The Future of Flying Checks

pilot4500

IT Manager/ Former Cirrus Charter Pilot
The vast majority of the flying that we do here at Ram Air Freight is flying bank checks, and bank mail from place to place. Over the past few months, I have noticed that we have lost a few runs. We are also selling some of our airplanes. I have always thought that the check flying business will eventually come to an end, as more and more banks will send their checks electronically. Bank mail can always be sent on a truck, as it is not really time critical.

As for a timeline, I don't really know when that will happen. What do you guys think?
 

mikecweb

Well-Known Member
Sooner then later. We used to carry close to 1500lbs of bank work out of Boston last august. We carry 150lbs now.
 

C150J

Well-Known Member
Question from an outsider:

Are your companies diversifying to combat the Check 21 Act?
 

mikecweb

Well-Known Member
Yes.

We are about 90% full every night. Mostly blood. But Boxes take up more room then bags so who knows what the bottom line looks like. Weight wise not even close.
 

pilot4500

IT Manager/ Former Cirrus Charter Pilot
I have not seen my company diversify at all. There is a rumor floating around that we might get a Cessna Caravan and use it to do UPS feeder runs, but that is just a rumor at this point. We also have one or two runs that we currently do for UPS, but everything else is bank work. And I think that we will see those runs slowly disappear.
 

wheelsup

Well-Known Member
Check 21 law not likely to affect check haulers by Mark Phelps

What does Federal Reserve chairman Alan Greenspan have to do with the market value of Mitsubishi MU-2s?

Late last year, flying overnight check runs (long recognized as one of the ideal turbine-time builders for budding professional pilots) appeared poised to fall victim to the digital age. Legislation known as “Check 21” became law, clearing the way for banks to cancel checks electronically through the “Fed” without transporting the actual paper. A monumental time and cost saver for the banking industry, the new law will go into effect in October.

But what about all those pilots and companies who have been making their living from flying checks overnight? Turbine Air Services (TAS), which supports the Mitsubishi MU-2 under contract with Mitsubishi Heavy Industries, recognizes the speedy turboprop twin as one of the mainstays in the overnight check-flying market. Some 25 percent of the MU-2 fleet is involved in flying under contracts with the Federal Reserve, according to Pat Cannon, vice president of TAS. If that market were to disappear overnight come October, the market value of the 413 MU-2s in operation could plummet since a quarter of the fleet would find itself out of a job–not to mention the pilots who would be forced to look for other work.

Even National Public Radio expressed concern for the potentially lost jobs with a report aired on its Evening Edition news program the day President Bush signed the Check 21 legislation into law. (One unsympathetic listener subsequently wrote to the network complaining that mourning the loss of such jobs was comparable to feeling bad that the telegraph had put pony express riders on the dole).

But apparently, the midnight riders actually have little to fear from Check 21 through the next decade. Cannon told AIN that key operators supported by TAS report they have received no indications from the Federal Reserve that its contract flying requirements would diminish for at least 10 years. Among the Check 21 law’s provisions, the nation’s check writers have the option of continuing to receive their canceled checks back in the mail if they so desire. It seems the Federal Reserve now anticipates that plenty of Americans will still want their actual checks back (rather than photocopies). Also, there are enough other sorts of time-critical paper transactions to keep the overnight freighters full for the foreseeable future.

Still, one check-flying company is hedging its bets. AirNet Systems of Columbus, Ohio, operates more than 120 aircraft. AirNet announced last month that it has branched out, creating a new subsidiary called Fast Forward Solutions. The subsidiary’s focus will be “the sale of newly developed payment solutions to financial institutions [using] software technology…image platforms and opportunities resulting from the enactment of Check 21.” In other words, AirNet is using its Rolodex of financial-institution customers to move into the digital check-processing business–kind of like a pony express rider keeping his horse saddled, but also learning how to operate a telegraph key.

Aviation International News is a publication of The Convention News Co., Inc., P.O. Box 277, Midland Park, NJ, 07432. Copyright 2004. All rights reserved. Reproduction in whole or in part without permission from The Convention News Co., Inc., is strictly prohibited. The Convention News Co., Inc., also publishes NBAA Convention News, HAI Convention News, EBACE Convention News, Asian Aerospace 2004, Farnborough 2004, Paris 2005, Dubai 2005 and AIN Alerts.

[...source...]
Interesting article from 2004.
 

Boris Badenov

Just running in to a burning house...
Yeah that was 2004. Sometime in 2006 (I think) the Fed posted a "revised" schedule for check-relay closings. A lot of stuff got moved up, and most everything was supposed to be gone by late 2009. There haven't been any further official "revisions", but I've heard from extremely unconfirmed sources that they may be looking more towards the original 2013 timeline again. Either way, the vast majority of check flying is eventually going away.
 

pilot4500

IT Manager/ Former Cirrus Charter Pilot
I have noticed that a lot of the banks have chosen to send their checks by truck as opposed to airplane. It probably is a lot cheaper that way, even if it does take a little bit longer. I have also noticed the banks opening up more processing centers where the checks can be processed. For example, Wachovia bank opened up a processing center in Roanoke, VA last year. That resulted in Ram Air losing the afternoon VJI ROA UKF run that we used to do.

For other runs like MYR to CAE, a lot of banks have chosen to drive their checks and mail to the processing center. It takes one hour to fly, and about three hours to drive. Not a big difference, and I'm sure that driving would be cheaper.
 
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