From the Cockpit with Amerijet CEO Joe Mozzali

Amerijet has recently changed its leadership structure and fleet operations, altering its strategy to adapt to slowing market demand for dedicated freighters. The Miami-based airline began removing 757 freighters from service in the first quarter of 2024, after negotiating a return of the aircraft to their lessors, as part of a financial restructure that saw a disbursement of $55 million from Amerijet’s lenders and modifications to its current commitments. [caption id="attachment_56868453" align="alignright" width="376"] Amerijet Chief Executive Joe Mozzali. (Courtesy/Amerijet)[/caption] Amerijet Chief Executive Joe Mozzali sat down with Cargo Facts to discuss the carrier’s decision to remove six 757 freighters from service and become a single-type operator of 767Fs while reshaping the carrier’s business model after losing multiple contracts. What follows is an edited version of the conversation. Cargo Facts : What led to the decision to ultimately remove the 757s from the fleet? Joe Mozzali: I think the main decision is that we were over capacity and at that point, you’re evaluating the 757F versus the 767F. For the missions that we want to fly, including Europe, which a 757 doesn’t have the range or the payload for, to me, the economics of the 767F work much better than the 757F. The engines, parts and heavy maintenance costs all played a role in the decision. One of the main reasons is the fact that the 767 freighter can carry almost twice as much as the 757F and it's relatively the same cost per block hour; the 767F wins every time. CF : How long will Amerijet continue with its single type fleet strategy? What changes can we expect in 2025? JM: I think we’re going to operate a single fleet type for the foreseeable future. The 767F is the most versatile aircraft in the fleet. It can fly interregional, intercontinental, U.S. domestic, has very good operating cost, and good capacity as well. So, I see the 767F being tied to our fleet for the foreseeable future. We have thirteen aircraft. One is currently completing a heavy maintenance check, and once that is completed, it’ll be sent back to the lessor. At that point, we'll have twelve 767Fs: nine with the Amerijet fleet and three operating for Maersk. That’s the sweet spot. The cargo market is pretty volatile and there’s no just-in-time procurement of aircraft. But we’ll remain agile and look for opportunities going forward when it presents itself and is a good fit. I think we just can’t get over our skis like Amerijet previously did, taking on speculative capacity without having a revenue stream. CF : How is Amerijet scaling network capacity and growth before it sees profitable returns? How do you balance the ACMI and CMI business with your own scheduled network? JM: Over the last six months, we’ve been really focused on network optimization of our scheduled service. And you see it in the numbers. We actually have a positive EBITDA and a 5.7% margin for the first four months of the year. We had a very strong November and December as well and carried that momentum on into the first half of the year. We’re really focused on network optimization, combining routes. Our scheduled service tonnage is up 13%, against the backdrop of about 19% fewer block hours. We’re becoming more efficient with the aircraft and routing for efficiency. You certainly see that in the numbers of our scheduled service segment. [caption id="attachment_56868452" align="aligncenter" width="1168"] Amerijet had six 757 freighters until recently. (Courtesy/Amerijet)[/caption] CF : How has the emergence of new narrowbody freighter operators in the Caribbean and Latin American markets affected Amerijet’s strategy? JM: We control what we can control. Certainly, there are new entrants in the market, but we haven’t seen them impact Amerijet at this point. You kind of see that in the numbers, our scheduled service tonnage is growing 13%; I would assume that’s outpacing the market, against a backdrop of fewer block hours. The markets we serve are mainly served by 767Fs. There’s a reason why we voted the 757Fs off the island, so to speak. The 767F is the more versatile airplane. We think it’s the right aircraft for the missions that we fly, and I think you see that in the competition that are flying 767Fs in the same markets that we’re flying as well. CF : How does your vision for Amerijet differ from that of previous CEO Tim Strauss ? JM: I don’t really want to compare my experience with Tim Strauss. I think that our focus is really to keep it simple: Control what we can control, and then really focus on three major areas. One is to protect and grow our scheduled service, which is our core. Over the last several years, we lost our vision which is our core business. We need to improve our customer experience, whether it’s booking, tendering, etc. Our on-time performance has been very good with our scheduled service; our completion factor is near 100%. That’s our first strategic imperative. The second is becoming relevant in Colombia. I was kind of surprised when I was on-boarded at Amerijet that you have a Miami-based airline that’s really not relevant in flowers. The market is there, especially in January, when scheduled services are a little bit soft. How can we supplement our scheduled service business with growth in Colombia? Year to date, we had over 200 flights operated in Colombia from basically a base of zero. We’ve been able to provide good, timely, on-time performance for other airlines, as well as other freight forwarders. Third — and this is where my thirty-year DNA at UPS comes into play — is cost optimization. Managing the cost, aligning our cost to market demands and reducing leads, and we’ve been able to do that. It’s hard to make these decisions but they are the right decisions to make. The third strategic imperative is basically being agile with cost, flexing up when you can and flexing down when it’s needed. Since July, we’ve reduced our non-crew headcount by about 19%, which is pretty much in line with our reduction in block hours and reduction of fleet. Basically, my goal is to try to improve the variability of our cost.

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