May 2021: Airfreight Demand Back to Pre-COVID Levels But Capacity Remains Tight

Airfreight demand is back to pre-COVID levels but capacity remains tight, with volumes now at levels seen prior to the US-China trade war. When comparing figures from February 2021 with those in the same period of 2019 (comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19), Global capacity, which is measured in available cargo ton-km (ACTKs), has declined by 14.9%.

Government-imposed travel restrictions are a main contributing factor, and this crisis is lasting much longer than anyone could have expected. The reduced level of international flying has resulted in a 15% overall shortage of cargo capacity, which is straining supply chains and driving up rates.

Cargo airlines have added 30% more capacity by operating more pure freighters and running them at higher utilisation rates, but it isn’t enough to make up for the lost belly space in such a high-demand environment. The resumption of international passenger travel, which accounts for about two-thirds of airline revenues, is a key element for overall recovery.

The return to break-even levels has been made more difficult by the rising cost of jet fuel. IATA estimates jet fuel will average $69 per barrel, close to the 2019 average of $77 per barrel. Jet fuel is already adding to the high cost of air cargo as airlines pass on the extra expense in the form of fuel surcharges (FSC). Capacity is likely to return at a much slower pace than demand, as the airlines must take a cautious approach toward recovery; managing their rising debt during this critical stage will be paramount to their long-term survival and overall fiscal health.

Going forward, it is critical to understand how passenger demand will recover, as this is a key indicator of how much belly capacity will be available for air cargo. We are collaborating regularly with our carrier partners and our clients so that we are able to efficiently plan for and secure the capacity needed to uplift our clients' shipments and ensure that our air cargo operations can flex as necessary to manage through any spikes in demand.

April 2021: Temporary Suspension of Economy Services to the Middle East/Indian Subcontinent/Africa (MEISA)

COVID-19 has disrupted supply chains globally, and air cargo capacity is extremely constrained, causing restrictions on our operations. These result in network changes and temporary service adjustments for selected shipments.

Effective April 29, 2021, we have suspended selected Economy services to the Middle East/Indian Subcontinent/Africa (MEISA) till further notice. 

Selected Economy services within intra-Asia and from the Asia Pacific to the rest of the world remain temporarily suspended as well. You can continue shipping with New Zealand Couriers International Priority to these destinations. We regret any inconvenience this may cause you and appreciate your understanding.