Mail realized as an ever-important generator of extra revenue for airlines

Mail realized as an ever-important generator of extra revenue for airlines, Even though for the past 13 months revenue has been cut about in half by post-Sept. 11, 2001, security restrictions. Airliners cannot carry U.S. mail packages over 1 pound until a security screening method is in place.

Ailing airlines are lobbying to end the restriction and have gotten a sympathetic ear in Congress — but not much more.

A House bill includes a provision that would lead to the restriction being lifted, but the bill remains pending, and it's unclear when the provision would take effect.

In the meantime, big airlines are losing $450 million to $540 million per year, depending on whose estimates are used. Some of that business is going to airfreight and trucking companies still allowed to carry heavier mail.

Even when the Transportation Security Administration settles on inspection procedures for mail, it's unclear whether commercial carriers will get all of the business back.

Since the new restrictions took effect, the Postal Service has created a new truck hub 2 miles south of Hartsfield International Airport to deliver mail in the Southeast, to compensate for the loss of volume carried by Delta Air Lines.

"Now we're trucking more in the Southeast than we ever have," Postal Service Vice President Paul Vogel said. "That is volume that has left the commercial air industry and will never come back. Trucks are always less expensive."

New truck hubs also were opened in Dallas, San Francisco and Los Angeles.

TSA spokesman Robert Johnson couldn't say why the government decided letters 1 pound or under are still allowed while heavier letters and packages are not. He also would not comment on whether the government screens lighter mail still flying on passenger planes.

The restriction doesn't affect cargo carriers such as FedEx. "If your aim is to create terror, the most likely target would be a plane full of people," Johnson said. There's no deadline for when the government must devise a screening process for heavier mail, although the pending House bill would require the TSA to set one.

Johnson said the TSA hopes to settle on a process by early to mid-2003. Even then, implementation may take longer, he said. The government is testing screening methods ranging from X-rays and other technologies to dogs, Vogel said. The TSA wants a solution "for all the potential threats," Johnson said, including explosives and biological and chemical weapons.

It's unclear who will pay for any new security equipment and processes. "The Postal Service's opinion is that it's not going to be the Postal Service," Vogel said. "Generally we share the cost with the partners involved," Johnson said.

Delta Air Lines Chairman Leo Mullin, who has led the industry's effort to get relief from security-related costs and lost revenue, has said the heavy-mail ban costs the Atlanta carrier $50 million per year.

It is not make-or-break money for a company with annual revenue of $13.9 billion, but it is money airlines could sorely use amid the current slump.

Joe Samudovsky, manager of postal sales for United Airlines, said passenger carriers have a lot to offer the Postal Service, including a "massive" domestic network of flights and low prices. The average cost per pound of transporting mail on a passenger plane is 33 cents, Samudovsky said.

Delta spokesman John Kennedy said Delta's mail rates throughout the country, including long-haul routes, are more competitive than those of FedEx.

While the Postal Service could not provide a price comparison, spokesman Mark Saunders said it's cheaper to use FedEx planes because the company charges by cubic feet rather than a combination of weight and distance traveled, as do passenger airlines.

Gene DelPolito, a spokesman for the Association for Postal Commerce, also said cargo carriers are considered more reliable because they do not cancel flights or bump cargo in favor of passengers.

Still, Vogel said the Postal Service takes no joy in shifting business away from airlines. "The Postal Service is the largest individual user of the commercial airline industry," Vogel said. "That's why this hurts so much. Pan Am, United Airlines, American Airlines, all started as mail planes," he said.