economic environment.” Operating revenue rose +8% to $13.2 billion from $12.2 billion, while operating expenses increased +9.2% to $11.55 billion, producing an operating profit of +$1.62 billion, up +0.2% from the year-ago quarter.
Davis told reporters and analysts, “There is increasing uncertainty in the global economic environment, most notably exports from Asia, which slowed considerably during the quarter. On the other hand, it appears as if the USA economy has stabilized and continues to show modest growth. Despite all the concerns of the European economy, our business there continues to perform well, with exports up +9%.”
In the domestic segment, (UPS) (CFO) Kurt Kuehn said (UPS)'s operating margin is the “highest we’ve experienced in 3 years, improving +13.1% due to higher yields.” 3rd-quarter revenue is up +6.6% to $7.8 billion. “A base price increase of +3% and higher fuel charges were the key factors,” Kuehn said.
On the international side, operating profit was +$409 million, down -2.4%, which Kuehn attributed to “excess capacity, higher fuel prices and the slight drag from currency fluctuations.” As volumes declined on the Asia to USA link, Kuehn said (UPS) “acted swiftly to take down airplanes and pull capacity out of the market, but not quickly enough as margins were negatively impacted.”
Despite this slowdown, Kuehn said (UPS) International revenue jumped >+14%, to $3.06 billion, “driven by solid volume growth in other theaters.”
Looking forward, Davis said the outlook for the remainder of the year is for “continued slow growth.”
(UPS) stated it is reiterating its 2011 guidance for (UPS) adjusted diluted earnings per share to a range of $4.15-to-$4.40.
November 2011: (UPS) announced a +4.9% net increase in shipping rates for all air services and USA-origin international shipments, effective January 2, 2012. "The rate increase for (UPS) air and international services shipments is based on a +6.9% increase in the base rate, less a 2% point reduction to the index-based air and international fuel surcharge," the express delivery giant stated.
The increase is identical to the +4.9% rate hike imposed by (UPS) at the beginning of this year. It added that next day and 2nd day airfreight rates for shipments within and between the USA, Canada and Puerto Rico will increase +5.9% from January 2.
December 2011: The Independent Pilots Association (IPA), representing about 2,700 United Parcel Service (UPS) pilots (FC), petitioned a USA Federal Court in Washington, challenging cargo carriers' exemption from the new pilot (FC) flight time, duty and rest regulations finalized by the (FAA) this month.
The (FAA)'s Notice of Proposed Rulemaking (NPRM) on pilot (FC) fatigue issued in September 2010 did include airfreight airlines. But the (FAA) chose to exclude cargo carriers from the final rule, instead giving them the option to opt into the new requirements. "Covering cargo operators under the new rule would be too costly compared to the benefits generated in this portion of the industry," the (FAA) stated.
(IPA) attorney William Trent said the union does not seek to delay implementation of the rule (USA airlines must comply with the new regulations by December 21, 2013), but wants cargo airlines included within the scope of the rule. The (FAA) made clear in the text of the new rule that cargo was excluded based on a cost-benefit analysis, saying that cargo "compliance costs significantly exceed the quantified societal benefits."
Implementation of the rule is expected to cost airlines $297 million. The (FAA) contended that including cargo carriers would add another $306 million in costs for the airline industry. In a footnote to the rule, the (FAA) explained why it believes imposing such costs on airfreight operators are not worth it: "The projected benefit of avoiding one fatal all-cargo accident ranges between $20.35 million and $32.55 million, depending on the number of flight crew (FC) members on board the airplane."
Trent said that the (FAA)'s new rule is plagued by "internal inconsistency," adding, "For example, the (FAA) states that current regulations do not adequately address the risk of fatigue and that the maintenance of the status quo presents an 'unacceptably high aviation accident risk.' Yet 2 of the very factors that the (FAA) cites as exacerbating the risk of pilot fatigue (operating at night and crossing multiple time zones) are more present in cargo operations than in passenger operations."
He accused the (FAA) of providing insufficient information on how it conducted the cost-benefit analysis that led to cargo's exemption. "The rule is wholly and utterly opaque when it comes to providing any factual support for the cost-benefit conclusions reached," Trent said.
January 2012: United Parcel Service (UPS) posted 2011 net income of +$3.8 billion, up +14% over a net profit of +$3.34 billion in 2010, and projected that it will do well in 2012 despite uncertainty about the global economy.
(CFO) Kurt Kuehn said (UPS) has expectations "for mixed economic growth around the world [in 2012] with modest improvement in the USA." However, he added, "(UPS) projects another strong year of earnings" with 2012 per share earnings expected to rise +9% to +15% over 2011.
(UPS)'s "cash flow will remain strong," Kuehn said.
(UPS)'s 2011 revenue increased by +7.2% compared to 2010 to $53.1 billion including a +10% rise in air-intensive international package revenue to $12.25 billion. USA domestic package revenue grew +6.6% to $31.72 billion. Expenses lifted +7.1% to $47.03 billion and operating profit was +$6.08 billion, up +7.8% year-over-year.
(UPS) has 97 Flight Crew (FC) pilots on furlough and announced they recalled 6 pilots (FC) in December. Recalls beyond that are still under review. See FltOps.com and FAPA.aero.
767-34AER (37871, N347UP), delivery.
February 2012: United Parcel Service (UPS) confirmed that it is attempting to acquire (TNT) Express (TNB), the major European delivery operator that was spun off last year from Dutch mail services provider, "NLPost."
(TNT) (TNB), still 29.9%-owned by NLPost, rejected an unsolicited bid from (UPS) earlier this month. But (UPS) said that it has made "a revised, increased and comprehensive proposal to acquire the entire issued share capital of (TNB) for €9/$11.8 per share in cash." The revised offer values (TNB) at >$6 billion.
"Discussions between the parties concerning this proposal are ongoing, although there is currently no certainty that any agreement will be reached," (UPS) stated. "Further details will be provided when appropriate."
767-34AF (37872, N348UP), delivery.
March 2012: United Parcel Service (UPS), saying it is focused on creating long-term value for shareholders, reached an agreement with (TNT) Express (TNB) to acquire the Amsterdam-based delivery operator for €5.16 billion/$6.8 billion.
The deal, if approved by the 2 companies' shareholders and regulators on both sides of the Atlantic, would create a mega-cargo transport company that will generate >$59 billion in revenue annually. (UPS) and (TNB) have been negotiating since at least last month, when (UPS) made an unsolicited bid for its European rival. (UPS) is aiming to close the transaction in the 2012 3rd quarter.
(UPS) Chairman & (CEO) Scott Davis told analysts on a conference call that the deal would mark "the largest investment ever made by (UPS) by far." The companies will be merged under a 4-year integration plan, he added, explaining that the combination will be done in a deliberate way to avoid any service disruptions. "It's going to take time, but in the long run we did this for the future," he said.
(UPS) is already a formidable player in Europe and combining with (TNT) (TNB) should enable it to eventually compete head-to-head against market leader (DHL). "We've got a lot of experience working in Europe," Davis said. "We have >40,000 employees in Europe today."
(UPS) estimated the transaction will bring annual pre-tax synergies of €400 - €550 million realized 4 years after closing. The deal will be financed with $3 billion in existing cash and "new debt arrangements," (UPS) said.
"We think we create substantial economic value with the merging of the 2 companies," Davis said. "This is a significant milestone in our history."
April 2012: United Parcel Service (UPS) reported 1st-quarter net income of +$970 million, up +6% from a net profit of +$915 million in the year-ago period, on a +4.4% increase in revenue to $13.14 billion.
Expenses rose +4.1% year-over-year to $11.57 billion and operating profit was +$1.57 billion, up +6.6%. Air-intensive international package revenue heightened +2.3% to $2.97 billion, while USA domestic package revenue increased +6.1% to $8.01 billon.
“Continued weakness out of Asia and increased intra-regional volumes negatively impacted yield growth.” (UPS) said it is making a Latin America push, increasing cargo capacity >50% on 20 weekly flights in the region during the year’s 1st 3 months. It also established a regular flight to Guadalajara.
“(UPS) delivered earnings growth in line with our expectations, driven by the results of the USA domestic and supply chain and freight segments,” (CFO) Kurt Kuehn said. “We remain confident in our previous guidance for 2012 diluted earnings per share of $4.75 to $5.00, an increase of +9% to +15% over 2011 adjusted results.”
May 2012: United Parcel Service (UPS) said it has put in place financing to complete the acquisition of Amsterdam-based, TNT Express (TNB). In a move likely to alter the express delivery landscape in Europe, (UPS) in March reached a deal to buy (TNT) (TNB) for €5.16 billion/$6.8 billion. (UPS) said it will finance the purchase with €3.7 billion of available cash on its balance sheet and €1.46 billion in debt through existing credit facilities.
(UPS) formally submitted the deal for approval to the Netherlands financial markets authority. It aims to close the transaction in the current quarter.
Boeing (TBC) delivered 1 767-300F freighter to (UPS), the cargo carrier’s 50th of the airplane type. It has 9 more 767F freighters on order.
July 2012: United Parcel Service (UPS) reported 2nd-quarter net income of +$1.12 billion, up +2.2% over a net profit of +$1.09 billion in the prior-year period. (UPS)’s revenue growth stagnated as the global economic outlook grew more cloudy.
“Increasing uncertainty in the USA, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion,” (UPS) Chairman & (CEO) Scott Davis said.
(CFO) Kurt Kuehn added, “The company’s performance was mixed during the 2nd quarter. As we look toward the 2nd half of the year, customers are more concerned as greater uncertainty exists. Additionally, economic growth expectations have come down.”
(UPS) lowered its earnings guidance for 2012, projecting that full-year earnings per share will rise +3% to +8% over 2011. Back in February, (UPS) had been predicting an earnings per share increase of +9% to +15% for 2012.
Companywide 2nd-quarter revenue grew +1.2% year-over-year to $13.35 billion, while expenses heightened +1% to 11.56 billion, producing an operating profit of +$1.79 billion, up +2.6%. The air-intensive international package segment experienced a -4% decline in revenue compared to the 2011 June quarter to $3.01 billion. An international package operating profit of +$454 million was down -10.1% year-over-year.
(UPS)’s core USA domestic package business did boost 2nd-quarter revenue +4.1% to $8.06 billion.
United Parcel Service (UPS) said its proposed €5.16 billion/$6.3 billion acquisition of (TNT) Express (TNB) will undergo a Phase II review by the European Commission (EC), a process that will push back the closing of the deal to the 2012 fourth quarter.
(UPS) is making a significant move into the European market with its planned buy of Amsterdam-based, (TNT) (TNB). The Phase II review, a more in depth examination of potential antitrust implications from the (UPS) - (TNB) combination, could take up to 25 weeks to complete, (UPS) said.
“(UPS) and (TNT) Express (TNB) remain convinced the merger will benefit customers and other stakeholders and look forward to successful completion of the regulatory process,” (UPS) and (TNB) said in a joint statement.
(UPS) had hoped to close the deal in the 1st half of 2012.
August 2012: United Parcel Service (UPS) extended the offer period for its proposed acquisition of (TNT) Express (TNB) from August 31 to November 9, by which time the companies hope antitrust concerns about the merger will have been resolved.
The European Commission (EC), however, is conducting an in-depth review of the combination’s antitrust implications and earlier this month indicated that a decision may not be made until as late as 2013 on the €5.16 billion/$6.4 billion deal.
Atlanta-based (UPS) and Amsterdam-based (TNB) said they still anticipate “close of the transaction in the fourth quarter of 2012.” Originally, the companies had planned to close the merger, announced in March, in the 1st half of this year.
(UPS) said the merged company, expected to generate $60 billion in annual revenue, will be good for consumers despite lessening competition in the express delivery markets of some (EU) countries. “The combined network will help facilitate the flow of trade, making customers more competitive not just in the USA and European markets, but also in markets across Asia and Latin America (helping to stimulate much needed economic growth).”
Volga-Dnepr Airlines (VDA) has started operating its 1st 737-400F (28663, VP-BCJ) it has recently taken delivery of on behalf of logistics provider United Parcel Service (UPS) between Moscow Domodedovo International (DME) and Cologne/Bonn Konrad Adenauer (CGN).
September 2012: (TNT) Express (CEO) Marie-Christine Lombard has stepped down to pursue an external opportunity. She will leave the company at the end of the month. TNT Express (CFO) Bernard Bot, will replace Lombard on an interim basis until a permanent replacement is found.
(TNT) Express Chairman, Antony Burgmans described the timing as “regrettable,” but added the change has “no bearing” on the (UPS) merger, which should be completed in early 2013. “We have complete confidence in Bernard’s ability to lead the business and to see through the merger with (UPS),” he said.
(TNT) Express is parent to (TNT) Airways (TNB).
October 2012: United Parcel Service (UPS) posted 3rd-quarter net income of +$469 million, down -56.3% from a +$1.07 billion net profit in the 2011 September quarter. It said much of the earnings decrease can be attributed to an after-tax, non-cash charge of $559 million associated with restructuring pension liabilities.
But 3rd-quarter revenue was down -0.7% year-over-year to $13.07 billion as (UPS) contended with what Chairman & (CEO) Scott Davis characterized as “an environment of slowing global trade.” (CFO) Kurt Kuehn told analysts that (UPS) customers continue to “migrate to less premium products” and “USA exports continue to disappoint.”
Davis did express confidence that world trade will rebound. “We think this slow global trade is cyclical and it will come back,” he said. “We see it coming back some next year.” However, Kuehn cautioned, “We’re not expecting a significant rebound in the economy” in the 4th quarter.
(UPS) 3rd-quarter expenses increased +7% year-over-year to $12.31 billion and operating profit lowered -54% to +$766 million. Air-intensive international package revenue dipped -3.9% to $2.94 billion as “lower fuel surcharges and currency exceeded the benefit from the +1.2% growth in daily export volume,” (UPS) stated.
Average daily international package volume was flat year-over-year at 2.3 million. However, (UPS) noted, “For the 1st time in several quarters, Asia exhibited growth in export package volume.” But Kuehn said the Asian air cargo market continues to be hurt by overcapacity.
Regarding the recent statement of objections (SO) received by (UPS) and (TNT) Express from the European Commission (EC) related to the companies’ pending merger, Davis said the merger is still on track to close “early next year.” He added that an (SO) from the (EC) is “absolutely a normal step” in a merger involving a (EU)-based company.
The European Commission (EC) has “serious doubts” about (UPS)’ €5.2 billion takeover of (TNT) Express, which is parent to (TNT) Airways (TNB), according to a report by the "Financial Times (FT)." Citing sources, the (FT) said the (EC) has wrapped up its investigation and issued a statement of objections (SO). The (EC) is concerned the deal will limit competition. (UPS) will have to offer concessions if it still wants the deal to proceed.
(TNT) Express Chairman, Antony Burgmans recently said the tie-up was due to be completed by early 2013. He made the comments following the sudden departure of (TNT) Express (CEO) Marie-Christine Lombard.
(UPS) reached an agreement earlier this year to acquire (TNT) for €5.16 billion/$6.76 billion, but the (EC) postponed a decision to approve the deal over antitrust (ATI) concerns.
The (SO) document is confidential, so the exact details of the (EC) objections are not public. In July, the (EC) said, “The proposed acquisition could in particular reduce competition for the provision of the fastest express delivery services, to the detriment of direct customers and ultimately of European consumers.”
(UPS) and (TNT) noted an (SO) “does not prejudge the final outcome of the case.” The companies said they plan to respond “within a couple of weeks and intend to preserve the confidentiality of the document.”
They reiterated their contention that, even with the express delivery operators merging, “competition in Europe continues to be significant, coming from multiple players who offer similar services. The combined company will help create a more efficient logistics market, thereby improving the competitiveness of Europe and the solutions offered to businesses and consumers.”
The International Air Cargo Association (TIACA) said it has agreed to “enhanced cooperation” with (ICAO), particularly in the area of security. The cooperation will also cover “environmental practices, market access, capacity building and air cargo safety,” (TIACA) stated. The organization, which counts as members, a range of air cargo players, including airlines, forwarders and airports, said it “will intensify participation in relevant (ICAO) meetings.”
The announcement of increased ties with the (UN) body follows (TIACA)’s recent International Air Cargo Forum & Exposition in Atlanta, during which industry executives expressed mixed views about the state of the global air cargo sector. According to a (TIACA) release of quotes from the conference, (UPS) Airlines President Mitch Nichols said the stuttering world economy continues to work against air cargo’s speed advantage over other transport modes. “The global economy is not moving as fast as I’d like,” he said. “When things slow down, people don’t want things so fast.”
(CEVA) Logistics (CEO) John Pattullo warned air cargo traffic growth is likely to continue to be slow in the near term. “I think we will have a sluggish economy and we will be battling for share in a sluggish but stable economy,” he said.
Atlas Air Worldwide Holdings (AAWH) (TLS) President & (CEO) William Flynn said long-term prospects are still bright: “Manufacturing is moving and airfreight remains vital. It is never a smooth, straight line but each time there is a challenge, airfreight recovers and grows.”
November 2012: (TNT) Express has agreed to sell its two airlines to the (ASL) Aviation Group to overcome ownership restrictions triggered by its planned merger with (UPS).
(ASL) Aviation is parent to Irish cargo airline Air Contractors (HCA) as well as French passenger and cargo operation Europe Airpost (EUE). Under the deal, (ASL) will acquire 100% of (TNT) Airways (TNB)) and Spanish carrier Pan Air (PNZ) just before (UPS) and (TNT) merge. “We have found a new ownership and control structure that secures the future of the airlines, ensures service continuity and safeguards (TNT) Express jobs in Liege. This is an important step towards completion of the proposed (UPS) - (TNT) Express merger and a positive outcome for the airline employees,” interim (CEO) Bernard Bot said.
The sale of the 2 airlines is conditional on (UPS) and (TNT) gaining regulatory approval for their tie-up. Once the deal is completed, (ASL) will take over all flights performed by (TNT) Express’ airlines and it will act as a 3rd-party provider to the combined (UPS) - (TNT) Express group.
Although the majority of staff will be transferred, a few will return to (TNT) Express’ Liege hub. (TNT) Express said (ASL) plans to maintain (TNB)’s Liege headquarters and it does not expect the change of ownership to impact activities at Liege for “at least 1 year.”
(ASL) Aviation Group (CEO) Hugh Flynn said the deal will give (ASL) new growth opportunities. (ASL) (which is 51% owned by Compagnie Maritime Belge and 49% by 3P Air Freighters) employs 1,200 staff and has a fleet of around 90 passenger and freight airplanes. In 2011, it generated a €410 million/$523 million turnover.
Beyond (HCA) and (EUE), (ASL) Aviation Group also includes leasing companies (ACL) Aviation, (ACL) Leasing and (ACL) Air, plus support businesses (ACL) Aviation Support, Air Contractors Engineering and Air Contractors UK.
Freight giants (TNT) and United Parcel Service (UPS) have submitted a series of remedies to the European Commission (EC) in a bid to secure regulatory approval for their merger.
On October 19, (TNT) and (UPS) received a statement of objections from the (EC). In its findings, the (EC) voiced concerns that the tie-up could reduce competition in the express delivery market and ultimately affect consumers.
(UPS) and (TNT) have now responded to the objections, saying they have submitted some proposed remedies to the (EC). These remedies include the “sale of business activities and assets,” as well as “granting access to air capabilities,” although the specifics are confidential and no further details were given.
“(UPS) and (TNT) Express continue to be fully committed to the merger and are working closely with the (EC) in order to gain competition clearance allowing completion of the transaction in early 2013. As part of the approval process, the (EC) will market-test the remedies on a confidential basis,” the companies said. The remedies’ submission will extend the (EC)’s review period by 15 business days to February 5, 2013.
(TNT) Express has already agreed in principle to sell its 2 airlines, (TNT) Airways (TNB) and Pan Air, due to ownership restrictions triggered by the merger.
January 2013: United Parcel Service (UPS) has unveiled a new service that will enable the shipping of heavyweight air freight on a “day-definite, door-to-door basis.” Dubbed “(UPS) Worldwide ExpressFreight,” the service is focused on “urgent, time-sensitive and high-value international heavyweight shipments.” It added that the service is “an extension of the [UPS] package portfolio and offers customers a seamless experience between shipping express packages and express freight.”
Pallets weighing >150 lbs will be able to be shipped “as easily as packages exclusively within (UPS)’s global air network from 37 origins to 41 destination countries and territories,” (UPS) said.
According to the company, heavyweight cargo will be possible for shipment in “one or two business days to the USA from Asia Pacific, Europe and the Americas; one or two business days from Hong Kong to the USA, Asia Pacific, Europe, and Canada; [and] two or three business days to Europe from Asia Pacific, the USA, and the Americas.”
It noted the heavyweight express service will have many of the same features as (UPS)’s package service, “including automated shipment preparation, online tracking and proactive notification technology. In addition, both express freight and package shipments are consolidated into one bill.”
(UPS) President Marketing, Ed Buckley said, “Our customers depend on the speed, reliability and visibility that (UPS) provides with our package express services. Customers (particularly in the industrial manufacturing, automotive, high-tech, retail and healthcare segments) have asked us for the same features for their urgent freight shipments.”
(UPS) first entered the heavyweight airfreight business in a significant way in 2004 when it purchased Menlo Worldwide Forwarding for $150 million in cash and the assumption of $110 million in debt.
United Parcel Service (UPS) has scrapped its takeover of European rival, (TNT) Express (TNB) after the European Commission (EC) said it would block the deal.
Netherlands-based, (TNT) Express said the 2 companies met the (EC) case team investigating the proposed acquisition on January 11. “The case team informed the companies that on the basis of (UPS)’s current remedy proposal, it is working towards proposing a prohibition decision,” it said. “Subsequently, (UPS) informed (TNT) Express that (UPS) sees no realistic prospect that (EC) clearance can be obtained and that (UPS) will not pursue the transaction on any other basis. Formal termination of the merger protocol will occur upon receipt of the prohibition decision from the (EC), which (based on the above) (TNT) Express deems inevitable.”
In October, the (EC) lodged a statement of objections related to the “competitive effects” of the companies’ pending merger, which the 2 companies failed to satisfactorily remedy.
Although details of the remedy remain largely confidential, (TNT) Express spokesman Cyrille Gibot said it involved (UPS) divesting certain business activities.
In November, (TNT) Express agreed to sell its two airlines to the (ASL) Aviation Group to overcome ownership restrictions triggered by the planned merger. “That deal was conditional on the overall [acquisition] agreement, so we can say it is off the table,” Gibot said.
(TNT) Express said it regretted the situation, “having believed the merger was feasible and beneficial for all stakeholders. (UPS) has confirmed to (TNT) Express payment of the agreed €200 million/$267 million termination fee.”
An (EC) Competition Commission spokeswoman declined to comment, other than saying its formal decision on the proposed acquisition is due before February 5.
The proposed €5.16 billion/$6.9 billion acquisition, which was revealed in March 2012, would have reduced the 4 global express freight carriers ((UPS), (TNT) Express, FedEx (FED) and (DHL) Express) to 3.
European competition regulators have, as anticipated, blocked (UPS)'s acquisition of (TNT) Express, saying the deal could harm consumers.
“The (EC) found that the takeover would have restricted competition in 15 member states, when it comes to the express delivery of small packages to another European country. In these member states, the acquisition would have reduced the number of significant players to only 3 or 2, leaving sometimes (DHL) as the only alternative to (UPS).”
(UPS) submitted 3 packages of remedies, in November, December and January, in a bid to secure competition clearance after receiving a statement of objections to the tie-up. It offered to sell (TNT) subsidiaries in the 15 problem countries: Bulgaria, the Czech Republic, Denmark, Estonia, Finland, Hungary, Latvia, Lithuania, Malta, the Netherlands, Poland, Romania, Slovakia, Slovenia, and Sweden. It was also willing to sell subsidiaries in Spain and Portugal to boost the scale of the disposal and give the buyer access to its intra-European air network for five years.
The remedies foundered because the number of would-be purchasers was “severely limited” and (UPS) failed to seal an agreement before the end of the (EC)’s investigation.
(EC) VP Competition Joaquin Almunia said: “We worked hard with (UPS) on possible remedies until very late in the procedure, but what they offered was simply not enough to address the serious competition problems we identified.”
Almunia said businesses would have been “directly harmed” by the takeover, because it would “drastically” reduce choice and probably lead to price increases. There are only 4 integrators in Europe: (UPS), (TNT), (DHL), and FedEx (FED).
(UPS) said January 14 that it had already given up hope of securing competition clearance. (TNT) Express had agreed to sell its 2 airlines, (TNT) Airways (TNB) and Spanish carrier Pan Air (PNZ), to the (ASL) Aviation Group to overcome ownership restrictions triggered by the (UPS) merger. This was conditional on (UPS) securing approval to acquire (TNT) Express.
At the end of the month, (UPS) posted net income of +$807 million in 2012, down -78.8% from a net profit of +$3.8 billion in 2011, though it attributed the earnings decline to a hefty non-cash charge.
(UPS) said earnings were skewed by a mark-to-market, non-cash, after-tax charge of $3 billion related to pension values. It noted the charge did not affect cash flows. On an adjusted basis, the Atlanta-based delivery giant said it earned 2012 net income of +$4.34 billion, up +1.8% compared to an adjusted net profit of +$4.31 billion in 2011.
(UPS) this week officially withdrew its €5.16 billion/$7 billion offer to acquire Amsterdam-based, (TNT) Express, after the European Commission (EC) blocked the deal over competition concerns. “It would be an understatement to say we were disappointed” by the unraveling of the (TNT) buy, (UPS) Chairman & (CEO) Scott Davis told analysts and reporters. “(UPS) put all hands on deck to get this deal done.” He said a “substantial amount of resources” were put into the failed merger.
(CFO) Kurt Kuehn added that (UPS) would still “pursue aggressive growth strategies” in Europe, though he did not give specifics.
Regarding the operating environment, Davis said there continues to be “mixed signals” in the global economy. He noted that “weak global trade” presented a challenge in 2012. Kuehn said customers continue to shift away from the highest-speed air shipping services to “non-premium products,” especially in Asia.
The company’s 2012 revenue rose +1.9% year-over-year to $54.13 billion, while expenses increased +12.2% to $52.78 billion, producing an operating profit of +$1.34 billion, down -77.9%. Again, (UPS) said the non-cash charge skewed results. On an adjusted basis, operating profit was +$7.07 billion, up +2.9% from adjusted operating income in 2011.
Looking at 2013, Kuehn said, “The basic expectations are that the USA economy will [grow] somewhere around +2% and global Gross Domestic Product (GDP) somewhere around 2.5%. Certainly not a barnburner year.”
(UPS) said it lost around -$75 million in 2012 revenue, owing to Hurricane Sandy.
April 2013: SEE ATTACHED "AIRWAYS" MAGAZINE UPDATE - - "UPS-2013-04 - UPDATE."
United Parcel Service (UPS) has appealed the European Commission (EC)’s rejection of its €5.16 billion/$6.7 billion bid to acquire (TNT) Express.
The appeal filed with the European Union (EU) General Court in Luxembourg is not aimed at reviving the (UPS)-(TNT) merger, at least in the near term. Instead, (UPS) is seeking to invalidate the (EC)’s decision as a precedent to be used for judging the antitrust implications of any future attempted acquisitions in Europe.
“We believe the decision was factually and legally erroneous,” a (UPS) spokesperson said in an emailed statement. “We are challenging the decision in order to ensure a more accurate assessment of the (EU) competitive landscape and that no precedent is established by the (EC) that would limit international growth opportunities.”
(UPS) said it wants to ensure that the rejection of its attempted purchase of (TNT) will “not be used as a basis for future decisions by the (EC).”
The (FAA) has proposed a $4 million civil penalty against United Parcel Service (UPS) for allegedly failing to follow (FAA)-approved procedures for making structural repairs to 2 DC-8F freighter airplanes and 2 MD-11Fs.
The (FAA) said (UPS)’s Louisville, Kentucky-based (UPS) Airlines unit operated the four airplanes on >400 flights between October 2008 and June 2009 “when they were not in compliance” with federal aviation regulations. (UPS) called the proposed penalty “unwarranted.”
The (FAA) said, “These violations stem from (UPS)’s failure to fully comply with the terms of a consent agreement in which (UPS) agreed to inspect all airplanes in its fleet and compare actual repairs with maintenance records. This would have ensured the four airplanes were in compliance with the regulations.”
(UPS) Airlines spokesman, Mike Mangeot said, “(UPS) has a long history of operating a safe, compliant airline. The proposed (FAA) penalty related to the documentation of 9 repairs on 4 airplanes is unwarranted and unreasonable. There was never a safety issue. We believe we were compliant with (FAA) rules and will vigorously defend our position.” (UPS) has 30 days to respond to the (FAA).
767-34AF (37864, N358UP) delivery.
July 2013: United Parcel Service (UPS) posted a 2nd-quarter net profit of +$1.07 billion, down -4% from +$1.12 billion in net income in the prior-year period, as total revenue grew slower.
2 767-34AFs (37870, N359UP; 37946, N360UP) deliveries.
August 2013: ACCDT: United Parcel Service (UPS) A300F4-622R (PW4158) (841, /04 N155UP) crashed and burst into flames on approach to Birmingham-Shuttlesworth International Airport (BHM), Alabama on Flight 1354 from Louisville International Airport (SDF), Kentucky, killing 2 flight crew (FC) on board. The airplane was written off damaged beyond repair).
Later, the flight data recorder (FDR) and cockpit voice recorder (CVR) were recovered. USA National Transportation Safety Board (NTSB) investigators initially had trouble recovering the (FDR) and (CVR) because the rear section of the airplane continued to smolder late into Wednesday night from the intense fire that had engulfed the A300F when it crashed at 6:11 am Wednesday. But the recorders were able to be recovered Thursday and will be sent to Washington DC for examination at (NTSB) labs.
The A300F, en route from Louisville apparently was much too low as it attempted to land on Birmingham Airport’s runway 18. The airplane “came through some trees” and then hit a hill short of the runway, according to (NTSB) board member Robert Sumwalt, who is on site in Alabama. The airplane broke into at least at least 2 parts with the front section, which includes the cockpit, completely separated from the rear section, which includes the wings and tail.
The rear section, which Sumwalt said was “extensively damaged by fire,” ended up about 75 - 80 yards from the front section. The debris field was wide, with smaller parts of the airplane found in the yards of nearby homes.
Sumwalt said that initial information indicates the pilots (FC), both of whom died in the accident, did not make a distress call at any time during the flight.
The (NTSB) investigators have not been able to find any indications of airplane system malfunctions on the (UPS) A300-600F freighter that crashed.
Both pilots (FC) were killed in the accident, which occurred when the A300F approached Birmingham Airport’s runway 18 too low, hitting trees and then crashing into a hill short of the runway, breaking apart and catching fire. The cockpit voice recorder (CVR) and flight data recorder (FDR) indicate that a sink rate alert occurred in the cockpit seconds before impact, according to the (NTSB).
But unlike July’s crash landing on approach of an Asiana Airlines (AAR) 777-200ER in San Francisco, there is no indication that the A300F was going too slowly. The (UPS) airplane was traveling at 140 knots as it descended into Birmingham, which is “consistent with the expected approach speed.”
Sumwalt said the (NTSB)’s preliminary review of (FDR) data shows the pilots (FC)’s “control inputs and the control surface response appear as expected” and the Pratt & Whitney (PRW) (PW4000) “engine parameters indicated normal engine operations.”
He said that both the autopilot and auto-throttle were “engaged to the last second of recorded data.” However, the (FDR) data appears to end a few seconds before impact, meaning it is possible the autopilot was turned off at the last moment.
Sumwalt said the (NTSB) will review the last 72 hours of the pilots (FC)’s activities before the accident in an attempt to determine their mental and physical condition for the Louisville - Birmingham flight. The pilots (FC) were nearing the end of their duty day when the crash occurred. According to the (NTSB), they began the duty day in Rockford, Illinois, flew to Peoria, Illinois, and then on to Louisville before the accident flight.
“We anticipate [in the coming weeks] we will do a flight test in a (UPS) A300 to see how this approach [to Birmingham runway 18] would be flown in this type of airplane and to learn more about (UPS)’s instrument control procedures,” Sumwalt said.
Later, Cockpit Voice Recorder (CVR) data from the (UPS) A300-600F freighter revealed an impact with either trees or terrain 4 seconds after 1 of the 2 pilots (FC) called out, “runway in sight”.
The short time span between runway sighting and ground or tree collision likely indicates that the pilots (FC) were either using a modified instrument approach procedure for Runway 18, or that there was an error or confusion leading them to believe the airplane was at a higher altitude.
According to instrument approach charts for the localizer approach to Runway 18, the non-precision approach which (UPS) Flight 1354 was using to land that morning, the airplane is not to descend below 556 ft above the ground (1,200 ft mean sea level) until the pilots (FC) visually spot the runway “environment” through the windscreen.
SEE ATTACHED - - "UPS-2013-08 - ACCDT A300-600F."
(UPS), since purchasing its 1st airplane in 1981, has become 1e of the world’s largest airlines. In addition to owning 235 jets, the company leases additional airplanes for the November through December peak shipping season.
SEE ATTACHED - - "UPS-2013-08 - FLEET STATUS."
September 2013: (FAPA): Future & Active Pilot Advisors.
See FAPA.aero: Pilot (FC) Career Conferences & Job Fairs
Note: The next Pilot Job Fair will be held in Chicago next month.
According to FAPA.aero, currently (UPS) has 50 pilots (FC) on furlough. (UPS) is also in the process of flight crew (FC) contract negotiations.
October 2013: United Parcel Service (UPS) credited its successful adaptation to changing shipping preferences for its 3rd-quarter net profit of +$1.1 billion, which more than doubled net income of +$479 million in the prior-year period.
December 2013: United Parcel Service (UPS) has conceded it did not have enough air capacity to deliver all of the express packages in its system designated for Christmas Eve arrival, forcing the company to apologize to customers and scramble to deliver late packages.
FedEx (FED) also is reported to have failed to make some express package deliveries in time for Christmas.
(UPS) stated in a message on its website that “the volume of air packages in our system exceeded the capacity of our network immediately preceding Christmas so some shipments were delayed.”
The delayed deliveries are a lead topic on television news programs in the USA, causing a rare black eye for usually reliable (UPS).
(UPS) and FedEx (FED) had both promoted last-minute Christmas deliveries. “Customers can ship as late as Monday, December 23, using (UPS) air services” for delivery by December 24, (UPS) said in a news release earlier in December. “The entire team at (UPS) has planned all year to handle the annual increased shipping volume during the holidays,” (UPS) Chief Sales, Marketing & Strategy Officer Alan Gershenhorn said earlier in the month.
January 2014: United Parcel Service (UPS) has issued a profit warning, saying it anticipates full-year 2013 earnings to be below expectations owing mostly to difficulties the company had around the Christmas holiday.
(UPS) last month conceded it did not have enough air capacity to deliver all of the express packages in its system designated for Christmas Eve arrival, forcing the company to apologize to customers and scramble to deliver late packages. It said that 2013 adjusted diluted earnings per share are expected to be $4.57, below previous guidance of $4.65 to $4.85.
(UPS) cited an “unprecedented level of online shopping that included a surge of last-minute orders,” adding, “This year’s highest delivery day occurred six days later than expected and was +7.5% greater than planned.”
Despite the difficulties in the 2013 fourth quarter, (UPS) said it remains “confident” in its outlook for 2014.
(UPS) reported net income of +$4.34 billion for 2013 on an adjusted basis excluding special items, down -1.2% from an adjusted net profit of +$4.4 billion in 2012, a drop in profitability blamed on the company’s Christmas period difficulties.
In addition, the USA National Transportation Safety Board (NTSB) has scheduled an investigative hearing for February 20 on the fatal crash of a (UPS) Airbus A300-600F freighter on approach to Birmingham, Alabama, Airport on August 14, 2013.
Regarding the earnings results, (UPS) executives said they have learned lessons from the 2013 Christmas period and gave assurance the problems will not be repeated in 2014. “While the year ended on a challenging note, we are confident in our ability to adapt and we expect much better results in 2014,” (UPS) (CFO) Kurt Kuehn said. “(UPS) expects balanced profitability growth [in 2014] across all segments in a slightly better economic environment.”
(UPS) Chairman & (CEO) Scott Davis said the delivery giant “experienced an unprecedented increase in volume [around Christmas], exceeding even our most optimistic plans. The increased volume put a strain on our network, causing delays.” He added, “(UPS) will make the necessary investments and operational improvements to ensure we meet the needs of the marketplace.”
(UPS)’s 2013 revenue totaled $55.44 billion, up +2.4% year-over-year.
ACCDT: Regarding the August 2013 crash, the (NTSB) said, “The 2 flight crew (FC) members were killed and the airplane was destroyed when it impacted the ground less than a mile short of [Birmingham Airport’s] Runway 18. Runway 18 was being used because the main runway at the airport was closed for repairs at the time of the airplane’s arrival.”
The (NTSB) said the February 20 hearing will focus on “execution of non-precision approaches, including initial and recurrent training, adherence to standard operating procedures, and proficiency.” It will also examine “human factors issues associated with effective crew coordination and resource management applicable to this accident, including decision-making, communication, fatigue and fitness for duty, as well as monitoring and cross-checking, policies, standard operating procedures, guidance, and training provided to (UPS) flight crew (FC) members.”
The (NTSB) said another area of inquiry will be “dispatch procedures, including the training, evaluation, roles and responsibilities of (UPS) dispatchers and the limitations of dispatch-related software.”
Federal investigators are looking at pilot fatigue, among other issues, as a possible factor in the fatal pre-dawn crash of a (UPS) cargo jet in Alabama last August 2013.
The pilots' (FC) work shift had begun at about 9 pm the previous day in Rockford, Illinois, and took them to Peoria and then to Lexington, Kentucky. They were finishing their last scheduled leg when the plane slammed into a hillside just before 5 am, while attempting to land in Birmingham.
Two years ago, the (FAA) issued new rules aimed at ensuring airline pilots (FC) have sufficient rest. But the (FAA) exempted cargo pilots (FC) from the rules, citing cost.
March 2014: There were 2 interrelated themes that emerged over and over again at the 2014 (IATA) (ITA) World Cargo Symposium (WCS) in Los Angeles this month: 1) Air cargo is hurting; and 2) the air cargo industry is shockingly behind much of the rest of the business world (including the passenger airline business) in terms of automation and electronic processing.
Even as there has been a slight uptick in air cargo traffic in recent months, yields have not improved. “We’re shipping more for less,” 1 airline cargo executive said. Everyone at the (IATA) (WCS) agreed that air cargo has lost market share to ocean transport. Increasingly, shippers are deciding to pay -10 times less to ship goods by other modes (particularly ocean, but also rail and road) rather than pay the premium price to move cargo by air. “Ocean transport has become more reliable with more sailing frequencies per lane offered by carrier alliances,” FedEx (FED) Chairman & (CEO) Frederick Smith explained. “Combined with improved shipment information, fuel-efficient slow-steaming container ships allow products to be landed at the destination port with great predictability.”
(IATA) Global Head of Cargo Des Vertannes said bluntly, “Shippers believe they’re not getting premium service for the premium price of air cargo.” He noted that the average end-to-end time for air cargo consignments is around 6 - 7 days, which is exactly what it was in the 1960s. Ocean shipping may take 30 - 40 days, but with a little pre-planning, shippers can save a lot of money moving cargo by sea rather than air (and be reassured by ocean shipping’s improved reliability). Vertannes believes air cargo end-to-end delivery time needs to be cut by about 2 days by the end of this decade for air to regain its value proposition.
A big reason air cargo moves so slowly is that the whole process continues to be extremely overburdened by paper in an e-commerce age. Air cargo often sits idle, or gets held up, because of paperwork. The air cargo industry is struggling to automate even the most basic piece of paper (the air waybill, which is roughly the equivalent of a passenger air ticket).
The air ticketing process is now almost entirely paperless. Not so for air cargo, which achieved just 12% e-air waybill penetration in 2013, not even close to the global industry’s modest goal of achieving 20% penetration.
Part of the problem is that the air cargo industry (aside from the express operators) is made up of multiple players. Whereas the big integrated delivery companies (FedEx (FED), (UPS) and (DHL)) largely handle their express packages end-to-end, traditional air cargo is passed from shippers to forwarders to ground handlers to airlines and back to forwarders again at the arrival airport. As a result, everyone seems reluctant to invest the necessary money to transform paper processing to e-processing.
Henrik Lund, Director of Global Airfreight for forwarding giant, Hellmann Worldwide Logistics, said, “The goal for us is to have true e-freight end-to-end. What we want is a seamless e-cargo supply chain. The word ‘seamless’ has been used [in the air cargo industry] for about 15 years, but it hasn’t happened yet. It’s all about the players working together. It’s all about harmonized processes and messaging across the whole supply chain.”
Global Shippers Forum Secretary General, Chris Welsh said shippers are frustrated by the air cargo industry’s inability to move forward with e-freight. Paradoxically, this means many shippers are not investing in the necessary Information Technology (IT) to help streamline the air cargo process.
Forwarders and airlines would like shippers to “key in” reliable data that could accompany the shipment from the start of the whole process. But shippers point to the fact that airlines and forwarders haven’t even been able to manage making the air waybill electronic, casting doubt on whether data provided by shippers would even technically be allowed to remain in electronic form throughout the airfreight transport process.
“The frustration is that the [air cargo] industry hasn’t been able to grasp this when the benefits to everyone are so obvious,” Welsh said during a (WCS) panel discussion. “What’s advisable first is for airlines and freight forwarders to sort out the e-airway bill, to make sure that’s doable. Shippers are not going to invest in new [e-commerce systems and processes] until they know what the [air e-cargo] architecture is. They are waiting for signals from the [air cargo] industry to see what the architecture is.”
Vertannes said, “Once shippers see that we’ve been able to transform our infrastructure, then the value proposition [for air cargo] will become more obvious.”
April 2014: United Parcel Service (UPS) reported 1st-quarter net income of +$911 million, down -12.2% from a net profit of +$1.04 billion in the prior-year quarter, as earnings were hit hard by severe winter weather in the USA.
In the USA domestic market, which accounts for the majority of (UPS)’ business, “the company experienced lost revenue and additional cost as a result of significant network disruptions on more than half of the operating days during the quarter,” (UPS) stated. “Overtime wages, purchased transportation and snow removal costs increased substantially over the prior year.”
(UPS)’s 1st-quarter domestic package operating profit dropped -14.6% year-over-year to $927 million and the company’s overall operating profit declined -4.2% to $1.51 billion. “Unusually harsh weather weighed on operating profit by approximately $200 million, due to increased expenses and slower revenue growth,” (UPS) said.
(CFO) Kurt Kuehn added, “During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather.”
(UPS) Chairman & (CEO) Scott Davis noted (UPS) was not alone: “Much of the USA economy was negatively affected by the severe weather conditions in the first quarter.” He told analysts and reporters that this further hurt the company’s business, saying, “We saw business-to-business shipments slow as manufacturers, distributors and retailers closed shop [on many days owing to weather conditions]. The good news is spring has arrived.”
(UPS) experienced strength in its air-intensive international package business, which posted a +24.4% year-year-over 1st-quarter operating profit gain to +$438 million on a +5% rise in revenue to $3.13 billion. “Our international export volume was +7.7% higher, with Europe leading the way,” Kuehn said.
Overall company revenue rose +2.6% year-over-year in the 1st quarter to $13.78 billion.
Kuehn said (UPS) is “encouraged by the positive trends in our business” and expects an improved performance in the final 3 quarters of 2014 with the challenges posed by winter weather behind it.
Looking at the full-year outlook, Davis said, “The macro-economic environment looks decent as we move forward. Both the global Gross Domestic Product (GDP) and USA (GDP) will be a little better than they were last year. Not robust, but better than they were a year ago.”
May 2014: United Parcel Service (UPS) has opened a much larger processing facility at its Taipei air cargo hub located at Taiwan Taoyuan International Airport (TPE). The new facility spans 82,000 sq ft, +40% larger than (UPS)’s previous air cargo facility at (TPE). “The new hub is expected to increase export processing capacity by >40%, while also doubling the processing capacity of import handling,” (UPS) Taiwan Managing Director Anita Li said.
(UPS) operates 28 weekly freighter flights from Taiwan to markets in Asia, Europe, and the USA. (UPS) said “customers can expect a 1- to 2-day delivery commitment to major cities in the USA and Europe” from (TPE). (UPS) noted the hub is particularly equipped to support Taiwan’s high-tech manufacturing sector.
Additionally, (UPS) opened a new contract logistics distribution facility in Beijing. “The 6,500 sq m of non-bonded warehouse space located 19 km from Beijing Capital International Airport, serves growing demand in China and is capable of servicing contract logistics orders with 4-hour delivery within the metropolitan Beijing area and next-business-day orders for major cities throughout China,” (UPS) said.
(UPS) opened similar distribution centers in Chengdu and Shanghai in 2013.
June 2014: United Parcel Service (UPS) Chairman & (CEO) Scott Davis will retire from his (CEO) role on September 1, to be replaced as (CEO) by (UPS) (COO) David Abney.
Davis has been (UPS) Chairman & (CEO) since 2008. He will assume the role of Non-Executive Chairman of the company’s board of directors effective September 1st. Davis has been with (UPS) since 1986, when (UPS) acquired II Morrow, a technology company, Davis led as (CEO).
Abney started with (UPS) in 1974 as a part-time package loader and has held a variety of positions with the Atlanta-based delivery giant. “As Chief Operating Officer (COO) Abney had responsibility for (UPS) Logistics, Sustainability & Engineering, leading the company’s significant investment in alternative fuel fleets, and implementing programs to expand the company’s total freight volume. In that role, he directed the (UPS) transportation network serving >200 countries and territories.”
Davis praised the choice of Abney to succeed him, saying, “His capability to anticipate global trends, identify risks and guide the company and our clients to capitalize on opportunities has proven invaluable.”
Before becoming (COO) Abney was President of UPS International and “oversaw several global acquisitions to expand service capacity and local market presence,” (UPS) stated, adding, “His international experience includes leading the Logistics & Freight divisions in Canada and Latin America, as well as heading Global Freight Forwarding and Customs Brokerage.”
United Parcel Service (UPS) Asia-Pacific President Brendan Canavan has been named (UPS) Airlines President, replacing Mitch Nichols, who was re-assigned to the newly created position of (UPS) Senior VP Transportation & Engineering at (UPS) main headquarters in Atlanta.
The change is effective immediately. Canavan, who has been based in Singapore for the past 2 years leading (UPS)’s Asia operations, will return to Louisville, the base of (UPS) Airlines, where he previously managed the delivery giant’s Worldport air hub from 2004 - 2007.
“Brendan’s proven track record in a range of key operational functions makes him ideally suited to lead (UPS) Airlines, which plays a critical role in our operations as well as growth strategy,” (UPS) Chairman & (CEO) Scott Davis said. The change of leadership came just days after Davis announced he will retire from his (CEO) role effective September 1, to be replaced as (UPS) (CEO) by (COO) David Abney.
Nichols became (UPS) Airlines president in 2011, replacing Robert Lekites, who retired after 13 years in the post. Nichols will relocate to (UPS)’s main headquarters in Atlanta. In his new post, “his responsibilities will include UPS Airlines, transportation, engineering and sustainability.”
Canavan started working for (UPS) in 1981 as a part-time package loader while he was a student at Villanova University in Philadelphia. He has been based in Singapore for the past two years leading (UPS)’s Asia operations. He now returns to Louisville, the base of (UPS) Airlines, where he previously managed the delivery giant’s Worldport air hub from 2004 - 2007.
August 2014: One year after the fatal crash of United Parcel Service (UPS) flight 1354, (UPS) pilots (FC) are calling for an end to the exclusion of all-cargo airline operators from FAR Part 117 (the new pilot rest and operating rules) Congress enacted to mitigate pilot (FC) fatigue. While Part 117, which became effective for cargo carriers on January 4, protects commercial pilots (FC) from fatigue, all-cargo airlines are “carved-out” of the duty limits and rest requirements, leaving them susceptible to exhaustion.
(UPS) flight 1354 drew attention to the exclusion of all-cargo pilots (FC), when cockpit voice recorder (CVR) transcripts revealed pilot (FC) fatigue played a large role in the August 14 crash. The crash occurred on approach at the Birmingham-Shuttleworth International Airport, killing Captain Cerea Beal, Jr and First Officer Shanda Fanning. The Independent Pilot Association (IPA) is bringing a lawsuit against the (FAA) in an attempt to fight the all-cargo exclusion.
"This carve-out puts our nation's entire aviation system at risk," said Jim Hall, former Chairman of the National Transportation Safety Board (NTSB). "A tired pilot (FC) is a tired pilot (FC), regardless of the plane he or she may be flying. By excluding cargo pilots (FC) from Part 117, the (FAA) is failing to adhere to its mission of making safety, the first priority in aviation. If the (FAA) believes even one life lost in an accident is too many, the principle should also apply to cargo pilots (FC)."
September 2014: The USA National Transportation Safety Board (NTSB) has blamed pilot (FC) error for the crash of a (UPS) Airlines Airbus A300-600, which crashed on approach to Birmingham, Alabama, on August 14, 2013. The accident killed both pilots (FC), when the airplane burst into flames after hitting a hill less than a mile short of the airport. (UPS) Airlines is owned by United Parcel Service.
According to the (NTSB), (UPS) Flight 1354 crashed “because the crew (FC) continued an unstabilized approach into Birmingham-Shuttlesworth International Airport in Birmingham, Alabama. In addition, the crew (FC) failed to monitor the altitude, and inadvertently descended below the minimum descent altitude, when the runway was not yet in sight.”
The board also found that the “flight crew (FC)’s failure to properly configure the onboard flight management computer (FMC), the first officer’s failure to make required call-outs, the captain’s decision to change the approach strategy without communicating his change to the first officer, and flight crew (FC) fatigue all contributed to the accident,” it said.
“The (NTSB) determined that because the first officer did not properly program the (FMC), the autopilot was not able to capture and fly the desired flight path onto Runway 18. When the flight path was not captured, the captain, without informing the first officer, changed the autopilot mode and descended at a rate that violated (UPS)’s stabilized approach criteria once the airplane descended below 1,000 feet above the airport elevation,” the (NTSB) said.
As a result of the investigation, the (NTSB) said it has “made recommendations to the (FAA), (UPS), the Independent Pilots Association and Airbus (EDS). The recommendations address safety issues identified in the investigation, including ensuring that operations and training materials include clear language requiring abandoning an unstable approach; the need for recurrent dispatcher training that includes both dispatchers and flight crews (FC); the need for all relevant weather information to be provided to pilots (FC) in dispatch and enroute reports; opportunities for improvement in fatigue awareness and management among pilots (FC) and operators; the need for increased awareness among pilots (FC) and operators of the limitations of terrain awareness and warning systems — and for procedures to assure safety given these limitations.”
(UPS) spokesman, Mike Mangeot said: “(UPS) places the highest emphasis on safety and we’ll continue to collaborate with our pilots (FC) to enhance our safety practices. This accident was a terrible aberration and (UPS) again extends condolences to the families of the crewmembers (FC). We thank the (NTSB) for its thorough and scientific investigation.
“Based on the facts of the accident, (UPS) has made a series of safety enhancements: training and standards enhancements on automation, call outs, pilot (FC) monitoring duties, stabilized approaches and no-fault go-arounds; enhanced meteorological information available to crewmembers (FC); committed to participate in (ICAO)’s Line Operations Safety Audit (LOSA) program; and new standards for flying into Birmingham at night.”
(UPS) added, “We will also upgrade our ground proximity warning system (GPWS) software. However, it’s important to note that the investigation showed that the software on (UPS) 1354 was compliant and that an upgrade would likely not have made a difference in this accident.
“(UPS) will also upgrade our ground proximity warning system (GPWS) software. However, it’s important to note that the investigation showed that the (EGPWS) system on (UPS) 1354 is compliant with (FAA) standards. The (NTSB) also noted that it could not determine whether a software upgrade would have made a difference.”
(UPS) said it “goes to great lengths to ensure safety in night-time flying. We schedule our pilots (FC) to fly about 30 hours a month (the fewest in the industry and approximately half of what a passenger pilot (FC) flies (55)); we provide 25% - 50% longer rest periods than the (FAA) requires, and we provide high-quality sleep and rest facilities for our crewmembers (FC).
“The (NTSB) found that the crew (FC)’s schedule would have been compliant with the new passenger pilot (FC) rest rules (also referred to as Part 117). Even with that fact, the (NTSB) noted that Part 117 would not have played a role in the outcome had the rules been applicable to (UPS).
“(UPS) has operated a safe airline with night flying for decades, with a history of >3.3 million flights and 8 million flight hours. We are taking corrective actions based on the facts of the accident. We hope the industry and regulatory community will, as well.
“The accident was a terrible tragedy and we continue to mourn the loss of our crewmembers (FC), Captain Cerea Beal Jr, and First Officer, Shanda Fanning. We will continue to build upon the lessons learned from this accident and work to improve the operations and safety moving forward.”
December 2014: (IATA) releases guide for safely transporting lithium batteries, by Air Transport World (ATW) Aaron Karp.
Lithium batteries are suspected to have played a role in three commercial freighter airplane fires between 2006 and 2011, and the ongoing concern about transporting the batteries by air has led (IATA) to issue a 56-page guide to mitigating the risks.
(IATA)’s “Lithium Battery Risk Mitigation Guidance for Operators” is available for free online and (IATA) hopes it will enable parties involved in shipping lithium batteries to have full access to best practices and guidelines. It also is aimed at helping airlines in educating passengers packing lithium batteries in baggage carried in airplane bellies.
“Lithium batteries are safe to transport, provided that they are designed, tested, manufactured and packaged in accordance with the global transport safety standards,” (IATA) Senior VP Safety & Flight Operations, Captain Kevin Hiatt said in announcing the guide’s release. “Developed with the input of leading industry groups specialized in the area of handling potentially dangerous goods, the [guide] represents an invaluable source of reference.”
The guide notes that “upwards of one billion lithium batteries are transported by air as mail, cargo or in passenger/crew baggage” annually, which “constitutes a safety hazard that must be managed in a clear and comprehensive manner.”
The guide points to 3 well-known cargo airplane fires: 1) The February 2006 incident in which a United Parcel Service (UPS) DC-8F freighter landed at Philadelphia International Airport on fire. During the descent, a fire broke out that substantially damaged the airplane; the 2 pilots (FC) survived but were treated for smoke inhalation. 2) The (UPS) 747-400F that crashed 50 minutes after takeoff from Dubai International Airport in September 2010 after attempting to return to the airport following its pilots (FC) reporting “smoke in the cockpit” owing to a main deck fire. Both pilots (FC) were killed. 3) The Asiana Airlines (AAR) 747-400F that crashed off the coast of South Korea in the East China Sea after the pilots (FC) reported an in-flight fire, killing both pilots (FC) and destroying the airplane.
“It is known that all three airplanes were carrying lithium batteries as cargo, some of which on the (UPS) Boeing 747-400F were subsequently determined to have not complied with the regulatory requirements,” (IATA) states in the guide. “However, the degree to which the lithium batteries were involved in these incidents (ie, whether they were the cause or aggravated the fire) could not be determined.”
(IATA) notes that lithium batteries are classified as “dangerous goods” by the United Nations (UN), subjecting the manufacturing and transport of the potentially flammable batteries to a host of requirements. “There remain, however, a number of systemic problems with lithium batteries,” the (IATA) guide says. “Their ubiquitous nature means that people who are completely unaware of the dangerous goods regulations and the requirements for lithium batteries are shipping them as cargo and in mail. Worse still, unscrupulous individuals are prepared to flout the requirements and put passengers and crew at risk. Many passengers are similarly oblivious to the potential hazards of lithium batteries. The result is that there are safety risks from lithium batteries in baggage, cargo and mail. This guide has been produced to assist operators in determining their strategies for mitigating these risks.”
(UPS) has been working on freighter aircraft fire mitigation technologies and procedures since the Dubai crash. In 2010, the (FAA) issued a safety alert on lithium batteries carried as air cargo.
December 2014: News Item A-1: See attached "UPS-2014-12 - CARGO FC CREW REST" by Flight International's Jon Hemmerdinger, Washington DC.
April 2015: News Item A-1: United Parcel Service (UPS) reported 1st-quarter net income of +$1.03 billion, up +12.6% over a net profit of +$911 million in the 2014 March quarter, on a +1.4% year-over-year increase in revenue to $13.98 billion.
(UPS) also announced that (CFO), Kurt Kuehn will retire effective July 1 and be replaced by (UPS) Corporate Controller & Treasurer Richard Peretz, a longtime company executive who originally joined (UPS) in 1981. Kuehn has been (CFO) since 2008.
Kuehn touted (UPS)’s “positive momentum,” pointing to a projected +6% to +12% gain in earnings per share for the full year 2015. First-quarter operating expenses increased just +0.3% year-over-year to $12.3 billion and operating profit was +$1.67 billion, up +10.6% over operating income of $1.51 billion in the prior-year quarter. The first-quarter net profit put (UPS)’s earnings back to the company’s level of profitability in the 2013 March quarter after a swoon last year; (UPS)’s 2014 first quarter earnings were negatively affected by severe winter weather.
During a conference call with analysts, (UPS) (CEO) David Abney was asked about rival (FED)’s conditional agreement to acquire Netherlands-based (TNT) Express (TNB). (UPS)’s own attempt to take over (TNT) fell apart in January 2013 after the European Commission (EC) said it would block the deal over competition concerns. “I’ll just remind everyone that the FedEx (FED)-(TNT) deal is a complex deal and we expect that regulatory agencies will be as stringent on this deal as they have been on previous deals,” Abney said.
He added that (UPS) expects to continue to be a strong player in Europe: “Let’s don’t forget the fact that we have experienced just great returns from our Europe markets and we certainly don’t expect that to change. We have a real good business in Europe and we expect it to continue to grow and we are as excited as we have been at any time about Europe.”
News Item A-2: "The (FAA), the (NTSB) Remain At Odds On ‘Dive & Drive’ Instrument Approaches" by John Croft, Aviation Daily, April 7th, 2015.
A type of non-precision instrument approach composed of a series of step-down altitudes, informally known as “dive and drive,” remains a point of contention between the (FAA) and the (NTSB) following the August 2013 crash of (UPS) Flight 1354 in Birmingham, Alabama.
To date, the (FAA) has refused an outright ban on the technique, despite nearly a decade of pressure by the (NTSB). (UPS) separately says it plans to prohibit the practice in its pilot (FC) manuals.
In the Birmingham crash, the flight crew (FC) of the Airbus A300-600F freighter had intended to use a more precise non-precision instrument approach technique known as a constant descent final approach (CDFA), but the Captain (FC) ultimately resorted to a dive and drive approach late in the arrival. The airplane hit terrain approximately 1 mile short of the runway, killing both pilots (FC).
The (NTSB) issued 15 recommendations to the (FAA) following the crash, including 1 recommendation calling for the (FAA) to prohibit dive and drive approaches, a recurring theme in the (NTSB)’s crash investigations.
The (NTSB) first asked the (FAA) to “develop and encourage” the use of (CDFA) approaches at all airports served by commercial carriers after an American Airlines (AAL) MD-80 struck trees, while on a dive and drive approach to Bradley International Airport near Hartford, Connecticut, in 1995.
After a Korean Airlines (KAL) Boeing 747-300 crashed on approach to Guam in 1997 using the same approach technique, the (NTSB) asked the (FAA) to address the equipment and training needed for (CDFA)s. The (FAA)’s response to both recommendations was considered satisfactory and the issues were considered closed.
However, a controlled-flight-into-terrain crash of a Corporate Airlines Jetstream 32 turboprop on a dive and drive approach into Kirksville, Missouri, in 2004, prompted an (NTSB) recommendation to ban dive and drive techniques altogether, a plea that was superseded by the (UPS) recommendation.
The (FAA) does not agree, stating that while a (CDFA) is the “preferred method” of accomplishing a non-precision approach, dive and drive use should not be prohibited. “In certain situations, primarily dependent on weather conditions and runway alignment in combination with runway visibility, a dive and drive maneuver could benefit an operator,” the (FAA) wrote in its December 2014 final response to the recommendation, noting that potential problems with the technique are spelled out in an Advisory Circular.
“Dive and drive is prudent and safe, when done correctly and under appropriate circumstances.” Based on the response, the (NTSB) recently closed the recommendation as “unacceptable action.”
(UPS), however, appears to be heeding the (NTSB)’s advice. Houston Mills, (UPS) Director of Safety, said in a December letter to the (NTSB) that (UPS) is in the process of “explicitly prohibiting dive and drive maneuvers” in its manuals.
July 2015: United Parcel Service (UPS) reported 2nd-quarter net income of +$1.23 billion, well more than doubling a net profit of +$454 million in the 2014 June quarter, even as revenue dropped -1.2% year-over-year to $14.1 billion.
2nd-quarter expenses decreased -10.3% year-over-year to $12.14 billion and operating profit was +$1.96 billion, more than double operating income of +$747 million in the prior-year period. USA domestic package operating income was up +3% to $1.2 billion while international package operating profit rose 17.2% to +$552 million. (UPS) (CEO) David Abney said “strong momentum in our international business” offset some weakness in the USA domestic market.
Abney told analysts that while (UPS) is optimistic about its financial performance for the full year 2015, “mixed” economic news in the USA has “caused us to be cautious” about the USA economy. “If you just look at January, the [USA] Gross Domestic Product (GDP) forecast [for 2015] was about 3.1%,” he explained. “Now, the thinking in July is (USA) (GDP) growth for 2015 of about +2.3% a pretty significant decrease. Retail has been uneven and we saw it soften a little bit in June. And so, that’s the reason that we’re cautious. Obviously, we had a good 1st quarter, a good 2nd quarter, but we’re a little bit cautious about the USA economy.”
September 2015: News Item A-1: Cargojet Airways ((IATA) Code: W8, based at Hamilton, Ontario) (CJT) says it has signed a new Air Cargo Service Agreement with United Parcel Service Canada Ltd (UPS) replacing 1 entered into in 2003 to provide domestic overnight air cargo services throughout Canada.
“Cargojet (CJT) is extremely pleased to have successfully extended our long-standing business relationship as the primary domestic air cargo service provider to (UPS) in Canada," Ajay Virmani President & (CEO) of Cargojet (CJT), said. "(CJT) will continue to provide highly reliable and cost-effective overnight air cargo services to (UPS)."
The initial term of the agreement is for a 10-year period with 2, 3-year renewal options.
Cargojet (CJT) specializes in overnight courier operations utilizing a fleet of 6 767-300Fs, 3 767-200Fs, 5 757-200Fs, and 8 727-200Fs.
News Item A-2: Leaders of (UPS) Airlines’ Pilot (FC) Union, the Independent Pilots Association (IPA), have asked its members to vote in favor of authorizing a strike.
October 2015: News Item A-1: "UPS Reports $1.26 billion 3Q Net Profit" by (ATW) Mark Nensel, October 28, 2015.
United Parcel Service (UPS) posted 3rd-quarter net income of +$1.26 billion, up +3.5% from +$1.21 billion in net profit during the 2014 September quarter. Company-wide revenue was down -0.4% year-over-year (YOY), to $14.24 billion.
The "Next Day Air" element of (UPS)’ USA domestic package product generated $1.66 billion in revenue during the third-quarter, up +1.6% (YOY).
(UPS)’ operating expenses decreased minimally (down -0.7% (YOY)) to $12.25 billion. Total operating profit for the quarter was +$1.98 billion, up +1.5% (YOY). USA domestic package operating profits were down -1.6% (YOY) to 1.26 billion, while international package operating profits grew +10.2% (YOY) to +$507 million.
Year-to-date, through September 30, (UPS) is reporting net profits of +$3.51 billion, up +36.2% (YOY).
“[The] 3rd quarter results reflect strong progress on our long-term initiatives, despite uneven economic conditions,” (UPS) (CEO) David Abney said. “(UPS) continued its positive momentum with the 3rd consecutive quarter of improved growth and earnings per share during the 3rd quarter, our international segment again produced double digit growth in operating profits.”
The company reported its total shipments increased +1.9% YOY to 1.1 billion packages, “led by USA air products and European transborder shipments.”
Looking to the upcoming holiday peak delivery season, “between Thanksgiving and New Year’s, we expect to complete about +10% more deliveries compared to the same period last year, “ (UPS) Executive VP & Chief Commercial Officer (CCO) Alan Gershenhorn said. “On our planned peak day, December 22, we are scheduled to deliver about 36 million packages worldwide, more than twice a typical day.”
News Item A-2: "UPS Pilots Vote to Authorize Strike; UPS Cautions Vote is ‘Ssymbolic’ by (ATW) Aaron Karp, October 23, 2015.
United Parcel Service (UPS) Airlines pilots (FC) have voted to authorize a strike, though a number of steps remain before the flight deck crew (FC) can actually strike.
The 2,252 to 8 vote gives the executive board of the Independent Pilots Association (IPA), the union representing (UPS) pilots (FC), the right to request a release from talks mediated by the USA National Mediation Board (NMB). Only if the (NMB) grants the release would the pilots (FC) be able to strike. The (NMB) has scheduled talks in November and December, so the release request would likely not come until those negotiations have occurred.
Nevertheless, the (IPA) believes the strike vote gives (UPS)’s 2,500 pilots (FC) additional leverage and sends a message to (UPS) management and the public.
(IPA) President Robert Travis noted that negotiations between (UPS) and the pilots (FC) have gone on for 4 years and “the company has failed to deliver a contract for its own pilots (FC).” He added, “In a clear voice, (UPS) pilots (FC) have said they are willing to strike if necessary to finish the job.”
(UPS) Airlines spokesperson, Mike Mangeot said, “Since we’re still at the table under (NMB) supervision, there’s no merit to any talk of a job action (The vote is a symbolic gesture. A strike is not possible without the (NMB)’s permission, and then only after exhausting a lengthy series of safeguards).”
He said (UPS) “continues to negotiate in good faith for a win-win contract. We have every reason to believe we’ll arrive at such an agreement, just as we have in all 4 previous (UPS) - (IPA) negotiations.” Mangeot added that (UPS) operations won’t be affected by the negotiations. “Any discussion of holiday disruptions is negotiations posturing,” he said.
Travis said (UPS) “management is playing a risky game using ‘stall and delay’ tactics against its own people.” He noted that FedEx Express (FED) pilots (FC) recently ratified a new six-year labor contract. “This deal brings labor peace to our main competitor,” Travis said.
December 2015: News Item A-1: "Amazon to Set Up Own Air Freight Unit" by www.ch-aviation.com, December 21, 2015.
Online retail giant Amazon is in talks with Boeing (TBC)) over the proposed acquisition of "at least" 20 freighter airplanes, "Cargo Facts" has reported.
Following weeks of speculation in the cargo community, informed sources told "Cargo Facts" that Amazon is indeed pushing ahead with plans to set up its own air freight operation, specializing in overnight deliveries throughout the USA. As such, talks with Boeing (TBC) reportedly focus on the 767-300F with deliveries to be spanned over three years.
In preparation for the logistics unit launch, Amazon has partnered fellow USA firm and parent to (ABX) Air ((IATA) Code: GB, based at Wilmington, Ohio, USA), Air Transport Services Group Inc, in trialing freighter operations. Thus far, Amazon has set up bases around the USA including Seattle Boeing Field and Wilmington, Ohio. At the former, Amazon has chartered a 737F freighter from Northern Air Cargo ((IATA) Code: NC, based at Anchorage Ted Stevens) (NAC) for use in serving Seattle, San Bernardino (close to a large Amazon fulfillment center), and the small city of Boise in Western Idaho.
The multi-billion dollar firm's move into the logistics market is expected to have serious repercussions on the global air freight market, given that the majority of its parcels are shipped using third party operators such as United Parcel Service (UPS), FedEx (FED), and the United States Postal Service.
February 2016: "(UPS) Net Profit Up +60% to $4.8 Billion in 2015" by (ATW) Mark Nensel, February 2, 2016.
United Parcel Service (UPS) posted +$4.84 billion net profit for 2015, up +59.8% from (UPS)’s +$3.03 billion net profit in 2014. Company-wide revenue for the year was $58.36 billion, just above 2014’s total revenue by 0.2%.
“This was the fourth consecutive quarter that (UPS) exceeded our financial expectations,” (UPS) (CFO) Richard Peretz said. “Our business generated strong results in 2015. While we face uncertain macro-economic conditions, we are continuing to invest for profitable growth.”
4th-quarter net profit was +$1.33 billion, nearly tripled from 2014. Total revenue for the quarter was $16.05 billion, up +1% year-over-year (YOY).
For 2015, (UPS)’ operating expenses were down -4.8% (YOY) to $50.7 billion. (UPS)' total operating profit for the year was +$7.67 billion, up +54.3% (YOY).
USA domestic package operating profits increased +66.7% (YOY) to 4.77 billion, while operating profits for the company’s international package segment was up +27.4% (YOY) to $2.14 billion, reportedly the first time the delivery element has surpassed the $2 billion threshold. (UPS) attributed its increased international profits to a strong performance in Europe, combined with “disciplined pricing, favorable customer and product mix and improved operational performance,” (UPS) said.
The "Next Day Air" element of (UPS)’ USA domestic package product generated $6.57 billion in revenue in 2015, down -0.2% (YOY). During the fourth quarter, "Next Day Air" had revenues of $1.76 billion, up +2.4% (YOY).
The company reported its full-year shipments increased +2.1% (YOY) to 4.7 billion packages. In the fourth-quarter, shipments were up +1.8% (YOY) to 1.3 billion packages; during the peak season between Thanksgiving and New Year’s, (UPS) delivered 612 million packages.
March 2016: "Brazil Rejects (UPS) Appeal of FedEx-(TNT) Merger Approval" by (ATW) Aaron Karp, March 30, 2016.
Brazilian regulatory agency, Conselho Administrativo de Defesa Econômica (CADE) has rejected United Parcel Service (UPS)' appeal of (CADE)’s approval of the FedEx Corporation - (TNT) Express (TNB) merger.
(CADE) had previously unconditionally approved (FED)’s acquisition of Netherlands-based (TNT) Express (TNB), joining regulators in the European Union (EU) and the (USA) in clearing the transaction. The rejection of (UPS)’ appeal, which reaffirms the Brazilian government’s approval, means only the Chinese government’s approval is needed for the merger to close.
(FED) has said it expects to close its takeover of (TNT) Express (TNB) in the 1st half of this year.
April 2016: News Item A-1: (UPS) added a new sorting facility and expanded its existing building at Ontario International Airport, California. The new building will process (UPS) next day air packages and will feature automated sorting capabilities. The building’s size increases +15% to almost 900,000 sq ft. Construction of the 416,000 sq ft air sorting facility was completed in September 2015. (UPS) flies 38 daily flights to and from Ontario International Airport.
News Item A-2: (UPS) named Juan Perez as Chief Information Officer (CIO), effective April 1. He succeeds Chief Information & Global Business Services Officer, Dave Barnes, who is retiring after 38 years. Barnes will continue with (UPS) through June 30.
August 2016: According to FAPA.aero United Parcel Services (UPS) hired 21 pilots (FC) in July and 42 (FC) year-to-date. (UPS) has projected to hire more pilots (FC) in 2016. (UPS) is sending pilot (FC) recruiters to (FAPA)'s job fair in Newark on September 23rd.
October 2016: United Parcel Service (UPS) has ordered 14 Boeing 747-8F freighters and placed options on +14 more of the type. The 747-8Fs will be used to support (UPS)’s fleet expansion plans.
(UPS) President Brendan Canavan said 747-8Fs “are a strategic investment for increased capacity for (UPS) customers around the globe. The 747-8Fs will allow (UPS) to upsize our network in both new and existing markets.”
The order is significant for Boeing Commercial Airplanes (BCA) because the 747-8 has been a slow sale, with (BCA) earlier this year announcing it would reduce production rate to 0.5 airplanes per month (or just 6 per year) from September 2016, citing softness in the global air cargo market.
Until September, the 747-8 was produced at the rate of 1.3 airplanes per month and the rate was previously slated to drop to 1 per month in March. The 747-8F has been more successful than the passenger 747-8i variant, but a sluggish-to-stagnant global cargo market has slowed demand.
(BCA) took an $885 million pre-tax charge tied to the 747-8 rate slowdown. Other customers for the 747-8F include AirBridgeCargo (ABC), Atlas Air (TLS), Cathay Pacific Airways (CAT), Cargolux (CLX), Korean Air (KAL), Nippon Cargo Airlines (NCA), Silk Air (SLK) and Volga Dnepr (VDA). Before the (UPS) deal, Boeing had logged a total of 74 orders for the 747-8F, according to the Boeing orders and deliveries web page.
Airline customers for the 747-8 passenger airplane include Air China (BEJ), Arik Air (AKI), Korean Air (KAL), the Lufthansa (DLH) Group, and Transaero (TRX) and total 42; Boeing has also sold 8 747-8s as business jets.
November 2016: Teamster Union (UPS) aircraft mechanics (MT) have voted to strike. The vote for action follows 3 years of negotiations with (UPS) over wages and health benefits. No date has been set for when any possible action will take place.
January 2017: News Item A-1: United Parcel Service (UPS) reported a 2016 net profit of $3.4 billion, down -29.2% from net income of +$4.8 billion in 2015, on a +4.4% year-over-year rise in revenue to $60.9 billion.
(UPS) noted that it recorded a non-cash after-tax mark-to-market pension charge of $1.7 billion in the 2016 4th quarter, which significantly affected its net profit and largely drove the year-over-year earnings decline.
Revenue from (UPS)’s domestic package business rose ++4.2% year-over-year in 2016 to $38.3 billion, though next day air revenue increased just +2.8%. International package revenue increased +1.7% year-over-year to $12.4 billion.
The major issue faced by (UPS) during the year was that it “experienced a significant shift in mix toward lower revenue products,” (CEO) David Abney told analysts.
Average revenue per piece was down year-over-year or flat in every category of (UPS)’s package shipping business in the 2016 4th quarter, and down -0.8% on a consolidated basis in the quarter.
(CFO) Richard Peretz explained that (UPS) is carrying “historic levels” of business-to-consumer (B2C) cargo as a result of booming e-commerce activity. (B2C) deliveries are generally less lucrative and more costly than business-to-business (B2B) deliveries. Peretz said (B2C) made up 63% of the volume of (UPS)’s deliveries in December.
(UPS) said it is well positioned to benefit long term from the shifting express delivery environment and is retooling its business to focus more on (B2C) deliveries, but the transition will take some time. “We are mid-cycle in transforming our network over the next several years, as we move through this period of expanding e-commerce opportunity,” Peretz said. “As investments come online, we are adding capacity, more efficiency and greater flexibility. With the e-commerce opportunity, we recognize additional revenue initiatives are needed to better align price with our cost to serve. This is a dynamic process to ensure that we are properly compensated for changes in product mix and the cost to manage volume surges through the year.”
February 2017: News Item A-1: "(UPS) +e-commerce," The Seattle Times Business, February 1, 2017.
United Parcel Service (UPS) stock plunged -6.8% January 31 as a rapid shift toward home deliveries exposed how much further the world's largest package delivery company has to go to keep up with the shift to e-commerce.
(UPS) said it would spend an extra $1 billion to automate warehouses and pay for other efforts to cope with increasing demand from internet shoppers. The challenge for (UPS) lies in earning more from record shipments to homes, which are less profitable than commercial deliveries.
News Item A-2: United Parcel Service (UPS) has conducted a test delivery in which an unmanned aerial vehicle (UAV) launched from the top of a delivery truck and carried a package in a residential area.
The (UAV), manufactured by Ohio-based Workhorse Group, delivered a package in Lithia, Florida, and then returned to the truck, which had continued on its way to another delivery. (UPS) said the test was successful. “This test is different than anything we’ve done with drones so far,” (UPS) Senior VP Global Engineering & Sustainability Mark Wallace said. “It has implications for future deliveries, especially in rural locations where our package cars often have to travel miles to make a single delivery. Imagine a triangular delivery route where the stops are miles apart by road. Sending a drone from a package car to make just 1 of those deliveries can reduce costly miles driven. This is a big step toward bolstering efficiency in our network and reducing our emissions at the same time.”
Atlanta-based (UPS) noted that rural delivery brings added costs because of the distance drivers must travel. (CFO) Richard Peretz recently explained that (UPS) is carrying “historic levels” of business-to-consumer (B2C) cargo as a result of booming e-commerce activity. (B2C) deliveries are generally less lucrative and more costly than business-to-business (B2B) deliveries. Many (B2C) deliveries are also going to rural areas; (B2B) deliveries are generally urban-oriented and often clustered together.
Wallace said the test demonstrated the “potential for drones to aid drivers at various points along their routes, helping them save time and deliver on increasing customer service needs that stem from the growth of e-commerce.”
(UPS) said the Workhorse "octocopter" (UAV) docks on the roof of a delivery truck. “A cage suspended beneath the drone extends through a hatch into the truck,” the company explained. “A (UPS) driver inside loads a package into the cage and presses a button on a touch screen, sending the drone on a preset autonomous route to an address.”
The (UAV) is battery-powered and recharges while it is docked on the truck. It can fly for up to 30 minutes and carry a package weighing up to 10 lbs.
March 2017: 767-346 (33494, N363UP), ex-(JA605J) registered with (UPS).
April 2017: United Parcel Service (UPS) posted a +$1.2 billion net profit for the 1st quarter of 2017, up +2.4% from net income of +$1.1 billion in (1Q) 2016, on a +6.2% year-over-year rise in total company revenue to $15.3 billion.
1st-quarter revenue from (UPS)’s domestic package business rose +5% year-over-year (YOY) to $9.5 billion, with next day air revenue up +5.7% to $1.7 billion. International package revenue increased +4.9% (YOY) to $3.1 billion. Total fuel expenses were up +43% (YOY) to $621 million.
(UPS) said its revenue per piece increased across all products in its USA domestic segment, up +2.4% in total, as the company benefited from previously implemented price increases. Total domestic revenue was up +$451 million (YOY) in the 2017 1st quarter as business to consumer (B2C) deliveries rose. (UPS) said its Next Day Air and deferred air shipments were up +3.9% and +4.1%, respectively, compared to (1Q) 2016. The company said construction is underway on 17 new facility projects, adding >5 million square feet of capacity to support further (B2C) and (B2B) (business-to-business) growth.
International package operating profit was down -7.8% in the 1st quarter, to +$529 million. (UPS)’s USA domestic package operating profit also declined (YOY), down -2.4% to $1.1 billion. “Revenue came in strong this quarter with all segments adding to the topline,” (UPS) Chairman & (CEO) David Abney said. “[Our] customers are benefiting from expanded capacity, choice and improved time-in-transit.”
“Our current momentum, combined with accelerated investment initiatives gives us confidence in our ability to attain our full-year guidance,” (UPS) (CFO) Richard Peretz said.
(UPS) reaffirmed its 2017 adjusted (EPS) guidance to be between $5.80 and $6.10, which included >$400 million, or 30 cents per-share, of pre-tax currency headwinds.
September 2017: See 747-8 "The Spirit of Joe Sutter" delivery flight:
February 2018: News Item A-1: (UPS) ORDER FOR 14 747-8F's AND 4 767-300F's.
United Parcel Service (UPS) has exercised all 14 Boeing 747-8F freighter options it had, firming the airplanes for delivery on “an expedited schedule.”
Atlanta-based (UPS) ordered 14 747-8Fs in 2016 and took 14 options. It took delivery of 3 747-8Fs in 2017. The firmed options provide another boost to the 747-8 program, which has struggled with sales on the passenger side. (UPS) additionally has ordered 4 767-300Fs.
The exercised options and 4 767-300Fs are valued at a combined $6.5 billion at list prices. All 32 aircraft (the 28 747-8Fs and the 4 767-300Fs) will be delivered by 2022, (UPS) said. “All of the new airplanes will be added to the existing fleet and no existing airplanes are being replaced. Our growth opportunities are accelerating,” (UPS) (CFO) Richard Peretz said. Surging e-commerce orders requiring expedited delivery are driving strong growth for the cargo specialist.
The company’s international segment “has generated 4 consecutive quarters of double-digit export growth,” (UPS) Chairman & (CEO) David Abney said on February 1.
In the 2017 4th quarter, the international segment reported 13% year-over-year (YOY) revenue growth “driven by premium products,” (UPS) said. “Export shipment growth surged 16% per day. All regions of the world contributed to the expansion.”
Abney said the additional freighters have been ordered to “support this strong customer demand.” He added that the tax legislation passed by the USA Congress in late 2017 enables (UPS) “to significantly increase capital investments and to make them earlier than previously planned.”
(UPS) Airlines President Brendan Canavan said there is “unprecedented demand for our air products,” adding, “The new freighters will allow us to continue upsizing airplanes on routes and will create a cascading effect that will boost capacity on regional routes around the world.”
(UPS) noted the 747-8F carries 46 shipping containers and has a cargo capacity of 307,600 pounds (approximately 30,000 packages). It has a range of 4,200 nautical miles.
ATLANTA, February 01, 2018 (GLOBE NEWSWIRE) -- (UPS) (NYSE:UPS) today announced it has ordered 14 Boeing 747-8F cargo jets and 4 new Boeing 767-300F airplanes to provide additional capacity in response to accelerating demand for the (UPS)’s air services. All of the new airplanes will be added to the existing fleet and no existing airplanes are being replaced.
The airplanes will be delivered on an expedited schedule, building on (UPS)’ 2016 order of 14 Boeing 747-8F freighters. All 32 of the jets will be delivered by the end of 2022, adding >9 million pounds of cargo capacity. (UPS)’ global airline network includes >500 owned and leased airplanes. (UPS) received 3 new 747-8F freighters in 2017.
“Our intra-USA next-day and deferred air shipments are expanding to record levels, and (UPS)’s International segment has produced 4 consecutive quarters of double-digit export shipment growth,” said David Abney, (UPS) Chairman & (CEO). “To support this strong customer demand, we continue to invest in additional air capacity, providing the critical link our customers need to markets around the world.”
In addition to growing customer demand for express services, recent USA tax reform legislation is enabling (UPS) to utilize tax savings to significantly increase capital investments and to make them earlier than previously planned.
“As we celebrate the 30th anniversary of (UPS) Airlines today, we are seeing unprecedented demand for our air products,” said (UPS) Airlines President Brendan Canavan. “The new freighters will allow us to continue upsizing airplanes on routes and will create a cascading effect that will boost capacity on regional routes around the world.”
The 747-8F freighter carries 46 shipping containers, 34 on its main deck and 12 in its lower compartments. The 747-8F has a cargo capacity of 307,600 pounds, or approximately 30,000 packages and a range of 4,200 nautical miles. The new 747-8F airplane line has a strong industry safety, reliability, and environmental record. The Boeing 767-300F freighter has cargo capacity of 132,200 pounds and capacity for 31 air containers, 24 on the main deck and 7 in its lower compartments. It has a range of approximately 3,000 nm. (UPS) currently operates 59 Boeing 767 airplanes.
“(UPS) has clearly tapped into the power and efficiency the 747-8F Freighter brings to the market,” said Boeing Commercial Airplanes President & (CEO) Kevin McAllister. “We’re impressed with how (UPS) is leveraging the airplane in its operations and excited to see them bring additional 767-300Fs into their fleet.”
* About (UPS)
(UPS) (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, (UPS) serves >220 countries and territories world wide. The company can be found on the web at ups.com or pressroom.ups.com and its corporate blog can be found at longitudes.ups.com. To get (UPS) news direct, follow @UPS_News on Twitter.
Jim Mayer, (UPS) Airlines, Telephone: +1 (502) 329-3014
Glenn Zaccara, (UPS) Airlines; Telephone: +1 (404) 828-4663
News Item A-2: United Parcel Service (UPS) anticipates continued growth in the global express cargo market in 2018 and believes investment in its air services will pay off handsomely. “It’s apparent that [(UPS) Airlines is] an area where we want to invest as much as we can, as often as we can, because it does bring return very quickly to the bottom line,” (UPS) (CFO) Richard Peretz told analysts. (UPS) reported a 2017 net profit $4.9 billion, up +43.1% over net income of +$3.4 billion in 2016.
April 2018: News Item A-1: "(UPS) Seen at ‘Breaking Point’ as Pilots Lament Outsourcing" by Michael Sasso, "Bloomberg News" April 4th, 2018.
United Parcel Service (UPS) was already in trouble with Wall Street over a long-term investment plan to cope with soaring e-commerce. Now the company is clashing with its pilots union because of a short-term fix for the same challenge.
Aviators are angry that (UPS) has turned to 3rd-party cargo airlines to help make up for a shortage of aircraft capacity. Accusing (UPS) of years of poor planning and insufficient investment, the Independent Pilots Association has complained to an industry arbitrator that the courier is violating its labor contract by outsourcing flying that should be done by its own pilots (FC).
“On a daily basis, our pilots operate a system chronically short on aircraft and strained to the breaking point,” union spokesman Brian Gaudet said. The dispute underscores the pressure on (UPS) to keep pace with the rise in online shopping, which is fueling record demand for its delivery services. (UPS) has contracted with Western Global Airlines and 21 Air to provide and fly a total of 7 airplanes, the union told its 2,700 members on February 22 in a memo seen by "Bloomberg News."
(UPS) acknowledged it’s hiring outside contractors, declining to identify the companies. (UPS) said it was leasing planes to be flown by (UPS) flight crews (FC) and also having 3rd parties fly their own planes on the company’s behalf.
Western Global, based in Estero, Florida, and Greensboro, North Carolina based 21 Air didn’t reply to requests for comments.
The extra help is needed in “bridging the gap” before a major fleet expansion, (UPS) said. (UPS) said it was in discussions with the union about the pilots’ complaints.
The capacity shortage came to the fore during the 2017 holiday season, when record demand briefly overwhelmed operations. That forced (UPS) to increase overtime as it rushed to complete shipments on time.
On February 1, (UPS) pledged to spend an extra $7 billion through 2020 on an aggressive expansion and modernization program that includes automating warehouses and buying additional Boeing 747F and 767F freighters.
The shares tumbled that day by the most in a year as investors questioned why it wasn’t raising prices more steeply to compensate for higher costs. (UPS) fell -12% this year through March 29, compared with the -3.8% drop for rival FedEx (FED) and a -2% decline for a Standard & Poor’s index of industrial companies.
News Item A-2: (UPS) has named George Willis, a 30-year (UPS) veteran, as President of USA Operations, succeeding retiring President Myron Gray.
Click below for photos:
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UPS-747F - 2013-11
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UPS-767 - 2012-05
UPS-767-300F - 2013-08-A
UPS-767-300F - 2013-08-B
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UPS-MD-11F N256UP 2017-11.jpg
0 727-100F (RR TAY 651-44). 15 WFU AT ROSWELL 2003-04. 3 WFU AT ROSWELL 2003-07. 19233 RF (SDK) 2004-04. 19357 RTS, 19103; 19232 RF (SDK), 19115; 19117; 19245; 19808; ST STEWART IND, 2004-08. 19244 ST STEWART IND 2004-10. 19229; 19244; 19245; SCRAPPED 2004-12. 19302; 19721; 19850; WFU IN STORAGE 2005-02. 19246; 19310; 19230; PARTED OUT 2005-05. 19850; PARTED OUT 2005-10. 19196; 19232; 19233; 19234; 19722; & 19857; ST STEWART INDUSTRIES 2007-09. 19012; 19101; 19231; 19837; ST STEWART INDUSTRIES 2007-12. 19503; & 19506; ST STEWART INDUSTRIES 2008-02. 19103; & 19826; ST STEWART INDUSTRIES 2008-03. FREIGHTER.
0 727-200F. 5 STORED. 1471-21697; 1474-21698; ST (TML) 2002-08. (1489-21700, N211UP; 1305-21392, N212UP) ST (TML) 2003-09. FREIGHTER.
4 747-100SF (JT9D-7A) (SCD). 19641 SCRAPPED AT (BFG) 2002-06. 46-20100, /70 N674UP; & 115-20323, /71 N671UP; WFU AT ROSWELL 2003-03. 20325 ST (KAC) 2003-07. 20923 ST (KAC) 2005-10. 20100; ST STEWART INDUSTRIES 2006-02. 20324;& 20390; ST STEWART INDUSTRIES 2010-07. MAINT BY (IAI). FREIGHTER.
0 747-200F, (EVR) 6 MTH WET-LSD 2000-07. FREIGHTER.
0 747-212SF (JT9D-7Q) (475-21943, /80 N520UP; 510-21944, /81 N521UP; 401-21936, /79 N522UP), EX-(SIA), F CONV BY BEDEK (IAI). ALL 3 RETIRED. 21943; ST STEWART INDUSTRIES 2010-06. 21936; ST STEWART INDUSTRIES 2010-07. FREIGHTER.
0 747-212SF (JT9D-7Q) (449-21939, N525UP), (GRB) LSD 2000-08, RTND 2001-12. FREIGHTER.
0 747-212SF (JT9D-7Q) (419-21937, /79 N526UP), EX-(SIA)/(TOW), CONV TO F BY (IAI), (TIA) LSD. RTND. FREIGHTER.
0 747-237F (JT9D-7J) (318-21446, N104TR), EX-(AIN), MAINT BY (IAI), EX-(TOW), (TIA) LSD 2000-05. RTND, LST (TWX). FREIGHTER.
0 747-256B (JT9D-7Q3) (699-24071, N528UP), EX-(IBE), (TIA) LSD 2001-03, (IAI) CONV TO F. RTND 2004-08, LST (AID). FREIGHTER.
0 747-259BF (JT9D-7Q3) (372-21730, /88 N924FT), (PAO) LSD 2001-02 2 YRS, RTND 2003-04. FREIGHTER.
0 747-283B (500-22381, N523UP), ST STEWART INDUSTRIES 2010-07. FREIGHTER.
1 747-34AF (983-37857, N366UP), 2009-10. FREIGHTER.
1 747-4R7F (CF6-80C2B1F) (1002-25866, /93 N581UP), BF (CLX), EX-(LX-FCV). FREIGHTER.
6 747-44AF (CF6-80C2B1F) (1388-35667, N570UP; 1393-35668, /07 N571UP, 2007-09 W/O & DESTROYED IN ACCDT SEE SEPTEMBER 2010 REPORT; 1396-35669, N572UP, 2007-11; 1401-35663, N573UP, 2008-03; 1403-35664, N574UP, 2008-04; 1406-35665, N575UP, 2008-06; 1412-35666, N577UP, 2009-01), FREIGHTER.
1 747-45EC (CF6-80C2B1F) (994-27154, /93 N578UP), EX-(EVA), BF (GEF) 2008-01. TO CONV TO F. 8F, 16C, 241Y/PLTS.
1 747-45EC (CF6-80C2B1F) (1016-26062, /94 N579UP), BF (GEF) 2008-05, EX-(EVA), EX-(B-16465). 8F, 16C, 241Y/PLTS.
5 +9/14 ORDERS 747-8Fs (N605UP, 1ST FLYING EVERETT TO LOUISVILLE ON 2017-09-27; 1542; AND 1544 DELIVERED LATER.
14 ORDERS 747-8F:
74 757-24AF (35 (PW2040), 40 (RB211-525E4). 25462; 25464; WET-LST (SDK) FOR (UPS) EUROPEAN OPS 2001-09, 2002-06, & 2002-10. 25464 RF (SDK) 2004-11. 25462; 25463; 25465; RF (SDK) 2005-06. NOT (ETOPS) EQ'PD. FREIGHTER.
1 757-200PF, WET-LST (VIE) 2001-03. FREIGHTER.
4 ORDERS 767-300F:
1 767-346F (33494, N363UP), EX-(JA605J) REGISTERED TO (UPS) 2017-03.
30 767-34AERF (CF6-80C2) (979-37856, N335UP, 2009-07; 37857, N336UP; 986-37858, N337UP, 2010-01; 37859, N339UP, 2010-04; 988-37944, N338UP, 2010-03; 989-37859, N330UP, 2010-04; 991-37860, N340UP, 2010-07; 992-37861, N341UP, 2010-07; 37864, N358UP, 2013-06; 37870, N359UP, 2013-07; 1020-37871, N347UP, 2012-01; 37872, N348UP, 2012-02; 37946, N360UP, 2013-07), FREIGHTER.
32 767-34AERF (CF6-80C2B7F) (724-27750; 726-27751; 728-27752), (ETOPS) EQ'PD. FREIGHTER.
00 DC-8-71CF (CFM56-2C) (316-45900, /67 N700UP; 321-45948, /67 N748UP; 320-45898, /67 N798UP) (46014 STORED AT ROSWELL 2003-04). 45897; 46014; ST (AUB) 2004-04. 45898; W/0 DESTROYED 2006-02. 45902; 45938 RTS 2008-11. 45900, N700UP; 45952, N752UP; WFU AT ROSWELL; ALL WFU 2009-05. FREIGHTER.
00 DC-8-73F (CFM56-2C) (489-46101, /69 N801UP; 482-46094, /69 N894UP). 45936; PARTED OUT 2008-12. 46051, N851UP; 46073, N803UP; 46074, N874UP; 46089, N811UP), WFU AT ROSWELL 2009-02. 45968, N868UP; 46100, N802UP; WFU AT ROSWELL. ALL WFU 2009-05. FREIGHTER.
0 MD-11, (GMN) 6 MTH WET-LSD 2000-07, RTND. FREIGHTER.
1 MD-11F (CF6-80C2B7F) (473-48453, N286UP), EX-(NAM), BF CENTRAL AIR LEASE 2006-08. CONV TO F. FREIGHTER.
2 MD-11F (CF6-80C2B7F) (487-48455, N289UP, 2008-01; 543-48566, N292UP, 2007-12), EX-(DAL), CONV TO F. FREIGHTER.
2 MD-11 (480-48472, N801DE, 2006-05; 481-48473, N802DE, 2005-12), EX-(DAL), BF BANK OF NY. 48472; RF (WLD) 2008-01.
1 MD-11 (511-48477, N806DE, 2006-02), BF (DAL).
1 MD-11 (CF6-80C2B7F) (611-48540, N288UP), BF WELLS FARGO (AS TRUSTEE) 2007-02.
9 MD-11F (CF6-80C2B7F) (48405, N256UP; 547-48406, /93 N524UP; 554-48439, /93 N253UP; 588-48578, N277UP; 48577, N278UP, 2005-03; 599-48579, N276UP, 2003-12, (F) 2004-08; 596-48745, /95 N250UP; 592-48744, /95 N251UP; 601-48788, /96 N252UP), CONV TO F, BY ST AERO TIL 2004, EX-(VSP)/(TBC) 2001-08. FREIGHTER.
21 +/9 OPTIONS MD-11F (PW4460) (466-48416; 467-48417; 48444; 48446; 505-48451, N257UP, 2006-05; 472-48452, N282UP 2006-03; 473-48453, N286UP, 2006-08; 484-48484, N283UP, 2005-12; 487-48455, N289UP, CONVERTED 2008-01; 494-48456, N290UP, 2007-11; 498-48457, N285UP, 2006-11; 501-48418, N260UP 2007-09; 511-48477, N291UP, CONVERTED 2008-02; 48485; 48486; 533-48538, N281UP, 2006-01; 543-48566, N292UP, CONVERTED 2007-12; 552-48571, /93 N272UP; 556-48572, /93 N271UP; 568-48575, N274UP, 2004-05; 571-48539, N287UP, CONVERTED 2007-06; 574-48576, /95 N270UP; 583-48577, N278UP, 2004-10; 588-48578, N277UP, 2004-10; 610-48774, N275UP, 2004-08; 611-48540, N288UP, CONVERTED 2007-07; 621-48541, N284UP, 2006-01; 48573, N279UP, 2004-10; 48634), EX-(JAL). CENTRAL AIR LEASING. FREIGHTER.
52 A300F4-622R (PW4158) (805, /00 N120UP; 806, /00 N121UP; 807, /00 N122UP; 808, /00 N124UP; 809, /00 N125UP; 810, /00 N126UP; 811, /00 N127UP; 812, /01 N128UP; 813, /01 N129UP; 814, /01 N130UP; 815, /01 N131UP; 816, /01 N133UP; 817, /01 N134UP; 818; /01 N135UP; 819, /01 N136UP; 820, /01 N137UP; 821, /01 N138UP; 822, /01 N139UP; 823, /02 N140UP; 824, /02 N141UP; 825, /02 N142UP; 826, /02 N143UP; 827, /02 N144UP; 828, /02 N145UP; 829, /03 N146UP; 830, /03 N147UP; 831, /03 N148UP; 832, /03 N149UP; 833, /03 N150UP; 834, /03 N151UP; 835, /03 N152UP; 839, /03 N153UP; 840, /04 N154UP; 841, /04 N155UP - - SEE REPORT - - "UPS-2013-08 - ACCDT A300F4-622R" AIRPLANE W/O, 2 (FC) FATALITIES & PHOTO - - "UPS-2013-08 - ACCDT -A300-600F;" 845, /04 N156UP; 846, /04 N157UP; 847, /04 N158UP; 848, /04 N159UP; 849, /04 N160UP; 850, /04 N161UP; 851, /05 N162UP; 852, /05 N163UP; 853, /05 N164UP; 854, /05 N165UP; 861, /05 N166UP; 862, /05 N167UP; 863, /05 N168UP; 864, /06 N169UP; 865, /06 N170UP; 866, /06 N171UP; 867, /06 N172UP; 868, /06 N173UP; 869, /06 N174UP). FREIGHTER.
10/10 ORDERS (2012-?) A380-800F (GP7200):
Click below for photos:
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UPS-4-Don Albertsen 2018-01.jpg
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DAVID ABNEY, CHAIRMAN & CHIEF EXECUTIVE OFFICER (CEO) (2014-09).
David started with (UPS) in 1974 as a part-time package loader and held a variety of positions with the Atlanta-based delivery giant. “As Chief Operating Officer (COO), David had responsibility for (UPS) Logistics, Sustainability & Engineering, leading the company’s significant investment in alternative fuel fleets, and implementing programs to expand the company’s total freight volume. In that role, he directed the (UPS) transportation network serving >200 countries and territories.”
Scott Davis, Chairman praised the choice of David to succeed him, saying, “His capability to anticipate global trends, identify risks and guide the company and our clients to capitalize on opportunities has proven invaluable.” Before becoming (COO), David was President of (UPS) International and “oversaw several global acquisitions to expand service capacity and local market presence,” (UPS) stated, adding, “His international experience includes leading the Logistics & Freight divisions in Canada and Latin America, as well as heading Global Freight Forwarding and Customs Brokerage.”
SCOTT DAVIS, NON-EXECUTIVE CHAIRMAN, (UPS) BOARD OF DIRECTORS (2014-09).
Scott retired from his (CEO) role on September 1st, 2014. Scott was replaced by David Abney (COO).
OCTOBER 2007: Scott, then 55, joined (UPS) in 1986, when it acquired technology company II Morrow, of which he was (CEO). He served in positions of increasing responsibility in Finance & Accounting, before assuming the role of (CFO) in 2001. He was named Vice Chairman and elected to the (UPS) board in 2006. "Over the past several years, Scott has worked closely with Mike Eskew as an architect of the (UPS) strategy, helping the company expand through acquisitions and investments in new products and technology," board member, Victor Pelson said.
BRENDAN CANAVAN, PRESIDENT (UPS) AIRLINES (2014-06).
Brendan replaced Mitch Nichols as President. He started working for (UPS) in 1981 as a part-time package loader, while he was a student at Villanova University in Philadelphia. He had been based in Singapore for (2013 - 2014) leading (UPS)’s Asia operations. He returned to Louisville, the base of (UPS) Airlines, where he previously managed the delivery giant’s Worldport air hub from (2004 - 2007).
GEORGE WILLIS, PRESIDENT USA OPERATIONS (2018-04).
George a 30-year veteran for (UPS), succeeds retiring President Myron Gray.
MITCH NICHOLS, SENIOR VP TRANSPORTATION & ENGINEERING (UPS) AIRLINES (2014-06) (HDQBE5X) (firstname.lastname@example.org).
Mitch became (UPS) Airlines President in 2011, replacing Robert Lekites, who retired after 13 years in the post. Mitch relocated to (UPS)’s main headquarters in Atlanta. In his new post, “his responsibilities include (UPS) Airlines, Transportation, Engineering and Sustainability.”
RICHARD PERETZ, CHIEF FINANCIAL OFFICER (CFO) (2015-07).
Richard joined (UPS) in 1981.
JUAN PEREZ, CHIEF INFORMATION OFFICER (CIO) (2016-04).
MS ANITA LI, MANAGING DIRECTOR TAIWAN.
STEPHEN FLOWERS, PRESIDENT AMERICAS REGION, MIAMI (2003-04).
DAN BRUTTO, PRESIDENT (UPS) INTERNATIONAL OPERATIONS (2007-10).
WOLFGANG FLICK, PRESIDENT (UPS) EUROPE (2004-03).
DEREK WOODWARD, PRESIDENT ASIA/PACIFIC.
ED BUCKLEY, PRESIDENT MARKETING.
ALAN GERSHENHORN, EXECUTIVE VP & CHIEF COMMERCIAL OFFICER (CCO).
CHUCK SCHAFFER, SENIOR VP ENGINEERING.
CHRIS MAHONEY, SENIOR VP GLOBAL TRANSPORTATION SERVICES.
JOHN ALDEN, SENIOR VP BUSINESS DEVELOPMENT.
KENNETH LACEY, SENIOR VP & CHIEF INFORMATION OFFICER (CIO).
JOSEPH PYNE, SENIOR VP CORPORATE DEVELOPMENT.
LEA SOUPATA, SENIOR VP HUMAN RESOURCES (HR).
ALLEN HILL, SENIOR VP LEGAL & PUBLIC AFFAIRS & SECRETARY (2004-01).
CALVIN DARDEN, SENIOR VP US OPERATIONS.
MARK WALLACE, SENIOR VP GLOBAL ENGINEERING & SUSTAINABILITY.
BOB STOFFEL, SENIOR VP SUPPLY CHAIN GROUP.
CAPTAIN MATT CAPOZZOLI, VP FLIGHT OPERATIONS (2011-05).
ED GEERS, VP AIRCRAFT MAINTENANCE & ENGINEERING.
As (UPS) VP Airlines Aircraft Maintenance & Engineering, Ed directs the daily maintenance of (UPS) aircraft and related functions globally, keeping safety, regulatory compliance, fleet reliability and aircraft performance as priorities.
Prior to his current position, Ed served as the (UPS) VP Airlines Ground Support Equipment (GSE). In his 27 years at (UPS), Ed has held roles in Powerplant Engineering, Major Maintenance, Procurement, and Line Maintenance Operations.
A native of Springfield, Ohio, Ed holds a bachelor’s in Mechanical Engineering from the University of Dayton as well as a Master’s in Business Administration from the University of Phoenix. Ed serves on the Board of Directors for Wesley Manor Retirement Community, and the Kentucky Veterans Memorial Park Advisory Board.
WARREN JOHNSON, VP MAINTENANCE & ENGINEERING.
RICHARD CARNEJO, VP INTERNATIONAL OPERATIONS & CARGO SALES.
DON HERBERT, VP AIR CARGO.
RON ALBERTSEN, VP FINANCE & ACCOUNTING.
Ron Albertsen has responsibility for (UPS) Airlines operations’ fiscal activities as well as (UPS)’s procurement, traffic and airport properties.
Ron joined (UPS) in 1975 as a package preloader. The following year, he became a package car driver. After a promotion into management in 1977, Ron worked in the Industrial Engineering department. In 1980, he moved into the Accounting department, where he spent the next 6 years building experience in the accounting, billing, collections, data processing and payroll functions. He served as district controller in Des Moines, Iowa, and Philadelphia. He also worked in the Air Strategy Group at (UPS)’s corporate office in Greenwich, Connecticut, before transferring to the West Region in Omaha, Nebraska. Early in 1994, Ron relocated to Louisville, Kentucky, and was promoted to Accounting Coordinator. In 2005, he added procurement, traffic and airport properties to his duties as Airline Region Controller.
LENDA MACLEAN, VP FINANCE.
BOB ELIZONDO, VP OPERATIONS LATIN AMERICA.
JOHN HINDMAN, VP COMMUNICATIONS & PUBLIC AFFAIRS.
MS KAREN LEE, DIRECTOR FLIGHT OPERATIONS.
ED WALTON, DIRECTOR ENGINEERING, EX-(EAL)/(NWA) (2012).
As Director of Engineering for (UPS) Airlines, Ed Walton is responsible for the coordination of engineering activities for one of the largest airlines in the world. A management professional with >30 years of airline engineering experience, Ed became the Director of Engineering for (UPS) Airlines in 2012.
Ed began his (UPS) career in 1993 as an Aircraft Structures Engineer. He also had Manager roles with the DC-8 Fleet Team, Structures Engineering and Liaison Engineering. In 2004, Ed was promoted to Avionics, Systems and Liaison Engineering Division Manager. 2 years later, he accepted the assignment as the Structures & Liaison Engineering Division Manager, which he held for 6 years. He then assumed additional responsibilities as Fleet Management Division Manager before being promoted into his current position as Director of Engineering.
Prior to (UPS), Ed spent time with Eastern Airlines and Northwest Airlines completing roles as an Aircraft Structures Engineer, Aircraft Interiors Engineer, Project Engineer and Manager of Aircraft Structures Engineering.
CAPTAIN HOUSTON MILLS, DIRECTOR AIRLINE SAFETY.
CAPTAIN FRANK HEMKO, DIRECTOR FLIGHT SAFETY (email@example.com).
CAPTAIN CARLTON, DIRECTOR FLIGHT STANDARDS (firstname.lastname@example.org).
CAPTAIN LARRY PARKER, CHIEF PILOT.
JIM FOUCAULT, DIRECTOR HEAVY MAINTENANCE (HDQBE5X), (email@example.com) (2000-04).
DAVE THOMPSON, HEAD WIDE BODY REGIONAL FREIGHTER PROGRAM (1998-08).
BRAD SCHWANT, DIRECTOR MAINTENANCE (2007).
As Director of Maintenance for (UPS) Brad Schwandt is responsible for the 7x24 operational compliance and coordination of all line maintenance activities worldwide. Brad is also directly responsible for the Aircraft Maintenance Control Department within the (UPS) Global Operations Center, the Aircraft Technical Support Department, and the Maintenance Training Department.
A native of St Louis Missouri, Brad received a Bachelor’s Degree in Economics from the University of Missouri, Columbia. Prior to (UPS), Schwandt attended North County Technical High School where he obtained his Airframe & Powerplant (A&P) Certificate and built upon his aviation experience over the course of 10 years in both General and Corporate Aviation.
Brad began his (UPS) career in 1983 as a Hub Unload/Loader. He held positions of increasing responsibility in Hub, Package, and Air Operations. In 1990, Brad transferred to the Airline Division of (UPS) and has held positions in Maintenance Planning, Aircraft Structures, Line Maintenance Operations and the Industrial Engineering Department. Brad assumed his current position as Director of Aircraft Maintenance in 2007.
IAN WATSON, DIRECTOR MAINTENANCE (2001-05).
TONY MCBRIDE, DIRECTOR QUALITY ASSURANCE (QA) (2001-05).
ANGELO STEKARDIS, DIRECTOR PROCUREMENT (2016-01).
Angelo started with (UPS) in 1987 as an Industrial Engineering Supervisor. He has now been with (UPS) >30 years with experience working within ground, air operations and finance roles. Since January 2016 he has been Director of Procurement and is based in Kentucky. His job includes responsibilities for Digital Procurement, Transformation, Strategic Sourcing, Material Planning, Critical Procurement, Inventory Control, Supplier Performance and Commodity Management.
ALAN GERSHENHORN, CHIEF SALES, MARKETING & STRATEGY OFFICER.
FRANK HEMKO, FLIGHT SAFETY MANAGER (firstname.lastname@example.org).
BUD DEWEES, MANAGER MD-11 IMPLEMENTATION (2001-05).
LEE RYSDEN, MANAGER 757/767 FLEET OPERATIONS (2000-04).
DENNIS SOBIK, HEAD 727/747 FLEET OPERATIONS (1996-04).
GEORGE SLAUGHTER, MANAGER TECHNICAL SERVICES & TRAINING.
CHRIS TORO, MANAGER QUALITY CONTROL (QC).
DON KNIGHT, MANAGER AIRCRAFT STRUCTURES ENGINEERING (email@example.com).
BERT PEARSON, MANAGER (IE) AIRCRAFT MAINTENANCE OPERATIONS.
JOHN RIGGS, MANAGER 747/MD-11 FLEET OPERATIONS.
MS EDITH STEIN, MANAGER WEEKEND LINE MAINTENANCE (2000-04).
JAMES THELLE, MANAGER WHEELS & BRAKE SHOP (firstname.lastname@example.org).
KURT WALTHER, MANAGER LINE MAINTENANCE.
MARK MEEKER, AIRCRAFT MAINTENANCE MANAGER.
JIM MAYER, (email@example.com) +1-502-329-3014
GLENN ZACCARA, (firstname.lastname@example.org) +1-404-828-4663