21 Air eyes larger Boeing 777s to access long-haul cargo market

21 Air, a small mid-size cargo airline that provides dedicated transport for DHL Express and Amazon, is preparing to step up a level in aircraft size to the Boeing 777 in search of more lucrative international business under the guidance of a new interim CEO, said owner Jim Crane, the billionaire founder and chairman of Crane Worldwide Logistics, in an exclusive interview.

At the same time, Canadian investor Cargojet is exiting its position in the company. Crane told FreightWaves that he has installed Keith Winters, a confidant and former CEO of Houston-based Crane Worldwide Logistics whose ties to Crane go back more than 25 years as an executive at Crane-led Eagle Global Logistics, to run 21 Air on a temporary basis.

Winters succeeds Tim Strauss, 70, who was ready to retire after his two-year contract expired in February. Strauss left on good terms and was extended through June on a consulting basis, said Crane in a phone interview.

An information vacuum about the leadership transition led some industry sources with company connections to suspect that Cargojet had pushed for a new CEO given its 25% ownership stake and history of having a representative at 21 Air’s Miami operations center. “I own the controlling interest. I’ve got all the buttons.

I don’t do deals where I don’t have control,” Crane insisted, rejecting the notion that anyone, let alone a foreign air carrier, would pull the strings at one of his companies. “We haven’t done anything to suggest Cargojet is running the airline whatsoever.” Crane, who also owns the Houston Astros baseball team, made his fortune in logistics.

His net worth is $2. 5 billion, according to Forbes. He founded Eagle Global Logistics in the mid-1980s before selling it to a private equity firm in 2007. Eagle was eventually acquired by Ceva Logistics. With proceeds from the sale, Crane formed an investment management company, Crane Capital Group, and in 2008 he formed Crane Worldwide Logistics. U. S.

ownership rules for airlines require the president and two-thirds of the board be U. S. citizens and that no more than 25% of the voting shares may be held by non-U. S. citizens. The airline also must be under the actual control of American citizens. Crane noted that Cargojet’s 2021 investment in 21 Air was agreed to by U. S. regulators.

But Cargojet is selling its stake in 21 Air because it doesn’t want its pilot union to exploit the relationship in negotiations over a new labor contract, said Crane. Cargojet pilots, for example, could seek benefits enjoyed by U. S. -based 21 Air pilots. The existing labor agreement expires in June.

The Air Line Pilots Association, which represents 21 Air and Cargojet pilots, urged the U. S. Department of Transportation in 2021 to prevent Cargojet from loaning aircraft to 21 Air to operate on its behalf. Cargojet operates at least two aircraft on an interchange basis with 21 Air. The company maintains it simply dry leases the cargo jets to 21 Air.

ALPA has long argued that the arrangement is a way for Cargojet to bypass restrictions on foreign carriers operating domestic routes in the United States. 21 Air is legally owned by Avia Acquisitions LLC, which is owned by a joint venture between Crane and Cargojet called Avia Investments LLC.

Crane previously served as chairman of the board at publicly traded Cargojet before acquiring 21 Air in 2021. He denied that Cargojet has any managers seconded to 21 Air, saying that he hired former Cargojet executive Luis Fernando Alvarado after buying the airline. Fernando Alvarado was promoted in February to chief operating officer.

“I’ll call Ajay (Virmani, Cargojet’s founder and chairman), it might be weekly, it might be more than that, might be less than that and ask how did you do this? Why would you do this? ,” Crane said. “He’s run that airline for quite some time. I’ve been out of the airline business for a while, but I know how it works, and I know the intricacies of it.

And it’s not for the faint of heart.” Crane said the FAA has approved his purchase of Cargojet’s stake and that the transaction is expected to be finalized soon. Going forward, 21 Air and Cargojet will cooperate on a transactional basis, as needed.

Cargojet will be paid to provide consulting services and simulator training for pilots, while aircraft trades will be done as traditional arrangements between leasing companies and airlines, the owner explained.

Winters, who has more than 35 years of logistics experience in various senior positions, resigned three years ago from Crane Worldwide Logistics for health reasons. He is now tasked with building out the executive team at 21 Air.

He will stay there until the new leadership is in place “and set up to facilitate an accelerated growth plan,” Crane told FreightWaves. Expansion mode When Crane bought 21 Air it had four or five freighter aircraft.

The airline currently operates 16 planes in its fleet, including seven Boeing 767-300 converted freighters that shuttle e-commerce packages in Amazon