Air cargo woes

As a July 1 deadline came ever closer, American Airlines executives scrambled last week to find a company to handle its air cargo operations in Reno.

The issue is important because other carriers in the past have followed the lead of American.When the Dallas-based vendor has contracted with a company to handle cargo, other carriers have hired the same vendor largely because American holds the lease on a cargo facility at Reno/Tahoe International Airport.

Air General Inc.

of Peabody,Mass., began winding up its air cargo service at the Reno airport in mid-June.

Along with American, the company handled air cargo for United, America West,Northwest,Alaska Airlines, Continental, Frontier and Skywest.

Notably absent from that list: Southwest, which accounts for nearly half of the commercial flights at the airport and runs its own cargo operation.

Air General had worked at Reno/Tahoe International Airport since late 2005.

Airlines outsource their cargo operations to companies such as Air General much as they outsource the preparation of meals to companies that operate flight kitchens.

If American was unable to nail down a contract with a vendor to provide cargo services, it was prepared to pull its cargo operation out of Reno, said Spencer Dickinson, the airline's managing director of cargo marketing, A tentative deal with a Missouri-based company fell apart at the last minute just a couple of days before the deadline, but Dickinson was in serious talks with other companies.

"We wish to remain in Reno.

It's an important point on our map,"Dickinson said."We feel the Reno market has a lot of opportunities."

The region isn't necessarily too small to support a cargo vendor, he said, pointing to other similar-sized markets in which American has been successful.

But Dickinson said the market for air cargo in northern Nevada sometimes has been choppy.American itself left the air cargo market in northern Nevada for a couple of years, returning in May 2004.

Reliable air cargo service is so economically important to the region that economic development officials should consider subsidizing it, said an executive of a company that handles custom brokerage and freight-forwarding for northern Nevada companies.

Jim Ijams, who heads the Reno office of Vantage Point Services, noted that Air General was the third air cargo vendor in recent years to discover that it couldn't make a profit operating in Reno.

But without that service, Ijams said international freight headed to Reno will be caught in the growing logjam at airports in San Francisco and Los Angeles.

And airfreight is growing in importance, he said, because companies are increasingly worried that oceangoing vessels will be stalled for several days at overloaded port facilities along the West Coast.

"We need the regional authorities to step up and address the simple fact that air cargo services are a requirement for a great many companies here in northern Nevada," Ijams said.

It's not likely that a regional organization such as the Economic Development Authority of Western Nevada would put any money into air cargo services.

"We're a nonprofit.We're not in the position to subsidize anyone," said EDAWN President Chuck Alvey.

At the same time, however,Alvey said EDAWN views good air cargo service as "very, very important" to the development of the region's economy.