C-19 radar: Vax logistics – millions done, billions to go
As the vaccine machine warms up, Neanderthal man makes an unexpected headline.
Air Atlanta Icelandic is preparing to add two 747-400 aircraft to its freighter fleet.
The ACMI provider has always pursued a twin strategy of operating freighters as well as passenger aircraft, but for the near future, it’s all about the cargo planes.
“Freight is our lifeline now. We have no passenger revenue coming in,” said chief executive Baldvin Mar Hermannsson.
Prior to the global impact of Covid-19 on aviation, Air Atlanta had 15 aircraft running, eight of them passenger planes. As airlines slashed their operations and grounded their fleets, passenger demand quickly dried up.
“ACMI is always the first capacity to be shed in a downturn. It’s a fact of the business model we operate,” Mr Hermannsson said. “For us it was a massive hit.”
The impact would have been even more disastrous if it had come a month later: Air Atlanta was ready to launch passenger operations with leased A330 and 777 equipment. Two A330s were supposed to commence flying in April, and the first of three 777s was to start operations on 1 June.
“We’re ready to resume these when the market picks up,” Mr Hermannsson said.
The abrupt loss of its passenger business meant the loss of 70% of revenues. This has been mitigated by the current strength of the cargo market, which has generated strong demand for Air Atlanta’s 747 freighters. But revenue is still about 50% of its previous level.
“We’re putting more emphasis on freighters,” Mr Hermannsson said. “We will deploy additional 747 freighter capacity in the summer. This will give us a stronger foundation.”
The first of the two new 747-400 production freighters is due onstream in July, and Mr Hermannsson hopes the second will be ready in late July or early August.
Once the aircraft are ready, operations can begin quickly, he said, adding: “We have an abundance of pilots who are sitting at home at the moment.”
In recent years carriers have shifted focus to the 777-200F to take advantage of its better fuel economy, but Mr Hermannsson thinks the 747 is far from finished.
“I’m a firm believer in the 747. There is a need for 747s,” he said.
To take advantage of immediate opportunities in the cargo market, Air Atlanta is considering using passenger 747 planes on cargo missions, possibly with seats removed to augment cargo capacity.
“You can use nets, or possibly pallets, but it takes time, you need a supplemental type certificate. It’s faster simply loading cargo on seats. We’re now weighing the options,” Mr Hermannsson said.
At this point it is unclear when the passenger market will come back to life, he noted.
“We have seven 747-400s. We won’t come out of this with all of them flying,” he said. As Air Atlanta owns these planes, some of them will be scrapped for parts to support the freighters down the road. For some time, the cargo planes will be the main focus for the company.