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Emirates signal ‘Preighter’ commitment
When airlines grounded passenger services as the Coronavirus spread, they removed almost 50% of the world’s air freight capacity. Responding to the global need for PPE, many airlines subsequently redeployed passenger (PAX) aircraft to boost belly-hold cargo capacity, while others ripped out the passenger cabins to create ‘Preighters’.
With demand for PPE tapering off in May, air freight rates from China and other key PPE sourcing regions have been falling by as much as 50%, encouraging many carriers to withdraw from routes.
Against this background of softening demand and rates, key Metro partner Emirates is modifying 10 of its passenger 777-300ERs to fly cargo only, offering a capacity of 17 tonnes in the cabin and 40-50 tonnes in the belly-hold.
Having chartered over twenty such PAX ‘Preighters’ to transport millions of much needed PPE units, Metro can testify to the effectiveness of these aircraft in securing and flying cargo.
With rising fuel prices and falling air freight rates, the economics of operating passenger freighters is becoming less sustainable, leaving many to question Emirates’ strategy.
All airlines are understandably desperate to get their revenue-generating machines back into the air and some basic (actually quite complicated) calculations do prove an insight into Emirates thinking.
Pre-Covid an imaginary passenger flight from Europe to Asia would generate a profit margin of around 15%, on a fully allocated passenger and cargo basis. Taking into account costs factors including fuel, crew, airport handling, landing fees, en-route charges, maintenance, insurance, lease and overheads.
Updating the same factors to reflect the market, after 90% of the world’s fleet is grounded and demand for PPE goes through the roof. Redeployed PAX aircraft, flying PPE in their belly-hold covered their cost allocations and broke even, while generating valuable revenues for the airlines.
Taking out the empty passenger seats to create fully-fledged ‘Preighter’, increases cargo capacity by up to 69%, depending on the aircraft, providing the opportunity to generate a positive contribution, which could be up to 10% per round trip.
Emirates are not alone with carriers such as IAG offering customers whole aircraft charters, and Air France-KLM launching a partial-aircraft charter service.