IN the depths of the Covid scare when passenger airlines were facing extreme financial difficulties amid extremely low levels of passenger demand, cargo airlines were booming,' reports Montreal's Simple Flying.
Cargo operations were more profitable than ever during the period between April 2020 and April 2022, during which cargo yields rose to over 200 per cent of fuel costs, a common metric used to analyse the profitability of air freight operations, said the report.
With such profits to be made, it is not surprising that airlines like FedEx and UPS Airlines were operating at maximum capacity, and these airlines were doing better than ever before.
FedEx and UPS, the two largest cargo airlines globally by most metrics, operate end-to-end logistics networks, in which they can deliver freight from its origin to its final destinations. This contrasts sharply with airlines that transport cargo in the holds of commercial flights, which only transport goods between airports on regularly scheduled flights.
While most companies saw their stock prices crater and earnings fall during the first few months of the Covid these two carriers were some of the most profitable during the period between April 2020 and September 2020.
FedEx shares rose over 150 per cent throughout that first summer, while UPS saw similar returns of 125 per cent, both impressive numbers.
With extreme confidence from the market and rapidly growing demand for air cargo behind them, these carriers looked like they were ready for a period of extended impressive financial performance. Furthermore, consumer tendencies regarding online shopping have also shifted, leading to even more demand for air cargo transport. Nonetheless, it appears that the confidence in these legacy cargo operators' growth may have been significantly overblown.
The overall demand for air cargo has increased 10 per cent since 2019, according to data from consulting firm Accenture. There are two important things to understand about this number, the first being that it demonstrates the structural shift in how companies and individuals demand air cargo transportation.
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Cargo operations were more profitable than ever during the period between April 2020 and April 2022, during which cargo yields rose to over 200 per cent of fuel costs, a common metric used to analyse the profitability of air freight operations, said the report.
With such profits to be made, it is not surprising that airlines like FedEx and UPS Airlines were operating at maximum capacity, and these airlines were doing better than ever before.
FedEx and UPS, the two largest cargo airlines globally by most metrics, operate end-to-end logistics networks, in which they can deliver freight from its origin to its final destinations. This contrasts sharply with airlines that transport cargo in the holds of commercial flights, which only transport goods between airports on regularly scheduled flights.
While most companies saw their stock prices crater and earnings fall during the first few months of the Covid these two carriers were some of the most profitable during the period between April 2020 and September 2020.
FedEx shares rose over 150 per cent throughout that first summer, while UPS saw similar returns of 125 per cent, both impressive numbers.
With extreme confidence from the market and rapidly growing demand for air cargo behind them, these carriers looked like they were ready for a period of extended impressive financial performance. Furthermore, consumer tendencies regarding online shopping have also shifted, leading to even more demand for air cargo transport. Nonetheless, it appears that the confidence in these legacy cargo operators' growth may have been significantly overblown.
The overall demand for air cargo has increased 10 per cent since 2019, according to data from consulting firm Accenture. There are two important things to understand about this number, the first being that it demonstrates the structural shift in how companies and individuals demand air cargo transportation.
SeaNews Turkey
