The near-term demand for air freight is expected to remain strong, but the overall outlook for the airline industry is dire as passenger planes remain grounded and financial woes increase.
According to Glyn Hughes, International Air Transport Association (Iata) global head of cargo, airlines are burning through cash and millions of jobs are at risk. There are also far-reaching wider concerns for national economic prosperity if the global aviation industry loses airlines. In South Africa it is estimated that around 80% of air freight moves as belly freight on passenger planes. The grounding of f leets has resulted in huge capacity constraints and demand has soared.
“The dramatic and rapid grounding of the passenger fleet caused a huge spike in demand for cargo capacity during the early stages of the global travel restrictions around the world,” said Hughes. “This has progressively been addressed through increased freighter utilisation. Bringing back into service parked freighter aircraft has also helped address the capacity shortfall – and in recent weeks we have seen over 100 airlines start to utilise their passenger aircraft for cargo-only operations.
These collectively have helped address the demand/capacity imbalance.”In South Africa more freighters were available as well and some of the pressure on capacity has been relieved.But, warned Hughes, without urgent funding of an anticipated $10 billion, the Covid-19 crisis could see a collapse of the aviation sector in Africa, taking with it millions of jobs.Hughes told Freight News that the sector contributed $169 billion to Africa’s economy, representing 7.1% of the continent’s GDP.
Brian Pearce, Iata chief economist, said all indications were that air travel would recover more slowly than most of the economy and was estimated to be at least two years behind overall GDP recovery.
“There are several consequences of the anticipated slow return of the passenger business,” said Hughes. “Firstly, the reduction of global connectivity, which has been building significantly over recent years, will impact the industry as carriers will stop f lying on the passenger routes where demand has been impacted.
And considering approximately 50% of global air cargo travels on passenger planes this reduction in network operations will impact shipper choices.”It would also increase demand for freighter operations to satisfy the connectivity and reduced capacity situations.
“We can also expect to see the current trend of using passenger aircraft for cargo operations continuing for some time until passenger demands require those planes to be returned to passenger operations.”
