COVID-19: airport freight bottoms out but some steadying
While there may be very few passengers willing to fly anywhere right now - even if they could - and equally, few airlines there to take them, many eyes will be on developments in the airfreight sector, which struggled badly in 2019 as a result of trade wars and other factors.
Supply lanes must be kept open, and passenger aircraft are being adopted to fulfil that role, even when still configured as passenger aircraft.
Few airports have anything other than a steep cargo volume decline curve during Jan to Apr-2020, although it was at its steepest in different months, depending on the airport's location. The majority of them appear to have 'bottomed out' now, although whether the growth curve will be as positive as the one being presented is anyone's guess.
Freight volume is often taken as a precursor to what will happen in the passenger segment and it languished throughout 2019. Statistics are skewed by the necessity to ship vital supplies across the world but beyond that, figures will be examined closely to see if there will be a freight-led recovery for airlines.
This report covers the top 20 cargo airports worldwide by volume and how that volume is varying according to current global and local circumstances.
Summary
- While the COVID-19 outbreak is having such a damaging impact on passenger air traffic, at least there is a demand for cargo aircraft.
- Some passenger aircraft are undergoing ad-hoc conversions to carry freight where they can.
- There are a few freight-only airports, but the concentration of activity will be on the major hub/feeder ones.
- All the top 20 cargo airports in this survey have experienced sharp volume downturns over the last three months, but just when, and to what degree, has varied considerably.
- While some airports are yet to 'bottom out', others are showing signs of recovery.
Airlines are using passenger aircraft for freight, ad hoc
If there are any "winners" in the current situation, it is the freight airlines, which have an important job to do in keeping global supply lines open, and the airports that service them.
Bellyhold cargo space on passenger aircraft is limited, and unless an aircraft is in a 'combi' version already formally converting it to freight operations, such space is costly and time-consuming and would need eventually to be reversed anyway, also at a time and cost premium.
Even so, United Airlines in the U.S. and Lufthansa are among several airlines now using passenger aircraft to carry cargo only, on an ad-hoc basis, placing it in aisles, on seats, in galleys and in overhead lockers.
So for now, the global freight-handling airports and the dedicated aircraft that service them have been thrust into the limelight in a way that they probably never envisaged they would be.
For hub and spoke - read hub and feeder
For cargo operations, airports can be categorised as 'hub and feeder', where in the passenger domain it is 'hub and spoke'. Especially so in international operations, where the hub and spoke system continues to be the dominant operating model for scheduled flights, both passenger and cargo.
Larger aircraft are used on long haul international routes, while smaller aircraft serve domestic points and close international origins and destinations.
This system allows shipments between origin/destination pairs that could not support direct, point-to-point, services. It also provides for more frequent services from the hubs to the various international origins and destinations. The trend towards more fuel efficient modern aircraft operating thin routes between cargo airports has not yet developed to the same degree as it has in the passenger segment, and cargo aircraft tend to be older anyway; some of them are passenger conversions.
There are few freight-only airports
There are few airports in the world that handle freight only. One of them is Montreal's Mirabel Airport, but payload capacity (kg) there has almost halved since 2016.
There are many airports around the world, however, where cargo of one form or another is - or was - of equal or greater importance than passenger traffic.
Examples include East Midlands Airport in the UK, Frankfurt Hahn in Germany, Vatry Airport in France (another that has lost traffic), Maastricht-Aachen in the Netherlands, Seletar Airport in Singapore and Upington Airport in South Africa, which mainly exists to handle grape exports.
Two of them, Hahn and Vatry, attempted to secure business that primary airports (Frankfurt International and Paris CDG) could not handle because of slot restraints that have since been resolved or eased.
Two of the best examples of mixed passenger/freight business are in the world's Top 20 by cargo tonnage. They are Memphis (#2) and Louisville (#7) airports, which would be insignificant in the overall scheme of things if not for the fact that they were the main bases of the parcels logistics companies FedEx and UPS respectively.
None of the top 20 cargo airports only handles cargo. The following charts, taken from CAPA/OAG data, describe weekly total cargo payload for each of the top 20 cargo airports in 2018 (formal 2019 figures have yet to be released), from position #1 to position #20. Additionally, the growth curve is extrapolated predictively up to six months from week commencing 30-Mar-2020.
In all cases the 2020 line is the green one. The dotted green line is what airlines file as their planned schedules, and in the current environment this is often changing weekly.
Hong Kong International Airport weekly total cargo payload (kg) capacity: 2017 - 2020*
Under normal conditions, as of week commencing 30-Mar-2020, 84.3% of freight at the Hong Kong airport is carried on dedicated cargo aircraft and 15.7% on passenger aircraft.
Memphis International Airport USA, weekly total cargo payload (kg) capacity: 2017 - 2020*
All Memphis' cargo is domestic, whereas all Hong Kong's cargo is international, since there are no other airports in the territory.
The chart above only reflects activity on scheduled passenger airlines, which account for 100% of normal freight operations, apart from FedEx's parcels services. FedEx has suspended its regular economic update for the immediate future.
Shanghai Pudong International Airport weekly total cargo payload (kg) capacity: 2017 - 2020*
The interesting thing in this chart is that 83% of Shanghai's cargo is international. Of that, 76% is carried on dedicated freighters.
This is the first chart where a distinct uptick can be measured from the middle of Mar-2020, although it fell back slightly before levelling off to the end of the month.
Seoul Incheon International Airport weekly total cargo payload (kg) capacity: 2017 - 2020*
Similarly, for Incheon Airport in South Korea the capacity loss curve has flattened out on the cusp of Mar- and Apr-2020.
Korea is a little behind China in its 'recovery' from the economic impact of the virus. International freight represents 100% of the freight handled at the airport, and 79% is carried on dedicated cargo aircraft.
Ted Stevens Anchorage International Airport, USA, weekly total cargo payload (kg) capacity: 2017 - 2020*
The Anchorage airport has long been an important east-west hub airport for cargo, partly because cargo aircraft tend to have a shorter range than passenger versions. More recently, it has been reinventing itself as an e-commerce hub.
See the related report:
Domestic and international cargo is split broadly 50:50, and more than 97% of it is on dedicated freighters.
The airport suffered a short, sharp, drop in capacity in Mar-2020, as indeed it did in 2017, but rapidly steadied the ship and capacity began slowly to build again at the end of the month. As measured by cargo capacity, nine of the top 10 airlines at Anchorage are North Asian, with four from China (inclusive of Cathay Pacific).
Dubai International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Dubai, heavily dependent on the global interconnecting passenger traffic that has dried up, has experienced a sharp fall in capacity, prompted by the discontinuation of Emirates' passenger services rather than its cargo division, which is the largest international cargo airline in the world.
That fall has bottomed out now, but only by dint of the fact that the bottom may have been reached. The cargo division will have an important role to play in the coming months.
Louisville Muhammad Ali International Airport, USA, weekly total cargo payload (kg) capacity: 2017 - 2020*
Louisville International Airport is in the same position as Memphis, in that the chart refers to capacity on passenger aircraft, where there has been a steady decline, rather than the operations of UPS at its main U.S. and global hub, which have been reduced considerably.
Taiwan Taoyuan International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Located in North Asia and with most of its trade with China, Hong Kong and North Korea, Taiwan felt the immediate impact of the virus in China, with a sharp drop in volume capacity from mid Jan-2020 after an initial rise, then a levelling out in early March, followed by an even sharper drop towards the end of the month.
Volume is normally split equally between passenger and all-freight services.
Tokyo Narita International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Japan was hit by the virus later than China and Korea, and Narita Airport actually had a small amount of cargo volume growth throughout Jan-2020, followed by a shallow decline chart line until mid-Mar-2020 when it went into free fall.
Once again, there are indications that the dramatic decline may have come to an end - at least, for now.
Typically, the cargo carried by freighters is two and a half times the volume carried on passenger aircraft. The main market is China (one third of the volume), followed by the U.S., and more than 94% of the volume capacity is in international markets.
Los Angeles International Airport, USA, weekly total cargo payload (kg) capacity: 2017 - 2020*
It may surprise some people to learn that LAX is the tenth busiest cargo airport by volume. Currently it is the #3 busiest passenger airport, serving a wide geographical area of high-spending consumers.
The chart is a strange one under the circumstances, as volume was in a slow decline in Jan- and Feb-2020, then rose suddenly to mid-Mar-2020, before plummeting as California went into lockdown. There is no indication of an immediate end to that slump.
There is a high international component, but most of the volume is on domestic flights, which have been curtailed but not as yet completely stopped, while North Asian airlines make up over half of the international capacity.
Doha Hamad International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
In 2020 Qatar Airways' main base at Doha got through January, February, and most of March before experiencing a severe decline in capacity as Qatar Airways passenger services began to be reduced.
However, like Emirates, the airline maintains a significant cargo division with dedicated aircraft, which have been allocated towards providing food and medical supplies throughout the region and away from the main markets, which are Western Europe and Asia.
That could well explain the bottoming out of the sharp volume curve drop in the first week of Apr-2020.
Singapore Changi Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Changi's volume curve follows a similar path to many others, with a steady decrease followed by a sudden sharp drop in Mar-2020.
However, there is a distinct upward curve from the beginning of April, which may be connected to the Singapore government's organisation of a USD13 billion (SGD19 billion) support package, which includes bridging loans, equity, debt and bonds.
Singapore Airlines is dominant at Changi Airport and also has its own cargo division; the ratio of freighter to passenger cargo at the airport is 52%:48%.
Frankfurt Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Lufthansa, the major airline at Frankfurt, has suspended all its passenger services until the first week of May-2020, but its cargo division continues to operate and began using passenger aircraft as cargo flights on 25-Mar-2020, filling an A330 with freight in the cargo hold, passenger cabin and overhead lockers.
Frankfurt managed pretty much the same chart as it did in the previous three years through to the beginning of Mar-2020. Then there was a sudden and very steep decline in capacity, which rebounded towards the end of the month (as some of the passenger fleet was reallocated) and then levelled out.
Paris Charles de Gaulle Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
Paris CDG's freight is evenly split between passenger and all-cargo operations.
The capacity line is remarkably similar for each of the previous three years and the airport held on to its freight capacity until well into Mar-2020.
Air France then said (on 16-Mar-2020) that it would cut overall capacity by 90% for two months, but it does continue to operate some routes. The decline curve has been steep, and bottomed out at the 10m kg/month mark at the beginning of Apr-2020.
Miami International Airport, USA, weekly total cargo payload (kg) capacity 2017 - 2020*
As this is written, Miami's mayor has issued a letter to US President Donald Trump requesting that the government "immediately suspend flights from international and domestic COVID-19 hotspots to Miami International Airport".
That will further impact the dramatic fall in volume at one of the U.S.'s most important cargo airports; one that offers a lifeline to Central and South America.
Beijing Capital International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
As with Shanghai Pudong airport above, a different type of chart can be expected at Beijing Capital, where domestic freight accounts for three quarters of the whole volume and the majority of it is carried on passenger aircraft.
A very sharp decline in volume throughout Feb-2020 was countered by an upturn and then a levelling off on more than one occasion, with the trend back to positive in the first week of Apr-2020.
Guangzhou Baiyun International Airport, weekly total cargo payload (kg) capacity: 2017 - 2020*
A similar curve is apparent at Guangzhou Baiyun Airport, except that the recovery was more pronounced there.
Guangzhou airport handles more international freight than does Beijing. Again, the general trend is up but the recovery is uneven.
Chicago O'Hare International Airport, USA, weekly total cargo payload (kg) capacity: 2017 - 2020*
The situation at Chicago's O'Hare Airport is quite different, with the chart still very much in negative territory and the likelihood that it will continue to fall as U.S. domestic flights are curtailed.
Domestic represents 59% of the capacity there, but otherwise passenger and cargo aircraft each account for approximately 50% of the total.
London Heathrow International Airport weekly total cargo payload (kg) capacity: 2017 - 2020*
London Heathrow is one of few UK airports to be operating scheduled services and has retained some long haul flights as well as domestic connections to key cities.
The majority (85%) of its cargo capacity, though, is on passenger aircraft. The steep curve showing loss of capacity took place from the third week of Mar-2020 when the government suddenly, and belatedly, closed the country down.
Again, the curve appears to have bottomed out, but at a very low rate of activity - some eight million kgs of freight weekly.
Amsterdam Schiphol Airport weekly total cargo payload (kg) capacity: 2017 - 2020*
Finally, Amsterdam Schiphol Airport, which resisted a steep downturn in capacity until well into Mar-2020.
As with Air France, a number of important routes have been retained; 57 of them from 28-Mar-2020 to 03-May-2020, mainly in Europe and representing approximately 10% of its schedule before the virus outbreak. KLM also continues to operate cargo services to Delhi, Dubai, Lima, Nairobi, Beijing and Taiwan Taoyuan.
Over 75% of Schiphol's freight is handled on dedicated freighters.
The opening of Lelystad Airport has been delayed until 2021, which could cause some capacity issues at AMS Schiphol.
Falling volume has now bottomed out at many airports
Taking an overall view, few airports have anything other than a steep cargo volume decline curve during Jan to Apr-2020, although it was at its steepest in different months, depending on the airport's location.
The majority of them appear to have 'bottomed out' now, although whether the growth curve will be as positive as the one being presented is anyone's guess.
Some rebounds, for example Frankfurt's, while small is greater than what might be expected.
U.S. airports often do not look as bad as their counterparts in Europe and Asia because domestic services have been operating there. That could change.
Some airports, for example, the one at Anchorage, Alaska, seem to be immune to the ramifications of global events.
The three Chinese airports are showing freight volume growth again, though it is stop-start at the moment.
Freight volume is often taken as a precursor to what will happen in the passenger segment and it languished throughout 2019. Statistics are skewed by the necessity to ship vital supplies across the world, but beyond that, figures will be examined closely to see if there will be a freight-led recovery for airlines.
CAPA MEMBERS - Stay up to date with the latest critical global developments affecting the industry with our customisable CAPA Alerts. Please contact our Sales Team for assistance.
MEDIA - If you are seeking further commentary on this topic, please contact our Marketing Team.