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Cargo to the rescue – triple-A supply chains in the aviation industry

The transport of cargo has always played a role in airline operations, either through dedicated freighter capability or on direct passenger routes, but the Covid-19 pandemic has solidified cargo’s importance in the aviation industry. With increased demand for shipped goods worldwide, cargo flights have provided a vital income stream during the pandemic when passenger revenue has been so low and are contributing significantly to the positive cash position of some carriers.

Whilst capacity remains constrained on account of the significant number of grounded aircraft worldwide, IATA predicts that the trend of cargo outperforming passenger business will continue with cargo revenues projected to hit record highs this year. Those carriers with cargo carrying capabilities are well positioned for the resumption of more frequent passenger flights and can continue to use their cargo operations to offset the reduction of passenger volumes in the meantime.

Accessing the cargo market has been more straightforward for carriers with existing freighter capacity. Other airlines have made use of temporary passenger to freighter conversions, known as “preighters”, through the removal of passenger seats and with dedicated support from both manufacturers and IATA. Ethiopian Airlines, for example, has converted 25 of its passenger aircraft using its in-house MRO capability as well as taking delivery of newly converted aircraft. The conversion process is also creating a valuable line for business of MRO providers and opening up dedicated freighter leasing opportunities.

The recent (un)availability of certain goods and essential medical equipment has put airlines’ crucial role in global supply chains under the spotlight. Whilst the pandemic has highlighted the value of resilient supply chains, the importance of these also being agile in the face of disruption, adaptable over time and aligned on incentives and information sharing, should also be recognised. An aviation industry that can support these triple-A supply chains is essential to the support of export markets and overall economic growth.

Carriers globally have been flying temporary freighter aircraft or maintaining route networks just to fly cargo in bellyholds.

Tags

covid-19, transportation, aviation, logistics

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