Air Cargo Update

Several months ago we shared some analysis around the initial impact of COVID-19 on air cargo demand in and out of Australia.

We were curious to update our view of our earlier findings and completed some recent analysis to add to our thinking.

If your airport doesn’t have a solid air cargo strategy, and if you are not optimising your revenue from air cargo operations, then you are missing out. This is still a strong performing sector in an industry that is literally on its knees, and in Australia, will be for some time to come. Year on year passenger movements for international airlines operating out of Australia is still -98% change. However, year on year impacts for international air cargo is only -19.4% change. Air cargo volumes are operating at around 80% of pre-COVID levels.

Back in June we noted a dramatic switch in terms of average passengers per flight and average cargo per flight, in and out of Australia. This was driven by dramatic falls in passenger traffic, moderate falls in air cargo, a drastic reduction in number of flights operated and the emergence of many more freight-only flights and sectors, including those sponsored under the International Freight Assistance Mechanism (IFAM). This trend has continued, and in fact, deepened slightly, particularly with imports to Australia and inbound passengers.

The number of city pairs being operated as cargo-only flights has increased; however, so too has the number of city pairs being operated with passengers. Interestingly there has been an increase in the number of inbound cargo-only city pairs, and an increase in the number of outbound city pairs operated with passengers, since May 2020.

Recovery of individual markets is also interesting. As is the emergence of some new markets, which likely represent the Australian Government’s humanitarian role across the Pacific.

Our top 10 air freight markets by volume in August 2020 are listed below. The current IFAM schedule offers subsidised cargo options, particularly for outbound cargoes to six of these top ten markets, and to Korea which sneaks in at 12th place. It is interesting to note some of these markets recovering beyond their pre-COVID volumes, such as the US, Qatar and Taiwan. Neither Qatar nor Taiwan are currently supported by IFAM.

Changing the lens to look at % recovery, we take a quick look at the top 10 markets by % of June 2019 cargo volumes (or for markets which are just emerging, by percentage of volume on the initial month which appears in the data).

Guam topped this list with cargo volumes in July 2020 and August 2020, showing a more than 500% growth month on month. Other markets with new cargo businesses, which show strong growth, but which may be related to humanitarian work, include Solomon Islands, Mauritius and Vanuatu.

Markets which appear in both our top 10 by volume and in our top 10 by recovery rate are the ones to watch. These include Taiwan, Qatar, USA and the UAE. Korea and Japan fall just short, however our strong trading relationship with both countries is reassuring when considering options for recovery.

Also interesting is to consider changes in volumes at an Australian airport level. Sydney has seen an overall 10% increase in cargo volumes comparing August 20 to September 19. All other airports have experienced a reduction in cargo except for Toowoomba Wellcamp Airport which has increased cargo volumes by 257% over the same period (and more again when considered year on year).

Cargo is likely to continue to play a strong and leading role in the aviation industry’s recovery, and in uncovering the new normal. Avistra Aviation Consulting understands the commercial drivers for airline decision-making in the allocation of fleet to new cargo routes. Identifying real, sustainable long-term opportunities, and helping to express them in a way that gets a network planning team’s attention is key to cargo development. So is understanding the upstream and downstream logistics needs and potentials for various tariff and non-tariff trade barriers. Ensuring your airport has a good plan and understands how to drive airport revenue from air cargo operations is essential to your overall aviation recovery plan.

We are more than happy to have a chat about your current situation and how we can help. Just give us a call.

Avistra Aviation Consulting provides commercial and strategic advice to airports including aviation development, airport profitability and diversification, land development, non aero revenue development and air cargo development. You can reach Avistra Director, Sara Hales on +61 (0)434 570 152 or by email at