ANA to increase reliance on belly freight

Japan’s All Nippon Airways will reduce the number of scheduled freighter flights by about 15%, and become increasingly reliant on belly freight for certain routes, beginning 30 October, according to its new Fall schedule, and a report in Nikkei.

Following a tough first quarter (ended 30 June) during which ANA boosted cargo traffic, but saw cargo revenue drop, the move comes as no surprise. Total cargo traffic for the quarter jumped 16.2% y-o-y to 1.08 billion RTKs, but domestic and international cargo revenue fell by 1.5% and 29.1%, respectively.

ANA’s decision to reduce freighter capacity is not based solely on falling yields, but also on a shift in the types of cargo it is carrying, and the destinations to which it is delivering goods. In the past, the airline carried high volumes of auto parts and high-tech components from Japan to other industrial centers in Asia. But the persistently strong yen, combined with slowing growth in China, has put the brakes on such exports.

Swelling cross-border e-commerce has more than made up for falling industrial exports, and has been the main driver of ANA’s increased cargo traffic. In fact, ANA handles approximately 30% of all such cargo movements between Japan and China. However, unlike the industrial cargo it has replaced, cross-border shipments often end up closer to larger cities where high demand for passenger transport — and therefore, abundant belly space — also exists.

With a fleet of freight-friendly 767, 787 and 777 passenger aircraft, ANA is betting it can increase belly space utilization on routes with sufficient passenger demand.

ANA’s cargo unit currently operates five 767-300Fs and seven 767-300BCFs. What exactly might the reduction of freighter flights mean for ANA Cargo’s fleet? Retirement of older units? Operation for other carriers? 767 freighters are in high demand at present, so ANA would have little difficulty selling any freighter it no longer needed.

If you would like to learn more about ANA, or the impact of e-commerce on the air freight and express industry, join us at the Cargo Facts Symposium in Miami, 10 – 12 October, where Michael Michiru, Vice President, Global Marketing & Sales at ANA Cargo Innovation will speak on a panel dedicated to route cargo route strategies. To register, or for more information, go to CargoFactsSymposium.com.