Cargo capacity in focus as freight demand booms

Major carriers from Middle East plan expansion as China optimizes COVID-19 response

Major airlines from the Middle East, including Qatar Airways, Etihad and Emirates, are expanding their cargo transportation capacity in China and overseas to cater to booming freight demand from China after the country optimized its COVID-19 response measures.

Qatar Airways Cargo, the cargo unit of Qatar Airways and a top player globally, currently operates 26 weekly cargo flights connecting seven Chinese cities — including Shenzhen, Guangdong province; Changsha, Hunan province; and Xiamen, Fujian province — with Qatar's capital Doha.

Recently, Qatar Airways Cargo signed a partnership with RwandAir and launched its new African cargo hub at Kigali International Airport in Kigali, capital of Rwanda. The Boeing B777 freighter, which operates from Doha to Kigali twice a week, will help move more goods between China and Africa and facilitate greater Chinese trade with the continent, Qatar Airways Cargo said.

On average, a widebody cargo aircraft can transport about 100 metric tons of goods.

About 70 percent of goods on the cargo flight from Doha to Kigali — consisting mainly of electronic items like mobile phones, and household and consumer products — were from China, while a small quantity came from Europe, Qatar Airways Cargo said.

"There is a lot of business demand in China ... (it) is the factory of the world, and many Chinese companies export their products to Africa," said Guillaume Halleux, chief officer of cargo at Qatar Airways. "We would love to grow our business in those main hubs in China and we are looking at opportunities."

Africa, Halleux said, is one of the fastest-growing markets in the world, yet for it to develop to its full potential requires investment in logistics infrastructure. "Our customers will benefit from a reliable intra-African network through our Kigali hub, as well as enhanced service levels and cost synergies," he said.

Kigali's geographical location in Central Africa helps in connecting other African destinations. Qatar Airways Cargo said it would soon announce more routes from Kigali to other African cities. This is convenient because the cargo transportation route from China to Africa with a transition in Europe is more expensive.

Africa is home to a hugely diverse economy, with businesses and entrepreneurs looking for better connections to create new markets and expand inward investment, said Yvonne Makolo, CEO of RwandAir.

The airline and Qatar Airways Cargo have created a "fantastic" new facility to meet this growing demand across Africa to further generate a business boom that will power economies in every corner of the continent, Makolo said.

China resumed quarantine-free international travel in January, leading to the restart of more international passenger flights and an increase in the belly-hold capacity to transport goods. This has intensified competition in the cargo market.

However, it has not had a big impact on the business performance of Qatar Airways Cargo. The carrier is optimistic about future growth prospects in China, Halleux said.

Measured steps

The International Air Transport Association said the air cargo sector had a volatile first quarter, as the global economy continued its recovery from the effects of the COVID-19 pandemic.

Overall demand slipped back below pre-COVID-19 levels in March, and most indicators of the fundamental drivers of air cargo demand are weak or weakening, the global air transport body said.

"While the trading environment is tough, there is some good news. Airlines are getting help in managing through the volatility with yields that have remained high and fuel prices that have moderated from exceptionally high levels," said IATA's Director-General Willie Walsh. "Looking ahead, with inflation reducing in G7 countries, policymakers are expected to ease economic cooling measures and that would stimulate demand."

Middle Eastern carriers experienced a 5.5 percent year-on-year drop in cargo transportation volumes in March, though it was an improvement from February's 7.1 percent fall. Capacity, too, increased by 9.7 percent compared with March 2022.

In recent months, demand on Middle East-Europe routes has been trending upward, according to the IATA.

Etihad Cargo, the cargo and logistics arm of Etihad Airways, has also reinforced its commitment to the China market with the signing in April of a Memorandum of Understanding with China's SF Airlines, the cargo arm of SF Holding, which operates the largest air cargo fleet in the country.

Etihad Cargo operates 10 weekly freighter flights to China, including eight to Shanghai and two flights per week to Wuhan, Hubei province, in partnership with SF Airlines.

The new flights between Abu Dhabi and Wuhan will give Etihad Cargo greater access to 25 domestic Chinese destinations. SF Airlines will be able to transport goods with transit in Abu Dhabi and onward to Europe, the United States and Africa.

Etihad Cargo said it would increase flight frequencies to China in the coming months to further expand its network and meet increased demand from customers in the UAE and China.

"The addition of Wuhan to Etihad Cargo's Chinese network is the latest step in enhancing the carrier's capabilities in the region. These flights will further strengthen the relationship between the UAE and China and position Abu Dhabi as a global logistics and express hub," said Martin Drew, senior vice-president of global sales and cargo at Etihad Airways.

Meanwhile, Emirates SkyCargo, the cargo division of UAE-based air carrier Emirates, recently added two Boeing 747-400Fs to its freighter fleet, showing its strong confidence in the global cargo market despite the current environment of volatility.

Emirates SkyCargo said it is expecting 15 additional freighters to join its fleet from confirmed orders and its freighter conversion program, plus a boost in belly-hold capacity from new passenger aircraft deliveries starting with the Airbus A350s in the summer of 2024, followed by Boeing 777-Xs the year after.

Over the next decade, Emirates SkyCargo is expected to double its existing capacity, and add over 20 new destinations to its freighter network.

"While the current market volatility may cause others to hesitate, Emirates SkyCargo is pushing full steam ahead with our plans. The medium- to long-term projections for global air cargo show an upward trajectory of between 3 percent and 5 percent," said Nabil Sultan, divisional senior vice-president of Emirates SkyCargo.

"Combined with Dubai's strategy to double its foreign trade, and the economic activity happening in the markets around the Gulf, West Asia and Africa, the opportunity for Emirates SkyCargo is clear," Sultan said. "Emirates SkyCargo is also investing to develop new products, and speeding up digitalization and technological innovation."