Vol. 8 No. 3                                              WE COVER THE WORLD                                                       Monday January 12, 2009


EXCLUSIVE INTERVIEW

Facing Air Cargo Price Fix Jail Time Qantas Freight's
Bruce McCaffrey Is Undefeated

New York City Exclusive—It’s two weeks before Christmas and Bruce McCaffrey is standing in the Oyster Bar inside Grand Central Station, the great hub of Manhattan nestled in the shadow of what was once the Pan Am Building (now the Met Life Building).
     Bruce held the top USA post for Qantas Freight for more than 26 years, and as 2008 comes to a close, he has become the first and arguably the most famous airline individual in cargo to feel the full force of the law. He faces both a fine and jail sentence as the result of the fuel and security surcharge scandals that rocked the industry for almost a year.
     Most people following the story probably assume that the widely reported six-month jail sentence and $20,000 USD fine Bruce accepted as part of a plea bargain arrangement have already been served.
     In actuality, the six-month sentence (which could have been 41 months) is due to be carried out starting this April.
     Bruce McCaffrey is in New York City for reasons unlike those of most visitors during this time of year. He is here recuperating from a kidney transplant performed at Columbia Presbyterian Hospital in late October, thus the delay in his sentence as his body mends from this life saving surgery.
     Bruce looks thin, even a bit gaunt, as might be expected. But there is also a soft, determined air of strength about him.
     He recalls the day when law enforcement came into his offices at Qantas Freight Los Angeles to gather up information, paperwork and computers.
     That was two years ago.
     He also remembers the day he fielded a call from his bosses down the road from the cargo facility ordering him to report to Qantas headquarters.
     Upon arrival a human resources employee flown in from headquarters abruptly told him that his job at Qantas was over “based on performance.”
     When Bruce argued that his performance reviews were always deemed “excellent” and that he led Qantas Freight USA from 15% of total airline air cargo throughput to its current 25% during his tenure, and that during his watch he had delivered budget numbers 24 of 26 years (one year his numbers fell was during the 9/11 tragedy) – to all this, the HR type said simply: “Actually, we don’t have to give you a reason.”

       The Qantas Freight facility at 6555 W. Imperial Highway in LAX was a project undertaken by Bruce McCaffrey in 1994. The result was a state-of-the-art 50,000 square foot air cargo facility with great location, easy access and plenty of room for air cargo operations for Qantas Freight and a couple more carriers.
     As McCaffrey, the old Villanova University finance major recalled, "best of all, we delivered the space at about 25% of the comparable cost of similar construction at LAX."


     The “reason” became apparent when Qantas went public the next day with the admission of price fixing, and agreed to pay a fine as well as throw under the bus Bruce McCaffrey, perhaps one of the straightest, best cargo people you will ever know.
     “Maybe I should have seen this coming,” Bruce says.
     “Qantas management called me six months before I was terminated and offered me a buyout, but I refused.
     “I guess when you look at the landscape of executives in air cargo that are now taking the package and getting out, I should have gotten out then too.
     “I just thought everything would be OK, even with the ongoing investigations, and I thought that Qantas would handle all the price fixing allegations.
     “I went about my business as usual, reporting everything just as before.
     “As it turns out, now I am retired from Qantas having earned (and fought for) my pension.
     “The jail time can’t be easy, but I’ll be damned if I let the time define me.
     “I will define my time and my life by taking the opportunity to think about my life and reflect on my air cargo career.
     “I’ll also be studying up with an eye to renewing my private pilot's licenses.
     “There is life after air cargo, you know.
     “It’s curious, but with all the pressure and rapidly changing events, one thing that saved me when I lost my job was entering into a regular exercise program.
     “I work out regularly now and was able to face down the kidney transplant, speeding my own recovery, because of the exercise discipline.”
     You look at Bruce as he sits at 160 pounds in his chair and jokingly describes the weight loss, saying, “a good way to get thin is to go through this,” and you think of all the years of service at National Airlines, then Pan Am, then Qantas.
     This former Villanova economics major and U.S. Army helicopter pilot who served during the Vietnam era has just concluded a generation as an absolutely top world air cargo executive.
     It is hard not to feel sympathy for the guy and his fall.
     But take one look at Bruce, and you can see he will have none of it. Bruce McCaffrey does not want anyone’s pity.
     Behind his smile and bright blue eyes is rock hard determination.
     Life may have dealt him several terrible hands, but as he talks his eyes reveal that he is undefeated.
     And that is remarkable.
     What exactly happened to Bruce McCaffrey? He became the first designated fall guy for a giant international investigation (witch hunt) as the U.S. DOJ was looking to nail some Qantas people headquartered in Australia and realized that they could not be extradited to the USA.
     Testimony from two Qantas Freight employees obtained by DOJ was, in truth, nothing more than the word of a couple of low level types who were promised immunity.
     Bruce, DOJ was told, had issued instructions to secure information concerning rates from competitor airlines.
     Price fixing anything is a pretty ridiculous notion. Any carrier that wants to know about rates can offer a service quote to any forwarder who will, fast as a flash, quote a better rate from another carrier.
     Customers out on the street quote rates amongst each other and to carriers as leverage to get better rates – it’s almost the rule in air cargo, and everyone knows it.
     But as the world has learned through the USA auto crises, as Ford, GM & Chrysler executives are under the hot lamp of public scrutiny, the way business is done is mostly created at the upper levels of management, whether it’s automobiles, tobacco, oil or the airlines.
     So why is Bruce McCaffrey going to jail?
     Call it “body count” law enforcement.
     Here is this trusted and totally straight air cargo executive who made millions for Qantas Freight taking a fall after living almost his entire adult life in service to the airline.
     Bruce McCaffrey has no wife, no kids and you could say no decent luck.
     He once had a job that meant everything to him, and then one day he was told that in order to defend himself against an international law enforcement frenzy he would have to put up all he had and more.
     Bruce McCaffrey faced the demand of raising an impossible half million dollars, the kind of money airline people just don’t have, to defend himself with no guarantee of success.
     Qantas refused to help or support him in any way, other than to say if he fought the case and won that they would share in his legal fees.
     If he fought the case and lost he faced financial annihilation, fines of one million dollars or more and a possible sentence of ten years in jail.
     So Bruce McCaffrey, in total survival mode, agreed to cooperate with law enforcement, serve time, and pay a fine.
     As 2008 is ending, here is Bruce exiting the industry that was his entire life in some manner of disgrace, while most of the people around him at Qantas get off scott-free.
     “I just spoke to investigators from Canada this afternoon,” Bruce ventures.
     “Recently I was interviewed by investigators from New Zealand.
     “As often as I am approached now I cooperate because of the offer of immunity.
     “Investigators want to know about the business of air cargo,” Bruce McCaffrey says.
     What Bruce does not say is what is most apparent.
     Ongoing interviews, by a widening group of law enforcement characters from an expanding list of countries, serve as primers on air cargo for people who are descending on this industry like a school of blood-smelling sharks, as airlines continue to pony up huge fines.
     What Bruce does say is that all of this activity indicates that, “my case is not the end of the price fixing investigations.
     “I believe that there are many more cases yet to be raised,” Bruce McCaffrey concludes.
     “Fasten your seat belts, there’s a bumpy ride ahead,” barely raises a smile.
Geoffrey Arend/Flossie Arend

I Remember Bruce

     In early January in New York City, if you look up at the sky at 1100 hours, the sun is already on the wane as if it were 1400 hours. During this dark season in 2009, thoughts drift back to 1971 when I began the air cargo beat and the guys I knew from Qantas Freight.
     The first QF Freight sales and marketing type we knew was Gil Philaba (left).
     Gil was from another generation, a genuine old school gentleman who practiced his craft first from a city office here in New York, then later from an office building on the Sunrise Highway near JFK.
     I have always loved driving on the Sunrise Highway, which runs east to west, because in the daytime the sun is always coming or going.
     Gil and I had lunch once in a small restaurant adjacent to the train stop near his office.
     I got the feeling while we ate and exchanged pleasantries that he couldn’t wait to hop the train and get the hell out of that neighborhood.
     The boss of Qantas Freight in the Americas during that era was George Stark.
     George (pictured second from left in photo below) was a great nuts and bolts cargo guy.
     He was also a pillar of the O’Hare Air Cargo Association where he loved to play golf, as I recall.
     In 1980 when we showed up in California to give him our Man of the Year award, he was bemused and somewhat chagrined that a local labor beef had resulted in security observers posted in The Sir Francis Drake Hotel on Powell Street with a commanding view of Qantas House where George worked.
     Thinking back to that time, it should have been apparent to anybody in commercial aviation that someday our business and art might become a target.
     The first time I met Bruce McCaffrey he was sitting in Gil’s chair in that Sunrise Highway Building.
     But Bruce, who I always considered one cool customer, didn’t stay in New York for long.
     Bruce headed to LAX and was the founder of Qantas Freight in Southern California as the LAX West Imperial Cargo Center was created in the 1980’s.
     It is worth mentioning that Bruce, in a move of true grace and humanity, appointed Terry MacDonald, who was the great belly cargo guy from Eastern Airlines and sat atop EAL Building 9, as the man to take his regional seat in New York when he flew off to Lotus Land.
     Terry, (left with wife, Annette) like Bruce, might still be there except for a grim accident that claimed the love of his life, Annette, on that very same Sunrise Highway just a few miles from the Qantas office after a Christmas party.
     The next time I saw Bruce was at LAX in 2005.
     He was, of course, older and operating pretty well despite having suffered a stroke.
     Bruce was always proud to deliver on budget for Qantas Freight.
     I remember we exchanged memorabilia and did a story on Bruce. We felt lucky to have that opportunity because at this point he almost never appears in print about anything.
     At that time we suggested a trip down under, but Bruce, who checked everything with the home office, could not get us a bump up to Business Class and the trip idea fizzled when I thought of 14 hours with my chin to my knees.
     When word came that Bruce McCaffrey, the straight arrow guy I had known for many years, was in a price fixing beef with the U.S. DOJ our first reaction was disbelief.
     Now about a month after we met in The Oyster Bar in Grand Central Station and spoke to Bruce McCaffrey for the third time in twenty-five years, we can only marvel at the spirit and determination that Bruce, a guy who once lived for air cargo, now gives to himself.
     It’s worth mentioning that once upon a time Bruce was a Pan Am Clipper Cargo guy, back when those people of the big blue meatball were breathing more air in the cargo area than all the other international carriers combined.
     Not for nothing, but modern air cargo as we know it began with people like Bruce.
Geoffrey


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