The 2016 Freight 50: Analysis of top cargo carriers

For most of the top 10 carriers on the Freight 50 list, growth was relatively static. Cathay Pacific, for example, managed a 5.4 percent increase in overall traffic to reach 10.59 billion FTKs, thanks to its ability to capitalize on “very strong” trans-Pacific demand in early 2015, said Mark Sutch, general manager, cargo sales and marketing for Cathay. “2015 was not a year of new route additions but more of consolidation and thickening up on routes,” he said. “2015 was the first full year of our dual Mexico service, serving Mexico City and Guadalajara. Both these ports out performed our expectations and helped the strong 2015 result.”

Climb down from the top 10 rungs, however, and the changes from the previous year become more pronounced. Air China Cargo, at No. 11, climbed four spots from No. 15 last year, growing its FTKs at the fastest annual rate – 29.7 percent – in the Freight 50 list. Wilson Yam, COO at Air China Cargo, credited the success to the addition of two 777 freighters in the later part of last year to the carrier’s fleet of 15 freighters, comprised of 747s, 777s and 757s. “The good cargo performance was partly due to a better mix of cargo carried, as a result of carrying more cargo other than general freight.” In addition, the U.S. West Coast port slowdowns and Toyota’s massive airbag recall action at the beginning of the year had contributed to a sudden surge in demand resulting in “good incremental revenue,” he added.

Ethiopian Airlines was another fast mover, jumping two spots to No. 38, with 29 percent year-over-year growth to 1.29 billion FTKs. At Ethiopian Cargo, the carrier’s “2025 strategy” is shaping up to almost double the carrier’s fleet from the current ten freighters to 18, said CEO Tewolde Gebremariam. The plan calls for a more-than-400 percent increase in total annual revenues to $2 billion by 2025. With cargo representing 15 percent of these revenues, this expansion would involve an increase of the airline’s annual tonnage from the current 350,000 tonnes to 820,000 tonnes in the next nine years. When the new Addis Ababa hub is complete, the airline will offer a total cargo capacity of 1.2 million tonnes per year.

After years of steady growth, Qatar Airways has made it into the top 10 in the Freight 50 list, reaching No. 9, with a robust 27.7 percent rise in FTKs. In June, Qatar’s CEO of cargo, Ulrich Ogiermann, said he plans more rapid growth this year through new acquisitions and freighters. He also pointed to Qatar’s new European hub in Luxembourg, where he said Qatar has doubled the number of its flights. Qatar will also expand its freighter fleet to 22 aircraft by 2017, Ogiermann added.

Air New Zealand has also enjoyed some success of late, being one of the few carriers to offer a direct route from New Zealand to the United States. Since it has not needed to negotiate cargo rates for many years due to lack of competition, the carrier has been able to keep its yields high, especially since it stopped flying freighters on its trans-Pac routes. In 2015, ANZ rose to the No. 39 spot, with an 18.2 percent rise in FTKs. However, this year the Kiwi carrier is beginning to feel competitive pressure as American and United have begun 787 service from the U.S. to New Zealand.

Two other Freight 50 carriers that showed significant growth included China Southern Airlines, which leapfrogged four spots to No. 12, with a 28.4 percent, y-o-y, increase in FTKs, and Volga-Dnepr Group, a five-spot climber that enjoyed a 25.1 percent growth rate in FTKs to reach No. 19. Eddy Liu, vice president, cargo, for China Airlines, cited the West Coast port crisis and airbag recall in early 2015 for inflating trans-Pacific trade growth in the first half of the year. In addition, China Airlines, No. 16 on the list, with 1.4 percent growth in FTKs, saw demand rise sharply for shipments to Southeast Asia, so the carrier increased frequencies to Ho Chi Minh City and Hanoi in July 2015.