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COVID-19: Its concussion on air cargo reach

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N. I Malik, Strategic Business Analyst
at Elite Aviation.

Source: Seabury Consulting, The COVID-19 pandemic is a health and humanitarian crisis, and it is also an economic shock. We will be providing weekly updates throughout the COVID-19 crisis on air cargo capacity changes based on actual flight movements.

With our comprehensive, reliable and up-to-date demand and supply databases, Seabury Consulting, now part of Accenture’s travel industry practice, is able to provide insights and data on air, express and ocean freight demand and capacity on a global basis.

Global air cargo capacity declined 25% last week compared to last year

North America – Latin America decreases by only 8%. The Transpacific capacity grows 3% compared to last year and Europe – Asia capacity declines by -15%. The Transpacific capacity remains as the only trade lane with an increase in capacity.

Note: Thickness of arrows is representative of May 2020 capacity in metric tonnes, direct flights only; all flows indicate region-to-region capacity; regions are indicated by color coding; 1) Total cargo capacity includes widebody passenger and all freighter flights; 2) Same week last year defined as 09 – 15 Jun 2019, all dates measured in UTC; Source: Seabury Consulting, part of Accenture Capacity Tracking database, Seabury Consulting, part of Accenture analysis (June 2020)

The COVID-19 outbreak has increased market concentration by the biggest carriers

While the industry has previously shown a low and stable level of concentration, concentration of cargo capacity has increased recently, with the top 5 carriers now having a 28% share of total capacity in the market. Smaller carriers have been losing market share since the COVID-19 outbreak.

Note: 1) Concentration estimated using the Herfindahl-Hirschman Index (HHI). 2) COVID is defined as May 2020 and Pre – COVID as same month last year (May, 2019); 3) Ranking of carriers based on May capacity data; Source: Seabury Consulting, part of Accenture Capacity Tracking database, Seabury Consulting, part of Accenture analysis (June 2020)

European air imports from China increased 51% in April driven by PPE commodities

Strong growth rate in air imports shows a similar trend to USA air imports from China (+50% increase). Besides PPE, imports of articles for working from home, such as laptops, also increased in April. Face masks show the largest absolute increase in weight, with over 39 thousand tonnes added in April.

Source: Seabury Consulting, part of Accenture Global Trade Database; Seabury Consulting, part of Accenture analysis (June 2020)

Air freight companies are counting up charter flights to their networks to complement the widespread closures linked to the Covid 19 outbreak. Delta Cargo has launched a global charter service in the US, Canada, Australia, New Zealand and the UK to carry cargo at a time of uncertainty and change, the airline said. The International Air Transport Association (IATA) said on Friday it welcomed the Federal Aviation Administration (FAA) decision to suspend the use of lost slots at airports until June. 

As a result of the disruption of global supply chains, commercial airlines and air freight companies are trying to bridge alternative sources to expand the range of air freight services as they cope with major economic disruptions. Chinese airlines will be helped to expand their fleets through lease agreements and purchases, the State Council said in a statement after Tuesday’s meeting. The State Council also said mergers between aviation, freight and logistics companies will be “encouraged” and express delivery companies will receive support for expansion. 

About Elite Aviation: Elite Aviation is a Global Charter Solution Provider located in the UAE.  Our headquarters is positioned in the Middle Eastern metamorphosis of Dubai.  However, our global organization has assets in other areas of the Middle East, Asia, Europe, and around the world.   Services Provided by Elite Aviation: Air Cargo Charter, Full Charter, Part Charter, Private Jets, Group Jets, Medivac, Air Craft Leasing, Air Craft Trading, OBC (On Board Courier).

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