Global Air Cargo Capacity Falls; Still Unable to Meet Demand

Travel restrictions implemented to limit the spread of COVID-19 have brought the aviation industry to a halt, taking air cargo as collateral damage. April made history as the worst month to date for air cargo transportation.

Damage to the aviation industry at the hands of COVID-19 continues to pile up. While March once marked the sharpest decline in recent history for the sector, with a 52.9 percent in revenue passenger kilometers (RPK), April would prove to be even worse as RPKs fell by 94.3 percent year-on-year. RPKs, which measure passenger demand, fell almost uniformly across the globe, from Africa’s astonishing 98.3 percent drop to Asia Pacific’s somewhat smaller 88.5 percent drop. The fall in demand has even caused the downfall of major airlines, with Latin America losing its two largest airlines within two weeks as Avianca and LATAM airlines both file for bankruptcy protection.

This significant decrease in demand was also a blight for air cargo, as about half of the world’s air cargo travels in the bellies of commercial airplanes. Moreover, air cargo was also hurt by the slowdown in manufacturing as governments stopped or reduced non-essential activities to protect workers from exposure to COVID-19. Global manufacturing fell by 11 percent during April due to lower demand, plant closures and disruptions of supply chains, according to consulting firm IHS Markit. The drop in production and less demand due to the economic crisis caused a 27.7 percent drop in demand, explained the International Air Transport Association (IATA). Latin America showed by far the sharpest drop in demand with a 43.7 percent drop in cargo ton kilometers (CTK), which measure tons of cargo carried by any transport mode. IATA explains that this sharp fall was caused by the little support airlines are receiving in the region. “The COVID-19 crisis is particularly challenging for airlines based in Latin America owing to strict containment measures and a lack of support from governments to keep cargo moving.” After Latin America came the Middle East with a 36.3 percent fall, followed by Europe with 33.7 percent, Asia Pacific with 31.0 percent, Africa with 21.7 percent and finally North America, which showed the smallest contraction with only a 11.5 percent drop in CTKs.

While demand for air cargo shrank significantly, the drop in capacity was even higher, causing a shortage of available space and leading companies to lease aircraft directly to transport goods. IATA reports that capacity measured in available cargo ton kilometers (ACTK) fell by 42 percent in April as belly capacity in commercial flights fell by 75 percent due to the numerous flight cancellations. While the use of leased aircraft increased capacity by 15 percent, it was not enough to offset the damage. “Capacity was down 42 percent because of the sharp cuts in passenger operations which also carry cargo. The result is damaging global supply chains with longer shipping times and higher costs. Airlines are deploying as much capacity as possible, including special charter operations and the temporary use of passenger cabins for cargo,” said Alexandre de Juniac, Director General and CEO of IATA. The drop in capacity was also felt the sharpest in Latin America, which reported a 64.5 percent fall in ACTK. The region was followed by Europe with 48.8 percent, Asia Pacific with 48.3 percent, Middle East with 43.4 percent, Africa with 38.7 percent and finally North America with a 26.4 percent drop.

Mexican airlines are also reporting sharp drops in their cargo operations, according to the Federal Agency of Civil Aviation (AFAC). During the first four months of 2020, Mexican airlines, which transport 40.8 percent of all cargo transported locally and internationally, reported a 20.1 percent drop in transported tons. International airlines showed similar behavior, with 20.6 percent less tons transported. During that period, local and international airlines transported a total of 229,214 tons, which is 20.4 percent less than the previous year. This fall reflects the hurdles passenger flights are facing. The agency reports that from January to April 2020, national and international airlines operating in Mexico transported a total of 24 million passengers, 28.9 percent less than in April 2019. 

This sharp decrease in capacity can be a significant problem for the transportation of essential goods, medical devices and manufacturing supplies across the world. The International Civil Aviation Organization (ICAO) warns that the barriers placed in air travel have “severely disrupted the supply chain and delivery of essential medical supplies needed to respond to the pandemic.” To address the problems the industry is facing and streamline the delivery of necessary goods, industry associations are urging governments to implement measures that support air cargo. “Governments need to continue to ensure that vital supply lines remain open and efficient. While many have responded with speed and clarity to facilitate the movement of cargo, government red-tape—particularly in Africa and Latin America—is preventing the industry from flexibly deploying aircraft to meet the demands of the pandemic and the global economy,” said de Juniac.

ICAO also urges governments to implement Public Health Corridors (PHC) to allow airports to keep supply chains open, while preventing the spread of COVID-19. The proposed corridors rely on the use of clean crew, aircraft and airport facilities to minimize exposure, regular disinfection of the aircraft, isolation of crew that came in contact with COVID-19 cases, relief from flight duties for crew with symptoms and the observation of social-distancing practices.