Will Carriers Maintain Capacity Discipline?

  • David Harris
  • April 8, 2010
  • Archive

As we have reported in Cargo Facts, several of the world’s big cargo carriers have begun returning parked capacity to their fleets. Cathay has already brought one 747-400BCF back from the desert and is in the process of bringing back four more. Aeroflot is reported to be resuming a full operation schedule for its three MD-11Fs after cutting back drastically last year, and Lufthansa Cargo is bringing two of its parked MD-11Fs out of the desert and returning them to flight-ready condition (although no date for re-entry into service has been set).

These are all indicators of the return of demand for air freight, which is definitely good news in an industry that has been hit particularly hard by the recession. However, it is worth remembering that it was not just a fall in demand which caused the pain of the last two years, but also a fall in yield brought about by overcapacity. The reason that yields have improved so dramatically in the last six months is that so much capacity was removed last year. If carriers respond to the increase in demand by abandoning discipline and throwing capacity back into their networks as fast as possible, the good news will rapidly turn bad.

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One thought on “Will Carriers Maintain Capacity Discipline?

  1. Well David I dont agree re the capcity increases forst of all. What I heard was the Cathay went to Air China as part of the equity in new JV as will others, Aeroflot is desperate in trying to find a way out of the aircraft due to extremely unfavorable lease rates and an impossible deal where any contribution is better than the alternatives, and you can go on and on. I am extremely happy to see the sense that airlines have shown, keep it up and maybe by Sept. we can look at sustainable growth that warrants bringing them back. In the meantime old aircraft are being taken up by Midex and others to feed the US demand for military flights and charters, and ABC has aspirations that hopefully are well founded. Lets see what summer brings, reality says keep it in the desert