Post Date : January 15, 2021
As the most unprecedented year for logistics and the supply chain industry meets its natural end, the year 2021 now surfaces as the beacon at the end of the tunnel- with new hopes, expectations and faith for a limping industry and economy to reclaim its lost glory. We take a look at the expectations and predictions for the air cargo sector as calculated and prophesied by stalwarts of the industry.
The COVID-19 pandemic threatened the aviation industry for its very survival in 2020, registering the year as the industry’s worst financial year in history. Airlines cut expenses by an average of a billion dollars a day over 2020 and managed to stay afloat by adapting to innovations like Cargo-on-seat and the $173 billion financial support by governments.
Glyn Hughes, Global Head of Cargo, IATA while painting a picture for the aviation industry in 2021, says, “The aviation industry will continue to experience divergent fortunes between the passenger and cargo sectors throughout 2021.”
“Cargo volumes are expected to continue the recovery we saw towards the end of 2020 with the continued growth in e-commerce, support for economic production resumption, and the anticipated rollout of COVID vaccines all adding to industry volume growth. Passenger numbers are still expected to be significantly down versus pre-COVID numbers.”~Glyn Hughes, Global Head of Cargo, IATA
As per the IATA findings, Air Cargo will play a huge role in vaccine distribution which along with improved business confidence will help the segment grow to 61.2 million tonnes (up from 54.2 million tonnes in 2020 and essentially matching the 61.3 million tonnes carried in 2019).
Furthermore, the continued capacity crunch caused by slow reintroduction of belly capacity from passenger services with a higher proportion of time and temperature-sensitive cargo (vaccines) will see a further 5% increase in yields. This will contribute to strong performance in cargo revenues which are expected to grow to a historic high of $139.8 billion.
During the pandemic, the air cargo sector recorded better performance than the passenger segment; however, it is still depressed as compared to 2019 figures.
“The faster recovery in cargo volumes is largely due to the transport of essential supplies, especially in the pharmaceutical, medical equipment, and agricultural sectors besides the e-commerce business. The slow recovery in passenger aircraft traffic, particularly international routes, has led to a loss of the earlier available cargo belly capacity, which is impacting overall growth, said Satyaki Raghunath, Chief Strategy & Development Officer, Bangalore International Airport.
“Introduction of a road feeder service to manufacturing clusters,~Satyaki Raghunath, Chief Strategy & Development Officer, Bangalore International Airport
investment in infrastructure to restart the economy, easing of
restrictions on international Air Traffic Movement and cargo-friendly airports hold the key to cargo growth. In addition, the Government
of India’s Krishi UDAN Scheme, to bolster agricultural exports, will
also play a key role in adding impetus to the growth.”
Now moving forward, as we enter 2021 the picture for the aviation industry as a whole is not as merry as it is for the other sectors. Tushar Jani, Chairman, Cargo Service Centre believes that the Aviation sector will not be at its best in 2021.
“The aviation sector will not bounce back before 2024.”~Tushar Jani, Chairman, Cargo Service Centre
Sakshi Gupta, Country Manager-India, Air Logistics Group believes that logistics will be a big support for the airlines.
“It is clear that in 2021 the aviation sector will gradually move towards recovery mainly because of the innovations and cargo operations which will gain further importance with the rollout of the vaccine”, shares Ms. Gupta.
“The worst is definitely behind us. With the rollout of the vaccine, there is a sense of euphoria amongst people globally. Logistics will be a critically important part of aviation to keep the global economy functional in 2021. Retrofitted aircrafts would be new normal and it would be imperative to accelerate cold storage facilities on-board the planes for sure.”~Sakshi Gupta, Country Manager-India, Air Logistics Group
This is an abridged version of the Cover Story. To read the full article, click here.