For most airlines, cargo contribution represents the difference between profit and loss. As Murray Smyth, Sabre Airline SolutionsÆ vice president for Europe, the Middle East, and Africa puts it, ôCargo is an increasingly important element of Gulf Air's businessàCarriers have found that if cargo capacity is not managed successfully, critical revenue opportunities could be lostö (Hayden).
There are airlines that fly strictly cargo, those that fly strictly passengers, and many that fly both passengers and cargo. The difference in profitability between airlines that fly passengers and those that fly cargo is significant. In 2005, all of the air cargo companies surveyed by Airline Business Report had profits in the first quarter and all but one showed profits above those of 2004ùthat one lagger still showed a gross revenue increase of 20%; U.S. passenger airlines, by contrast, showed a loss for the first quarter that was worse than that of the same quarter in 2004 (Forsyth et al.). It is obviously to the advantage of a passenger airline to include cargo in its flights. Cargo contribution on passenger flights can make up some of the profits lost due to underbooked flights, inclement weather, and the high cost of fuel. There are also hidden costs that have undermined passenger airline profits in recent years. Since September 11, 2001 (9/11), many people are either afraid to fly, cannot bear the long delays, or refuse to submit to the more extensive screening modalities now in place. In addition, there has been a general stagnation in the world economy (Otto). However, those issues do not apply to cargo. Cargo can be thought of as nonhuman, paying passengers on a passenger flight. By employing cargo contribution, these airlines can return to a more stable financial position with more consistent profitability.
There are several issues that impact the increased profitability inherent in cargo contribution, however. The f...