Main Deck Or Belly Who Leads The Race?

With more and more widebody aircraft being purchased by the aviation companies, which come with expanded space for cargo, combination carriers have emerged as a new competitor on the block. The heat of competition and the challenges in the tough market are giving way to more link ups and partnerships.

- Shreya Bhattacharya

A recent deal signed between Emirates SkyCargo and Cargolux in Munich draws attention towards how the air cargo players are strategically attempting to boost their air freight activities to crack what has been a tough market for them. Although the global air-cargo business now handles more than a third of world trade by value, the volume of goods traveling by air has risen marginally over the past few years. Overcapacity therefore remains a difficult challenge to get rid of.

However, factors like growth of world trade, prevalence of e-commerce, the rising proportion in the global trade of the high-priced, low-weighted electric products, time critical shipments indicates that there is still lot more to explore in the air cargo sector and no stakeholders want to lose their share in the business. This has particularly affected the existing freighter networks who now are competing with the combination carriers, which not only have dedicated freighters in their fleets but have also sensed the opportunities of expanding their load factors by utilizing the large belly capacity in their modern passenger planes.

According to the latest International Air Transport Association (IATA) data, 712 tonnes of capacity were added to the freighter fleet in the first half of 2017, down 22 percent from the same time period last year. Passenger wide body belly capacity was up more than 4,500 tonnes, down 5 percent. The slower capacity additions have helped the global freight load factor hit 45 percent, a two-year high.