Air cargo in the EMEA region has increased its market share during the pandemic, benefiting from growth in volume and rates.
Fitch rating agency analyzed the actual data of airports in Europe, the Middle East and Africa for the period 2020-2021. Benchmarking led the agency to conclude that air cargo in EMEA has increased its market share during the pandemic and is already benefiting from rising volumes and rates. The new Fitch rating will allow air cargo carriers, such as ZetAvia, to assess the immediate prospects for the industry and, if necessary, make appropriate adjustments to their work.
Let's go back to the Fitch report and the main points that interest me as an aviation expert. The rating agency identified three key factors that have played in the two years of the pandemic in this region in favor of air cargo. According to Fitch analysts, these include explosive demand for goods, disruptions in shipping, as well as rising incomes for the population due to reduced spending on travel and services. As a result, all these components led to an increase in the total cargo traffic, which was redistributed in favor of air delivery due to a decrease in the reliability of sea deliveries amid the closure of seaports, a shortage of containers and a record increase in tariffs. The agency emphasizes that the timeliness and reliability of air cargo transportation was practically not affected by the coronavirus and covid restrictions, and the tariffs for the delivery of goods by air increased slightly compared to sea container transportation. In making this estimate, Fitch cites IATA data showing that at the end of 2021, air freight was on average only three times more expensive than shipping by sea, compared to more than twelve times the difference initially. That is, the tariffs for air cargo transportation have become comparable with the rates for the delivery of goods by sea, which has played in favor of air transportation. The leaders of the Fitch rating are airports focused on air cargo transportation. The first three places in descending order were taken by: Brussels Airport, MAG (Manchester Airport Holdings Limited) and cargo airport East Midlands. However, as noted in the report, even these successful compared to other hubs failed to make up for losses due to a sharp decline in passenger traffic. Such an analysis, in my opinion, allows a clear understanding of the current trends and needs of the aviation industry.
In the medium term, Fitch expects air freight volumes and rates to be under pressure as restrictions are gradually lifted and sea freight companies are taking steps to improve their competitiveness.
The International Air Cargo Association (TIACA) expects to solve a number of existing problems in the sector during the 2 + 2 Event conference. The profile event will be held in the format of personal communication between industry leaders who will gather in San Francisco at the end of March. The conference participants will exchange knowledge and experience for four days, discuss pressing issues and determine the future directions of the association's development. It remains to wait for the conclusions of TIACA on the results of the conference.