Delta Airbus A330-300 Delta Air Lines

Betting On Boxes

Delta's stellar operations numbers setting the table for cargo-division success.

Among the myriad benchmarking metrics Delta Air Lines shares as part of its quarterly financial reports is the number of zero-cancellation days flown, both by its mainline operation and its entire system. Through the first six months of 2017, it recorded 35 days without canceling a systemwide flight, and 129 with no mainline cancelations—year-over-year increases of 13% and 8%, respectively.

Such performance delivers plenty of benefits. It keep customers happy and internal plans—from crew rotations to tail-number route assignments—on track. It also yields positive returns in an oft-overlooked area common to all passenger airlines: the cargo division.

After opening the year with two consecutive months of year-over-year declines, Delta's cargo division has been rolling. Revenue ton miles jumped an eye-popping 19.4% July and 19.2% in August compared to last year, helping lift the year-to-date figure to an impressive 9.2% increase. 

"Our cargo team has got the right focus on the product, and it's been one that cargo has historically not been able to keep up with the same type of service levels and revenue premium that the passenger side of the business has been on," Delta Executive VP and CFO Paul Jacobson said at a recent analyst conference. "There's going to be a continued focus on execution, making sure that we're delivering on the promises to our customers and delivering that brand value."

Jacobson lauded the performance of the airline's logistics team, led by V.P.-Cargo Shawn Cole, who took the role in late July. Cole's background seems ideally suited to drive value from an ancillary service: he has executive-level experience in both financial planning and supply chain management.

Cole also has a dedicated team of aircraft operations professionals dedicated to doing their jobs, so he can focus on his. 

"Nobody in the combi space or in the passenger space can match our reliability, and that reliability should translate into better comfort for our cargo customers as well," Jacobson said.

"Ultimately, the vision will be to grow that business and focus on that business driving the same type of premiums that we see on the passenger side," he continued. "The team has gotten off to a really, really good start."

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