Half empty or half full?
How full are the planes now plying their trade across global skies really? To what extent have reactions to the outbreak of Covid-19 changed freight’s status in the industry? What next over the coming months? Here are a few answers.
The global spread of Covid-19 and the concomitant measures taken in government attempts to curtail it brought aviation almost to a standstill in mid-March. Initially, air cargo volumes collapsed dramatically. Now the falls have slowly stabilised somewhat.
In March 2020 all of the Iata members’ airfreight performance together fell by 14.7% vis-à-vis the like-for-like month last year. In April the same figure stood at an frightening –25.6%. For May, then, the figure ‘only still’ came to –20.3%. This included the rather important trans-Pacific trade route only falling 0.4% short of last year’s total. If you take a look at the available capacities for a comparison (March –22.7%, April –42%, May –34.7%), then a clear trend becomes apparent. The figures Iata provided for the load factor are a little less significant – but masks, clothing and gloves (collectively abbreviated to personal protective equipment PPE) don’t weigh much, after all.
The ‘dynamic load factor’; and the bottom line
The ‘dynamic load factor’, established by Clive Data Services, is much more illuminating. It takes more than just weight into account when calculating the efficiency of the airfreight industry; rather, it also considers a consignment’s volume. The world airfreight association’s ‘Tiaca4Cargo’ webinar, held for the first time on 24 June, delivered the insight that the global load factor stood at approximately 70%. On the Europe–North America route it even came to 91% – a massive 25 points higher than the previous year’s figure.
Volumes, freight tonne kilometres, sales – that’s one story. Profits are another one. Early in June, Iata declared freight to be aviation’s “only ray of hope”. It expects the total volume of cargo flown this year to fall no less than 10.3 million t below 2019’s figure and come to 51 million t. It simultaneously also expects a serious lack of capacity to arise, on account of grounded wide-body passenger units, which it expects will push up rates by about 30% in 2020.
Gearing up for the post-PPE era
“Freight income will reach a record of USD 110.8 billion (vis-à-vis USD 102.4 billion in 2019). Cargo’s share of aviation’s total income will amount to approximately 26%, compared to 12% in 2019,” Iata prophesied.
So have we already left the worst phase behind us, as Clive managing director Niall van de Wouw hopes? Only if airfreight can manage to continuously re-invent itself. It probably won’t suffice to be globalisation’s key mode of transport. Countries such as Canada are already close to being self-sufficient in PPE materials. The usual low-production summer phase has started in the northern hemisphere, and ever more airlines now once again provide belly-hold capacities.