Coronavirus weakens China’s demand for air cargo despite drastic freight capacity cuts on passenger planes
- There will be more than 25,000 fewer flights operated to, from and within China this week compared with two weeks ago, with 30 airlines halting services
- About half of the air cargo carried globally is on passenger jets rather than in dedicated freighters
Major air cargo carriers said they have no immediate plans to add China flights to replace the capacity lost amid steep cuts to passenger travel due to the coronavirus, as many factories have remained shut down after the Lunar New Year.
Aviation data firm OAG said there would be more than 25,000 fewer flights operated to, from and within China this week compared with two weeks ago, with 30 airlines halting services.
But a spokesman for Germany’s Lufthansa Cargo said it had reduced its flying schedule, in part to allow pilots to spend the night in Novosibirsk, Russia, rather than in China. Demand from China to Germany fell because of the production shutdown, the spokesman said.
The shutdown represents a fresh challenge to an air freight market that was already weak before the coronavirus epidemic. Global demand fell year-on-year for 13 consecutive months until November amid slowing economic growth and the US-China trade war, according to the International Air Transport Association.
“If you’re ordering people to stay in their houses it’s difficult to keep factories running,” Bernstein analyst Daniel Roeska said. “Many supply chains are essentially halted, so there’s nothing to transport.”
“On the other hand, Chinese transport and request of medical supplies such as masks and cleaning agents is increasing,” the airline said in a statement.
A spokeswoman at Japanese airline ANA Holdings also reported rising demand for medical supplies such as surgical masks although shipments of other goods had been delayed.
Once most Chinese factories resume production, dedicated cargo carriers like UPS, FedEx and DHL are likely to be the biggest beneficiaries of any surge in demand, said Helane Becker, an analyst at Cowen.
“Obviously the lack of belly space means everything goes on main deck,” she said, in reference to how cargo is carried in passenger planes compared with freighter aircraft.
China’s aviation fuel sales were down a quarter during the last week of January as domestic and international flights fell sharply amid the spread of the coronavirus, a senior oil industry source with direct knowledge of the matter said.
Aviation fuel sales between January 24 and 31 fell nearly 25 per cent from a year earlier to 555,000 tonnes, the source said on Wednesday.
Jet fuel sales – for domestic and international flights – were 3.07 million tonnes in January, 0.2 per cent lower than the same month last year, said the source, who declined to be named because he is not authorised to speak to the media.
A spokesman for China National Aviation Fuel Company, the country’s near monopoly jet fuel distributor, said he was not in a position to comment immediately.