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FedEx, American, 31 Carriers Commit Planes for War (Update1)
By John Hughes
Washington, Oct. 15 (Bloomberg) -- Aircraft from FedEx Corp., AMR Corp.'s American Airlines and 31 other civilian carriers may be used to transport U.S. troops and supplies in a war with Iraq.
``I don't think there is anything positive about going to war under any circumstances although we may have to do it,'' said FedEx Chief Executive Officer Fred Smith, a Marine fighter pilot in Vietnam. ``We're prepared to fly for them if we need to.''
The Civil Reserve Air Fleet was established in 1952 so the military wouldn't have to buy, maintain and hire crews for planes it rarely needs. Airlines led by FedEx, ATA Holdings Corp. and Northwest Airlines Corp. were paid $1.98 billion for flights during the 1991 Persian Gulf War and the buildup beforehand, the first time the program was activated.
Thirty-three carriers pledged up to 927 planes and four crews per aircraft as of Oct. 1. In return for the commitments, carriers got $1.26 billion in military contracts in the year that ended Sept. 30. Carriers also would be paid for the use of planes during a war, as they were in the Gulf conflict.
American, the largest carrier, and FedEx, the largest overnight delivery company, led other carriers in pledging up to 111 planes each to the program as of Oct. 1, followed by UAL Corp.'s United Airlines at 96. The availability of the civilian fleet saved the military $1 billion to $3 billion a year over 30 years, a 1994 Rand Corp. study found.
More Than Enough
The military may need only a fraction of the planes committed, or none at all, because an Iraq conflict would likely require fewer troops than the Gulf War, said Ron Priddy, a retired Air Force colonel who directed the program during the first activation in August 1990.
The military used at most 100 to 125 civilian planes at any one time in the Gulf War, said Priddy, now president of the National Air Carrier Association trade group. Dave Patterson, a spokesman for the U.S. Transportation Command, said the military doesn't discuss plans regarding the program.
A war with Iraq would bring more financial pain to an industry that may lose as much as $8 billion this year because air travel and fares fell after the Sept. 11 attacks.
During the Gulf War, international passenger traffic dropped 20 percent and domestic traffic fell by single digits for two months, AMR Chief Executive Officer Donald Carty said last month. Oil prices doubled in a three-month period after Iraq invaded Kuwait in 1990. Prices have risen 51 percent this year partly on concerns that shipments from the Middle East would be disrupted by a U.S. attack on Iraq.
Soldiers, Bullets, Toilet Paper
If the military uses FedEx planes for an Iraqi conflict, the Memphis-based carrier could use smaller planes to fly more routes to make up the difference or even lease planes from other companies if needed, said Bob Rachor, vice president of safety and airworthiness at FedEx. ``We have tremendous flexibility,'' he said, adding that the company's goal is no service disruptions.
FedEx led all carriers in flying 382 missions in the Gulf War and troop buildup, followed by ATA's American Trans Air with 307 missions and Northwest with 290 missions, according to a Transportation Command summary. Carriers in all flew 3,604 missions, carrying 407,450 troops and 171,147 tons of supplies, including food, missiles, bullets and toilet paper.
`No Problems'
Major passenger carriers have extra planes they could use if needed. Jet aircraft owners, including major U.S. airlines, had 1,306 planes -- or about 8 percent of their jet fleets -- in storage as of Oct. 5, according to Back Aviation Solutions, a consulting firm. It takes as little as a week to put planes in storage back into service.
``We anticipate no problems'' in supplying the military with any needed planes, said John Hotard, a spokesman for Fort Worth, Texas-based American Airlines.
American Trans Air based in Indianapolis, counts on military charters for 14 percent of its revenue. The 10th largest U.S. airline has 11 Lockheed Martin Corp. L-1011 planes in charter service that could be used for a military transport. A call-up of those planes would have no effect on the carrier's scheduled service, said company spokeswoman Lisa Jacobson Brown.
Delta Air Lines Inc., the third largest U.S. carrier, has pledged 72 planes, including 49 Boeing Co. 767s, 15 Boeing MD-11s and eight Boeing Co. 777s. It's unlikely all the planes would be called up at once, said Peggy Estes, a spokeswoman for the Atlanta- based company.
St. Paul, Minnesota-based Northwest declined to comment.
Some of the other carriers that committed aircraft to the program include Continental Airlines Inc., Southwest Airlines Co., United Parcel Service Inc., US Airways Group Inc., America West Holdings Corp., Alaska Air Group Inc., Airborne Inc. and Atlas Air Worldwide Holdings Inc.
