Carriers gear up for travel as cargo remains ‘bright spot’

Despite being the lone bright spot for airlines, Menon says 'cargo revenue could not offset the collapse in passenger revenue.'

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ANA yesterday announced the first trial of a digital health passport on its Tokyo-New York route to verify the effectiveness of tests and check-in procedures at Haneda Airport.

Almost a month after Singapore Airlines tested the International Air Transport Association (IATA) Travel Pass app for passengers arriving at Heathrow early in March, more carriers in Asia Pacific are following suit. And whilst this may be good news for the travel industry, it seems airlines along with its passenger side still have a lot on their plates.

The latest traffic figures from the Association of Asia Pacific Airlines (AAPA) reveal that passenger demand worsened in February with fears over the spread of new Covid-19 variants and added border control measures.

Airlines in the region filled only 1.2 million seats or 6.3 percent of the total number of passengers recorded in the same month last year (18.3 million). This was when air travel demand was already slowing down as the coronavirus broke out across the globe. For the first two months carriers only logged 4 percent versus the same period last year.

Available seat capacity and load factors, meanwhile, are down 14.9 percent and 24.8 percent for the month compared to the same period last year, underscoring ‘extremely weak demand conditions.’

The prolonged impact of the coronavirus has affected both the cargo and passenger side for airlines, but less so for cargo which has remained the ‘bright spot’ for the industry. And whilst economic activity has started picking up, the backdrop is still the same: most of the passenger aircraft that carried more than half of total air cargo are grounded.

Couple this with disruptions to container shipping and other modes and now this has led to additional pressure on the limited air freight capacity. Offered freight capacity in February declined 9.2 percent year-on-year, according to AAPA, despite increased utilisation of dedicated freighters and additional cargo-only passenger flights. Global load factors were 71.7 percent for the month, up 11.1 percentage points last year.

For the region’s carriers, international air cargo demand, as measured in freight tonne kilometres (FTK), climbed 7.6 percent higher compared to the same month last year, thanks to ‘acceleration in trade activity.’

Despite the positive numbers coming from cargo, AAPA director general Subhas Menon believes this is won’t be enough to get back the losses from last year, urging governments to extend support to ailing airlines.

“Air cargo remains the single bright spot for the Asian carriers. International air cargo demand for the first two months of the year was 2.2% higher than in 2019. Nevertheless, cargo revenue could not offset the collapse in passenger revenue. With travel markets shuttered by border closures, airlines will require further government support to weather the crisis,” he said.

Also read: Air cargo makes profit for Asia’s smaller airlines

Plagued by differing travel requirements and restrictions, the region’s airlines are focusing efforts in digitalising the travel process, including utilising technologies that aid governments and travellers in managing health credentials securely and efficiently, Menon mentioned.

This month, Singapore Airlines flew in the first traveller using IATA’s Travel Pass app to London’s Heathrow Airport. The platform is a global and standardised solution to validate and authenticate all country regulations regarding Covid-19 passenger travel requirements.

All Nippon Airways (ANA), one of 14 AAPA members along with SIA, has also conducted trials for the app early in March. Yesterday it announced that it will also test a digital health passport (CommonPass) on its Tokyo Haneda-New York route. It said, ‘CommonPass is a user-oriented standardized global identification framework that makes it possible for travelers to document and share their Covid-19 testing status and vaccination history,’ whilst protecting user privacy.

With the International Civil Aviation Organization (ICAO) Council’s approval of the latest recommendations from its Aviation Recovery Task Force (CART), AAPA thinks this is a further positive step towards the safe resumption of international air travel.

Recommendations include temporary liberalization of cargo flights, considering priority vaccination of air crew and increased cooperation among governments to implement CART’s recommendations and guidance.

The task force also released updated or new guidance for testing certificates, Covid-19 risk management including vaccination and its interdependencies, and dangerous goods guidelines for the carriage of cargo on passenger aircraft, including a new mechanism for reporting extended regulatory alleviations.

IATA’s director general and CEO, Alexandre de Juniac, said that these recommendations, guidelines and tools are only meaningful if they are adopted universally. “It is crucial that states implement this guidance, particularly as they plan for the restart of international aviation when borders are able to open. As we have said many times, it was easy to shut down aviation with individual decisions. Restarting and maintaining operations to deliver economically and socially vital connectivity can only happen if all parties work together,” he added.

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