High prices and demand could spark a new surge in passenger aircraft traffic

Shippers should be prepared for further tariff increases amid rising average prices, continued high demand and continued capacity shortages.

This conclusion was made by international analysts, based on the data of the Baltic Air Freight Index for April this year. Geographic disparities in the pace and scale of the global economic recovery are projected to continue to bring additional levels of unsustainable complexity and higher costs to air cargo customers (BAI Index).

Statistics show that in April 2021 compared to March, there was a noticeable deviation in prices, especially on the main routes of air cargo transportation. For example, on the routes Pudong Shanghai (PVG) / HKG - Europe, tariffs increased by an average of 7-14%. And PVG / HKG to North America saw an unprecedented 32-39% growth. Experts assess these figures as sequential growth, noting that extraordinary numbers began to appear during the first global lockdown, when the carrying capacity around the world was sharply halved almost overnight. It is assumed that if the upward trend in rates continues, then a new surge in the use of passenger flights only for cargo aircraft is likely due to the jump in average prices.

As an aviation expert, I believe that it is still too early to draw unambiguous conclusions on the results of April. It is necessary to understand what will happen with cargo transportation in May and the following months. However, I do not exclude that a further increase in rates can be fueled by several main factors at once: additional consumer demand for a number of goods, the difference in the pace of vaccination programs against COVID-19, as well as different rates of economic recovery.

It is now safe to say that air cargo carriers such as ZetAvia can expect sustained strong demand and good profitability in the short term.

Oleg Sergeev