Goodbye to passenger freighters?

Both rates and the level of passenger freighter operations have come down along with demand for personal protective equipment (PPE) in key European and North American markets. As of July 21, Cargo Facts‘ tally stood at about 195 airlines and 2,427 aircraft, about 2,100 of which are widebodies. About 160 of those planes with 52 airlines had seats removed. The largest number of aircraft were converted by the following carriers: Ethiopian, 22; China Eastern, 13; Condor, 10; and Lufthansa, 10. The interactive map below shows the details; one layer gives an overview by carrier of aircraft with seats removed and the second gives an overview of all carriers operating passenger freighter flights.

Interactive passenger-freighter map, as of July 21, 2020

June 2020 TAC Index  rates from China to the US and Europe were down about 23%-24% compared to a peak in May. While rates remain close to 70% higher than the same period last year, the economics of passenger freighters are marginal at best and sensitive to rates and fuel prices. Fuel is currently at around $1.10 per gallon compared to around 70 cents per gallon at the end of April.

An analysis of passenger freighter activity from China to Europe and to North America (see Figures 1 and 2) shows a peak in activity in mid to late May. Flights to North America did not reach the same levels as those to Europe, and have not decreased as much.

Figure 1: Passenger-freighter flights from China and Hong Kong to Europe for weeks 14 to 29

Figure 2 – Passenger-freighter flights from China and Hong Kong to North America for weeks 14 to 29

For the trans-Atlantic routes, passenger-freighter flights increased to 220-240 flights per week the beginning of June, but have started decreasing as regular passenger widebody flights have begun to resume (see Figure 3).

Figure 3 – Passenger-freighter flights on trans-Atlantic routes for weeks 14 to 29

Will we see a second wave of passenger-freighter flights? At this stage we don’t think so, even with high number of COVID-19 cases in the United States. Given that PPE demand has decreased on China to Europe lanes, this provides opportunity for redeployment of more efficient freighter capacity back onto U.S. lanes. This has already been happening, with regular freighter capacity up by about 20% in July compared to previous months.