Sep. 9--American Airlines is adding more flights from Philadelphia to Europe this month. But those planes won't be taking passengers across the Atlantic -- they will be ferrying cargo.
The air carrier flew three cargo-only flights a week from Philadelphia International Airport in August. That figure will be increased to 30 flights a week in September, to six European cities: Amsterdam, Frankfurt, Milan, Dublin, Rome, and Zurich.
As the pandemic continues to cut into passenger air travel, cargo activity is emerging as a bright spot. In July, PHL's passenger traffic was down 72.8% compared with July 2019, while cargo tonnage at PHL went up 5.6%. Shipments of personal protective equipment, pharmaceuticals, and e-commerce have contributed to the boost.
Yet even before the coronavirus hit, PHL officials were laying the groundwork to get more business from cargo services.
"We're situated in one of the most lucrative cargo catchment areas in the country," PHL chief revenue officer James Tyrrell said.
A study commissioned by the airport in 2017 found that the 400-mile radius around PHL -- an area that touches or encompasses mostly six states -- "is responsible for generating $53 billion in air cargo activity annually," Tyrrell said. But PHL handles only about 9% of that activity, he added, while 70% heads north to airports including New York's JFK.
"We think we have a great opportunity to really make a dent in that $53 billion a year," Tyrrell said. "COVID has just kind of shined a light on what some airlines could and should be doing."
And for PHL's part, Tyrrell said, "we need to develop the kinds of facilities to attract those shippers who are driving by our front door."
The airport has 400,000 square feet of warehouse space. In 2018, PHL acquired 135 acres that could house more than one million square feet of combined space for warehouse facilities and aircraft parking.
Construction on a road around the parcel's perimeter is expected to begin this fall, Tyrrell said. Though development of the main infrastructure is still a few years away, and the timeline will depend on funding. "We're looking probably in the 2023 area," Tyrrell said.
PHL is finding other ways to make inroads with cargo in the meantime. Earlier this summer, for instance, the airport rolled out an incentive package designed, in part, for cargo-only airlines, and aimed at COVID-19 economic recovery.
"There's a lot of short-term opportunity, and we're going to make sure we capitalize on that as much as we possibly can," said Stephanie Wear, PHL's director of air service development and cargo services.
If passenger airlines recognize more business opportunity in carrying cargo during the pandemic, that could also help them decide to restart routes more quickly or establish new ones, Wear said.
PHL received $118 million in CARES Act funding in the spring. It was enough to cover 111 days of operating expenses, which carried the airport through the end of June. During that time, PHL also extended payment relief to airlines and other vendors on site.
Airlines started paying landing fees again as of July 1, Tyrrell said. Concessionaires also resumed paying rent, but only as a portion of their gross revenue. Out of about 155 stores at the airport, just 75 are open.
In July, CEO Chellie Cameron warned that without additional federal funding, the airport faced the possibility of layoffs. (As a condition of the CARES Act money it received, PHL must keep 90% of its workforce on the payroll through Dec. 31.) At a virtual event last week, Cameron said the airport is weighing whether to "temporarily mothball" certain terminal areas where passenger use is down.
"The main reason is just that travel has not rebounded to anywhere near what we'd hoped," Cameron said.
Passenger volume on U.S. air carriers was down 70% at the end of August compared with the same time in 2019, according to data released last week by Airlines for America, an industry trade group.
American Airlines, PHL's dominant air carrier, plans to reduce its systemwide October schedule by 55% compared with the same period last year. At PHL, specifically, American will reduce the October schedule 63%.
Still, American's October schedule in Philadelphia will be slightly more robust than September's, with 140 average daily departures in October, compared with 113 this month.
"We continue to evaluate our network, matching supply with demand," company spokesperson Andrew Trull said.
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