How Has COVID-19 Changed the Air Cargo Market?
The global air cargo market has recently faced some challenging times. With the US-China trade war spurring yields into decline. 2019 saw one of the biggest declines in air cargo demand in a decade, falling by three percent. Now in 2020 with the aviation industry facing a challenge like none other, how has COVID-19 changed the air cargo market?
The viral spread of COVID-19 and subsequent shutdown of passenger air-travel, has had a notable impact on air cargo cargo capacity.
Source: Seabury Consulting Capacity Tracking database, Seabury Consulting analysis (May 2020)
As you can see from the above graph, passenger belly cargo has fallen by 72%, while airline and express freighter services have grown by 17% and 18% respectively.
Source: Seabury Consulting Capacity Tracking database, Seabury Consulting analysis (May 2020)
Freight services from China to the US have grown by 4%, while the remainder of freight links have decreased in size. Notable declines include US-Europe and South America-Europe. Global capacity has decreased by the aggregate of 26%.
Seabury Consulting Capacity Tracking database, Seabury Consulting analysis (May 2020)
Not surprisingly, with the US-China freight link growing by 4% year-on-year, Hong Kong International airport remains the king of global air freight. Even though Hong Kong sustained a decrease in capacity of 19% compared to the previous year.
Cathay Pacific, Hong Kong's flagship airline has recently taken advantage of Hong Kong's freight demand by operating both Boeing 777 and Airbus A350 passenger aircraft on freight only flights. This includes the use of the passenger cabin to store the cargo. Destinations of these unique cargo only flights include London Heathrow and Los Angeles.
While the pandemic has had a drastic effect on air-travel, the silver lining in the dark cloud that is COVID is the perpetual demand for air cargo services worldwide.
As airlines worldwide begin to ramp up passenger flight schedules, cargo has remained the financial foundation of those airlines lucky enough to have substantial air freight services already established.