The massive increase in air cargo demand in recent weeks is already starting to show signs of decline.
According to Brian Pearce, chief economist for the International Air Transport Association (Iata), this comes as the world moves further into a recession in the face of strict lockdown requirements worldwide.
“Air cargo has been busy while the passenger business for most airlines has stopped,” said Pearce. “The challenge for the cargo business, however, is that demand is collapsing as the world goes into a global recession and so whatever offset there might have been at the beginning of the crisis for airlines is not going to be there for much longer.”
He said more than anything the coronavirus pandemic had highlighted the importance of air cargo and the vital role it played in modern society.
“The improvement in the financial performance of the industry prior to the crisis was driven by a relatively small number of airlines,” said Pearce. “There is a long tail of much weaker airlines. In the absence of government support it is inevitable that a large number of airlines will fail.”
He said governments needed to urgently provide financial relief to the airline industry to ensure they survived as viable businesses that could lead the recovery of the world when it got to that stage.
Alexandre de Juniac, Iata director general and CEO, said recovery of the airline sector could not be left to chance and it was imperative that airlines had the ability to re-start operations when governments and public health authorities gave it the all clear.
From a trade perspective this was essential, he said.
“But, if airlines have been largely shut down for a few months, restarting is a complicated thing. All the licensed personnel need to be ready to go. But their licences may have expired or the airline’s safety audit dates may have passed. Airworthiness certificates may no longer be valid. Schedules may need to be coordinated. Aircraft will need some maintenance work.”
