Wendover Productions - Air Cargo's Coronavirus Problem

Short Summary

Main recommendation: The video does not give viewer advice; its central conclusion is that, during the COVID-19 crisis, passenger airlines flying empty passenger planes as cargo-only flights became profitable and partly solved a surge in air cargo demand for medical supplies, though this is temporary. Airline capacity fell sharply as long-haul passenger flights were cut, while demand for PPE and medical goods spiked, pushing air cargo rates up and making cargo-only passenger flights economically worthwhile.

Key Points

• Long-haul passenger flights were cut by roughly 80% to 90%, removing about 50% of air cargo capacity on Western Europe to US routes, and about 23% industry-wide in March 2020, since roughly 45% of air cargo normally rides in passenger aircraft bellies.
• Demand for air cargo fell only about 15% in March 2020 because urgent demand for PPE and medical supplies, largely produced in China, offset the broader economic slump, leaving an 8% supply-demand gap.
• Air cargo rates spiked, rising about 27% above normal from Hong Kong to North America and about 50% from Shanghai to Europe in late March.
• Cargo airlines such as Kalitta Air increased long-haul flying by nearly 50% but could only expand so far, so passenger airlines with spare capacity filled the gap, earning revenue from cargo that normally accounts for 15% to 20% of airline revenue.
• Anchorage, Alaska briefly became the world's busiest airport in April 2020 because it serves as a refueling stopover for Asia to North America cargo flights.
• The surge is temporary: air cargo demand closely tracks economic health, which is expected to remain weak after the pandemic.

Details Worth Noting

• Concrete instructions: The video gives no actionable advice for viewers; it describes how airlines adapted, including loading cargo onto and fastening it to passenger seats in empty cabins, and flying cargo-only routes such as a 16-hour nonstop Sydney to Toronto flight by Air Canada.
• A passenger A330 carries about 17,000 kg (38,000 lb) of cargo in its belly hold, versus about 60,000 kg (132,000 lb) for the freighter version—29% as much capacity—so even with rates up 50%, it earns about 44% as much per flight.
• Jet fuel fell from about $2.20 per gallon in January 2020 to about 40 cents in late April 2020, cutting operating costs dramatically.
• US airlines receiving government relief funding were required not to lay off or furlough staff, making the marginal staffing cost of extra flights minimal.
• Smaller airlines joined in: Air Greenland flew coronavirus tests to a Danish lab on a Dash-8, Titan Airways flew medical supplies to St Helena on an A318, and Wizz Air flew A321s to Shanghai via Kazakhstan for Hungary.
• China produced about 20 million medical masks per day before the pandemic, roughly half the world's supply, and scaled to more than 100 million per day by early March 2020.

Bottom Line

Airlines' empty passenger planes became a profitable stopgap for medical cargo during the pandemic's supply shock, but that advantage depends on temporary demand and will likely fade as urgent shipping needs ease.