Grounded passenger flights boost Japan NYK's Apr-Jun air cargo demand by 63% on year

Tokyo — Japan's Nippon Yusen Kabushiki Kaisha or NYK Line's revenue from air cargo transportation surged 62.8% year on year to Yen 28.8 billion ($272.4 million) over April-June, the company said August 5, as the transportation of goods via passenger flights plunged due to pandemic-led restrictions on international travel.

The company said while it expects resuming international passenger flights will have some impact on the business in coming months, it expects cargo aircraft demand to remain firm for the rest of fiscal 2020-21 (April-March).

NYK Line's air cargo segment posted a profit of Yen 9.3 billion for the April-June quarter, rebounding from a loss of Yen 4.4 billion a year earlier, as it captured urgent transportation demand for personal protective and medical equipment during the coronavirus pandemic, the company said.

This came against the backdrop of reduced air cargo volumes, but was supported by higher freight rates following the suspension or cancellation of most international passenger flights as multiple countries imposed restrictions to contain the spread of the coronavirus pandemic in the quarter.

Low jet fuel prices were also a major contributor in reducing variable expenses over April-June, the company said, declining to elaborate on its aviation fuel consumption volumes.

The FOB Singapore jet fuel/kerosene price averaged $30.70/b over April-June, down $49.04/b or 61.5% on the year, according to S&P Global Platts data.

Supported by its air cargo segment, NYK Line reported a net profit of Yen 11.68 billion for the April-June quarter, up 27.8% on year, while its revenue fell 11.1% over the same period to Yen 361.2 billion due to a reduction in marine transport and sluggish shipping markets amid the pandemic.