BA boosts air cargo deliveries from China to Europe to ship medical PPE

British Airways announced Friday that it has increased its number of cargo-only flights between China and the UK in order to deliver medical personal protective equipment supplies from Asia to Europe, although jet fuel differentials remain under pressure.

"British Airways is increasing the number of cargo-only flights from China to the UK to 21 a week, up from 13 last week, as demand continues to rise," the company said in a statement Friday.

Traders have also discussed repatriation flights and global cargo shipments as a small support mechanism for the struggling market.

"From May, 14 flights each week will depart from Shanghai, and seven from Beijing carrying cargo in the hold and, where possible, in the cabin too. These flights will be able to carry up to 770 tonnes of cargo for the NHS each week, including PPE and ventilators," BA said in its statement.

Global air cargo capacity is currently down by around 35%, according to analysts speaking on a African Airlines Association webinar earlier this week . But they added that cargo capacity has begun to pick up as Europe calls for support from Asia to provide protective medical equipment.

"Cargo capacity is picking up. A lot of cargo is heading to Europe, with the origin being Asia. The whole world is consuming cargo chartered flights," one analyst said.

As this form of demand builds, market participants said they expect the spot price of freighter aircraft to be highly inflated, leaving opportunity for passenger-configured aircraft to capture market share.

The jet fuel forward swaps curve is also pricing in a very slow and incremental recovery to prices beyond 2021.

Platts assessed Q3 2020 at minus $27.50/mt Thursday, and a gradual monthly increase to reach $27.25/mt by Q4 2021.

This value for Q4 2021 is still largely below where it was on January 2, at $45.25/mt, showing the market is still pricing an impact that far out.