Vaccine airlift to deliver a shot in arm to industry
PARIS/CHICAGO/SYDNEY: Airlines battered by Covid-19 are prepping for key roles in the mass vaccine roll-out that promises to unlock an immediate boost for the sector, and beyond that, its own recovery and survival.
Big challenges await carriers leading the airlift, as well as the drugmakers, logistics firms, governments and international agencies planning the deployment across networks blighted by the pandemic.
The gargantuan effort should nonetheless help airlines involved to trim their crisis losses, experts say, while bringing additional benefits to the broader sector, from supporting cargo pricing and revenue to restoring routes.
Developing vaccines in record time was the easy part, “the equivalent of building base camp at Everest”, according to World Health Organization vaccines director Kate O’Brien.
“The delivery of these vaccines, the confidence in communities, the acceptance of vaccines and ensuring that people are in fact immunised with the right number of doses – (this) is what it’s going to take to scale the peak,” she said recently.
Britain is about to become the first country to begin administering the Pfizer-BioNTech jab, which requires storage below -70°C. Moderna’s shot, stored at -20°C, is close behind.
In line for major roles are freight specialists and airlines with large cargo arms, such as Germany’s Lufthansa, Air France-KLM and Hong Kong-based Cathay Pacific – often under contract for forwarders and integrators like UPS, Fedex and DHL.
Gulf carriers Qatar Airways and Emirates, as well as Turkish Airlines, slammed by the long-haul travel collapse, can leverage their vast connecting hubs. Turkish has begun flying China’s Sinovac vaccine to Brazil and, like many peers, is increasing its cold chain capacity and storage.
While the earnings windfall is “difficult to quantify”, Cathay commercial chief Ronald Lam told analysts recently: “There will be a positive impact either directly through vaccine transportation or the surge in overall cargo demand”.
Freight is already a bright spot. Many airlines are making unprecedented cargo profits this year even while chalking up record losses overall.
Before the crisis, half the world’s air cargo travelled on 2 000 freighters, and the rest on passenger jets.
As lockdowns grounded flights, cargo rates soared, helping carriers keep remaining passenger routes open and avoid more red ink. Cargo’s share of revenue will triple to 36% this year as prices or yields rise 30%, airline body Iata anticipated.
“The profit margins of all the cargo operations will be very strong in 2020 as a result of the extraordinary circumstances, and will be sustained at that level in 2021 as a result of the vaccine distribution,” HSBC analyst Andrew Lobbenberg said.
Carriers joining the airlift can expect “a significant impact on the cargo economics”, he said. | Reuters