Seven-week strike at Boeing finally ends
The seven-week strike at Boeing, that has exacerbated its already challenging production schedules, has finally ...
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BA: WIND OF CHANGEMAERSK: BULLISH CALLXPO: HEDGE FUNDS ENGINEF: CHOPPING BOARDWTC: NEW RECORDZIM: BALANCE SHEET IN CHECKZIM: SURGING TGT: INVENTORY WATCHTGT: BIG EARNINGS MISSWMT: GENERAL MERCHANDISEWMT: AUTOMATIONWMT: MARGINS AND INVENTORYWMT: ECOMM LOSSESWMT: ECOMM BOOMWMT: RESILIENCEWMT: INVENTORY WATCH
Air cargo’s capacity shortage “will not be resolved any time soon”, and could linger “until the end of the decade”, exacerbated by ICAO’s 2028 sustainability targets, delegates at Aviation Connect in Istanbul heard this week.
Martin Drew, chief strategy and transformation officer at Atlas Air, said: “Certainly from a capacity perspective, there is a severe shortage of widebody freight capacity.
“Without doubt, demand is outweighing supply, and that’s thanks to companies such as Cainiao,” he explained.
And Mr Drew noted that increasing the amount of available capacity would be a key element of “revitalising the supply chain” – but, he added, there were limited options for doing so.
“There are the issues Boeing is facing, and when are we going to see new technology coming into the market?” he asked.
“It’s a great thing now that Airbus is finally going to have a very competitive widebodied freighter. However, when does the first A350 get delivered? I think at the moment it’s going to be the back end of 2026, which may slip, and then of course we’re waiting for the B777-8 freighter.
“On top of that, we’ve got the conversions, in terms of the 777-300Fs, but again there’s this huge issue of certification.
“So, it does seem that this continued shortage of capacity is going to continue for the foreseeable future. And that then really does put a lot of pressure on the supply chain,” he said.
And VP of operations performance at Saudia Cargo Mohamed Badri added that the 2028 deadline set by ICAO for aircraft emissions standards – which will limit production of certain aircraft – could squeeze capacity further.
“There’s already a capacity shortage and the problem does not seem to be resolvable, at least to the end of this decade,” he said, and warned that if capacity became further constrained, shippers and forwarders would feel more of a financial pinch.
“Obviously with less capacity, the average kilo rate has already gone up in a lot of regions, and it will continue to go up more and will be unaffordable for freight forwarders and customers to ship cargo,” said Mr Badri.
“In terms of this 2028 deadline, I just don’t see how it’s going to be achievable. There’s going to have to be some exceptions applied. ICAO is part of the ecosystem for cargo; we all support sustainability, we all support changes, but it needs to make sense,” he concluded.
And Mr Drew agreed: “In terms of 2028, I just don’t see how it’s going to be achievable. There is going to have to be some sort of exception to operate some older technology beyond that point.”
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