Passenger airlines “will kill air cargo market”

Swiss announced this week that it was converting a fourth 773ER to carry cargo, Finnair have converted 3 A330-300’s. American airlines has increased its cargo flights on passenger aircraft from 80 to 140 in one week.

Virgin Atlantic, British Airways, Lufthansa, Air France, KLM, you name it, they’re all putting boxes rather passengers on seats just to keep the cash flowing and the airline operating.

And as with all things, when there is too much capacity, the price that can be charged per kilogram starts to drop. And that doesn’t just affect the passenger airlines, it affects the primary freighter companies too.

And that’s what’s starting to happen. Just as more capacity is being added, the prices that can be charged and the money made is starting to fall, and relatively quickly.

With many western European nations slowly coming out of lockdown and economic activity re-starting, the need for vast amounts of PPE has gone from urgent emergency to routine supply and will inevitably decline.

It might not be so easy in the US, as the race to reopen the economy is bound to end up with more lives lost as the disease will spike again, as inevitably as a hurricane after June 1st.

Passenger airlines were quick to jump on board the cargo space shortage, but its largely seen as already over, and growing capacity is lowering prices, profits and inevitably will lead to more distress as airlines loose the extra income. Inevitably, passenger airlines will have to back out first and leave it to the specialists, or just accept that only belly cargo is their market when demand returns.