ANA Cargo’s new 777F enters at the worst time

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ANA Cargo took delivery of a new 777F on 10 June and its first on 23rd May, increasing it’s cargo capacity considerably at a time when its cargo loads have fallen sharply.

The environment is not good:

  • With a long running historical dispute with South Korea about the worst its ever been, leading to deliberate bureaucratic sanctions on goods shipping from Japan (by the Japanese Government)
  • The US-China trade/tariff dispute which affects Japan especially badly as it exports and imports to both for finished products
  • Japan’s own issues with China (that almost invariably end up with trade in the firing line)
  • A sagging Chinese export market
  • Low demand for air freight around the world (with the exception of Qatar), it all seems like a bad time to expand capacity.

ANA’s international air freight fell 9.3% year on year in 2018 and and so far this year it’s already down a staggering 12.3%. the air freight market to and from China has fallen 24%, almost all of it due to the Trump administration’s tariff’s, which are hurting its Japanese ally deeply, not that the US seems in the least bit bothered.

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The BlueJay logo on the first aircraft JA771F

The 777F’s however do have a positive side if the company can find new business – and it’s not like there is no competition. The new aircraft can carry aircraft engines, semi conductor plant, and ‘high-care’ goods like lithium batteries  and pharmaceuticals that were not viable with the 767F’s. They’re also far longer ranged and give the airline access to more of a global market than the 767F’s which tended to operate only regionally.

The first aircraft has been used on flights from Tokyo to Shanghai via Osaka and the next aircraft will allow a direct service to Chicago.

It remains to be seen if the airline can sustain a full fleet, or wether or not, like Korean Air Cargo across the straits of Tsushima, it will have to look at cutbacks to hubs or even aircraft. Korean Air Cargo and ANA Cargo are deeply competitive so neither will want to blink first, especially when both governments have a underlying issues that need to be resolved.

ANA operates 8 763F’s and 2 777F’s, the later were ordered in early 2018 before the market started to fall away.

 

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