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Belly weight

Satu Dahl examines the market to analyse trends and bellyhold opportunities for long haul low cost carriers such as Norwegian, as well as the innovative systems protecting belly cargo
Preliminary figures released in December by the International Civil Aviation Organization (ICAO) show that the international segment of freight traffic, which represents nearly 87% of total air freight, grew by around 4.6% in 2018, while the scheduled international freight load factor remained at a similar level as the previous year at around 55%.
According to Brian Pearce, IATA's Chief Economist who presented at the IATA Cargo Media Day in December, the cargo business has made a larger contribution to airline revenues in the past three years, helping to offset falling base fares in the coming year. 
IATA estimates that cargo revenues of over $116 billion will represent more than 13% of airline revenues in 2019. It’s no wonder therefore that low cost carriers are increasingly tapping into the growing cargo market. The recent news about Norwegian’s changes to its UK-US route network has brought the carrier’s long haul cargo strategy into focus.
Norwegian announced at the end of November that it will serve Miami International Airport (MIA) and San Francisco International Airport (SFO) from London Gatwick starting on 31 March, replacing the airline’s existing flights to Fort Lauderdale and Oakland airports. In addition to reflecting customer demand, Norwegian says the change in its US destinations is due to the increased cargo capabilities that both MIA and SFO offer. 
Norwegian was the first low cost airline to introduce long haul flights from the UK to the US in 2014 and the carrier now flies to 12 US destinations from London Gatwick. The airline, which reported its highest ever passenger figures in a single year with more than 37 million passengers and a load factor of 86% in 2018, launched 35 new routes during the year, primarily between Europe and the US. 
US opportunities for Norwegian Cargo
According to IATA, the strength of the US economy and consumer spending have helped support the demand for air cargo in the region over the past year, with North American airlines posting the fastest growth of any region for the second consecutive month in November 2018 with an increase in demand of 3.1% compared to the same period a year earlier. Regarding market share, in the latest edition of its World Airport Traffic Forecasts, Airports Council International (ACI) predicts that in 2040, an estimated 20% of all air cargo will be handled in the US. 
One of the two new destinations for Norwegian, San Francisco International Airport, completed its new West Field cargo facility with warehouse and integrated office spaces in 2014 and handled 300,476 metric tonnes of international cargo in 2017. Looking at monthly figures, the airport handled 28,277 metric tonnes of international cargo in November 2018, up by 6.2% from the November 2017 figure of 26,636 metric tonnes. 
Commenting on Norwegian’s move to San Francisco, SFO’s Director Ivar C. Satero said: “We are thrilled to welcome Norwegian service between SFO and London in the spring of 2019. With this move, travellers can enjoy Norwegian’s fantastic value together with SFO’s award-winning, world-class airport experience.” The airline will operate five-weekly services to San Francisco and daily flights to Miami, up from four-weekly services to Fort Lauderdale last summer. 
According to ACI, total air cargo volume at the top 30 busiest cargo airports in the world grew 7.3% in 2017. Miami International Airport makes this top 30 list as the world’s 14th busiest air cargo hub, ACI data published in 2018 states. This, coupled with MIA’s ongoing expansion of new all-cargo services, makes Norwegian’s strategic move to MIA an exciting opportunity for the airline.
“South Florida is one of our most important markets in the US, and by moving our London service to Miami, we will become even more competitive and offer more South Florida residents more affordable flights to London and beyond, while we will also have access to many more opportunities, including cargo” says Bjørn Kjos, Norwegian CEO and founder. 
“We are very committed to this market and look forward to increasing our presence at MIA in the future.” Norwegian is the third international airline to launch a Miami service this year. Moroccan national carrier Royal Air Maroc has announced it will launch the first-ever Miami-Casablanca route on 3 April and LOT Polish Airlines will 
begin four weekly flights to Warsaw on 1 June.
Maximising opportunities
Commenting on how the bellyhold capacity is influencing the development of Norwegian’s long haul routes, Bjørn Erik Barman-Jenssen, Managing Director of Norwegian Cargo, tells Airline Cargo Management that the carrier remains busy with 12 US destinations from London Gatwick operating new Boeing 787s. In addition, there are daily flights to Buenos Aires, and Norwegian will start a brand-new route to Rio de Janeiro from 31 March this year. 
“Our priority is developing a compelling route network that satisfies the demand for more affordable long haul travel,” Barman-Jenssen states.  “As part of this, we’re a cost disciplined company that primarily seeks to maximise opportunities for passenger development, but we also value the importance of cargo growth as it presents another  important revenue stream.” >>

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