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Trade Association Decries "Bottlenecks;" Airlines Use Passenger Planes to Move Vital Cargo

By Howard Smith - Mar 26, 2020 at 11:54AM

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Airlines are converting passenger planes to help during the pandemic and to generate revenue.

The International Air Transport Association (IATA), trade association for the world's airlines, is calling on governments to take action to ensure air cargo flows smoothly and efficiently to help the fight against the spread of COVID-19. 

Alexandre de Juniac, IATA's director general and CEO, specifically pointed out bureaucratic "bottlenecks" related to securing slots and obtaining operating permits, as cargo planes carrying medical supplies and equipment attempt to try and fill demand. As global passenger air services have virtually ground to a halt, airlines are battling government obstacles trying to meet cargo demand by repurposing passenger planes for cargo hauls, and reintroducing freight shipping services. 

Cargo being loaded onto jet airplane

Image source: Getty Images.

In an effort to increase cargo capacity, Delta Air Lines (DAL -2.62%), American Airlines Group (AAL -4.00%), and United Airlines Holdings (UAL -2.50%) are using passenger aircraft for cargo-only flights, domestically and internationally. International Airlines Group's (ICAGY 1.32%) British Airways, Air Canada (ACDVF -1.92%), and other international carriers are doing the same thing. 

The opportunity for the airlines to help transport important cargo as the world fights the pandemic also gives the industry much needed revenue as passenger capacity has been drastically cut. 

The IATA most recently estimated that passenger airlines could lose up to $252 billion in revenue from the COVID-19 crisis, a 44% cut from the level of a year ago. In its call on airlines and governments to help support using the previous passenger routes for cargo, IATA pointed to examples of 2 million masks being transported by Airbus (EADSY -0.64%) from China to Europe, and medical equipment donations being moved to African nations. 

 

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Stocks Mentioned

United Airlines Holdings, Inc. Stock Quote
United Airlines Holdings, Inc.
UAL
$43.11 (-2.50%) $-1.10
Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$38.21 (-2.62%) $-1.03
Airbus Stock Quote
Airbus
EADSY
$28.00 (-0.64%) $0.18
International Consolidated Airlines Group, S.A. Stock Quote
International Consolidated Airlines Group, S.A.
ICAGY
$3.06 (1.32%) $0.04
American Airlines Group Inc. Stock Quote
American Airlines Group Inc.
AAL
$16.08 (-4.00%) $0.67
Air Canada Stock Quote
Air Canada
ACDVF
$16.10 (-1.92%) $0.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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