What just happened?
In a bid to stay afloat amidst COVID-19, airlines have adapted quickly to convert their passenger cabins into cargo storage areas for freight such as Personal Protective Equipment (PPE) that is manufactured in Asia and desperately needed in many parts of the world. [1]
What does this mean?
For many airlines, with their cash reserves dwindling from a lack of passenger revenue, freight has been a lifesaving alternative. Emirates had no choice but to turn to cargo capacity to prevent a financial disaster resulting from huge revenue loss after it halted most of its passenger flights in 2020. As of the middle of 2020, 85 of Emirates’ Boeing 777-300ERs operate as stand-in freighters and Emirates has even called up its soon-to-be retired A380s back into service as air freight carriers. [2]
Finnair was one of the first European airlines to add to its cargo capacity by removing economy-class seats from the cabin of two of its Airbus A330s, doubling available space for cargo holding. The conversion was fairly straightforward, taking less than two days at Finnair’s in-house technical services centre, where the planes undergo an internal overhaul. The cockpit, business-class seats, bulkheads, lavatories, galleys, and overhead bins remain in place but everything else is removed (mostly economy class seats) and netting is then secured to the seat tracks to tie down cargo boxes and crates. Finnair notes that the aircraft can be easily returned to passenger operations when passenger traffic demand increases. [3]
In addition, De Havilland Canada and ATR - the two main manufacturers of turboprop passenger aircraft - are also pushing their own freighter conversions. De Havilland Canada is offering what it calls “simplified” packages for the in-production Dash 8-400, as well as legacy -100/200 and -300 variants, having secured approval from Transport Canada in May 2020. [4]
ATR is also offering an instant conversion programme for its ATR-42 and ATR-72 variants, to help get back into service some inactive aircraft, which account for just over half of the almost 1,300-strong global fleet. ATR managed to achieve this with external suppliers AKKA Technologies and PMV Engineering through removing seats and securing shipments with nets attached to the seat tracks. [5]
How does this impact the legal sector?
National governments should consider seeking public-private partnerships with airlines, backed by private equity, which includes funds from investors that directly invest in private companies such as airlines. This would provide funds that allow the government to purchase aircraft from airlines, particularly those that are intended to be replaced with newer aircraft models. Governments will then be able to sell them to cargo carriers or national agencies to carry out air freight services and other activities relating to the pandemic recovery.
Law firms that support engineering companies should keep a close tab on the developments in the aviation industry regarding cargo capacity. As airlines will be suppressed by COVID-19 for an indefinite time, monitoring such developments will allow the firms to advise their clients in clinching deals for parts and equipment that will enhance their aircraft conversion procedures. This will increase the attractiveness of their clients to airlines who are looking to convert their aircraft fixtures for cargo transportation in the near future.
Written by Nickolaus Ng
Assessing Firms:
#ClydeandCo #NortonRoseFullbright #DLAPiper #StephensonHarwood #Bird&BirdLLP
References:
[1] Murdo Morrison, ‘How coronavirus has turned the freight market on its head’ (Flight Global, 8 June 2020) <https://www.flightglobal.com/flight-international/how-coronavirus-has-turned-the-freight-market-on-its-head/138694.article> accessed 07 March 2021
[2] Damien Brett, ‘Emirates calls A380s up for all-cargo duties (Air Cargo News, 11th November 2020) <https://www.aircargonews.net/airlines/freighter-operator/emirates-calls-a380s-up-for-all-cargo-duties/> accessed 07 March 2021
[3] Finnair, ‘Cargo Keeps Going’ (Blue Wings, February 2021) <https://www.finnair.com/il-en/bluewings/world-of-finnair/cargo-keeps-going--how-finnair-cargo-has-kept-busy-during-the-pandemic-2231116> accessed 07 March 2021
[4] De Havilland Canada Ltd, ‘Transport Canada Extends Approval for De Havilland Canada Dash 8 Simplified Package Freighters’ (September 2020) <https://www.newswire.ca/news-releases/transport-canada-extends-approvals-for-de-havilland-canada-dash-8-simplified-package-freighters-849217489.html> accessed 07 March 2021
[5] ATR, ‘Medical Cargo and Essential goods replace passengers in times of need during COVID-19 pandemic’ (April 2020) <https://www.atr-aircraft.com/medical-cargo-and-essential-goods-replace-passengers-in-times-of-need-during-covid-19-pandemic/> accessed 07 March 2021
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.