The cargo division of South American airline Avianca had the same cargo revenue in the third quarter as last year, despite a reduction in freighter aircraft. But delivery of aircraft to replenish the fleet has been pushed back by six months or more, according to the latest timetable from the company, which could inhibit growth.
Still, Avianca has been able to add some capacity in the European market courtesy of a new flight operated by alliance partner Turkish Airlines.
Colombia-based Avianca Group’s cargo revenue in the third quarter was flat year over year at $155.4 million and dipped 4.3% for the nine months through September, a departure from most airlines that have seen cargo revenue build all year under strong market conditions.
Management attributed lower revenue to a fleet modernization effort at Aerounion, its Mexican partner in which Avianca holds a minority stake. Aerounion’s three aging Airbus A300 and two Boeing 767 cargo jets were retired this year, Chief Financial Officer Rohit Philip said on the company’s Nov. 8 earnings call with analysts. The fill rate for available cargo space, however, was 5% better than in the same 2023 period.
Avianca Cargo operates six production A330-200 freighter aircraft and is acquiring two A330-200 and two A330-300 converted freighters as replacements for AeroUnion under a new lease agreement. The A330s are significantly larger than A300s and also have more capacity than the medium-size 767s.
Avianca is the fifteenth largest scheduled cargo airline in the world by volume, according to the International Air Transport Association, but the figure includes shipments carried by subsidiary Tampa Cargo, as well as several nationally branded passenger airlines based in other Latin American countries.
In July, Avianca received the first A330-300 and placed it with AeroUnion to cover routes in Colombia, Mexico and the United States, but the delivery schedule for the remaining aircraft has been delayed. Two of the remaining aircraft – used passenger jets – are now scheduled to be delivered in 2025 and one in 2026 after being reconfigured for cargo, Avianca Cargo said in a news release two weeks ago promoting a new marketing slogan. Avianca previously said it expected to receive the three other freighters by mid-2025.
The delays are related to ongoing labor shortages and mismanagement at Elbe Flugzeugwerke GmbH, the Airbus repair and overhaul affiliate responsible for the passenger-to-freighter conversions. FreightWaves previously reported that EFW was months behind schedule converting A330-300 cargo jets for leasing company Altavair and its customer Amazon Air because of production problems at its workshop in Mobile, Alabama. EFW has had trouble recruiting skilled technicians since the pandemic and many workers were farmed out to Airbus for passenger jet manufacturing and an aircraft maintenance affiliate in Mobile.
“Principally, the delays have been caused by lack of manpower availability and planning problems on the part of the conversion specialist,” Avianca Cargo said in a statement provided to FreightWaves.
The new aircraft will be much less costly to operate and increase AeroUnion’s overall capacity, which will help the carrier’s profitability, said Philip.
In the meantime, Avianca has experienced a pickup in cargo volumes to South America during the current quarter, especially for electronics moving south from the United States, he added.
And a new freighter service to Miami operated by Turkish Cargo is also bringing more business to Avianca Cargo. The two airlines in April 2023 formed a cargo alliance and have since collaborated through interline agreements for cargo carried on passenger jets. The arrangement is similar to code sharing in the passenger world, which allows logistics companies to book a shipment with one carrier that will get transferred at an intermediate airport and move with the partner airline on a single airway bill.
The two airlines now have taken their partnership to the next level with the Nov. 3 launch of weekly service between Liege, Belgium, and Miami using a Turkish Cargo Boeing 777 freighter on which Avianca shares the capacity to sell to its customers, who are typically exporters to the European market. By the same token, Turkish Cargo sells to Latin American destinations that Avianca serves from its Miami hub.
Miami is Avianca Cargo’s main market because of the huge volumes of flowers it transports from Colombia that are transferred to passenger and cargo aircraft heading to markets in North America and Europe.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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