The carrier will be cancelling its daily B747-200F freighter service to Guangzhou from 1 July, and at the same time will remove one weekly eastbound frequency – on a Monday – from either Shanghai and Tokyo (which of the two is yet to be decided). From August, it will also be cancelling its freighterservices to and from Taipei.

The cuts will leave Northwest, whose freighters once ranged all over Asia, with just four freighter destinations in the region – Narita, Osaka, Incheon and Shanghai. It marks the end of the carrier’s strategy of hubbing into Narita and Osaka, using fifth freedom rights to carry traffic between Japan and other parts of Asia.

Tom Bach, who took over as president cargo at Northwest late last year, admits that it was in fact very difficult to compete for such intra-Asian traffic against the Japanese carriers. "The economics were not working for us; they were very effective competition," he says.

Guangzhou biggest blow
The loss of Guangzhou flights must be the biggest blow, however. Having started cargo services to the airport in 2005, it moved all of its Hong Kong freighters there in March 2007, with Jim Friedel, Northwest’s president cargo at the time, saying that Guangzhou provided "quicker and more convenient access to China’s largest market". Now Northwest will have no maindeck capacity at all to southern China, though it maintains passenger services.

Bach says it was the high fuel price which defeated the Guangzhou operation. "We spent three years developing the market and our team there did a great job, but the loads are not where we wanted them to be," he says. "With oil at US$55 a barrel, it would work, but with oil at US$110 a barrel and jet crack above US$130 a barrel, the numbers just do not stack up."

The much longer flying time compared to services to NorTheast Asia was a critical factor, he admits: "Eastbound the rates are not much different, and the extra flying distance adds a lot more cost."

Of Taipei, Bach says that its main function was as a feeder into Narita services, but Northwest has concluded that it can get better revenue from filling up the freighters in the Japanese market. Apart from the possible cut of one Tokyo frequency, Japanese frequencies are not being reduced; the Osaka to US leg of the Guangzhou service will be maintained once service ceases to the Chinese airport.

In defence of the B747-200F Given the cuts, there will inevitably be speculation that B747-200F operations are simply becoming uneconomical – a conclusion that carriers such as Air France and Nippon Cargo Airlines reached some time ago. Northwest currently has 13 -200Fs in its fleet, and Bach’s predecessor, Jim Friedel, robustly defended the freighter, saying that on transpacific routes the -400F offered minimal advantages.

Bach also defends the -200F, saying that once its lower cost of ownership is factored in, its costs are similar to the – 400F. Nevertheless, he admits that Northwest’s three most fuel-hungry freighters – its J-powered -200Fs, which have 10 per cent more fuel burn – are being retired, and one of its seven R-powered -200Fs will be upgraded to a more efficient Qpowered version, leaving the carrier with two Qs and eight Rs.

Northwest Cargo is also considering replacements for the -200Fs, though this decision must inevitably be caught up in the proposed merger with Delta, assuming that does in fact go ahead.

Fleet renewal
Bach says that for anti-trust reasons no cargo discussions between the two parties have yet taken place, but he clearly expects freighter operations to remain part of the merged cargo operation, and money to be available for replacing the -200Fs.

Options being considered include converting some or all of the 16 passenger B747-400s that are still operated by Northwest, which are due for retirement when the carrier takes deliveries of new 787 Dreamliners. These were due to start arriving this year, though Boeing has recently announced further delays to the launch of the aircraft, so this timetable must now be in doubt.

With Delta already operating passenger 777s, Bach reckons another option could be buying new 777-200LRFs. "The infrastructure and maintenance would already be in place for the aircraft, which would make the economics of buying 777Fs much more viable," he says.

He even says that he has looked carefully at the possibility of A330 freighters, since Northwest is the largest operator of the passenger version in the world. "We have spent some time at Airbus looking at it, and it is a fabulous airplane," he says. "I even have a big model of the A330 freighter on my desk."

Once again, the fact that Northwest already has a maintenance programme and simulators for the A330 would be a big plus. And though Bach does concede the A330F does not have the range to reach some Asian markets, he also says that "fleet decisions are always a matter of comparisons and compromises", suggesting this might not be an insuperable barrier.

Merger: Whither cargo?

As for the wider question of how Northwest could merge cargo operations with Delta, since no formal discussions have taken place, Bach can only speculate. At first sight the two carriers make an unlikely cargo pairing – Northwest as the last US major to operate widebody freighters, and Delta, which until recently ran an extremely stripped-down belly cargo operation, a policy that has only recently started to change under new cargo boss Neel Shah.

Bach sees synergies, however. One is that as freighter operator, Northwest has various areas of expertise that Delta Cargo lacks, and theother is that both carriers use the Unisys cargo IT system – though Northwest is supposedly in the process of migrating to Cargospot, now owned by Champ Systems.

He also says that with Northwest’s flying on behalf of DHL into Wilmington, Ohio due to come to an end in October – when the contract will be transferred to Polar Air Cargo, now 49 percent owned by DHL – he had been looking for a new market in which to deploy the freighter used for that business to a destination in the souTheast of the US. "We were considering Dallas or Atlanta," he says. "Now obviously Atlanta is a lot more attractive."

Bach is also a veteran of a previous US airline merger – that between Northwest Orient and Republic in 1996 – and so knows that it can be a long process and that much can happen on the way.

"But in the end, we should end up with a much stronger cargo offering, one that combines the best of both airlines," he says. "I also know Richard Anderson, CEO of Delta, because he used to be CEO of Northwest until 2003. He knows about freighter operations, and so I fully expect them to remain a part of our business in the future."