Airlines in scramble to deliver goods in time for Christmas

After the most devastating year in the history of aviation, airlines are scrambling to deliver goods and presents in time for Christmas. With thousands of jets grounded in the wake of the pandemic and the collapse in passenger numbers, cargo capacity has been dramatically cut, just as an online shopping boom has prompted demand for air freight to soar. It means companies are struggling to find planes to move goods around the world in the run-up to the busiest time of the year, putting the global supply chain under pressure. “There aren’t enough cargo freighters in existence to meet the need for travel by air,” said Heathrow airport’s CE John Holland-Kaye. Overall freight capacity has fallen 25% year on year, according to IATA, while the cost of transporting goods by air on the Baltic Exchange has spiked again after rising to record levels in Q2. With US consumers spending $9b online on Black Friday last week, up 21.5% compared with 2019, according to software group Adobe, the rush into ecommerce is straining the market to the limit. The squeeze on supply chains and disruption to services prompted Amazon to urge customers to shop earlier than normal to make sure they meet their Christmas deadlines. “It's going to be tight for everyone . . . we will all be stretched,” Amazon’s CFO Brian Olsavsky told analysts in October. The capacity shortfall has been compounded because the aircraft best suited for carrying cargo, the large wide-body jets used for long-haul, are still mostly grounded, with demand for short flights returning more quickly. It has forced the cavernous specialist cargo planes to take up the slack. They are transporting 80 to 90% of the world’s freight this year, an increase from about 50%, said John Peyton Burnett, managing director at air freight pricing group TAC Index. Air cargo and courier companies such as DHL and FedEx have also kept flying to try to plug the capacity gap.<br/>