Cargo industry is facing its biggest crisis ever and is battling hard to keep the entire air cargo supply chain operational to support the need of the hour. Alexandre De Juniac, Director General and CEO, IATA and Brian Pearce, Chief Economist, IATA discusses the challenges associated with regulatory and border issues as well as safety concerns and operational support.
IATA recently organised a webinar to discuss how the entire air cargo supply chain has adapted its operation during this crisis to keep cargo flying. Despite a capacity shortfall by nearly a quarter, as per IATA’s air cargo market analysis for the month of March, cargo business has suffered less in this crisis. Explaining it how, Brian Pearce,
Chief Economist, IATA, says, “In the global financial crisis of 2008-09, we saw a fall of 23 per cent while the cargo tonne kilometres (CTKs) flow down 15.2 per cent from March last year. However, this is a very steep fall reflecting the impact of the COVID-19 crisis.”
Secondly, cargo business is suffering far less than passenger at the moment because cargo business has been essential to fly around the medical supplies. He also highlights that pharmaceutical shipment has doubled in volume since the beginning of the year.
Agreeing with Pearce, Juniac calls cargo the ‘bright spot’ for industry because air cargo is the only part that is operating and earning revenue at any scale.
However, he adds, “There are challenges as well. Since the demand has fallen by 15 per cent, in the short-term, we don’t have sufficient capacity. Airlines are doing whatever it takes to gain the physical capacity by taking freighters out of storage and using them more intensely. They are also adapting passenger planes to all-cargo operations. That, however, is only half the solution.”
Juniac listed down three fundamental issues which are not yet fully sorted out by government:
• It takes too long to get the approvals for special or charter operations.
• Some governments are still treating operating crew as if they were arriving passengers, even though they don’t interact with the local population. They need to be exempted from special quarantine measures.
• And we are still finding it difficult to secure proper facilities to process cargo or to rest the crew.
Juniac also highlights the importance of International Civil Aviation Organization (ICAO). Calling it a global standard setter for aviation, he says, “The industry is in its biggest crisis ever, suffering even more than most other economic sectors. We were shut down by unilateral actions of governments. But the restart will require governments to work together. We need a strong ICAO now more than ever.”
Since some states are finding it difficult to meet their funding commitments to ICAO, Juniac encouraged them to prioritise keeping ICAO strong. He says, “The main financial issue we are facing in the short run is to run out of cash. An orderly restart for aviation needs coordination that only ICAO can provide. This will be critical for the economic recovery from the COVID-19 crisis.”
By Kalpana Lohumi
