Unchartered Waters: Surviving a treacherous charter market
Even in the middle of this oil-and-gas slump, when the “conga-line of airplanes flying in and out of North Dakota” has stopped, Simone of AirNet II said there is still a call for a very specific type of oil industry charter – one that moves pipeline inspection equipment that carries a nuclear isotope, which falls under the category of dangerous goods.
“We focus on things that need a little extra care in handling,” Simone said. “These dangerous goods are anything from explosives to flammable liquids to radioactive material. We pretty much handle all the classes and divisions.” For example, while the charter auto parts business is slumping, the airbags are a popular commodity because the small explosives they carry, known as squibs, classify the parts as dangerous materials that must be moved by a certified handler, such as AirNet II.
Most charter carriers and brokers that spoke with Air Cargo World have differing opinions on the causes of the current charter slump and disagreed on what needs to be done to survive these lean times. But one thing they all agreed on was that a turnaround will not happen anytime soon and that the market may need until 2017 to show signs of recovery.
“And then you have the election year,” Joseph said, referring to the U.S. presidential contest. “It seems like every time we have an election, we have a year like this when everyone wants to sit and wait to see who their next president is before they make commitments.”
Amerijet’s Huff said it’s important to remember how cyclical the business can be. “For every charter that’s not being flown today, there’s inventory sitting somewhere in Houston or in Miami,” he said. “There’s stuff waiting to fly. It’s very much a feast-or-famine kind of business – right now, we’re in the middle of a famine.”
Huff added that there have been relatively few natural disasters lately. “A lot of the charter business is driven by natural disasters,” he said. “All it takes is one world event.”
Well, there is that presidential election in November.
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