Business

Air freight rates head back to earth as virus-driven boom cools

Published

4 years ago

June 19, 2020

SYDNEY/LOS ANGELES (Reuters) – An air cargo boom driven by demand for protective gear against the coronavirus has peaked and rates, while still 50% above normal levels, are falling in a worrying trend for airlines relying on freight revenue in the absence of passengers.

Declining prices may deal a blow to carriers that are scrambling to move cargo to offset weak passenger revenues as they rebuild networks by flying reopened routes with half-empty cabins.

“The early-mover advantage has disappeared and I can see why some of the rates are coming down,” said Phil Seymour, president of aviation consulting firm IBA. “The market is becoming flooded with belly freight capacity.”

About half of the air cargo carried worldwide normally flies in the belly of passenger jets rather than in dedicated freighters.

But flight cuts due to weak travel demand squeezed freight capacity at a time when demand for masks, gloves and other protective gear was surging, leading many airlines to fly empty passenger jets as freighters.

Global air cargo capacity was down 27% in the week starting May 31 compared with a year ago, according to Accenture data, but capacity is rising as passenger flights return.

Air freight rates from China to the United States surged to more than $7 a kilogram in April and May and China-Europe rates were at more than $6 a kilo, Frederic Horst of Cargo Facts Consulting said. Rates have since softened, although they remain 40%-50% above normal levels closer to $3 a kilo, he added.

“I wouldn’t say they have come back to earth, but they are heading toward it,” Brian Bourke, chief growth officer of U.S.-based SEKO Logistics said of rates.

The International Air Transport Association estimates cargo will contribute 26% of airline industry revenue in 2020, up from 12% in 2019, due mostly to a sharp fall in passenger revenue that will lead to forecast losses of more than $84 billion.

Air freight demand had been depressed before the pandemic due to subdued global economic growth and a U.S.-China trade war and recessionary conditions will make for a slow recovery, said Oliver Plogmann, Singapore-based aviation lead at Accenture.

“We estimate around 100 passenger freighters are flying globally and we think the number is going to reduce over the next weeks and months when more capacity comes back into the market because it is simply not viable,” he said.

Hong Kong’s Cathay Pacific Airways Ltd (0293.HK), one of the world’s biggest freight carriers, said last week that demand for medical supplies had softened in the latter half of May. It flew nearly 900 cargo flights with passenger planes in May but that could be reduced as demand falls.

Taiwan’s China Airlines Ltd (2610.TW) said it was concerned about the outlook for cargo given there was no obvious global economic recovery trend.

“PPE (personal protective equipment) via air freight has drastically slowed down in the last couple of couple weeks, and it’s probably because the second round can afford to go ocean freight,” said David Goldberg, chief executive of DHL Global Forwarding USA.

“We’ve seen more rationalisation of the air freight rates. They’re still at high levels.”

Logistics group C.H. Robinson said it helped the state of Minnesota save $500,000 in shipping costs for surgical gowns by selecting fast boat services over air freight.

Reporting and photo: Reuters

Events

Maldives Association of Tourism Industry (MATI) holds its 34th Annual General Meeting

Published

2 months ago

February 20, 2024

Maldives Insider

The Maldives Association of Tourism Industry (MATI) held its 34th Annual General Meeting at Kurumba Maldives today, with a total of 100 members in attendance.

The day’s events began with a welcome address from the Chairman of MATI, Mr. Mohamed Umar, who also presided over the session. The agenda included an address from the Secretary General, Mr. Ahmed Nazeer, the review and approval of the minutes of the 33rd AGM, the review and adoption of the Annual Report and Financial Reports for 2023, the approval of the 2024 budget, the appointment of auditors for 2024, the welcoming of new members and election of executive board members to the two vacant positions (by-election).

In the member discussion session, the following topics were covered: the Government’s aim to reach net-zero emissions by 2023 and renewable energy generation in the Tourism Industry, new terminal of Velana International Airport and developments, employment challenges, the Industrial Relations Act and trade unions, environmental conservation and the significance of creating and executing efficient management plans for protected areas like the South Ari Marine Protected Area (SAMPA).

Following the official proceedings, the Minister of Tourism Hon. Ibrahim Faisal and the Minister of Economic Development and Trade Hon. Mohamed Saeed joined the forum. The Ministers provided remarks and engaged in a Member Q&A session. This session provided members with the chance to directly engage with the Ministers and delve into crucial industry topics. The queries focused on the Economic Outlook, forthcoming development plans and immediate challenges and issues affecting the Tourism Industry.

A video presentation was also showcased that delved into the extensive work undertaken by MATI in 2023. The video also touched upon the Tourism Industry’s performance over the past 5 years, as well as the current and projected human resource capacity of the sector.

In his closing remarks, the Secretary General highlighted the importance of collaborative efforts in addressing industry challenges and called for greater unison amongst industry stakeholders, ending with an acknowledgement of the promising start to the year in terms of arrivals.

Executive Board Members elected to the 2 vacant positions (by-election):

Ibrahim Shareef, CEO and Managing Director of Maldives Airports Company Limited
Renato De Olivera, General Manager of The Ritz-Carlton Maldives, Fari Islands and representative of Marriott International

Business

Unlocking power of travel storytelling at Travel Creators Exchange 2024

Published

3 months ago

January 30, 2024

m@ldives

Join us for the Travel Creators Exchange 2024, taking place on February 1, 2024, at the Hotel Jen in Male’, Maldives.

This dynamic event provides a platform for networking and collaboration among Maldives-based travel creators, fostering connections, idea-sharing, and the establishment of lasting partnerships to expand opportunities and monetise content.

Our lineup of distinguished speakers includes:

Zihuny Rasheed, Deputy Managing Director of MMPRC, will present on “Power of Digital Storytelling: Collaborative Strategies for Destination Promotion.” MMPRC actively markets the Maldives globally, utilising a comprehensive approach that includes travel trade shows, roadshows, digital marketing, and more.
Amjad Thaufeeg, Commercial Director of Kuda Villingili Maldives Resort, brings over 23 years of hospitality industry experience. He will discuss “The Role of Content in Tourism Marketing,” drawing on expertise in revenue, customer service, sales & marketing, and human capital development.
Suresh Dissanayake, Assistant Vice President of Sales & Marketing of Heritance Aarah & Adaaran Resorts, with nearly two decades of experience, will shed light on “What does a Sales and Marketing Director Do?” He brings extensive luxury hospitality experience and a proven track record in sales, distribution, and marketing.
Vishal Amir Ahmed, a versatile cinematographer and content creator, will explore “Who is a Content Creator.” Currently associated with Various Arts Studio, he specialises in providing multimedia solutions to various clients.

Organised by Maldives Insider, Maldives Virtual Tour, Travel Trade Maldives, and Hotelier Maldives, this collaborative effort aims to empower Maldives-based travel content creators and elevate the Maldives as a premier destination for captivating travel storytelling.

Events

Acclaimed contemporary artist Ana Pušica explores perpetuality and community at Patina Maldives

Published

4 months ago

January 3, 2024

Maldives Insider

Ana Pušica Kramer, an internationally acclaimed contemporary artist, joins Patina Maldives for an exclusive art residency in the now infamous Fari Art Atelier. From January 22 to February 22, 2024, Ana Pušica will grace the shores of the Fari Islands, weaving a vibrant narrative of colour and emotion across her larger than-life canvases.

Her artistry transcends boundaries, melding abstraction and figuration into awe-inspiring masterpieces. Having exhibited globally, from New York to Beijing, Ana’s paintings are a physical, intuitive act rooted in movement. Described as a “beautiful fluorescent thunderstorm,” Ana’s art explores light and colour, capturing the energy of life itself.

The Fari Art Atelier which has previously hosted the likes of Daniel Arsham, Chris Stamp and David Nott, will be transformed into Ana’s studio and gallery showcasing her enthralling artworks—a mesmerising journey through poetry, memory, and the vibrant interplay of colour. Guests at Patina are invited to delve into Ana’s world, where each stroke reveals layers of meaning, evoking sensations of intense lightness and boundless interpretation.

At Patina Maldives, Ana will immerse herself in a month-long residency, inviting the Patina Malidves community or guests and team to witness her artistic fervour firsthand. Guests will have the rare opportunity not only to observe her creative process but also to engage with and create art alongside this luminary.

Experience artistry at its most exclusive

Art Exhibition
Experience Ana’s captivating exploration of colour and emotion in her spellbinding artworks displayed at the Fari Atelier.

Art Workshops: Message in a Bottle
As part of a collaborative artwork, Ana invites Patina guests to participate in short workshops, actively contributing to the creation of a permanent installation at Patina Maldives.

Open Studio Session
Join Ana for an exclusive open studio session, offering guests a behind the-scenes look at her creative process.

Ana Pušica residency package
Discover a world where creativity knows no bounds as Ana Pušica, the maestro of contemporary art, transforms Patina Maldives into an immersive canvas of inspiration.

Book now to secure your experience.
For more information and reservations, please visit Patina Maldives or contact
reservations.maldives@patinahotels.com