The 2016 Freight 50: Analysis of top cargo carriers

Bracing for impact

While some carriers, like China Airlines, saw a decent bump in 2015 due to the U.S. port crisis, it was not enough to save the year for many others. Of the 50 carriers and groups on the list, none saw FTKs drop as rapidly as Saudi Arabian Airlines. In 2015, the carrier’s traffic totals fell by 47.9 percent, y-o-y, to 848 million FTKs, and dropping the carrier eight spots in the Freight 50 rankings to No. 43 – the largest drop by any carrier in this year’s listing.

Much of Saudia’s contraction was caused by the stiff competition the airline faces in its own backyard with the Big Three Gulf carriers, Emirates, Etihad and Qatar Airways. But Saudia continues to struggle with an edict handed down by the Saudi Arabian government, requiring all airlines to operate aircraft younger than 20 years old. This has caused Saudia to reduce its leased-in fleet of 747-400Fs.

Garuda Indonesia also got off to a good start in 2015, with $29.3 million in net revenue, but most of its successes came in the passenger side. By the end of the year, the carrier’s FTKs declined by 18.8 percent, dropping Garuda five positions in the ranking to No. 49. Other carriers suffering a double-digit loss in FTKs include South African Airways (No. 42, -18.1 percent), Thai Airways (No. 31, -15.9 percent) and EVA Air (No. 24, -10.4 percent).

At Malaysia Airlines, the carrier’s cargo division, MASkargo, keenly felt the effects of its restructuring program, said MASkargo CEO Ahmad Lugman Mohd Azmi. “Year-over-year contractions were mainly driven by our passenger belly network rationalization,” he said. MASkargo ended the year with a 12.2 percent decline in FTKs, y-o-y. “One of the greatest challenges was the turnaround,” Azmi said, with uncertainty of the fate of the staff impacting morale.

Home sweet home

On the domestic side, the rankings are a bit different, though not surprising, given the e-commerce surge in the U.S. and China. The top two carriers are, as always, FedEx with 8.57 billion domestic FTKs, followed by UPS, with 5.41 billion FTKs (see Domestic FTKs list).

Bringing up a distant third is China Southern Airlines, the top non-express carrier in the pack, with 2.44 billion domestic FTKs. Although it is less than half of UPS’ domestic total, China Southern is gaining rapidly. The carrier saw its domestic FTKs rise by nearly 48 percent in 2015, to 2.44 billion FTKs.

Even more impressive is Air China Cargo, which stands at No. 4 on the domestic list, with 1.80 billion FTKs. Air China Cargo’s domestic FTKs grew by 62.9 percent, y-o-y, allowing the carrier to rise from the No. 6 position from last year, muscling ahead of Atlas Air. Crucially, during China’s 2015 economic slowdown, Air China Cargo invested in a transit hub in Shanghai, resulting in a 76 percent increase of volume through the hub.

Speaking of e-commerce, expect No. 5 Atlas Air’s results for 2016 to be even higher than the 1.30 billion domestic FTKs it reported for 2015, thanks to the deal it has worked out with Amazon. In that deal, announced in May, Atlas agreed to operate twenty 767Fs to provide air cargo services for Amazon.

Another notable fast riser on the domestic list is HNA Group, which includes data from subsidiary carriers Hainan Airlines, Hong Kong Airlines and Tianjin Airlines. In previous years, FTKs for these carriers had been listed separately, but this year they’re bundled together and have combined domestic traffic of 660 million FTKs, placing them at No. 8 on the domestic list.