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The coming air cargo reality check: how the industry will evolve through COVID-19

Nearly six months since the World Health Organization officially declared Covid-19 a pandemic, the
world is still in a state of near-emergency. Aviation as a whole is, as is well documented, being hit hard by the ongoing restrictions in travel. The air cargo business has also been affected, but to a lesser extent.

Cargo is a short-term winner for the industry

At the peak of the crisis in April, global cargo capacity was 44% lower than in the same period in 2019. However, the demand decline was not quite as steep, at just 33% against 2019. This, coupled with extraordinarily high demand for personal protective equipment (PPE) and medical goods resulted in air cargo rates skyrocketing by up to 200% on the most important trade-lanes.

As a result, cargo has emerged as a lifeline for many airlines. It was the most profitable business
segment for Lufthansa Group in Q2 2020, and helped Korean Air and Asiana avoid operating losses for the same period. American Airlines recently completed its 1000th successful belly-cargo-only flight since the start of the pandemic. Clearly, cargo is no longer only a byproduct or afterthought of airline operations. It has become a significant factor in airlines’ strategic planning, necessitating a robust view of its development as the industry recovers from the effects of COVID-19.

Lufthansa Consulting addresses the outlook for the industry on three dimensions – volume (demand), capacity (supply) and yield levels.

Read the full article here

To learn more and discuss how your organization could benefit from Lufthansa Consulting’s expertise on Crisis Recovery, please get in touch at ALcrisis-solutions@LHConsulting.com

Further insights from Lufthansa Consulting’s aviation experts are available here.

Award

Best of Consulting

For the second time in a row Lufthansa Consulting has been awarded the renowned consultancy prize "Best of Consulting" by the German weekly business news magazine WirtschaftsWoche. The “Excellent” award went to a successful Air Service Development project with Auckland International Airport, the largest airport of New Zealand and the third busiest international airport in Australasia. Lufthansa Consulting and its client Auckland International Airport are incredibly pleased about the award and that the WirtschaftsWoche jury could also be convinced of this successful project. Both look very much forward to their further productive and prosperous cooperation.