High demand and rates set to persist

posted on 4th March 2021
High demand and rates set to persist

The current low stock of freighter capacity and buoyant demand mean we can expect elevated prices to continue during 2021, possibly even beyond, believes Pierre Vanders, director for cargo operations at Chapman Freeborn Group

As we enter 2021, we are continuing to see an absence of belly capacity on scheduled passenger flights, due to the travel and tourism market still largely being on pause. This means cargo operations remain to be fulfilled by freighter aircraft and converted ‘preighters’ (passenger aircraft converted to cargo aircraft). I believe this will continue throughout the rest of the year, and additional pressure from the e-commerce and pharma sectors, caused by COVID-19, will further exacerbate it. The low stock of freighter capacity and high demand that we are seeing mean that we can expect the current high prices to continue during 2021, possibly even beyond.
Prior to the COVID-19 pandemic, e-commerce grew 25%, year-on-year; but lockdown across much of the world has boosted this even further, putting even more pressure on capacity. To alleviate this pressure, we can expect to see new cargo charter airlines emerging, older aircraft that were previously in storage being reactivated, and passenger-to-cargo aircraft conversions becoming even more common. Together these solutions will help to produce increased charter capacities to serve the demand that has emerged since the pandemic; however, we are yet to see whether this will be sufficient to return the market to pre-pandemic pricing levels this year.