Is Cargo a way out of a dark Covid tunnel for Airlines?

Keywords: Air cargo, Australia, Combinartion Airlines
Session Type: Virtual Paper Abstract
Day: Saturday
Session Start / End Time: 2/26/2022 05:20 PM (Eastern Time (US & Canada)) - 2/26/2022 06:40 PM (Eastern Time (US & Canada))
Room: Virtual 11

Abstract

Air cargo has seen a sudden increase in activity, stimulated by shortage and delays in supply chains, and also by a sudden drop in belly-hold capacity as passenger routes were closed. Is this a temporary adjustment, or is there a new eco-system emerging around cargo systems? The paper establishes the role of three elements in the cargo business: one, specialised freight airlines using freighter aircraft, two, combination airlines with freighter aircraft and passenger aircraft with belly-hold capacity, and three, airlines operating passenger aircraft with bellyhold capacity. The paper explores this industry structure within a background context of air cargo movements in Australia, where there has been an increased geographic concentration of international cargo movements in Sydney, the nation’s major air passenger gateway. That leads to an analysis of the change over time in the freighter vs combination airlines. The combination airlines operating into Australia have an advantage of large international networks, and the flexibility to use passenger or freighter aircraft depending on demand. Current evidence shows that there has been a shift toward the combination carriers , and this is possibly associated with the increased a concentration of activity at Sydney. This would seem to suggest that the combination carriers who have both specialised freight aircraft and belly-hold in passenger services at their disposal might emerge as the key actors in the industry. The paper acknowledges the small scale of the cargo industry in Australia and suggests the experience there may be a special case.