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Amazon.com, Inc. (NASDAQ:AMZN), (MESA) – Boutique French Airline Ventures Into Air Cargo

Many passenger airlines have expanded cargo services out of necessity since the start of the COVID pandemic. Now, a boutique French carrier is leveraging the crisis to start cargo operations from scratch.

La Compagnie, which offers exclusively business-class flights between New York and Paris, recently began hauling cargo in the belly of its Airbus A321 Long Range aircraft for the first time as it looks to capture ancillary business from a sector with high yields amid a shortage of freight space. The airline said it awarded Worldwide Flight Services a three-year contract to load, pack and discharge shipments.

The A321 Long Range plane can carry 244 passengers in regular configuration, but La Compagnie’s business passenger service only has 76 fully reclining seats. That leaves extra room for up to 3.9 tons of cargo, WFS said in a news release.

Offering cargo service, which is common for most passenger airlines, is something La Compagnie never had time to adequately prepare for since its founding in 2014, Anne Crespo, the airline’s head of marketing and communications, told American Shipper.

“As a start-up, we had no time to work on this before. Our efforts were focused on delivering a state-of-the-art business class experience to our passengers. With COVID-19, we suspended our flights and took the time to comply with the requirements needed for cargo. We have a lot of room for luggage in our passenger flights, so we can take some cargo in addition to that,” she said in an email.

Key customers for the cargo service are expected to include luxury goods and fashion brands, Crespo added.

La Compagnie is increasing its schedule between Newark International Airport in New Jersey and Paris Orly Airport from four flights per week to seven in September. It also offers seasonal service between Newark and Nice, France, through late September, as well as seasonal service from Sept. 5 until the end of the year between Paris and Tel Aviv, Israel. And in late November, the carrier will begin flying between Newark and Milan, Italy.

It’s possible the cargo service could be expanded to the Tel Aviv route, but not between Newark and Nice because the aircraft need more fuel capacity, Crespo said.

Worldwide Flight Services also holds ground handling contracts with La Compagnie in Newark for its passenger and ramp services to Paris Orly and Nice.

Branching Out Into Cargo

The huge demand for air cargo and elevated yields during the pandemic have motivated many airlines to focus more on cargo than they did in the past when cargo was often an afterthought. Nearly half the normal cargo capacity exited the market when passenger airlines grounded flights, putting a severe strain on supply chains. Airlines quickly pivoted to temporarily redeploy many aircraft as temporary freighters to help move critical supplies, including personal protective equipment. The supply shortage substantially pushed up rates from pre-pandemic levels, helping airlines score large gains in cargo revenues.

International flights that are important for freight markets are still limited because of travel restrictions. The pandemic also accelerated the trend toward online shopping, creating a great demand for quick e-commerce deliveries made possible by air transport. 

With air cargo projected to grow at an annual rate of 4% to 6%, and an e-commerce tailwind that could push that even higher, several passenger carriers are making long-term commitments to expand, or add cargo capabilities.

Before the pandemic, leisure passenger airline Sun Country (NASDAQ: SNCY) and regional carrier Mesa Airlines (NASDAQ: MESA) diversified their business by launching cargo divisions to serve Amazon Air (NASDAQ: AMZN) and DHL Express, respectively. 

The recognition that cargo could be more lucrative than in the past has recently spurred Air Canada (OTCUS: ACDVF) to start a dedicated freighter division. Latvian carrier SmartLynx has also launched a cargo division to fly converted Airbus A321 freighters for DHL in Europe. Lufthansa Cityline, a regional passenger carrier, next year will begin flying A321 freighters for sister company Lufthansa Cargo. And ocean carrier CMA CGM launched its own cargo airline with a fleet of widebody jets operated by tourist carrier Air Belgium.

 Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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