Breaking News: Nippon Cargo Airlines grounds fleet

Japan-based all cargo carrier Nippon Cargo Airlines (NCA) has grounded its entire eleven-unit 747F fleet, effective 17 June, shortly after inspectors from Japan’s Civil Aviation Bureau (JCAB) discovered major inconsistencies in the company’s  maintenance records.

Increased scrutiny of the airline began last month after JCAB found NCA had omitted multiple incidents involving its aircraft, and subsequently launched an audit of the airline.  An audit is expected to take around one week, according to NHK World News, during which the majority of NCA’s operations, including its codeshare flights co-marketed by Luxembourg-based Cargolux, and Japan-based ANA will be impacted.

Apart from NCA’s own-operated fleet, Atlas Air Inc. was operating two 747-400Fs on an ACMI-basis for NCA as of September 2017. These aircraft will likely to continue flying uninterrupted. Regardless, with eleven freighters suddenly parked, transpacific trade lanes will see a shortage of capacity in the week(s) to come.

Until recently, when the global market for air cargo rebounded, Japan’s largest cargo carrier struggled with the glut of maindeck capacity that proliferated the market. NCA was a launch customer for the 747-8F, placing an order for eight units in November 2005, and upping its total to fourteen in early 2007. However, by the time the carrier took delivery of the first of those fourteen freighters in July 2012, the air freight world was a much different place. Demand growth had disappeared, and not only was NCA (like carriers everywhere) struggling to fill its freighters, the market for used freighters had also disappeared, making its plan to sell or lease out its 747-400Fs as the -8Fs entered the fleet more difficult. In September 2015, NCA, which had by then taken delivery of eight 747-8Fs, cancelled four of its remaining six orders. Eighteen months later, in March 2017, the carrier’s parent NYK Group posted a notice on its investor relations site saying: “NCA has come to an agreement with Boeing on the cancellation of two 747-8F freighter aircrafts.”

Returning to the present, Japan’s transport ministry is said to be considering punitive measures against NCA.  Whether such fines will prompt NCA to sell-off additional freighters and opt for more ACMI operations, or attempt other similar restructuring initiatives, remains to be seen. One thing that is certain, is that it’s a seller’s market if NCA wishes to part with any of its -400Fs.