Three more freighters rejoin Cathay fleet
Rebound in air cargo demand sees call-up of parked aircraft for Chek Lap Kok
Charlotte So
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The better-than-expected rebound in air cargo demand has prompted Cathay Pacific
(SEHK: 0293) to put three more mothballed freighters back into service in the summer.The aircraft would return from desert storage sites in the United States in June and July, which had been laid up during the downturn, Rupert Hogg, cargo director of Cathay, said. "Their return to operations will be gradual and phased in during the second half of 2010, preferably to coincide with the seasonal peak from Hong Kong," he said.
The carrier parked five freighters last year. Two were returned to service earlier this year to release two aircraft for transfer to the
Air China (SEHK: 0753, announcements, news) Cargo joint venture. "The market outlook remains broadly positive with robust demand on the major trade lanes to North America and Europe," Hogg said.
Cathay will take delivery of six B747-8Fs next year while transferring two more freighters to the cargo venture. Other carriers including Cargolux, a Luxembourg-based outfit, and Finnair, a Helsinki-based airline, has already boosted or have plans to increase their freighter capacity in Hong Kong. From next month, Finnair will operate a twice weekly freighter service between the city and Helsinki by deploying an MD-11 freighter with an 80 tonne capacity.
Hong Kong Air Cargo Terminal Ltd, the largest cargo terminal in Chek Lap Kok, reported a record daily tonnage on April 23 of over 10,000.
Charter rates surged to US$700,000 in Hong Kong and US$800,000 in Shanghai last week as exporters became desperate to clear backed-up shipments caused by the blanket shutdown of European air space due to volcanic ash.
Even with freighter services back to normal this week, charter rates for a Boeing 747-200 freighter still stood at above US$500,000 per flight, compared with US$300,000 during the normal low season. The shortage of charter flights has intensified as Shanghai shippers are edging out Hong Kong shippers by offering higher prices.
"The prospect for the year is very promising and we suspect there will be no low season throughout the year," said Paul Tsui Hon-yan, chairman of the Hong Kong Association of Freight Forwarding and Logistics. The buoyant demand for air cargo also has been affected by a structural change in manufacturing on the mainland.
"Manufacturers have to start to outsource part of the production to the factories in rural areas where labour is more abundant," Kelly King, managing director of Toll Global Forwarding (HK) said. However, labourers in the mainland's inner regions of are less skilful and produce more defective goods which need extra time to repair. As a result, some shipments would fail to meet deadlines if shipped by sea, he said.
More shipments may not mean more profits, King said. "Airlines are deploying most of their new capacity to charter services in a bid to control the capacity and create more leeway for them to raise rates," he said. "The price is so fluid that when we finally talk our client into agreeing a new rate, it has already gone up."