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By Alex Lennane
It would seem as if all is not well at Southern Air. It is just under a year since majority owner Oak Hill Capital made a strategic investment of $55 million ? but it sounds as if the cash is starting to run out, while managers are leaving, and fast. One former manager told The Loadstar the reasons for his departure: “Mainly as a result of cutbacks in the fleet size, leaving very little requirement remaining, in the short to ...
Comment on this article
Doug Caldwell
September 12, 2012 at 2:35 pmAlex,
I assume that this will not affect the multi-year agreement between DHL and Southern Air that was signed a year ago. Southern Air is operating the new “around the world” flights for DHL, including the Hong Kong-Cincinnati-Bahrain and back to Hong Kong run. In March, DHL & Southern Air added a Hong Kong-LAX-Leipzig-HK run, which provides for 24 hour transit times between Asia and Western North America.
AAC
September 17, 2012 at 10:44 pmIn 2011 Thai Airways cancelled a Southern Air contract for two Boeing 777F. In the same year Malaysian Airlines Kargo cancelled its Southern Air contract for four Boeing 747F. Perhaps a customer survey effort will find out the reason why. My internal source indicated Mr. McHugh was personally involved in the matter.
When you compare the contract with the legacy airlines which are typically multi-years with guaranteed monthly flight hours and payments, to the military contracts, which always fluctuate and are subject to the military activities requirement, the former is a better deal. More, when you compare to the DHL contract, which is understood to be very rigid with hefty penalties if the departure time is not strictly met, the former is a much better deal too. The management decision must be questioned if Southern Air’s entering into the deal with DHL – Mr. McHugh’s former employer, is indeed a prudent decision that make business sense.
When Kalita was sold, the ex-owner went idle for a while. When Kalita did badly and was on the verge of bankrupcy, the ex-owner returned and bought back his beloved firm, and turned it around. Know-how in global business is essential in longhaul air cargo. Without it, one is not going to make it.
james
September 27, 2012 at 9:57 pmup today Southern Air is just a F.A.A operational certificate with eight high payment leased aircrafts, a bounch of ex DHL employees and with too many VP’S, good luck to all folks at Southern Air
John
November 08, 2012 at 4:43 pmDHL kills ACMI airlines….. Astar and ABX are 2 that comes to mind. Southern also lost the Ethiopian contract to Hong Kong. The Oak Hill boys are true professionals at gutting Airlines. I’m sure Southern will end up in the same boat as Gemini Air Cargo….I feel sorry for their Crews…
Frank
May 22, 2013 at 5:21 pmYes John, you are right. As a furloughed SA crew member we could not understand why they would park all their Classics which were all paid off to buy new aircraft with hefty monthly payments. For two years they supported the new fleet type B-777 which were breaking even at best! Now since they were all retired the company is losing money. It appears the chickens have come home to roost.