As the Covid-19 pandemic usurps the balance of the world, the aviation and the air cargo sector falls prey to its vehemence as it juggles capacity and demand constraints due to the imposed lockdown and travel restrictions. As we now head towards normalcy and enter the fifth phase of the lockdown, it is critical to work upon the revival of the aviation sector. Here we explore the impact of COVID 19 on air cargo, the preparedness of the sector, its revival strategies, and much more.
The COVID-19 pandemic, a health and a humanitarian crisis, has come as a shock to the economy, causing severe disruptions to all businesses, with the worst hit being the aviation and air cargo sector that is suffering from a severe capacity crunch as countries shut down their borders.
The International Air Transport Association (IATA) via its recent report informed that the global air freight demand dropped by 27.7% in the month of April as compared to the same period in 2019 – the sharpest fall ever recorded.
As the pandemic leads to the grounding of approximately 90% of the global passenger fleet, IATA forecasts a reduction of revenues over $340 billion for the aviation industry, which is a 55% reduction in comparison to last year. Further, it predicts the cancellation of 4.5 million flights by the end of June, and as 50% of air cargo travels in the bellies of passenger flights, it poses a huge challenge to the air cargo industry to operate with only 50% of the capacity available.
While air cargo – a significant contributor to the global economy and international trade – was sinking with the restrictions applied by the government to control the spread of the virus, it turned out that it plays a very important role in preventing and battling the disastrous effect of coronavirus. The value of air cargo to airlines, governments, shippers, and consignees has become more evident in the response to the COVID-19 crisis.
Airlines across the world had to battle with financial constraints during the pandemic. Yet they continued to serve the industry by converting their passenger aircraft into freighters and carried cargo in the passenger cabins to meet the demand.
“Freighters around the world have increased their utilization and slowly, more carriers are now using passenger aircraft for cargo-only operations. But more capacity is needed. IATA is continuously trying to identify the various issues and work with governments and carriers to address them all.”~Glyn Hughes, Global Head of Cargo, IATA
Dipen Lalsodagar, Dy. Director – Cargo Sales, Global Aviation Services Pvt Ltd believes that even amidst dwindling finances, the air cargo sector has met the demand of essentials and overcome all the challenges.
He says, “Air cargo logistics had certainly taken a hit before the COVID-19 was declared a pandemic, as airlines started reducing/ withdrawing their flights from the biggest supply source-China. As countries started closing their borders for humans, air cargo also felt its effect. It was time to meet the uninterrupted demand of medical supplies and pharma for the pandemic, and, airlines in true spirit catered to meet the demand despite their dwindling finance. With new challenges come new ideas. Airlines over the world has tried to create more capacities to cater to critical air cargo demand.”
Air cargo has been a crucial link in the movement of essentials and medical supplies across the borders, throughout the pandemic. However, a flexible aviation environment is the need of the hour for industries to be on the path of recovery.
Amar More, CEO, Kale Logistics Solutions Pvt Ltd says, “Industry and governments need to create a more flexible aviation environment for freight, which can serve as a model for passenger aviation once that resumes. Industry
recovery depends on it.”
He added, “We believe this is a temporary drop and as the pandemic subsides, we believe normalcy will return to the earlier days.”
As the country awaits normalcy and keeps an optimistic approach to the recovery of the air cargo, it is to be noted that the aviation industry is most likely to face the crisis even in the PostCOVID days, due to restricted demand and
supply from the international Market.
Speaking on the similar lines, an official from DGCA told Logistics Insider, “The guidelines of export or measures of inter-country distribution will only start with set regulations; once the government complies with all such advisories or regulations; the Ministry of Civil Aviation will have strict compliance on each set of rules. The industry will get a kick start only when the Markets and businesses start fullfledged hence even after lockdown the capacity of kick-start will depend on demand and supply chain of the Inter-country and International Market.”
Taking into consideration the fight of the air cargo industry against the COVID-19 and the critical requirements of the sector for its revival, the question that pops up is: What steps have the stakeholders taken to ensure its revival and what new trends are being adopted?
This is an abridged version of the original story published in the June issue of Logistics Insider magazine. To read the complete unedited story, download the e-copy of the magazine.