Mr. TONY ANH – Aviation Services Director Of ITL Corporation

“Currently, we are optimizing freighter carriers with weekly regular and fixed schedule to provide capacity solution to customers. These airlines, who are represented by ITL, are not affected by the disease and being operated as normal. For the demand to the destinations not within scheduled network, we provide charter solution for customers.”

Question 1: What’s your view on the impact of the N-covid pandemic on the Air Cargo industry in 2020?

Firstly, the impact of N-covid pandemic on the Air Cargo industry worldwide in general and Vietnam in particular has been unprecedented since Vietnam participated in the global supply chain.

For production activities, first is the impact on the supply when China becomes the center of the pandemic, this has caused production stagnation at the factories and a shortage of supply relative to raw materials and spare parts for most of other manufacturers in the world. After that, the pandemic had spread to Europe, US and other countries, reducing the purchasing power and causing lower demands. Production activities in the world are being stagnated during the pandemic, especially to the commodity items that need to be transported by air cargo such as auto parts, electronic spare parts, garments, footwear. IATA forecasts global air cargo demand will decrease by 15% – 20% in 2020.

As for the air capacity, most of the airlines have suspended their international passenger flights from mid-March 2020 to prevent the N-covid outbreak. For the time being, about 45% – 50% of the air cargo volume is transported by belly capacity and grounding of passenger aircrafts has disrupted the supply chain. Airlines have announced cancellation of passenger flights until the end of May 2020 or Jun 2020 subject to the situation.

Question 2: In your opinion, what are the challenges to the big Logistics Corporations such as ITL in the Aviation industry in the incoming time?

In Vietnam, key export commodities such as mobile phone, electronic spare parts, garments and footwear are shipped by air destined to two major markets: US and Europe (Current air cargo traffic from Noi Bai & Tan Son Nhat airports to EU & US shares more than 60% of total air cargo volume from Vietnam. Country closure and social distancing policy in US and Europe have negative impact on consumption the import demand of these commodities and lead to decreased air cargo volume.

Passenger airlines including the ones represented by ITL as a General Sales Agent (GSA) have suspended flights from Vietnam since mid-March 2020. Our off-line sales business units are also struggling to find capacity on the Feeder airlines. Suspension of all passenger flights has created pressure on the aviation market in Vietnam as well as on ITL Aviation in particular.

What we can see for the challenges in the coming time are the export volume decrease for long haul sectors to US and Europe and lack of capacity for short-haul sectors eg in Southeast Asia where belly capacity is mainly used for air cargo transportation so far.

Question 3:  As an Aviation Services Director of ITL Corporation, could you please share some of solutions that ITL Aviation will prepare in case the N-covid pandemic is still not well controlled?

Currently, we are optimizing freighter carriers with weekly regular and fixed schedule to provide capacity solution to customers. These airlines, who are represented by ITL, are not affected by the disease and being operated as normal.

For the demand to the destinations not within scheduled network, we provide charter solution for customers.
We continue to combine single sectors of each airline to widen network under SPA cooperation, such as from Vietnam to Thailand, Hong Kong, Korea, etc… by Feeder airlines and onwards from there to EU, US etc… by another airline.

In the situation that the pandemic has not been controlled, the passenger airlines represented by ITL as a GSA are being suspended until further notice. To adapt to the current situation, we coordinate with these airlines to use passenger aircrafts but for cargo carriage only. This is a good and flexible solution for our customers, especially for short haul sectors in Asia. This is very unique and the first time ITL Aviation has implemented this practice

The pandemic is still going on and at this time health and calmness are the two important factors to help us overcome the challenges, which may last till May and possibly June. Thank you all our partners and customers for accompanying us in this period. Please keep yourselves and your families safe and healthy.