The Recovery is Underway – Air Freight, Increasing Capacity and Technology Play Pivotal Roles
Air Freight Activity is Driving Latin American Passenger Carrier’s Success
Transporting cargo by air, and especially life-saving supplies to fight COVID-19, has been an important driver of success for Latin America’s passenger carriers. This was the consensus of a panel group at the October 25th ALTA Airline Leaders Forum held in Bogota. In addition to vaccines, passenger airlines transported personal protection equipment such as masks along with ventilators and oxygen. These carriers, including Azul, LATAM and Avianca, also played an a significant role in humanitarian transports.
According to Azul Chief Executive John Rodgerson, “Cargo is an instrumental part of what we do. I always say that at Azul, every single one of our 13,000 crew members works for our cargo department.”
Azul received a significant boost to its revenues from its cargo business. Specifically, revenue in the cargo segment is projected to top $198 million in 2021, double the 2019 revenue. Currently, Azul is delivering 20,000 packages daily and can transport them to over 1,000 cities in Brazil within two days which is much less than ground-based transportation delivery times.
LATAM Cargo CEO Andres Bianchi added, “The fact that we are very active moving vaccines and doing disaster relief, enabled different conversations with the governments, and I think that’s a first step in generating a new operating environment.”
The desired environment would be one which enables the industry to address longstanding challenges such as high taxation, outdated processes, and aging infrastructure. The industry also has been handicapped by factors such as certain nations not recognizing an e-air way-bill, which is the interchange of electronic data messages in lieu of a paper air way-bill.
Another airline that has benefited from increased air cargo business has been Avianca. Its CEO. Cargo & Courier Gabriel Olivia noted, “We were able to show the industry and the world what cargo was capable of during the pandemic, and it will remain important in the future. A lot of great things happened in the last 18 months, for example, processes have been accelerated and we can’t lose that momentum.”
Latin American exporters are also enjoying the current boom in air cargo. They are capitalizing on the pandemic, rebalancing their supply chain,s and driving more e-commerce and related opportunities.
Looking Ahead to Winter Travel
Airline capacity experienced the usual changes in capacity common over the summer season. Summer 2021 left the airlines with 78.5 million seats for sale, which is 27% below 2019 levels. November, however, is looking bright with the possibility of surpassing an 80 million weekly capacity level. Across North American and Southeast Asian airlines, more capacity is being added. Additionally, Australian airlines are planning to resume international services sooner than previously anticipated. Currently, capacity for January 2022 remains at 400 million seats; a 62% increase over 2021. With that said, there has been a consistent cut of approximately 5 million seats in three-month forward capacity projections.
Looking at other regions, Northeast Asian saw a drop of almost 4% in its capacity week on week. This is largely attributed to China’s continued struggles with COVID-19 outbreaks. As for North America, that region too saw a slight dip week on week with an estimated 250,000 fewer seats on sale as American and Delta Air Lines cut back on capacity. In the Middle East, the United Arab Emirates (UAE) has advanced ahead of Saudi Arabia with a 3.2% capacity increase. It is believed that the UAE could conceivably overrun South Korea where capacity is not expected to change unless either China or Japan reopens their border for larger volumes of capacity.
In Europe, Italy earned the fastest-growing market in the week of October 25th. This is due, in part to anticipation over a new Italian airline; in actually, Alitalia’s new look. The United Kingdom had a 5.6% capacity increase, while British Airways and Ryanair added capacity, returning back to the two million seats a week level for the first time since March 23rd.
It was in China where the top 20 carriers all cut capacity. Leading these airlines in capacity reductions was Shenzhen Airlines with 9% of capacity suspended during the week of October 25th.
Credit Contactless Technology for Enhancing Passengers’ Airport Experience
There is little doubt that contactless technology has been instrumental in gaining passengers’ confidence that air travel is safe. To address COVID-19 concerns, many airports have adopted technological advancements to support safer passenger processes. Facial recognition and biometric technology, driven by Artificial Intelligence, have been used to establish passenger identities safely. AI is also being deployed to support other airport process such as baggage handling and airport security. AI-driven security systems are eliminating the need for immigration officers, as well as the inconvenient process of passengers having to remove their shoes, belts, etc. at check points.
A Global Data poll found that 51% of respondents are more positive towards AI technology, but the same poll also revealed that 23% of passengers still had some negative feelings about AI. Still, with new travel protocols in place to stem COVID-19 contagion, those passengers resistant to technology will need to recognize that the increasing use of technology in airports to promote passenger safety is unavoidable. Further, with international departures worldwide having decreased by 71.8% from 2019 to 2020, and airport footfall also decreasing in parallel with domestic and international travel restrictions, airports will continue to deploy technology that help mitigate the risk of spreading the virus and contribute to further declines in departures. In addition to contactless technologies, vaccine passports, COVID-19 testing, passenger locator forms, and deep cleaning routines, which are in place already across airports worldwide, will continue and along with technological advancements support passenger confidence.
Google Flight’s New Sustainability Features, the Search for Tracking CO2 Emissions is Over
Google Flights just launched a new carbon emissions feature which enables travelers to understand the environmental impact of their travel choices so that they can make more sustainable selections. The feature allows users to view carbon emission estimates on different flight searches bringing both transparency and accountability to the travel experience.
To estimate carbon emissions for various flights, Google integrated data from the European Environmental Agency. These estimates take into account factors such as one seat, class of travel, type of aircraft, and route distances. Typically, fuel-efficient aircraft covering shorter routes will exhibit lower carbon emissions. Conversely, seats in premium economy, business and first-class reflect higher emission estimates and are responsible for the largest share of a flight’s total emissions. Using the tool, passengers gain greater visibility on how certain flights and seating choices impact the environment. Given a recent GlobalData consumer survey which found that 74% of global respondence believe environmental issues are “extremely or “quite” important, the new Google Flights carbon emissions feature is likely to be very well-received.