COVID-19: Fostering continuity of the air cargo business – the transportation lifeline that matters more than ever

Ilia Lioutov by Ilia Lioutov | Mar 25, 2020

From the very first day of the travel restrictions that have been introduced worldwide in response to the COVID-19 pandemic, it became clear that air cargo operations would remain an essential lifeline.

The movement of cargo is necessary not only for transporting medical supplies and equipment in a timely and efficient manner, but also for transporting food, basic necessities and other commodities essential for people to continue with their lives.

As all countries have different geographical, economic, and infrastructure-related characteristics, air cargo operations can be of greater importance to some countries than others.

While bigger diversified economies and populous countries have alternative transportation channels and deeper economic capacities to mitigate the ongoing challenges, smaller States, isolated communities, and island economies become especially vulnerable in the context of the ongoing crisis.

Airports have a particular role in formulating appropriate and rapid policy responses needed to support air cargo operations during the unprecedented distress. Continuity of the air cargo business is essential not only for a large number of households, communities, and industries, but also for the global economy at large and, more importantly, to fighting the ongoing pandemic.

Policy responses to support air cargo continuity

In regular times, air cargo is split between cargo carried on all-cargo aircraft, combi-aircraft that can be used to carry passengers or cargo, and passenger aircraft carrying cargo in the belly holds.

Given the current context of a radical drop in passenger flights and hence reduced air cargo capacity, preserving air cargo operations during the COVID-19 is vital.

ACI World believes that the air cargo industry currently plays a fundamental role and a  balance needs to be achieved between the interests of air cargo operators, infrastructure providers, freight forwarders, and stakeholders at large, so as to deliver air cargo operations in the most effective manner during the outbreak.

Consequently, ACI World urges to:

  • Protect airport revenues generated from air cargo operations so as to ensure airport’s financial capacity to maintain essential airside and cargo facilities opened and staffed
  • Exclude air cargo operations from any COVID-19-related travel restrictions and exempt air cargo crew members, who do not interact with the public, from 14-day quarantine requirements
  • Ensure that standardized measures are in place so that air cargo can continue to move around the world with minimal disruptions
  • Support temporary traffic rights for cargo operations where restrictions may apply, and
  • Urge airlines to return slots within 24 hours of removing flights from booking systems to ensure that unused slots are reallocated to cargo flights.

As regards the protection of airport revenues, it must be stressed that operating cargo flights implies the provision of airport infrastructure and services in a similar fashion for passenger traffic.

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Maintaining air cargo operations requires that airport operators remain in a position to recover the related costs through charges in line with relevant cost recovery policy principles. It is indeed crucial that airport operators are able to weather the crisis by generating some cash to at least safeguard their staff.

Finally, taking stock of the temporary suspension of slot usage requirements, ACI urges airlines to return slots to airport slot coordinators/slot pools within 24 hours of removing flights from booking systems. This would ensure that unused slots can be reallocated to essential cargo flights in the timeliest and most efficient manner.

Illustrations of increased freight operations can, for instance, already be seen at Amsterdam-Schiphol airport, where slots handed back to the airport slot coordinators are to be offered to cargo operation as a priority during the outbreak period.

Supporting air cargo operations during the crisis is essential

As we live in a global world characterized by a high degree of trade and other interdependencies, the ongoing health crisis has sent the global economy into a recession.

A long list of industries dependent on constant human throughput and regular consumer behaviour are collapsing, forcing them to burn whatever liquidity they are left with at least to safeguard wages in the short-term.

Air cargo – a major trade facilitator and a significant contributor to the global economy – creates millions of jobs across the globe. The global economy depends on the ability to deliver high-quality products at competitive prices to consumers worldwide. Air cargo transports over $6 trillion (figures in US Dollars) worth of goods, accounting for over one-third of world trade by value. It enables very long and sophisticated supply chains essential for producing high value-added products using components from all over the world.

Therefore, airports are an indispensable component of the entire mechanism enabling air cargo operations. Even during the full closure of airports to passenger traffic, a substantial share of overall airport infrastructure and the airside infrastructure remains open, which implies minimal change in the overall cost base, as most airports costs are fixed.

Air cargo became an irreplaceable player in delivering the much-need medical supplies and equipment.

As an increasing number of people have realized themselves in a lockdown under quarantine, however, it has also created  additional pressure on the e-commerce chain and air cargo subsequently, as more people became reliant on parcels for anything ranging from food and hygiene supplies to electronics, books, and toys.

Formulating appropriate policy responses to support continuity of cargo operations is essential to fight the ongoing pandemic and also to support vitality of numerous communities, industries, and economies.

Ilia Lioutov

Ilia Lioutov

Senior Manager, Economics and Policy, ACI World
Ilia Lioutov is an air transport economist with in-depth expertise in economic and financial performance of airports. Lioutov is instrumental in developing ACI World policies in the domains of economic regulation and aeronautical charges, privatization and public-private partnerships, taxation, capacity development and slot allocation. His core responsibilities include formulating advocacy strategies at national and international level and representing the airport industry interests within political, economic and regulatory institutions. In addition to advocacy, industry representation and stakeholder management, Lioutov has an extensive analytical background and is a contributor to the flagship ACI publications including the Airport Economics Report, World Airport Traffic Report and the series of policy briefs on various topics including private sector participation, airport networks, economic impact assessments, taxation and industry crisis management.
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