Eased HKG, Japan travel restrictions boost capacity

Although travel restrictions have eased in Hong Kong and Japan, cargo stakeholders are unsure whether the return of belly capacity will boost cargo volumes as freighters dominate the cargo market. In September, the governments of Hong Kong and Japan announced they would remove some travel restrictions related to COVID-19, increasing overall airfreight connectivity. Following the announcements, carriers said they would add services to Hong Kong (HKG), Handea (HND), Osaka (KIX) and Tokyo (NRT). The long-term effects of shifting belly capacity have yet to be felt. While capacity from Northeast Asia remains around 11% lower than pre-pandemic levels, regional capacity fell 14% week over week between Sept. 26 and Oct. 3, according to a market report from OAG. [caption id="attachment_96467" align="alignright" width="362"] Photo/Japan Airlines[/caption] Hong Kong opens up Hong Kong dropped its mandatory COVID-19 hotel quarantine for travelers on Sept. 23, easing access for visitors. While handler Hong Kong Air Cargo Terminals Limited (HACTL) is confident the relaxation of quarantine regulations in Hong Kong will restore bellyhold capacity to the local market, freighters provide a much larger proportion of the city’s total capacity, Wilson Kwong, HACTL chief executive , told Air Cargo World . “Freighter capacity has proven more resilient to extreme events such as the pandemic and will therefore retain favor both among carriers and the global logistics community,” Kwong said. See also: Weak cargo market sees depressed July volumes Malaysia-based forwarder Transcargo Worldwide, which transports roughly 100 tonnes per month to Hong Kong International Airport (HKG), anticipates more airlines, especially AirAsia, will resume passenger operations and bellyspace, Transcargo co-founder and director Ong Chin Kian told Air Cargo World . Cathay reestablishes network Meanwhile, Hong Kong-based Cathay Pacific Airways saw abnormally high website traffic following news of the lifting travel restrictions in Hong Kong and Japan, Bloomberg reported. And Cathay will begin flights to Osaka (KIX) this month, and increase flight frequencies between HKG and Tokyo (TYO). “The removal of mandatory hotel quarantine in Hong Kong is yet another significant and greatly encouraging step toward recovery ,” a Cathay Pacific spokesperson told Air Cargo World . “Our teams have been working hard to add more flights, restart operations and bring our parked aircraft back into service to ready ourselves to take full advantage of the recovery.” Cathay Pacific relies on both freighter and passenger services to meet capacity supply, the spokesperson said. The carrier has 20 747Fs that provide additional capacity to its passenger fleet. Further, its subsidiary, Air Hong Kong, supports regional cargo services. Cathay Pacific has been rebuilding its network following the grounding of its fleet early this year and this summer began operating its full freighter schedule. While belly capacity does play a large part in the carrier’s cargo capacity, it has been boosting capacity using its freighters and 777 so-called “preighters .” “In October, we intend to add more than 200 pairs of passenger flights to both regional and long-haul destinations,” the spokesperson said. “We have also looked at the lessons from elsewhere about opening up too quickly without the resources in place, and we expect to be able to deliver more capacity and network choice without affecting consistency.” Other carriers create HKG connectivity In addition to passenger belly capacity, AirAsia plans to operate its own A321 freighters on behalf of logistics affiliate Teleport next year, as reported by Air Cargo World ’s sister publication Cargo Facts . “So far, we have had no problem [obtaining capacity to HKG] since we have contracts with airlines, and there are some freighter flights to HKG like Raya Airways , Kargo Xpress and Malaysia Airlines which provide sufficient space to HKG,” Transcargo’s Ong said. However, volumes to HKG and Mainland China could increase if “China eases [or] lifts their COVID-19 restrictions [by] the end of this year, because most of the raw materials are produced in China, and random lockdowns in China impact the worldwide supply chain,” he added. Capacity from HKG to other parts of Asia, the U.S. and Europe is currently soft with stable rates, according to Dimerco’s Oct. 3 market forecast. But volumes at HKG have been on the decline for several months, primarily due to global supply chain disruptions and geopolitical challenges. In August HKG saw a 21% year-over-year decrease in volumes and a 17% YoY drop in July as the airport saw decreases in service between North America and Europe. However, the July opening of HKG’s third runway will “enable us to welcome back business that was lost during a period of restricted runway capacity,” HACTL’s Kwong noted. Japan set to boost capacity Since June, Japan has lightened its travel restrictions and the country announced Sept. 22 it will fully reopen for tourists Oct. 11, ending limits on daily arrivals and tourist visa requirements. Japan lost connectivity with Europe due to the Ukraine war, dropping 12% of routes between Q1 and Q2, according to a September report from CLIVE by Xeneta. Since the country has eased COVID-19-related restrictions, belly capacity to Europe grew 3% in Q3 to almost 38% of pre-pandemic levels. “Looking ahead, the further removal of travel restrictions for individual tourists will further boost the capacity recovery from long-haul widebody flights,” according to CLIVE. In general, capacity is available from Japan, Claudio Di Zio, head of air freight forwarding, Americas for Yusen Logistics, told Air Cargo World. A return of travelers may create a short-term dip in bellyhold capacity as the space is filled with baggage, but passenger flights should increase available capacity as demand remains soft. “ The rebound in passenger flights will also bring more options and flexibility for air cargo solutions in the market that we can leverage for our customers’ requirements,” he added. Combination carrier All Nippon Airways (ANA) had called for an end to Japan’s strict border control against foreigners in February, saying it negatively impacted the airline’s business. Following the government’s announcement of eased travel restrictions, ANA said it will increase international flights, ramping up its passenger flights from Narita (NRT) to Vancouver (YVR) and Handea (HND) to Honolulu (HNL) starting Oct. 30. United, a Star Alliance partner of ANA, plans to add flights between the U.S. and Japan starting Oct. 11. The airline will offer flights from Chicago (ORD) and San Francisco (SFO) to HND and Houston (IAH), Los Angeles (LAX), New York (EWR) or SFO to KIX. Join Air Cargo World for our next webinar, “Dangerous goods in focus: Shoring up air cargo logistics,” on Tuesday, Nov. 15, at 11 a.m. ET. Click here for more information and to register.

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