Journal of Commerce / February 16, 1999
By Larry Luxner
SAN SALVADOR, El Salvador -- Rapid growth in Central American garment and electronics exports is driving demand for added air-cargo capacity between the United States and key Central American cities.
One of the largest players in the region, Grupo Taca, has decided to establish its own all-cargo fleet after years of carrying cargo on passenger flights and rented cargo planes. The conglomerate -- formed by Costa Rica's Lacsa, El Salvador's Taca, Guatemala's Aviateca, Honduras's Taca and Nicaragua's Nica -- has received provisional authorization from the Federal Aviation Administration and plans to implement its new regular cargo service by the end of February between Miami and the cities of San Salvador, San Jose, Managua, San Pedro Sula, Guatemala City, Panama City and Tegucigalpa.
Five Airbus Industrie A300 jets -- once used by Alitalia to ferry passengers to and from Italy -- will be based at Miami International Airport, following their conversion by British Aerospace PLC in Bristol, England. Taca acquired the Airbus jets late last year in a $60 million lease from the JHM consortium, as part of a corporate overhaul. It has already taken delivery of three of the planes; according to airline spokeswoman Claudia Arenas, the fourth and fifth will arrive in April.
Each of the reconfigured jets can carry up to 100,000 pounds of containerized cargo, or 140,000 pounds of volume within their 11,000 cubic feet of space. Taca says the Airbus A300 is ideal for its purposes, since the aircraft can be unloaded in 30 minutes and loaded in 60 minutes, requiring a total of one and a half hours -- a factor that'll help keep operational costs down.
"We are going through a process of improving our entire cargo operations," explained cargo analyst Juan Jorge Villareal, interviewed at Grupo Taca headquarters in San Salvador. "Besides the new [Airbus cargo] jets, we have a new warehouse in Miami. Instead of individual warehouses for each airline in the group, now we have one big warehouse."
Miami International Airport, which handles more Central American air cargo than any other U.S. airport, said Central America accounted for 130,015 tons, or 14.3%, of the 905,156 tons of international cargo passing through Miami in 1997.
Bunny Schreiber is an official with the airport's cargo development division. She said that in 1997 -- the latest year for which statistics are available -- Costa Rica was the region's most important source and destination of cargo, accounting for 54,865 tons of imports and exports, followed by Guatemala (21,652 tons); El Salvador (16,818 tons); Honduras (15,648 tons); Panama (12,929 tons); Nicaragua (7,654 tons) and Belize (449 tons).
Grupo Taca estimates its current air-cargo market share in and out of Central America at 44%, followed by Challenge Air Cargo, (33%); Fine Air (19%), Antillas (2%) and American Airlines (1%). Much smaller airlines accounted for the remaining 1%.
Last year, Grupo Taca's cargo sales came to $56.5 million, representing 12% of the company's total revenues.
"Airline capacity here in El Salvador is very limited. What we already had wasn't sufficient," said Mr. Villareal, noting that Central America's cargo market jumped by 20% in 1997. "If the market grows as we think it will, we'll have seven cargo planes next year."
Taca, an acronym for Transportes Aereas Centro-Americanos, began in 1929 with a single cargo route between San Pedro Sula, Honduras and New Orleans. Today, the airline has 184 employees working exclusively in cargo.
While most free-zone exports leave Central America by boat -- mainly through Puerto Cortes, Honduras, and other Caribbean ports -- some items like high-value fashions, microchips, cut flowers, shrimp and other seafood must go by air.
"Free-trade zones account for 70% of the products we send by air," said Jose Ernesto Vides, Grupo Taca's cargo manager for El Salvador and Belize. "Our rates are higher, but we try to give the best service in the industry. People prefer to fly with Taca, even though it costs 2 cents per pound more."
Northbound, Taca's lift out of Costa Rica last year was 33.1 million pounds, followed by Guatemala (23.7 million pounds); Honduras (15.2 million pounds); El Salvador (12 million pounds) and Nicaragua (6.9 million pounds). Southbound from Miami, Taca carried 56 million pounds of cargo in 1998.
Last year, however, wasn't a normal one, considering the widespread devastation wrought by Hurricane Mitch, particularly in Honduras and Nicaragua.
"We didn't move even one pound of commercial cargo for a month," said Mr. Vides. "We were receiving so much relief freight that we didn't have the capacity to move it all."
He said that immediately following the hurricane, Taca established an airbridge from Houston, Los Angeles, Washington and New York -- all of which contain large Central American immigrant communities -- to transport medicines, vaccines, clothing, canned food and other humanitarian supplies into Tegucigalpa, San Pedro Sula and Managua. For this purpose, it had been using a Boeing 737-200 with a liftoff of 28,000 pounds per flight.
Since then, said Mr. Vides, Grupo Taca has resumed commercial operations to and from all major Central American cities; he added that the worst-hit country, Honduras, "is slowly moving back up to pre-Mitch levels."
In the meantime, one of Taca's competitors -- United Parcel Service -- has begun dedicated round-trip cargo flights into San Jose, Costa Rica, five days a week. UPS says the new flights follow a 16% growth in Latin American cargo volume during 1998.
"Costa Rica is the Silicon Valley of Central America and serves as a technology corridor for many companies including Motorola, Lucent and AT&T," Robert Elizondo, vice president of the company's Latin American and Caribbean operations, said in a prepared statement. "This has created a greater demand for door-to-door express delivery service to and from Costa Rica."
Beginning Jan. 18, a Boeing 757 aircraft valued at $45 million began making round-trip flights between Miami and San Jose's Juan Santamaria International Airport. UPS says the new scheduled service -- previously handled by commercial aircraft, provides customers with improved transit times, earlier delivery and later pickup times, and increased capacity.
With Costa Rica serving as a springboard to Central America, UPS now will offer feeder service through San Jose to Panama, Guatemala, Honduras, El Salvador and Nicaragua. Beginning Feb. 1, Costa Rican customers can also choose UPS Worldwide Expedited service, a day-definite alternative to air freight.