Air Transport World

Alitalia's rosy dream for cargo: a full belly in passenger aircraft.

Alitalia's rosy dream for cargo: A full belly in passenger aircraft

Airlines generally agree that there is good money to be made in freight carried aboard passenger aircraft. Freight doesn't have to be pampered, wined and dined, and doesn't complain if the staff forgets to smile. Best of all, it commands a higher price than passenger traffic does.

But there's a problem: figuring the profit that cargo and freight earns in a mixed operation, one that carries both goods and passengers. The freight doesn't move free, of course. There are identifiable costs, such as those for personnel in administration, sales and handling, for the fuel needed to carry the extra weight, for investments in facilities and equipment, and for the tracking of shipments from time of acceptance until delivery. These are easy to isolate. However, allocating the appropriate share of the cost of overhead and aircraft is trickier, and different airlines have different formulas. Depending on how the numbers are played, one comes up with various versions of what it takes to make freight profitable.

Highlighting freight

There's the rub, says Ferdinando Rodriquez, head of cargo marketing services at Alitalia. Says Rodriquez, too many airlines regard freight revenues as marginal. They base their aircraft calculations on passenger revenues, and any income that freight brings in above the incremental cost of servicing it is considered pure profit. …

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