Hello, London. I talked about the aviation industry’s response to the coronavirus, and I am often asked why there have not been more airline bankruptcies in the past year. Many people have built a cash firewall from the government and capital markets to help them weather the crisis. However, one part of the equation that is often overlooked is that the air cargo market is booming, and capital-scarce airlines are doing everything they can to achieve this goal.

With the government’s mixed information on whether people should travel abroad, emotions among airline owners have begun to sour, and there is no guarantee that passengers will return during the critical summer holiday. Last week, I went to Heathrow Airport on the day the British government lifted many travel restrictions. The lights are on and there are many smiling staff, but Terminal 5 is shockingly quiet.

However, what is not visible from the airy departure hall is that Heathrow Airport is actually one of the busiest ports in the UK. Today’s main content looks at the rise of air cargo and how airlines have become creative to help meet increasing demand, even as passenger operations are deteriorating.

The soaring demand for cargo will continue to help airlines

Cargo is the dishonorable side of the aviation industry. It will not show you the world, it will not reunite with your loved ones, and there is absolutely no first class and champagne.

However, the device you are reading is almost certainly the same from the manufacturer to the retailer by plane, as are many medicines, fresh foods, and auto parts. Indeed, the aviation industry has never been more important than it is now, because aircraft carry high value-added goods around the clock, so that traditional sea routes are troubled. Deadlock caused by the pandemic, Is working hard to provide it in time.

The demand for air cargo was first the sudden influx of personal protective equipment during the first Covid-19 wave, and then the explosion of e-commerce and transportation delays.

The International Air Transport Association (International Air Transport Association) said that with the recovery of the global economy, air cargo volume hit a record high in March, which helped offset some of the Covid losses in the air transport industry. Willie Walsh, director of Iata and aviation industry veteran, said that freight revenue has always been “the difference between life and death for certain airlines.”

Although the freight business is undoubtedly a boon, but even in the past year, they have not been spared. Usually, half of all air cargo is flown in the belly of passenger planes, and the increase in demand is precisely due to the grounding of thousands of planes. Since the wide-body jets that are most suitable for carrying cargo fly into the air at the slowest speed, the demand for long-distance transportation takes longer to recover than short-distance domestic or regional hops, which makes the situation more complicated.

Cargo-only airlines such as DHL and FedEx have Pick up slack Where possible, many airlines have converted their jets into temporary cargo aircraft. Emirates has stripped seats from some of its Boeing 777 aircraft to convert them into freighters, and Air Canada is doing the same for some of its 767 aircraft. Virgin Atlantic usually pays for its fascinating jet image, and it operates some of the most compelling cargo services. Earlier this year, the airline opened a flight to Norway to transport fish and seafood, including salmon, cod and crab, in the belly of its 787 Dreamliner. It also reported that freight volumes on flights to Brussels have increased due to the possibility of logistics companies turning to the sky to avoid the possibility of delays at the Brexit border. In total, the airline’s fragile balance sheet balance has added 319 million pounds to its cargo revenue in 2020, accounting for more than one-third of its total revenue.

Glyn Hughes, head of the International Air Cargo Association, told Trade Secrets that the rapid use of passenger aircraft to fill this gap is “one of the most innovative things in the industry in decades.” He added: “There is no process, regulations must be established, and ground crews have never faced the situation of loading 1,000 boxes one after another in the cabin.”

With a large number of passenger jets waiting to be redeveloped into freighters, Hughes expects a “strategic shift” in the aviation industry, as passenger traffic is not expected to resume until 2024 at the earliest. Optimism is consistent with Iata’s forecast, and his economist pointed out that “the underlying drivers of air cargo demand remain strong.”

Demand has traditionally been closely related to the new export orders component of the Global Manufacturing Purchasing Managers Index.Factory Activity Scale rose It rose from 53.5 in March to 54.7 in April. A number higher than 50 indicates an increase compared to the previous month.

Iata also pointed out that PMI data shows that suppliers’ delivery time has been extended, and as seaports are blocked, companies with sensitive supply chains in a timely manner have turned to air cargo to help them complete their tasks on time. Although sea transportation is cheap, many people now expect that the period of relief from the shortage of container shipping capacity will last until next year. Since the pandemic, air cargo prices have risen sharply, and the delay in delivery time is likely to mean that freight rates cannot fall back to pre-pandemic levels in the short term.

For Hughes, the biggest challenge will be to maintain the supply line, because the normal air form will become fragmented due to the decline in passenger demand. He specifically pointed to Latin America and Africa, even before the Covid attack, where supply lines were often underdeveloped. “The current challenge for freight forwarding is how to build a global network. This is of utmost importance,” he said.

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