Cargo carriers reap rewards of coronavirus chaos

Not all airlines are reeling from the coronavirus pandemic. Cargo airlines are cashing in on rush for medical supplies and other goods, marking a reversal of fortunes for the sector on the heels of its worst year in a decade.

As passenger demand plunged while Covid-19 spread around the globe, airlines have stored about two-thirds of the world’s fleet of about 26,000 planes through mid-April, according to U.K.-based aviation consulting firm Ascend by Cirium.

That meant a crunch for space because passenger planes routinely carry everything from mail to fresh food to pharmaceuticals in aircraft bellies.

Air freight volumes worldwide dropped by more than 15% in March from a year earlier, but capacity dropped 23%, the International Air Transport Association says.

Some cargo carriers are reaping the benefits.

Atlas Air Worldwide Holdings on Thursday said it swung to a $23.4 million profit in the first quarter from a loss of nearly $30 million in the same period from a year ago. Executives were upbeat about strong demand in the second quarter. Shares of the cargo airline that flies for Amazon and others were up by about 6% in midday trading and are up by about 47% in the second quarter.

The company said in a statement that it expects adjusted net income in the second quarter to rise as much as 50% from the first quarter. It also announced an agreement with its pilots for 10% pay increases, after a protracted battle for higher pay. 

Air Transport Services Group, another Amazon contractor that also offers passenger charters, on Tuesday reported a nearly 12% increase in revenue in the first quarter from a year earlier. Its stock was slightly down Thursday but up by about 16% in the second quarter so far.

The results are a stark contrast to the four biggest U.S. passenger airlines, which last month posted their first quarterly losses in years as U.S. travel demand dropped more than 90%, a result of the virus and measures to keep it at bay, like shelter-in-place orders.

United‘s stock is down by about 25% since the end of March, Delta is off 23%, Southwest is down 28% and American is down about 21%.

Those airlines, however, have quickly moved to operate cargo-only flights facing a dearth of passengers. American, for example, seeing a strong demand for medical supplies, in March flew its first scheduled flight carrying only cargo since 1984.