News / PPE cargo surge gives a massive boost to air cargo brokers' bottom line

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Global grounding of passenger fleets led to a $1.2bn surge in Air Charter Service (ACS) sales for 2020-21, although it knows such a surge is unlikely to be repeated.

Pointing to the chaos in air travel from the pandemic, the charter broker said “urgent demand for medical supply transport” had provided one of its biggest markets with the bulk of the sales’ growth.

CEO Justin Bowman said: “Due to our businesses in China, we had been dealing with the Covid-19 outbreak since January 2020. “At that stage, we were extremely concerned what it would mean for aviation and business.

“However, we were born out of dealing with crises and our infrastructure, business model and remarkable team came together to achieve a quite incredible result for any broker.

“We had to radically change the way we worked, the audiences we were targeting and the aircraft we were chartering, but everyone here seems to have taken it in their stride.”

Mr Bowman said it was unlikely the company would achieve such results again, but added that the strong figures had allowed it to reinvest heavily across several areas of the business.

“Some of these are already helping us to beat even our most optimistic forecasts for the year, and we expect others to provide potentially exciting returns longer-term.”

One source told The Loadstar the ACS performance was “undeniably” driven by the initial surge in demand for PPE, with charter services “full of the stuff” through to October.

“In the UK, British Airways and Virgin were running two to three ‘preighter’ flights a day at, minimum £200,000 per flight, and at points substantially higher,” said the source. “ACS was the main supplier for these charters, and it also had gloves coming out of Malaysia and ad-hoc demands from various sectors.

“So, on these scheduled PPE runs, it was making £1m a day, and that was way higher April to June with prices substantially increased because of the global demand.”

The surging cargo sales at ACS reflected similar performances across the charter sphere, with Air Partner seeing record sales in freight activities generate a 272% surge in the division’s gross profit, to £11.9m, driven by PPE demand and automotive supply chain disruption.

CEO Mark Briffa told investors last year’s momentum had carried into this year, but pointed to the “softening” of the freight sector as focus returned to passenger services.

He added: “The US last year performed exceptionally well and, again, there was the drive in recruitment and a focus on the freight business. When we look at Asia this is an important region for us, with private jet and freight particularly important.”

While freight may have seen a softening more generally, chair Ed Warner noted it was continuing to rank as the key division for the broker’s US operations. As a result, the company said, one of its priorities for the full year ending 2022 would be to strengthen its freight business across all locations, including through hiring dedicated freight experts and targeting specific market sectors where it was seeing strong demand.