Space stays tight for air cargo after war: higher fuel prices, military demands still hit shipments.

Space stays tight for air cargo after war

Higher fuel prices, military demands still hit shipments

The availability of air-cargo space out of Los Angeles International Airport has yet to normalize following the tumult of the Persian Gulf War, according to freight forwarders interviewed last week.

Sharply higher jet fuel prices, and delays caused by the U.S. military taking over cargo planes, upset conditions beginning last August.

"We seem to have some problems, especially into Europe," said Warner Althaus, vice president of Bill White Inc. freight forwarders in Inglewood. On May 14 Al Italia airlines told him it could fly his 200-pound shipment on May 19 at the ealiest, a longer-than-usual delay, he said. A strike by Spain's Iberia Airlines, however, may be contributing to extra traffic into Italy.

Officials at a major wholesaler of cargo space, Airfreight Consolidators International of Los Angeles, said the only flights with a great surplus of space are those bound to the South Pacific. Asia-bound service is slightly tighter, and Europe is worst, according to ACI President Julian Keeling. He said in some cases cargo carriers have not been able to raise prices much beyond a 7 percent increase this spring to warrant offering more space.

During the war and its immediate aftermath there "was almost a panic situation among those moving cargo to and from overseas points. Scare stories abounded about cargo being embargoed (and) about freight piling up in warehouses with delays of as much as two weeks before shipment," Keeling said.

Military shipments jumped 161 percent out of LAX during 1990, compared to 1989.

The war disruptions prompted some carriers serving Los Angeles to cut flights or substitute smaller, narrow-bodied aircraft for their Boeing 747s.

Schedules were "sharply diminished" by KLM, British Airways, Lufthansa, Air France and Federal Express, said Keeling.

"Normally, there's a surplus of space," said ACI spokesman Shura Bary. "That was a perennial problem in the air-freight industry. The war changed that."

Getting goods quickly again onto a plane, especially to Europe, may depend on when and if carriers decide to raise rates beyond their general price increase this spring.

"If it's a short-term thing, shippers might just have to wait it out. Or, they might have to fly (goods) on two different airlines, and then truck it to their destination," said Bary. "Long-term, rates would probably go up, and space would then become available."

According to a recent ACI survey of space availability out of LAX:

* London: Space is very tight to this city, and many flights to Europe also have little excess. Improvements can be found in British Airways and Virgin Atlantic increasing frequencies since the war's end. Fed Ex has returned wide-bodied 747s to its fleet.

* Frankfurt: Space is "extremely tight." Keeling predicted little likelihood of the situation alleviating during the near future unless Lufthansa and Fed Ex boost their schedules.

* Amsterdam: Easing up former bottle-necks.

* Hong Kong and Tokyo: Ample capacity and no delays.

* Sydney and Auckland: great surplus, "almost an embarrassment of space." Keeling credited the economic downturn in Australia and New Zealand. Qantas Airlines' major rate increase about seven weeks old was diluted because of weak demand resulting, he noted.

Some said the situation is changing from Keeling's analysis.

"I think Europe is dropping off and Asia is getting tighter," said David Brown, assistant manager for sales for Korean Air Lines in L.A. "We're going out at over 90 percent (capacity) each day."

KAL jets from LAX to Korea, and on to other Far East destinations. Brown, however, said the backlog he had during the war has ended.

Spain is the worst destination, said forwarder Althaus. Air crews in Madrid are striking several days per week. An Iberia spokeswoman on May 15 said the next LAX flight with available space to Spain would leave in 11 days.

Althaus said Japan and Taiwan are indeed tight.