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 per cent of total air freight, grew by around 4.6 per cent in 2018, while the scheduled international freight load factor remained at a similar level as the previous year at around 55 per cent.

    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.

    Volga Dnepr

    IATA estimates that cargo revenues of over $116 billion will represent more than 13 per cent 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.

    Long haul low cost aircraft capacity for cargo
    15 to 25 tonnes of capacity is available on the 787s

    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 per cent 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 posted the fastest growth of any region for the second consecutive month in November 2018 with an increase in demand of 3.1 per cent 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 per cent 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 per cent from the November 2017 figure of 26,636 metric tonnes.

    Belly space prior to the CLS upgrade
    Belly space prior to CLS upgrade

    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 per cent 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 low cost 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.”

    Moving on to what opportunities the new daily non-stop flights to Miami and San Francisco from London Gatwick bring to the airline when it comes to cargo, Barman-Jenssen says Norwegian is delighted to start serving the major airport hubs of San Francisco and Miami from 31 March 2019.

    “This is a beneficial move, not only for business and leisure customers but also for Norwegian Cargo. Miami International Airport, in particular, presents us with improved freight facilities and interlining opportunities to South America.

    “These new airports will join our existing cargo operations at Oakland and Fort Lauderdale that we have developed significantly over the past few years as we continue our long haul services to these airports from other European cities.”

    Barman-Jenssen reports that the carrier will build upon the cargo capabilities and reputation established at Oakland and Fort Lauderdale to maximise the opportunities for cargo growth within the newest additions to the global network.

    “With access to these key markets by serving the primary airports, Norwegian Cargo will continue to provide services to customers seeking fast, reliable shipments using our 787-bellyhold capacity.”

    Barman-Jenssen continues: “The cargo capacity on our new routes to Miami and San Francisco will be consistent with our wider global network of long haul routes operated using the 787s. A fantastic benefit of operating these state-of-the-art aircraft is having between 15-25 tonnes of capacity to meet the demand from freight forwarders and Norwegian Cargo customers.”

    Industries creating growth

    When talking about the industries that provide the biggest demand for cargo on Norwegian’s long haul routes and the key products the airline transports, Barman-Jenssen notes the following:

    “As Norwegian serves a diverse mix of global destinations, we have developed extensive experience shipping different types of air freight. Overall, given our home market, seafood shipments tend to be popular, particularly from Norway to the US and Asia using our domestic and long haul networks. E-commerce and perishable products such as fruit and vegetables, in addition to clothing that supports fast fashion industries, have also generally seen the most demand.”

    Indeed, when it comes to industries that are creating opportunities for cargo, e-commerce features prominently. Pearce from IATA points to the structural shift in retailing towards e-commerce, on domestic markets, as part of the reason for the outperformance of air cargo over the world trade.

    He says air cargo has grown faster than world trade over the past five years; despite the slow growth and continued uncertainties about world trade, air cargo has increased its share over other transport modes since early 2014.

    Protecting the cargo hold

    When it comes to the latest aircraft bellyhold technologies, interesting and innovative systems have been coming on to the market in the past couple of years, such as the CLS cover system developed by Eirtech Aviation Services.

    A320 CLS long haul low cost cargo panel upgrade
    A320 CLS installation and cargo panel upgrade

    Eirtech Aviation Services, an Ireland-based company which provides a range of aircraft engineering solutions and has engineering facilities in Dublin and Singapore, designed the cover system for easy conversion in less than four hours from an Airbus A320 Family logistic cargo loading system to a safe bulk loading option.

    The system has already been installed in A319, A320 and A321 aircraft for multiple airlines globally, including Avianca, Fly Ernest, Indigo, Titan Airways, Bangkok Airways and Avion Express which have all opted to use the cover panel system.

    Eirtech says its CLS cover system is lighter, more affordable and available much faster than the OEM or competitor equivalent; the panels are installed as an EASA/FAA minor modification with no permanent modification to the aircraft, fitted without use of tooling to the existing fixtures and easily removed later, eliminating any aircraft redelivery issues.

    Manufactured using 7075 T6 aluminium, the additional weight is less than 140kg for both cargo holds and all cargo net access points are still accessible for use. A cargo bay sidewall, ceiling and floor panel upgrade is also available, using a reinforced outer layer for durability and longevity, in addition to a high-definition surveillance system to help protect cargo, luggage and aircraft.

    The company has developed the Cargo Bay Surveillance System which is designed to assist in eliminating challenges in all areas of the cargo bay, increasing security, safety and protection against theft. Up to 8 HD colour cameras can be connected at one time and wireless streams from all cameras to the Electronic Flight Bag or airline security centre.