Air market update; May
IATA is predicting a positive outlook for air cargo demand and believes it will continue to improve as bellyhold services pick up, but with freighter capacity “maxed out” and travel restrictions likely to remain in place, it is unlikely much passenger bellyhold capacity will be added through 2021.
The COVID19 outbreak initiated the effective grounding of the world’s passenger aircraft fleet, triggering severe supply and demand volatility in the global air cargo industry and while the introduction of PAX ‘preighters’ has been welcome, capacity remains severely affected and down significantly.
Driven by continuing consumer demand, new manufacturing orders are propelling Asia’s economic bounce back and the ensuing increase in export volumes, is putting more pressure on already strained supply chains, leading to increased lead times, shortages of aircraft space and rising prices.
Global freighter capacity is “maxed out” for 2021 and 2022 and with continued COVID outbreaks and travel restrictions likely to remain in place, it is unclear how much belly capacity can be added through 2021 as countries struggle to curb the impact of the pandemic.
Even though a significant amount of conversion work is underway to transform aircraft from passenger to all-cargo ‘preighter’ configurations, this will not produce a substantial amount of additional (maindeck) capacity this year
The freighters that are flying, are operating to maximum block hours and every available freighter aircraft has been put into service, which has enabled maindeck capacity to increase by 30% when compared to pre-COVID levels.
But belly capacity, which prior to the health crisis represented 55% of all air cargo capacity, is down over 50%, with an overall capacity shortfall of around 25%.
Asia export stays at super-peak levels with rates in some origins approaching the peak levels seen during the height of the PPE frenzy.
With demand outstripping capacity, flights are full across the board and current market conditions are likely to continue through June, based on large amount of cargo in pipeline.
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