Substituting cargo for passengers becomes mainstream business for airlines

A big silver plane being loaded with cargo.

What started out a month ago as a niche, experimental business — turning passenger aircraft into dedicated freighters for cargo customers — has exploded in popularity and become a driver of sorely needed revenue for airlines.

In just three weeks, United Airlines (NASDAQ: UAL) has already operated 270 cargo-only flights carrying more than 9.2 million pounds of goods on repurposed Boeing 777 and 787 jets, cargo chief Jan Krems said Thursday in a message to customers. Initial service was between United’s U.S. hubs and Amsterdam; Frankfurt, Germany; and London’s Heathrow Airport. Since then, United Cargo has added Brussels, Hong Kong, Shanghai, Sydney and Tel Aviv, Israel, to its all-cargo network. And later this week it will begin service to and from Chengdu, China; Beijing; and Taiwan.

Demand for repurposed passenger jets has been so high that Lufthansa Airlines says it will even remove seats from four aircraft to make room for more cargo. Earlier, Lufthansa said it is operating 25 special flights this week with passenger aircraft dedicated solely to cargo. An additional 60 cargo flights with passenger aircraft are planned for next week.

Beginning Monday, Lufthansa and its sister Austrian Airlines will add 35 weekly flights with passenger aircraft operating between Europe and Asia. The schedule includes two daily connections from Frankfurt to Shanghai and one daily connection to Beijing with Airbus A330-300 aircraft. One Airbus A350-900 will take off daily from Munich to Shanghai and Beijing. The planes have about 30 tons of cargo capacity.

Austrian Airlines plans to provide 16 flights a week from Vienna, with Shanghai being served eight times per week, Beijing five times, Penang, Malaysia two times and Xiamen, China, once a week. The airline will deploy Boeing 767-300 and 777-200 jets on those routes.

The flights supplement 14 flights per week that Lufthansa operates with its fleet of Boeing 777 freighters, which can haul about 103 tons of goods.

American Airlines (NASDAQ: AAL) announced Friday that it is expanding cargo-only operations to provide more than 5.5 million pounds of capacity to transport critical goods each week between the U.S. and Europe, Asia and Latin America. American flew a couple flights in late March between Dallas-Fort Worth (DFW) and Frankfurt, and since then the concept has taken off.

Within a week, the Dallas-based carrier will begin operating mini-freighters from DFW to Dublin and Hong Kong; between New York (JFK) and London Heathrow; and between Miami and Buenos Aires. American said it is also planning to add cargo-only service to Shanghai and Seoul by the end of the month. The flights will transport personal protective equipment and pharmaceuticals, automotive components, fresh fruits and vegetables, mail, and electronics.

Air Canada (TO: AC) said Friday it is adding seven dedicated cargo flights per week to and from Shanghai on a scheduled basis, beginning Friday. The airline initially deployed passenger mini-freighters from Toronto to Amsterdam, London and Frankfurt. It says it has operated dozens of on-demand flights for medical supplies and regular goods to Europe, as well as Seoul and Hong Kong using Boeing 787-9 and 777 aircraft. 

The coronavirus pandemic and widespread travel restrictions caused passenger travel to crater, forcing airlines to ground up to 90% of their fleets to control costs. About 30% to 40%  of global cargo capacity immediately disappeared because passenger bellies are extensively used to haul cargo and mail. That created a shortage of space because there are not enough full freighters to make up the loss, especially with huge demand to move medical supplies.

Hemorrhaging cash, a few airlines, such as Delta, Cathay Pacific, El Al and American, began offering their aircraft to logistics companies and big shippers as cargo-only charters and were soon joined by many of their competitors.

The airlines continued to become more creative with cargo. Some, like Delta Air Lines, added scheduled cargo service on certain routes to supplement ad hoc charter business. Lufthansa, China Eastern and others filled passenger seats with boxes to maximize efficiency. Light goods, such as protective masks, are typically carried in the upper deck. Others are using special “seat bags” that modify the seat space and allow more cargo to be safely loaded. Southwest Airlines is renting planes to cargo users even though its fleet consists of narrow-body Boeing 737s that can’t fit giant containers or flat racks. And Air Canada is even offering its small, regional jets to get cargo to rural areas and tribal communities.

The demand for these services reflects the importance of air transport to move emergency aid, food products, e-commerce and other items to keep businesses running during a pandemic crisis in which hospitals are stressed and millions of people are quarantined at home.

Industry officials say governments need to do more to ensure cargo flights can easily operate on short notice to new destinations and provide greater financial support to ensure airlines can continue to operate.

“I am proud of the way our industry has stepped up to supply what the world needs to manage through this crisis,” Krems wrote.

Etihad Airways is another carrier substituting passenger planes for cargo applications. It is adding five routes to the original 10 destinations served by 777 and 787 passenger aircraft in cargo-only mode. The new services connect Abu Dhabi, United Arab Emirates, with Melbourne, Australia; Chennai and Kerala, India; Karachi, Pakistan; and Amsterdam, the company said.

The airline also operates a fleet of full-size freighters. With the combined fleet, it is operating more than 90 turnaround flights per week to 29 destinations.