Major airline giants bet on China’s air cargo market amid slow global recovery

A Boeing 757 freighter loaded with freight by SF Airlines arrives at Nantong Airport in east China’s Jiangsu Province. Photo: PCP

Despite the slow recovery of the aviation industry in Asia-Pacific, many international cargo giants continue to bet on the Chinese air cargo market as growing demand shows no signs of slowing down.

Boeing announced at the Singapore Airshow on Tuesday that it will add a Boeing 767-300 Converted Freighter (BCF) conversion line at ST Engineering’s airframe plant in Guangzhou, south China’s Guangdong province to the during the second half of 2022, a move aimed at meeting growing demand from global customers.

The new line adds to the two additional 767-300BCF conversion lines that Boeing previously announced to Guangzhou Aircraft Maintenance Engineering Company Ltd, an existing MRO supplier for 737-800BCF conversions.

Last year, Boeing also announced plans to add eight 737-800BCF conversion routes to new and existing MRO providers.

Boeing predicts a need for 1,720 freighter conversions over the next two decades. Asia-Pacific-based airlines will need 505 large and medium wide-body aircraft, both new planes and conversions, through 2040, according to Boeing’s 2021 Commercial Market Outlook.

To boost its cargo business, Etihad Cargo, the cargo and logistics division of Etihad Airways Group, has launched an official Chinese website, which will be the landing page for all customers based in China. All relevant product information, site capabilities, customer feedback and agreement details will be presented in Chinese.

Experts attributed the move to growing demand from freight companies in China as the country consolidates its role as the engine of the global recovery.
Despite the uncertainties, many companies are still busy fulfilling massive export orders and remain confident about their export prospects this year. Factories across China are gradually resuming production after the Spring Festival holiday, making a strong start to 2022.

Official data showed that the scale of China’s merchandise imports and exports topped $6 trillion for the first time in 2021, a record high.

China’s Foreign Ministry said earlier this month that the country’s vibrant and resilient economy is playing a positive role in stabilizing the global supply chain and promoting the recovery of the global economy.

Market watchers said the rapidly recovering economy, diversifying manufacturing and supply chains continue to fuel demand for global logistics and transportation. Due to labor shortage and one-way demand, China-Europe container shipping and rail links are extremely congested, causing the global industrial chain and supply chain to face under significant pressure, while channeling excess demand into air cargo.

According to data published by the International Air Transport Association (IATA), in 2021, global air cargo demand increased by 6.7% compared to 2019, with the epidemic leading to a sharp reduction in hold capacity. medium and long-haul passenger aircraft, available air cargo capacity fell 11.5% compared to the same period in 2019.

This extreme imbalance between demand and supply has pushed companies to be more innovative when it comes to air cargo.

East China’s Jiangsu Province has seen its local cargo flight industry grow 489.2 percent in the past two years from levels before the COVID-19 outbreak, according to the provincial department. border inspection, as reported by the Xinhua news agency in January.

The number of international air cargo flights reached 13,686 in 2020 and 2021, with many passenger planes being refitted to operate as cargo carriers due to the outbreak, according to the department.

The Chinese regulator has placed more emphasis on the domestic freight business. Chinese officials said they will implement the development strategy of paying equal attention to passengers and cargo, which means the industry will change the previous policy direction of focusing on supporting the transportation of passengers.

Due to the low cost and wide accessibility of cargo in the belly of passenger aircraft, the development of aviation logistics cannot just continue to increase the number of all-cargo aircraft, and the belly cabin of aircraft of passengers remains one of the most realistic. options, Liang Nan, an official with the Civil Aviation Administration of China (CAAC), said Wednesday, citing the 14th five-year plan (2021-25) of civil logistics.

CAAC data also showed that China carried out freight transport equal to 654,000 tons in January, a monthly increase of 1.1%.

IATA has released data for global air cargo markets showing that full-year air cargo demand is expected to grow 6.9% in 2022, adding that demand for manufactured goods in Asia-Pacific airlines remains strong, including PPE.

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