News / Influx of capacity brings a 'new era' for air cargo markets

© gopixa

New capacity in the passenger and freighter market is changing the parameters of air cargo this year.

Different aircraft entering the market will alter the balance, according to Frank Ziesemer, CEO of Strike Aviation. But he said these changes had not been thought through, particularly in the freighter market.

“During the pandemic, everybody was looking for freighters, because passenger aircraft were grounded. So the airlines shifted towards cargo aircraft without any clear strategy, just to satisfy the market’s needs.

“Currently, air cargo carriers are increasing frequencies and capacities to gain market share. Some of them do it without calculating the costs or profit and loss, and without receiving any state aid, which could lead to unforeseen difficulties,” he explained.

On the passenger side, however, there could be benefits for cargo carriers, despite the return of capacity, added Mr Ziesemer, pointing to low-cost carriers such as JetBlue, which are buying extra-long-range narrowbody aircraft, such as the A321 XLR, for the north Atlantic.

“These aircraft can fly for non-stop over the Atlantic, which means they will begin to operate on routes from the North-eastern US and Canada to Europe. Because these aircraft do not carry as much air cargo as widebody aircraft, they will have a remarkable and positive impact on the airfreight prices,” he said.

Mr Ziesemer believes this will significantly reduce transatlantic air cargo capacity, as well as from Europe to the Middle East, in the next five years.

He said: “Integrators such as FedEx and UPS, as well as airlines like Air Canada, will profit from it because they have a mixed fleet of freighters and passenger aircraft, and they will enhance their positions in developing countries.”

However, some passenger airlines had increased capacity, he warned, switching from aircraft like the A330 to the A350. He added: “For example, airlines like Iberia and Finnair went back to their pre-pandemic schedule and, with the new aircraft, doubled their capacity, especially in the North Atlantic region. This results in lower rates.”

Mr Ziesemer said the winners in the new era would be companies that invested in people, training and technology.

“I am pretty sure that some of the air cargo carriers which are investing heavily in technologies and human resources will set the new standard for the entire air cargo industry.”

AI will also play a role in air freight, he believes, but only if operational industrial standards are implemented and enforced in markets like Latin America and Africa.

“The EU, North America and China’s populations are over-aged, while Latin American and African countries with their young population offer more promising opportunities. At the same time, technology with the human factor and capital will work out for the benefit of all continents,” he said.