The coronavirus pandemic caused an economic crisis and significantly affected the development of various sectors of the world economy. The aviation industry has also suffered from quarantines, border closures and travel restrictions.
According to the latest estimates by the International Air Transport Association (IATA), global airlines will lose an average of $ 84.3 billion in 2020.
IATA CEO Alexandre de Juniac commented on the financial problems of the aviation industry: “Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses.”
Already, the world’s major airlines are facing significant financial problems. For example, Austrian Airlines’ financial report for the first quarter of 2020 shows that the coronavirus crisis resulted in a 24% decrease in revenues. The company’s CFO Wolfgang Jani commented on the situation: “The pandemic hit our company with full force. This blow is also reflected in our earnings. We will likely see the full effects in the coming months. However, it is already obvious today that it will take years for us to weather the crisis”.
Given the open borders, it is assumed that next year airlines will recover their financial performance, and their financial losses will be reduced to $ 15.8 billion. However, the resumption will be long and difficult through debt and changes in aircraft operating parameters due to the need to maintain social distance between passengers.
According to IATA estimates, the situation with air cargo is somewhat better. Compared to 2019, the total amount of air cargo transportation will decrease from 10.3 million tons to 51 million tons. However, the severe deficit in cargo capacity due to the lack of cargo on passenger aircraft is expected to increase the cargo aviation performance for the year by about 30%. Air cargo revenues will reach $ 110.8 billion in 2020 (compared to $ 102.4 billion in 2019).
According to Seabury Consulting, as of the last week of June 2020, global air cargo capacity declined by 27% compared to the same period in 2019.
IATA’s forecasts for cargo aviation for the future are quite positive. The growing role of this industry will remain, and revenues from air cargo transportation will reach $ 138 billion (25% more than in 2020). In 2021, the demand for air cargo transport will be very high, due to the fact that the world will see the restoration of the work of enterprises.
Despite the decrease in cargo capacity due to the coronavirus pandemic, the International Air Cargo Association (TIACA) is positive about the future of freight transport. Association Secretary General Vladimir Zubkov believes that “Air cargo will play a significant role in supporting the recovery of the global supply chain and the economy”.
Airlines that have cargo aircraft in their fleets are now in a winning position and are making the most of their assets. In the context of the coronavirus pandemic, cargo aviation resources have become particularly important for the supply of essential medicines and medical equipment to various parts of the world, as well as for supporting the supply of perishable goods. The urgent demand for essential goods has led to the fact that the cost of cargo charters has increased significantly.
In order to weather the economic crisis, airlines with only passenger aircraft are responding to market needs and refurbishing passenger cabins for cargo transportation. Such measures are necessary to overcome the shortage of air cargo transportation capacity due to a significant decrease in the number of passenger flights. IATA, in collaboration with various stakeholders, has even developed guidelines for the safe transport of goods on aircraft passenger cabins. Maximizing the use of passenger aircraft resources for cargo transportation helps airlines solve financial problems.
For example, Lufthansa began operating cargo flights with four Airbus A350s and six Airbus A330s. With these ten passenger airliners, Lufthansa has created additional air transport capacity and expanded its cargo fleet, which has 17 air-only aircrafts. Emirates has removed the Economy Class seats from ten Boeing 777-300ERs and can now carry up to 17 tons more cargo on a single flight.
One of the largest airlines in the Asia-Pacific region, Cathay Pacific, canceled 3/4 of all scheduled flights due to the coronavirus pandemic and has high hopes for air cargo transportation. The company is improving the development of freight traffic thanks to passenger flights re-equipped for the transportation of goods.
Ronald Lam, Chief Commercial Officer and Chief Customer Service Officer, commented on the changes and state of air cargo at the company: “To ensure time-sensitive cargo, such as medical supplies, was shipped to where it was needed most, we continued to take steps to maximise our available cargo-carrying capacity. We improved the utilisation of our freighter aircraft, which have been flying around the clock, and chartered more flights from our all-cargo subsidiary, Air Hong Kong, to serve regional demand. Moving forward, we expect our freighters will operate at near full capacity, while our cargo-only passenger flights may be reduced.”
For the air transportation of medicines needed to combat the coronavirus pandemic, the maximum payload is used on passenger aircraft. Such special flights are operated by, for example, American Airlines, Etihad, Delta, Emirates, Air Canada, Cathay Pacific, Air New Zealand and others.
Large global logistics companies are trying to make the most of the economic crisis to accumulate capital. To this end, the leaders of the transport and logistics industry are creating special response centers to monitor market changes associated with the coronavirus pandemic.
Deutsche Post DHL, one of the world’s largest logistics concerns, is on track to increase profits by almost a billion euros in 2020. The financial position is strengthening, as services to help various companies are in great demand to establish mechanisms for the supply of goods to the market after the outbreak of the coronavirus.
The company, which operates more than 250 aircraft, regularly reports an increase in demand for its cargo aircraft: “The value of our dedicated fleet is even higher [in the current environment],” – said DPDHL Chief Financial Officer Melania Kreis.