The airline industry has taken a dramatic drop due to the travel and safety restrictions from the Coronavirus. However, despite the drop of commercial air travel, the steady demand of air freight is giving hope for the industry as a whole.
Last week, jet fuel prices rose 7% in the market. China to Europe freight rates are back to $3.32 USD per KG which is the same rate it was back in November 2019. China to U.S. even remains higher than peak season at $4.38 USD per KG. Trans-Atlantic rates remain significantly higher than last years, which will compensate for the shortage of commercial travel for the market being that travel is unavailable amid the claims that Europe has not managed to control the spread of the virus.
Through the month of June, we have seen a shortage in demand with air freight being that the demand for PPE is no longer urgently needed. E–commerce sales also have a trend of being lower in the summer months for freight. This does not stop European Aviation which told FreightGlobal that it would create up to ten A340’s into cargo only configurations adding them to the three they already own. This is in anticipation of the Freight Investor Services pricing curve, which shows a rise in demand for air freight in the 4th quarter of 2020. Ram Menem former chief of Emirates SkyCargo noted that air freight benefits when unique demand situations occur. He then stated that there will be even further demand when we are closer to the development of a vaccine.