News / Cargo airlines chief Ziemelis eyes more freighters, but stays cautious

Avia Solutions Group Chairman, Gediminas Ziemelis

There is a thirst for freighter capacity at SmartLynx Airlines and Bluebird Nordic, two cargo operators under the Avia Solutions Group umbrella.

Considering the soft demand for air cargo globally, group chairman Gediminas Ziemelis is cautious, and acknowledged that freighter utilisation and load factors were down, year on year.

And he said: “If market conditions continue to deteriorate, we will not have a peak season in the fourth quarter. Therefore, we could see older, less-efficient freighters being parked or put into storage.”

SmartLynx operates a fleet of A321 converted freighters in Europe, Asia, Africa and South America, where, in October the Latvian division announced plans fior a fleet of 20 A321Fs this year.

Mr Ziemelis said SmartLynx already had the feedstock for all its conversion slots, and some were currently operating in passenger configuration in preparation for induction, adding: “The conversions are progressing well, and supply chain restraints are gradually easing.”

The pandemic created a boom for air cargo, but the return of belly-hold capacity has driven cargo prices down steeply and IATA estimates that year-on-year cargo yield will fall 28.6% this year.

“This means air cargo, notoriously cyclical, is again entering a period of turbulence. This is the context in which airlines are deciding whether to purchase new freighters,” said Mr Ziemelis.

The group’s Iceland-based Bluebird Nordic operates a fleet of two B737-400Fs and seven B737-800Fs and in March announced plans to add 25 aircraft to the fleet in the next few years, as well as a Slovakian AOC. Mr Ziemelis said there was a need to steadily renew the fleet, and the B737-800F had emerged as the freighter of choice.

Typically, a 737-800F offers up to 24 tonnes of capacity, or 12 pallet positions. Recently, analysts at aviation advisory firm IBA observed that availability of -800Fs was quite high, with as many as nine for sale or lease, mostly early production aircraft, but a later-build 2010 is in there too.

Last year, Bluebird CEO Audrone Keinyte told The Loadstar of plans to add more widebodies to the fleet, potentially converted B777-300s, but Mr Ziemelis said for now, Bluebird would focus on the B737-800F.

“Widebody freighters are one of the considerations that we are evaluating, along with market trends,” he added.

The carrier would be looking at monthly lease rates of $1m for an 737-800F, according to figures by Avia Solutions. By contrast, leasing a converted B777-300 will cost $0.6m per month, or roughly $65m to purchase outright.