Carrying the load – Cargo had a ‘good’ pandemic

Innovation has always been at the heart of the air transport industry and with COVID-19 restricting passenger movements, airlines quickly looked to alternative revenue streams to stay afloat. The obvious and most common solution was to carry freight, which required minimal human intervention and, with no passengers on board, meant minimal risk of spreading the virus.

Some operators were already prepared for this carrying bellyhold cargo onboard their aircraft, some had more established freight operations and divisions, while others quickly adapted (by passenger-to-freight conversions), or improvised by carrying cargo in the main cabins of passenger aircraft and the arrival of so called ‘preighters’.

Global air cargo traffic comfortably exceeded constrained capacity throughout 2021, while capacity shortages benefitted cargo yield and load factor. Demand has softened more recently, but Jun-2022 CTKs were still +0.8% up on Jun-2019 (while RPKs were -29.2%).

The resilience of cargo traffic, coupled with strong yield growth, resulted in a +37% increase in world airline cargo revenue: from USD101 million in 2019 to USD139 million in 2020. IATA estimated that cargo revenue jumped by a further +47% in 2021 to reach USD204 million – more than double the 2019 number.

Air cargo increased its share of airline revenue from 12% in 2019 to 40% in 2021. IATA forecasts that this will ease back to 24% in 2022, but air cargo could well emerge from the pandemic with its position structurally enhanced.

The air cargo sector is edging back to a kind of post-pandemic structural normality, both in terms of total capacity and the balanced duopoly between freighter and belly capacity (with no preighter deployment).

  • What is the outlook for air cargo from the easing of COVID-19 restrictions in China and smoother global supply chains?

  • What impact will high inflation and rising interest rates have on air cargo?.

  • Will airlines look more positively on the role of cargo in their operations?

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