11 ms·

I'm a bit confused. Shouldn't chartered flights go down in cost now that there are lots of airlines with planes, costs, competition, and virtually no passenger

I'm a bit confused. Shouldn't chartered flights go down in cost now that there are lots of airlines with planes, costs, competition, and virtually no passenger demand? I realize passenger and cargo planes are different, but probably don't understand just how different in terms of effort/cost of adapting passenger planes to haul cargo primarily vs passengers and what the typical revenue is for a given flight (total revenue for passenger tickets). Even if it makes any economical sense to repurpose existing passenger jets for supplies unless of in dire need (which this may be the case for).

toomuchtodo 7y ago
There is only so much air cargo capacity, and passenger aircraft cannot be rapidly converted into that capacity. The cost is excessive to convert passenger aircraft to cargo service.
- Frost1x 7y ago
  Yea that's my assumption. Don't know what it takes to pull out seating, overheard, flooring?, etc. and what sort of effort that takes time wise. I assume it's not simple and takes time.
  - throwaway_pdp09 7y ago
    For smallish cargoes I don't see why you'd need to rip out anything. Place it on the floorspace in front of seats, place it on the seats. Getting it in an out is a matter of people lifting and carrying. (am not an air cargo freight expert if you haden't realised already, so be gentle)
    - ThrowawayR2 7y ago
      I'd imagine that if these parcels are not strapped down and the load shifts in flight because of severe turbulence, that could shift the center of gravity enough to result in a chain of events leading to a crash.
      - throwaway_pdp09 7y ago
        I seriously thought that the need to strap down or generally secure this stuff, and that it would be done, was so obvious as to be beneath mentioning. It seems not.
        vonmoltke 7y ago
        How do you properly secure cargo in receptacles intended to secure humans?
        luckylion 7y ago
        Is that really an unsolved problem in airline business? It can't be that hard to build small containers that fit on the seat and can be fastened with the seat belt system. Obviously, you won't want to do this for general cargo transport, but for "hey, we have a grounded plane, but transporting air mail gives great rates right now" situations?
        frandroid 7y ago
        So it's not a solved problem on massive scale because there aren't frequent and long worldwide air passenger traffic shutdowns.
        namibj 7y ago
        German post uses it for next-day letter delivery. They just put the boxes in bags and use the seatbelts to stap the bags to the seats.
      - mullen 7y ago
        You have to secure the loads or they can shift, causing the airplane to crash. I agree that you take out the seats in the aircraft but I don't know if the cargo "hooks" are certified or even there. Cargo can not be loaded into aircraft if it can not be secured into place.
        7y ago
  - KarlKemp 7y ago
    The doors are (one of) the problems.
- Swizec 7y ago
  Don’t passenger planes already have huge cargo holds for all the luggage? Would it really be that hard to stuff that space full of cargo?
  - toomuchtodo 7y ago
    Not comparable to dedicated cargo aircraft.
    - remarkEon 7y ago
      Why? I'm genuinely curious. Obviously total cargo volume is lower. Is there some regulatory concern that makes them "not comparable"?
      - jldugger 7y ago
        I'm guessing they do a lot more pallet shipping, and your typical passenger jet isn't prepped to load / store / unload that versus luggage.
      - adwww 7y ago
        The volume vs weight probably comes into play as well. Without passengers, passenger aircraft probably run out of volume capacity long before they approach their max take off weights. Whereas I think with dedicated cargo aircraft, it is usually the other way around - weight is the main limit, less volume.
  - kzrdude 7y ago
    Passenger planes already take cargo as part of normal flights yes! Now there are less passenger flights, so less capacity there! And less passengers to make the flight break even with people + cargo paying.
  - Frost1x 7y ago
    I would guess typical passenger planes have significantly smaller cargo stores than cargo planes so the layout may not be good for efficient cargo transport (outside of course... people as cargo). You'd allocate the volume in the aircraft very differently I imagine for cargo than passengers. I also suspect passenger planes were already using any leftover cargo from passenger cargo storage for commercial cargo transport to begin with. Two potentially very different optimization problems.
deleted 7y ago
[deleted]
paulgb 7y ago
I wonder how much this is a shortage of supply vs. an increase in demand. From what I understand, commercial passenger flights often take commercial cargo. With fewer flights, all that demand for cargo capacity has to go somewhere.
jldugger 7y ago
There was a discussion on the economist podcast about this. 1. Passenger jets often take a bit of cargo, but even if they rejiggered, it'd only be half full of cargo. 2. Many companies already hedged the price of fuel so the oil glut isn't really helping them any. 3. Demand is unidirectional: medical supplies are made in a handful of countries (ie China) but there isn't a huge demand for air freight the other direction. See also the container problem. 4. The airline network is a complex emergent system. Passengers from one international flight often connect into another domestic one. Cancelling an international flight has unpredictable knock-on effects for downstream flights. 5. Cancelling a flight can lead to losing your 'slot'. Similar to how google will kill non performing ads, airports have a system to allocate arrivals / departures to airlines that factors in usage. If you shift a passenger jet flying EU to US into doing cargo hauls, that slot is jeopardized.
- 6gvONxR4sf7o 7y ago
  > Many companies already hedged the price of fuel so the oil glut isn't really helping them any. It's really interesting that oil can be hedged against such a dramatic change. But not everything can be hedged in such a way. Do you have a simple explanation for what can and can't be hedged?
  - roro159 7y ago
    What matters for the financial hedge is the existence of futures, which means the companies can buy something they know they will need at a known price months before they actually need it. The specifics of this operation differs depending on the actual financial instrument used, but the idea is the same, even on the opposite side (selling at a known price in the future).
    - TAForObvReasons 7y ago
      The futures contracts don't always guarantee delivery. "Cash-settled" instruments just pay out cash based on the market rate (with the expectation that the long party can purchase the oil at that price)
adwww 7y ago
Cargo and passengers typically cross subsidise each other, depending on the route. Without (business and first class in particular) passengers the costs of running the planes have to met fully by the limited cargo.
darksaints 7y ago
The costs are actually reflecting the repurposing of passenger planes for cargo flights, at least on a small scale. Most passenger planes have cargo space...it's about 1/2 to 1/3 the usable space of their plane, therefore they are quite a bit less efficient. The increase in prices is reflective of a new market clearing price where capacity can meaningfully be increased.

toomuchtodo 7y ago

There is only so much air cargo capacity, and passenger aircraft cannot be rapidly converted into that capacity. The cost is excessive to convert passenger aircraft to cargo service.

Frost1x 7y ago
Yea that's my assumption. Don't know what it takes to pull out seating, overheard, flooring?, etc. and what sort of effort that takes time wise. I assume it's not simple and takes time.
- throwaway_pdp09 7y ago
  For smallish cargoes I don't see why you'd need to rip out anything. Place it on the floorspace in front of seats, place it on the seats. Getting it in an out is a matter of people lifting and carrying. (am not an air cargo freight expert if you haden't realised already, so be gentle)
  - ThrowawayR2 7y ago
    I'd imagine that if these parcels are not strapped down and the load shifts in flight because of severe turbulence, that could shift the center of gravity enough to result in a chain of events leading to a crash.
    - throwaway_pdp09 7y ago
      I seriously thought that the need to strap down or generally secure this stuff, and that it would be done, was so obvious as to be beneath mentioning. It seems not.
      - vonmoltke 7y ago
        How do you properly secure cargo in receptacles intended to secure humans?
        luckylion 7y ago
        Is that really an unsolved problem in airline business? It can't be that hard to build small containers that fit on the seat and can be fastened with the seat belt system. Obviously, you won't want to do this for general cargo transport, but for "hey, we have a grounded plane, but transporting air mail gives great rates right now" situations?
        frandroid 7y ago
        So it's not a solved problem on massive scale because there aren't frequent and long worldwide air passenger traffic shutdowns.
        namibj 7y ago
        German post uses it for next-day letter delivery. They just put the boxes in bags and use the seatbelts to stap the bags to the seats.
    - mullen 7y ago
      You have to secure the loads or they can shift, causing the airplane to crash. I agree that you take out the seats in the aircraft but I don't know if the cargo "hooks" are certified or even there. Cargo can not be loaded into aircraft if it can not be secured into place.
      - 7y ago
- KarlKemp 7y ago
  The doors are (one of) the problems.
Swizec 7y ago
Don’t passenger planes already have huge cargo holds for all the luggage? Would it really be that hard to stuff that space full of cargo?
- toomuchtodo 7y ago
  Not comparable to dedicated cargo aircraft.
  - remarkEon 7y ago
    Why? I'm genuinely curious. Obviously total cargo volume is lower. Is there some regulatory concern that makes them "not comparable"?
    - jldugger 7y ago
      I'm guessing they do a lot more pallet shipping, and your typical passenger jet isn't prepped to load / store / unload that versus luggage.
    - adwww 7y ago
      The volume vs weight probably comes into play as well. Without passengers, passenger aircraft probably run out of volume capacity long before they approach their max take off weights. Whereas I think with dedicated cargo aircraft, it is usually the other way around - weight is the main limit, less volume.
- kzrdude 7y ago
  Passenger planes already take cargo as part of normal flights yes! Now there are less passenger flights, so less capacity there! And less passengers to make the flight break even with people + cargo paying.
- Frost1x 7y ago
  I would guess typical passenger planes have significantly smaller cargo stores than cargo planes so the layout may not be good for efficient cargo transport (outside of course... people as cargo). You'd allocate the volume in the aircraft very differently I imagine for cargo than passengers. I also suspect passenger planes were already using any leftover cargo from passenger cargo storage for commercial cargo transport to begin with. Two potentially very different optimization problems.

deleted 7y ago

[deleted]

paulgb 7y ago

I wonder how much this is a shortage of supply vs. an increase in demand. From what I understand, commercial passenger flights often take commercial cargo. With fewer flights, all that demand for cargo capacity has to go somewhere.

jldugger 7y ago

There was a discussion on the economist podcast about this. 1. Passenger jets often take a bit of cargo, but even if they rejiggered, it'd only be half full of cargo. 2. Many companies already hedged the price of fuel so the oil glut isn't really helping them any. 3. Demand is unidirectional: medical supplies are made in a handful of countries (ie China) but there isn't a huge demand for air freight the other direction. See also the container problem. 4. The airline network is a complex emergent system. Passengers from one international flight often connect into another domestic one. Cancelling an international flight has unpredictable knock-on effects for downstream flights. 5. Cancelling a flight can lead to losing your 'slot'. Similar to how google will kill non performing ads, airports have a system to allocate arrivals / departures to airlines that factors in usage. If you shift a passenger jet flying EU to US into doing cargo hauls, that slot is jeopardized.

6gvONxR4sf7o 7y ago
> Many companies already hedged the price of fuel so the oil glut isn't really helping them any. It's really interesting that oil can be hedged against such a dramatic change. But not everything can be hedged in such a way. Do you have a simple explanation for what can and can't be hedged?
- roro159 7y ago
  What matters for the financial hedge is the existence of futures, which means the companies can buy something they know they will need at a known price months before they actually need it. The specifics of this operation differs depending on the actual financial instrument used, but the idea is the same, even on the opposite side (selling at a known price in the future).
  - TAForObvReasons 7y ago
    The futures contracts don't always guarantee delivery. "Cash-settled" instruments just pay out cash based on the market rate (with the expectation that the long party can purchase the oil at that price)

adwww 7y ago

Cargo and passengers typically cross subsidise each other, depending on the route. Without (business and first class in particular) passengers the costs of running the planes have to met fully by the limited cargo.

darksaints 7y ago

The costs are actually reflecting the repurposing of passenger planes for cargo flights, at least on a small scale. Most passenger planes have cargo space...it's about 1/2 to 1/3 the usable space of their plane, therefore they are quite a bit less efficient. The increase in prices is reflective of a new market clearing price where capacity can meaningfully be increased.