HONG
Kong's Cathay Pacific is reported to
be preparing to cancel "many" of its freight-only flights as air
cargo rates begin to drop following the decline in demand for personal
protective equipment and the use of alternative shipping methods.
Air freight rates have fallen by
half from their peak last month, according to TAC
Index.
"Cargo has been tapering
off, and as a result, there will be many cancellations of cargo-only passenger
aircraft flights, as the commercial decisions are made closer to the time of
the flight," the airline said.
Cargo revenue has been Cathay's
primary source of income for at least three months, as the collapse in air
travel has seen passenger revenue dry up. With the grounding of numerous
passenger aircraft, which typically carry half the world's cargo, airfreight
pricing surged on the shortfall in capacity.
Among Asian airlines, who rank
among the biggest cargo carriers globally, a mixed picture was emerging,
reports the South China Morning Post.
Korean Air, the sixth largest,
said it anticipated a "change" in demand, but its capacity was still
rising, while seventh-placed China Airlines told Reuters it was concerned about
the outlook against a weak global economic environment.
Cathay, meanwhile, planned to
"remain agile in the deployment of our aircraft to ensure our available
cargo capacity is aligned with market demand", the airline said in an
emailed statement. In May, the airline operated 900 such return flights.
Korean Air says it was currently
using passenger planes for 70-80 return cargo-only flights per week.
"If the global economic
recession and trade restrictions due to Covid-19 continue for a long time, the
air cargo market is bound to face challenges," a Korean Air spokeswoman
said. "We expect cargo demand to change, but currently cargo transport
capacity is on the rise due to the increase in cargo-only passenger
flights."
Cargo freight pricing from China
to Europe has halved to US$6 a kilo in June since the end of April, according
to TAC Index data. China-US pricing topped $15 by mid-May but has dropped by
two-thirds. Rates pre-Covid had hovered around $2 to $3 a kilo.
Rates from Hong Kong to the US
and Europe, meanwhile, are all starting to give up the significant gains, but
remain 5 0 per cent higher than at the same
time in 2019.
Source : HKSG.
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