According to the International Air Transport Association’s (IATA) data, globally air cargo business is demonstrating a severe capacity shortfall. However, airlines across the world are putting their best foot forward to meet demand by adding freighter services, including adapting passenger aircraft to all cargo activity. Glyn Hughes, Global Head of Cargo – IATA, opens up about the crisis at hand, his valuable two cents on riding through the turbulence and what lies ahead for the global aviation industry in this fight against COVID-19.
Q) The outbreak of the coronavirus has brought the global air cargo business to an unprecedented standstill. In such a gloomy scenario, how is IATA planning to support the stakeholders of the air cargo supply chain? Can you shed any light on the possible roadmap?
The loss of so much capacity arising from the grounding of 60% of the world’s passenger aircraft was a very difficult situation for the air cargo industry when demand for medical supplies was growing everywhere in the world. 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.
Q) IATA’s report said that Air Cargo Demand had declined by 15.2% in the month of March as compared to the previous year. This figure is enough to share the present status of the global air cargo business. How do you see the graph moving in the coming months, and when can we expect demand recovery in the business?
Demand did drop in March and we expect an even bigger drop in April as the full effects of the transport closedown takes hold. But capacity has dropped even more, which means that air cargo has had an overall challenge to find capacity and move the important cargo.
Q) Digitalization will certainly gain more prominence in the post-COVID era. What new digital initiatives does IATA have in the offing, especially in terms of air cargo?
Yes, I fully agree. We have all had to work in a much more digitalized fashion whilst working from home and we anticipate the digital trend accelerating as business returns to a more normal situation. IATA’s ‘ONE Record Program’ is perfectly placed to help the industry as it moves down the path of smart data sharing.
Q) What are the initiatives taken by IATA in order to facilitate the air cargo agents across the world? How do you view the role of the freight forwarders and agents in the whole ecosystem?
I am a very strong supporter of the role played by freight forwarders. They have great expertise in understanding shippers’ needs and then designing and delivering highly effective solutions. The forwarding community has been instrumental in the success of the global economy but like all industries, air cargo is evolving, and the freight forwarder’s role will evolve equally.
E-commerce requires different solutions; specialized supply chains are increasingly replacing traditional general cargo shipments. But I’m sure these challenges will be met with great innovation by the entire forwarding community.
Q) As the Global Head of Cargo for IATA, what appeal would you like to make from Government of India and the Ministry of Civil Aviation for the hassle-free continuation of air cargo business in the present scenario?
I think the Government of India has shown great leadership in designing a great new air cargo industry for the country. COVID-19 has certainly created some hindrances for those plans. But the long-term direction is still clear and is on the right path to deliver an effective framework to support India’s growing exports of high-value goods and hopefully more fresh produce as well.
To deal with the current crisis, I think two key issues are most important to address: 1) to ensure there is an adequate staff at airports and on the roads to keep air cargo imports and exports passing through the system, avoiding airport blockages and full facilities and 2) to support home and foreign airlines as they try to mobilize additional capacity through ad hoc charter operations and deployment of passenger aircraft for cargo-only operations. India is a critically important global supplier of medicines and we need to ensure these products can be moved as efficiently as possible.