Cargo Proves Its Lasting Value

Airlines and Airframers Cash in on Freight Bonanza

Pushing Back: Inside the Issue

Airlines rediscovered freight during the pandemic. Well, that's not strictly true: Cargo always has been an important revenue stream. But with the surge in e-commerce during the pandemic, maritime shipping's bottlenecks, and factories rushing to restock, one of the least glamorous parts of the industry is getting more attention. Even if maritime freight gets its footing back and factories finish the restocking cycle, the shift toward e-commerce likely is structural and will only grow. For many airlines, cargo footed the bills during the pandemic and they want to keep that revenue stream flowing.

But it's not just the airlines. Airframers, too, are cashing in, and in that game, Boeing has the advantage. In fact, Air Lease Corp.'s Steven Udvar-Hazy predicts that as much as 30 percent of the 777 fleet could be freighters. Meanwhile, Airbus doesn't have a similarly sized freighter, although A330 conversions and A330 "preighters" helped many airlines weather the pandemic. Airbus is said to be developing an A350 freighter to help close the gap with Boeing.

Meanwhile, airlines are rethinking their networks. At the beginning of the pandemic, airlines added hundreds of routes simply to try and capture what few travelers there were. Now that the urgency of the pandemic is starting to recede in parts of the world, airlines are rethinking their networks and bringing them back to some version of what they had before the pandemic. Leisure is still king and is likely to remain so this year.

Verbulence

“We don’t have a yard sale to conduct.”

Airbus Commercial Chief and Head of Airbus International Christian Scherer when asked last week if the airframer was experiencing any softness in pricing for its aircraft

The Airline Weekly Lounge Podcast

New episodes drop every week and are available wherever you get your podcasts and on AirlineWeekly.com. In the latest podcast, Edward "Ned" Russell and Madhu Unnikrishnan discuss the ceasefire in the Airbus-Boeing trade spat, why JetBlue is pruning its schedule, and all the change in Canada's airline market. Listen to the episode.