A crash of stock market prices, the worst in a long time, the collapse of air traffic due to the closing of borders as just declared by U.S. President Trump, isolating the USA from
mainland Europe, all coupled with constantly rising numbers of Covid-19 infections in most countries worldwide.
The corona crisis dominates the headlines.
What was originally not taken seriously and hushed up by the Chinese autocrats has meanwhile developed into one of the most serious plagues of modern times.
How companies in the airfreight industry are reacting to this dramatic development, and what they are doing to keep day-to-day operations running and protect their employees from infections, is described in the following statements collected by CFG.
Nathalie Berchtold, Senior Communications Manager, Swissport
Overall, the spread of the coronavirus since January has led the aviation industry into a massive crisis comparable only to the financial crisis of 2008 - for some regions even worse. As a result of the sharp drop in demand, airlines worldwide are significantly reducing their capacities. We took appropriate measures at an early stage and responded with business contingency planning and the implementation of a task force.
Several airlines have reduced their flights by up to 50% and will very probably cancel further flights in the next weeks, which will have a direct impact on us. Swissport has therefore immediately introduced cost-cutting measures. Unfortunately, some of these measures also affect our staff, as around three quarters of our expenditure is wage costs. We have introduced measures, such as a recruitment freeze, a reduction in overtime, and, in some countries, the introduction of reduced working hours to cushion the financial impact of this crisis.
All in all, the entire travel industry is in a very challenging situation that changes daily and whose further development is difficult to assess at this point. We assume that the airlines will continue to reduce their passenger and cargo capacities and that it will take months for volumes to return to pre-crisis levels.
József Kossuth, Head of Cargo, Budapest Airport
Budapest Airport finished the January-February 2020 period with 20,828 tons handled cargo volume and +1% change compared to the previous year. BUD Cargo City started operation 06 January 2020, successfully and smoothly. The air cargo community is using now the facility with high satisfaction.
Long-haul pax flights were cancelled to Asia and recently to the U.S., decreasing the belly cargo capacity, but on the other hand, as we see, some freighter routes are gaining business due to the actual situation.
Freighters can operate from each country to BUD/Hungary, but the crew cannot set foot on the grounds at airports in Korea, China, Iran and Italy at the moment. They need to stay on board the aircraft.
Korean Air Cargo started its BUD freighter connection on 21 February 2020 and operates well. As we see in short term, the air cargo market in our region will also suffer a decrease of cargo traffic and volumes 5-15%, but we believe the traffic will return to the normal path within 2-3 months and the extra air cargo demand resulting from the revitalization of the global supply chains will compensate the lost volumes suffered earlier this year at a later time in 2020.
Peter Seenan, Finnair Cargo Communications and Marketing, sent these lines:
COVID-19 related cancellations within our flight network have had and will continue to have a significant impact on our cargo operations. As the situation around the world is evolving continuously, it is hard to estimate the final impact on our volumes. You can see the latest cancellations affecting our cargo customers on this page, which is being continually updated. The cancellations of the flights listed below will have a further impact on Finnair’s narrow-body traffic in Europe. Finnair will communicate changes once decisions are made, the carrier notes.
Last Thursday, all U.S. flights from Helsinki to LAX, MIA and ORD were suspended until 12 April, as were the Delhi flights until 14 April.
Further to this, Finnair Cargo requests their GSAs to cancel shipments still at origin. “Our team in COOL (Helsinki Nordic Cool Hub) will return the shipments if the shipment is in HEL but the connecting flight is cancelled, announces the carrier on its website."
Joachim von Winning, Exect. Director, Air Cargo Community Frankfurt
It’s never boring to be working in air cargo. In view of today's challenges posed by coronavirus and the Trump ban on EU travelers, even less so.
Admittedly I’ve been working in air cargo full time only for six years now, but I’ve been in the aviation/airport business for over 20. We mastered several external shocks since I graduated. However, the current crisis is different. It is affecting not just our work life but also our personal and social existence. For example, all schools and kindergartens in Frankfurt’s home state, Hesse, will be shut down as of next Monday for at least 2 weeks, as also announced for most of the other German states. Particularly younger kids need care. This poses a huge challenge to parents in case both are working.
Touching aviation: Shocking is the split between pax and cargo traffic, caused by the many cancellations of passenger flights. The pax decline at FRA is abysmal. Even before Donald Trump’s travel ban on persons who have been to the Schengen area, passenger numbers were down 45% recently in a year-on-year comparison. Airport operators, airlines, retailers, even taxi drivers and rental car jockeys are in crisis mode. However, national governments and the EU commission have decided to support the beleaguered aviation industry.
And air cargo? Not that much of a change. Fraport just announced that cargo was down around 8% in January and February, roughly the same decline we saw since last autumn due to the slowdown in global trade. Early numbers for March show a positive trend. Even the massive loss of belly capacity on selected routes didn’t create a notable dent in cargo volumes. Most lower deck capacity losses were compensated by full freighter services. Major cargo airlines serving Frankfurt reacted with especially tailored schedules. Load factors are good and cutthroat rates especially on lanes to and from China are last year’s news. Cargo handling agents are busy, with one or two in Frankfurt even struggling with staff shortages.
Everything OK then? Here’s the answer, fact is that we don’t really know. The current demand is driven by backlogs of Chinese producers that ocean just can’t get into Europe or the U.S. fast enough. But with Corona starting to take its grip on the western hemisphere, disruptions of European and North American manufacturing as well as fluctuating consumer behavior seem to be inevitable. But in times of uncertainty global supply chain managers resort to air freight in order to keep their businesses running. Challenging times but also opportunities. Frankfurt with its strong community of airlines, forwarders and handlers is well prepared for it.
Henrik Ambak, Emirates Senior Vice President, Cargo Operations
Facing the spread of COVID-19, we adapt on a daily basis to restrictions placed by various governments while keeping up and expanding our ad-hoc cargo flights to serve a market increasingly impacted by reductions in global passenger operations. We continue to offer cargo capacity to and from China through our freighter services to Shanghai and Guangzhou as well as on our daily passenger flight to Beijing.
Reactions compiled by Heiner Siegmund
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