Combination carriers stay keen on cargo, for now

As combination carriers begin to re-establish some long-haul connectivity, bellyhold capacity is likely to remain constrained as passenger demand fluctuates and networks remain spotty. At the beginning of the pandemic, Helsinki-based carrier Finnair refocused its operations around cargo, Fredrik Wildtgrube, vice president of Finnair Cargo, told Air Cargo World . The airline had to learn how to operate cargo-only flights, and then ran more than 600 of them in the second quarter of 2020, Wildtgrube said. [caption id="attachment_95573" align="alignright" width="350"] Cargo loaded on the main deck of Turkish Cargo's A330 passenger freighter for Trinity Logistics. Photo: Trinity Logistics[/caption] On the whole, the airline’s operations were somewhat simplified by focusing solely on cargo, rather than splitting its attention between both cargo and passengers, Wildtgrube said. “But that being said, the logic behind it hasn’t really changed. We wanted to be certain that we operated in areas where we have a strong demand for our services,” he added. Delta Air Lines followed a similar strategy to Finnair, and reconfigured several 777s at the beginning of the pandemic while aggressively reducing its fleet, Rob Walpole, vice president of Delta Cargo. said. “Through March and April we flew about 2,500 cargo-only flights using our passenger planes,” Walpole noted. While passenger demand continues to be erratic in many regions , combination carriers are pursuing what Walpole calls a “cargo-led strategy” by resuming passenger networks. The strategy allows airlines to operate cargo-only flights in which passenger demand is expected to return, meaning the planes will already be in place when they’re needed. “We fly it as cargo-only, but if people get on the flight, that’s great,” Walpole said. “Then, as passenger volume has slowly grown, particularly in Europe, that’s a strategy that’s played out well for us.” “It’s flying on the economics of the cargo business, basically, with the passengers on,” Walpole continued. “We’re using our widebodies predominantly for the cargo network,” while also redeploying others back into Delta’s domestic network. Finnair, meanwhile, focused on maintaining routes relied upon by its established customers while also working to protect the flow of much-needed medical supplies into Finland, according to Wildtgrube. “We had a very customer-focused view; we knew that we had already established quite a good response to the value proposition that we provide to our customers, given our geographical location and the destinations we serve between our home base and in Asia,” he said. Carriers have also responded by resurrecting long-haul routes that disappeared at the onset of the pandemic, and even establishing new ones. Finnair, for example, added a new route between Pittsburgh (PIT) and Helsinki (HEL) in response to a cooperation proposal from the U.S. airport, Wildtgrube said. Emirates, meanwhile, has been offering cargo capacity to and from Miami (MIA) with a focus on transporting perishables, e-commerce, and electronics. American Airlines also launched perishables-focused routes connecting Athens (ATH) with Chicago (ORD) and John F. Kennedy International Airport (JFK), bringing back a route that hasn’t been in service for more than two years. Earlier this month, IAG Cargo added a new direct flight from Madrid (MAD) and Jose Joaquin de Olmedo International Airport (GYE) in Ecuador, adding some much-needed capacity to the highly constrained lanes connecting Europe and Latin America. IAG also has plans to restart flights to San Juan in Puerto Rico (SJU). Ready to relaunch As summer heats up the Northern Hemisphere, tourism is likely to create a jump in demand for passenger travel, and thus bellyhold capacity, according to Stephane Soulagnat, airfreight procurement manager at Bollore Logistics . This will be especially true on routes within Europe and those connecting Europe to North America, he said. Western Europe is leading in short-term recovery, according to airline data aggregator OAG, with 700,000 seats added between June 14 to 21. However, overall capacity remains 40% below 2019 levels for the same weeks. Data from WorldACD, meanwhile, showed capacity in Europe increasing 4% during the period of June 14 to 20 from the previous week. “We anticipate passengers will return gradually during summertime,” said Wildtgrube, with passenger demand increasing steadily in the next two years. However, it remains “anyone’s guess” when it comes to full resumption of pre-pandemic passenger demand, he said. Finnair is “ready to scale upward very quickly,” when demand does return, he added. Preparedness to relaunch as soon as demand reappears is something of a trend among combination carriers. “We are adding back capacity progressively into those markets over the next quarter,” Walpole said of the regions where Delta has seen hints of passenger recovery. The airline has already seen some demand return in northern and southern Europe, and in the Asia-Pacific region to a lesser extent, said Walpole. “We have worked on items that give us the agility to then scale up as quickly as possible and react very quickly,” in response to a constantly shifting economic landscape, said Wildtgrube. “We are a passenger-driven airline with a strong cargo strategy,” Wildtgrube added. “This is going to be continued in a new normal, or, were an old normal to eventually resume, we would definitely pick up from where we left off while taking advantage of some of the learnings the pandemic has brought us.”

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