"As carriers fight over fliers, Continental looks to ship everything else"

Thursday, December 9, 2004

As carriers fight over fliers, Continental looks to ship everything else
By BILL HENSEL JR.
The Houston (TX) Chronicle


CONTINENTAL Airlines, seeking to boost its bottom line by moving more
freight through Houston, is opening a new $20 million facility here today.

The move consolidates the carrier's Houston cargo operations at Bush
Intercontinental Airport from four buildings into one.

The new 120,000-square-foot facility is equipped with state-of-the-art
technology and features everything from animal kennels to expanded
refrigeration areas.

In recent years passenger airlines have been paying more attention to the
business of cargo movement, and experts say Continental in particular has
made cargo a priority.

"Unlike other airlines that have treated it as an afterthought, Continental
has been trying to develop it as a significant source of revenue," said John
Salagaj, research director for the cargo consulting firm Air Cargo
Management Group.

Currently, cargo accounts for about 4 percent of Continental's revenue.

Airlines these days would welcome whatever extra revenue they could milk
from operations other than moving passengers, where they are getting
hammered by fuel prices and intense competition that is holding ticket
prices down.

"It's a big deal for us," said Jack Boisen, Continental's cargo vice
president. "It's about four percent of revenue, but a far larger part for
the bottom line."

Getting to the right gate

Cargo is in some ways more difficult to handle than passengers because it is
so different than just getting passengers in gates, Boisen said. Cargo
involves density, and it comes in all shapes and sizes, from live animals to
dead bodies to computer parts. 

"If you've got a container of goods and you make a mistake, that container
doesn't get up and go to the right gate," he said.

The new warehouse is all-electric because officials say it is cleaner from
an environmental standpoint. A new container-handling system will reduce the
number of forklifts needed to operate.

"A 90-pound girl could push a 10,000-pound pallet all by herself," said
Kenneth Kramer, Continental's director of cargo operations. The entire
facility was designed to be employee friendly, according to Continental.

The facility's animal kennel, which ultimately will be run by a third party,
was included because Houston is a crossroads of sorts for shipping animals.

The Houston carrier's animal shipping program, called PetSafe, is increasing
by about 25 percent a month, Boisen said, factoring in the decision to offer
on-site kenneling services.

A lot of air carriers scaled back cargo operations between 2000 and 2003
because business had fallen off. But Continental actually has built new
facilities in Newark, N.J., New York and Houston, spending almost $100
million the past five years.

Air cargo is becoming increasingly important because of the ongoing increase
in just-in-time inventory coupled with more and more high-technology trade
from Asia.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************