Coyne warns of new airfreight landscape
Larry Coyne, the CEO of Coyne Airways, said carriers must adapt to survive.
Larry Coyne warned that carriers must embrace change to survive in a new airfreight landscape defined by emerging global brands, modal shift and growing freight capacity on passenger planes.
Cargo migrating to both surface transport and passenger planes has changed the economics of freighter operations, putting traditional operators and owners under pressure, the CEO of Coyne Airways told delegates at the 10th Annual Meeting of the Air Cargo Club.
The Air Cargo Club is an annual gathering in St Paul de Vence, France. It consists of air cargo and aviation professionals who share a common interest in the challenges facing the airfreight industry.
“I believe our industry is undergoing revolutionary change,” Coyne said. “At Coyne, we are embracing that change because we know it will be good for us. In the next 20 years, more carriers will have to do the same and adapt to survive.”
He said the rise of a small number of global brands will cause casualties amongst independents and force a shift in the way the industry operates.
Passenger carriers are becoming bigger and more aggressive players in the long-haul freight business, and ownership of large freighters is becoming an unattractive proposition, Coyne said.
“There is a likelihood that more and more carriers will exit that business,” he said.
Coyne said deliveries of wide-body planes, which were, in effect, “mini-freighters,” are predicted to grow by over 8,000 in the next 20 years, bringing more services to more destinations and cutting into the main-deck freighter market.
“There are only about 500 wide-body freighters operated today, mainly by express carriers, so you can see what adding passenger cargo capacity equal to around 100 freighters a year will do to this market,” he said.
He pointed to a recent survey by Seabury revealing that an estimated 15.2 million tonnes of airfreight had been lost to surface between 2000 and 2013, equal to 11,000 B777 freighter flights a year.
“It is creaming off some of the growth that air used to enjoy and has reduced it from a potential 7.3 percent growth to 2.6 percent a year,” he said.