Cargo Chat: American Airlines’ Oliver discusses sliding cargo rates

A merican Airlines , along with its peers, is ramping up passenger service for the summer season, particularly on trans-Atlantic routes. Given the general softness of air cargo demand and the growing bellyhold cargo capacity available on trans-Atlantic routes, air cargo rates are expected to slide significantly. [caption id="attachment_57136999" align="alignright" width="300"] Emma Oliver[/caption] Air Cargo Next chatted with Emma Oliver , American Airlines Cargo ’s director of cargo sales for the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions, about summer cargo rates and trends on trans-Atlantic and trans-Pacific routes. What follows is an edited version of the conversation. Air Cargo Next: Is American Airlines Cargo currently seeing sliding cargo rates? Emma Oliver: We are seeing a downward pressure on the rates; however, there is still a lot of cargo moving and there remains demand for good service and performance. Service frequency, combined with a reliable service and high service standards, really matters to our forwarder customers and our ongoing, consistent performance, which is why we continue to see demand. Air Cargo Next: How do current rates on trans-Atlantic flights compare with pre-pandemic levels? EO: At American, we are still a little higher than pre-pandemic — but, equally, our costs are also higher than the pandemic, as is to be expected given global events not connected to our industry. But your question demands a little more detailed analysis because the world has changed a lot since 2019. Looking at it from the outside perspective and simply comparing pre-pandemic rates to rates today doesn’t take into account capacity that was missing from the market during that period and capacity that came into the market and has since disappeared. Those of us who provide consistent, reliable service over a long period of time may have a different view to those who are not necessarily regular players. Air Cargo Next: Do you expect rates to continue to fall over the summer? EO: I think we have reached the trough for regular allocated freight; the ad hoc market might continue to fluctuate until September. There are always going to be peaks or troughs in the course of the year. It is then up to us to provide a service which is in demand in order to ensure rates are stable. Air Cargo Next: Are you hopeful of a market recovery in the final quarter of the year or have you written off a peak season 2023? EO: As an optimist, I am quietly hopeful for a market recovery. As international business continues to recover, there will indeed be a peak season in 2023, and we are certainly seeing the typical drivers of a peak return after COVID. The scope of our gateway network into the U.S. is what attracts customers and, combine that with onward connections within the U.S. and to Latin America , and the enquiries we are already receiving from customers, that’s where I base my optimism. Air Cargo Next: Which air cargo verticals — for example, pharma, high-tech, luxury goods and perishables — are struggling the most and which are staying strong? EO: At American, we are really happy to have seen perishables and luxury goods hold up well this year. Of course, e-commerce continues to go from strength to strength, both in EMEA and the Asia-Pacific region. Items like cosmetics and other retail commodities are likely returning to ocean freight, which is to be expected. Air Cargo Next: Are you seeing similar trends on trans-Pacific routes? EO: The trans-Pacific picture is very different. The simple reason for that is that it is so reliant on China’s full reopening, both in terms of production, but also passenger demand. The next quarter will be very interesting to watch — the high-tech vertical remains a key factor in this market. … The reliance on China across passenger and cargo is key to how the [trans-Pacific] market operates. It might be better to revisit this question in 12 months’ time, when we’ve had over a year of China reopening both its industries and international travel. Join Air Cargo Next for the second Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

Cargo Chat: American Airlines’ Oliver discusses sliding cargo rates

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