Air Cargo Market Gets Pandemic Boost, but ‘Preighter’ conversions set to end

LONDON – Global air cargo demand continues to exceed pre-pandemic levels, in June 2021 9.9% higher than June 2019, IATA reports. Even the so-called ‘preighter’ operations have increased significantly during the pandemic with hundreds of aircraft converted.

However, aviation regulatory authorities are imposing limits on Cabin Cargo Fleets owing to safety reasons.

Although the steady growth isn’t homogeneous worldwide, with the lowest numbers in Latin America, it’s a generally favorable time for air cargo. May and June were slow months for demand but, considering the strong seasonality of the industry, volumes are set to climb again in the coming months.

IATA says that “a fall in the ratio has been associated with strong air cargo traffic growth, as it means businesses don’t have enough stocks to meet rising demand” (IATA, 2021).

In addition, the congestion of container ships, resulting in logistical difficulties for Asian ports, and the closure of the Suez Canal caused by the Ever Given (Harper, 2021), have increased the cost of sea freight.

In May 2021, the scheduled reliability of ocean carriers was around 40%, compared to 70-80% prior to the crisis, according to Sea-Intelligence (Cirium, 2021). Therefore, the congested situation of maritime transport makes air transport more affordable

The fastest-growing air cargo market is the African one, posting +33.5% in CTKs (Cargo Tonnes Kilometres) and a load factor of 48%. Due to the lack of international capacity, the Asian market is growing less with +3.8% but with a very high load factor at 76%.

However, it should be noted that, according to IATA, the segment with the highest growth for International CTKs is Africa-Asia. The route has been over 25% growth for six consecutive months with an impressive rise in early 2021 (IATA, 2021).

Passenger-freighter numbers remain high (Lufthansa’s CEO Carsten Spohr is credited with coining the portmanteau ‘preighter’). Cirium has calculated that about 200 planes have undergone the removal of the seats. Of these 81.5% are widebodies, including 63 A330s and 58 777s deployed by 17 different airlines.

Forty-five, or 23.5% of preighter planes belong to Chinese airlines, in first position China Eastern Group which temporarily converted 19 Airbus A330s. As of May 2021, 75 aircraft, equating to 37.5% of the Cabin Cargo fleet, returned to passenger service.

In Q2 2020, 116 aircraft had seats removed, only 32 in H2 2020. In 2021, conversions dropped to 25 aircraft (Cirium, 2021).

In May 2020, IATA published the Guidance for the transport of cargo and mail on aircraft configured for the carriage of passengers (IATA, 2020).

The trade association states that any preighter reconfiguration of an aircraft “requires a full evaluation of cargo restraints connected directly to the seat tracks to ensure structural loads are within design limits and the appropriate restraint system is applied.”

IATA also notes that “reconfiguration of the aircraft also requires a formal authorization from the national aviation authority (NAA) of the State of the operator.” Among the general recommendations, the association suggests using “crew members to survey and access all areas of the cabin during all phases of flight.

This is to address any possible risk of fire, leakage, or other unforeseen circumstances that might occur in the cabin during the flight.”

Nevertheless, regulatory bodies are now warning airlines that the preighter era must soon end. The Federal Aviation Administration has extended the exemption until the end of the year after members of Airlines 4 America had asked for a year’s extension to the rule, but this was denied.

“The FAA is limiting the extension of the exemption until 31 December 2021, based on the FAA’s observation of the ongoing trend toward a return to pre-pandemic passenger air travel, and estimation of the continuing need to bolster the capacity for air freight service to certain communities,” said an FAA spokesman.

Also, the European Air Safety Agency has extended the period in which airlines can use Cargo Cabin aircraft, pushing the deadline back to 31 July 2022. During the pandemic’s initial stages in 2020, EASA granted the deviation from design requirements for cargo compartments.

The European agency is however concerned about the safety aboard preighter flights and in the above-mentioned document performs a risk assessment.

In a statement IATA said; “Cabin fires originate either from aircraft systems or from occupant’s personal belongings that are subject to intensive screening and control. Furthermore, it is assumed that passengers and crew members can detect cabin fires in a timely manner,”.

The regulator sees the possibility that operators of freight-carrying passenger aircraft can “underestimate the hazard associated with a cargo fire” and therefore imposed time limitations to “mitigate to an acceptable level the risk of exposure to a catastrophic cargo fire event”.

Still, the future of Cargo Cabin aircraft seems to be temporary even for primary users of the model. Ground times of converted aircraft increase as a lot of manual work is needed.

Handling preighters typically requires between 12 to 20 agents to load and offload the cabin in 4-6 hours depending on the type of ground support equipment (such as MDLs) is being used (Smith, 2020).

According to IBM, the pandemic anticipated the conversion to e-commerce by around five years (Perez, 2021). Preighters are a logical temporary solution, but it’s unlikely that they can alleviate the situation. Future conversions will be useful only in the tightest of markets when rates are above a certain threshold.

Consulting company Accenture reports that in June, preighters accounted for only 6% to 7% of total widebody passenger flights. This means that preighters will also have a limited impact on current air cargo demand (Brett, 2021).