Delta leans on its cargo business

ATLANTA, Jan. 5 (UPI) -- Delta Air Lines Inc. executive Neel Shah said the U.S. carrier would lean more and more on its cargo operations while its passenger services shrink.

Delta and Northwest, following their merger in October, will reduce passenger capacity by 20 percent at the end of 2009 compared with 2007, The Detroit News reported Monday.

Third quarter revenue from cargo increased year-over-year 35 percent in the third quarter of 2008 to $162 million.

"This is an absolutely critical component of our business," said Shah, Delta's vice president in charge of cargo. "We're getting involved in driving where this company is going," he said.

The International Air Transport Association said cargo revenue fell 13.5 percent in 2008 compared with 2007. But Shah said Delta will expand with new routes to Africa, Asia and Australia, increasing the possibilities for its cargo business.

"If you look at the revenue profiles on flights like Detroit to London or Detroit to Amsterdam, the cargo revenue provides a lot of the margin on that trip," Shah said.