To Our Valued Customers:
Airfreight demand drops significantly from China resulting in a rate of free-fall over the last two weeks, passenger airlines are putting together plans to reinstate services, and yet another airline files for bankruptcy.
Here is a shortlist of what we are seeing so far this week:
Airfreight Rates on a Downward Trend: Increased restriction on PPE suppliers has resulted in shipment cancelations and a decrease in overall demand. China/HKG have both seen a substantial drop in airfreight rates leaving them at nearly a third of what they were a few weeks ago. Full charter rates have decreased by roughly $800K, about half of what they were during peak.
Overall Airfreight Volume Down 31%: Despite how the market has looked over the last several months, with exorbitant rates and difficult to find space, the total year-over-year monthly airfreight volume is currently 31% lower than 2019. This is leaving skeptics questioning the true damage caused by COVID-19 as the demand for PPE continues to dwindle.
Italy Gets Closer to Normalcy: By the first week of June, Italy is expecting that 21 of their 40 airports will be fully operational. This is a huge sign of recovery for a country that was once the epicenter of the coronavirus.
Latin America’s Largest Airline Files Chapter 11: Unlike the USA, where government bailouts have been instrumental for keeping airline carriers afloat, Latin American countries cannot afford the same luxury. LATAM, the region’s largest carrier, filed for bankruptcy on Tuesday. The airline plans to continue services during restructuring.
China to Maintain “Five Ones” Policy until October: The Civil Aviation Admin. Of China (CAAC) announced that the “Five Ones” policy will remain intact until October. This policy has limited passenger airlines to service no more than one flight per week on one route to each country.
Passenger Services Will Have Limited Reinstatement in June, Here is an Update for Key Carriers:
Korean Air: Scheduled to resume 32 of its 110 international routes. Included in the USA will be IAD and SEA airports.
Asiana Airlines: Resuming 27 of 73 international routes including some to the Americas. USA destinations have not yet been announced.
United Airlines: Expected to resume service from SFO to Beijing, Chengdu, and Shanghai. Additionally, EWR to Shanghai.
Delta Airlines: Pending approval from the Chinese government, Delta is looking to resume services from SEA and DTW airports to Shanghai.
Lufthansa: Announced plans to resume flights to three destinations including LAX airport.