The air charter business has been booming, with companies reporting impressive revenues following one of their busiest ever seasons. Air Charter Service (ACS) was one of the charter brokers that has benefitted from the rise in demand for their services, as cargo switched from sea to air and there was a continued lack of bellyhold capacity.
ACS secured record annual revenues of £1.3 billion in 2021, following strong growth and sales across all divisions, with that success carrying forward into 2022. The company’s Chinese offices in Beijing, Shanghai and Hong Kong in particular helped ACS to meet demand, as it took advantage of the lack of availability and airfreight space to provide capacity for the sizeable amount of business coming out of the region.
Scale is crucial
As the pandemic took hold and the air industry rapidly changed, charter brokers came front and centre, with passenger planes grounded and the e-commerce industry growing at a remarkable pace. Whether transporting medical equipment or people’s packages, ACS played a crucial role in keeping global trade on track.
Rising to the moment, the company had scale on its side, as one of the most far-reaching charter brokers in the industry. ACS is spread all over with places in Africa, Asia, Australia, Europe, the Middle East, North America and South America.
“We are able to operate at quite a fast rate in terms of finding availability on the market, communicating with our colleagues, working between two offices with large freight porters that may be global as well. I think that’s the one thing with ACS: We’ve always worked on a very collaborative nature between our locations,” Dan Morgan-Evans, ACS’ head of cargo, said.
“For example, if we had flights out of China, we’ve got people based there. They can go to the airport, arrange trucking, the warehouse, speak the language,” he added, discussing the benefits of having teams on the ground globally.
“I think we had the upper hand in terms of being able to respond quickly. It wasn’t really a ramping up even for us. For the first couple of months, we were fixing every freighter that we could possibly get our hands on. Then we decided to just leverage our commercial jets department which spread all around the world, just like the cargo department.”
Chartering is a popular option
This return to normality in the air cargo market has seen charter prices, which spiked to unprecedented levels over the past two years, come down to a more sustainable level. “The prices that were going on last Christmas were just unbelievably high and I think that we are certainly seeing a softening in rates.”
Russia’s invasion of Ukraine, rising fuel prices haven’t helped the situation though, as it has kept costs higher than pre-pandemic for the whole industry. Although, looking ahead to next year, ACS expects costs to be a lot lower than last year as capacity frees up.
“Charter, especially with the prices coming down, is still very much on everyone’s radar, which has helped keep us going during these times. We’ve already got good forward bookings for October, November and December.”
Asia remains a key market
While the global climate has calmed slightly in 2022, returning in parts of the world to a pre-pandemic situation, supply chain disruptions have continued with the war in Ukraine, lockdowns in Asia and businesses feeling the strain forcing companies to adapt to keep their operations running smoothly.
“The first quarter of this year and into the second quarter, there was still massively strong demand,” Morgan-Evans added. However, it wasn’t all positive, as restrictions in China caused a “bit of a headache” when ACS was forced to move flights planned out of Shanghai to other airports due to the local lockdowns.
“It’s given us a bit of a breather in terms of the Covid demand dropping down but it’s still above pre-pandemic levels. Even in August, a traditionally quiet time, it was particularly busy with double or even triple what we were doing in August pre-pandemic.”
Founded on providing aid
As the world found itself in in crisis, ACS stepped up to transport medical equipment and provide humanitarian support where needed. Having experience quickly and effectively delivering aid to places that need it most, ACS regularly supports NGOs, governments and aid agencies, including in Ukraine, Haiti, Puerto Rico, Nepal and more.
“30 years ago, this company was really founded on delivering humanitarian aid. Chris Leach was working in his basement on a fax machine and won some contracts with the UN. So, he feels that that’s what helped begin this whole process,” Morgan-Evans said.
“It’s a big passion for him and that’s rubbed off on the rest of us. It’s one of those things that’s quite important and core to what we do. When the invasion of Ukraine happened, we have a lot of Ukrainian friends, colleagues, people that use airlines and we sent some staff down there to ferry stuff from the supermarket to refugee spots.
The future is bright
ACS has been expanding in recent months, opening a new office in Brisbane and expanding operations in the UK with the office in Gatwick. More is to come in the next 12-24 months, as the market remains strong. “We know there’s a bigger market and having a presence on the ground will help us to secure more business from those markets,” Morgan-Evans stated.
For ACS, the company has a mixture of planned offices and opportunistic offices depending on what happens in the market but, as always, their plan remains trying to replicate their successful business model. “It’s definitely going to be a different airfreight market going into next year. I hope we’re certainly a stronger company than we were previously; the number of customers has increased, the experience of our brokers has massively increased.”
“In terms of where the market is going to be, that’s much harder to predict. If we’re in a global recession, it’s going to be a tough market…consumer demand and consumer confidence is going to be a big factor – how quickly and what steps governments take to curb inflation.”
“I think that we put in enough work during the last two years to mean that we will see a decent amount of business but it won’t be anything like it has been for the last two and a half years.”