World’s largest ocean freight carrier launches air-cargo business

MEDITERRANEAN Shipping Co (MSC), the world’s largest container line, will expand into air cargo using 4 leased Boeing wide-body freighters after missing out in a bid for Italy’s flag-carrier airline.

The new business will be led by Jannie Davel, a former managing director of cargo at Delta Air Lines who has also worked at Emirates and DHL, with the 777-200Fs to be provided by Atlas Air, which will fly them on MSC’s behalf.

“This is our first step into this market and we plan to continue exploring various avenues to develop air cargo in a way that complements our core business,” MSC chief executive officer Soren Toft said in a statement on Monday (Sep 26).

The Swiss firm joins French rival CMA CGM in establishing an in-house air-freight fleet. CMA began flying cargo jets in 2021 and in May, swollen with profits generated during the coronavirus pandemic, agreed to an alliance with Air France-KLM that included a stake of as much as 9 per cent in the debt-laden airline.

AP Moller-Maersk also agreed in 2021 to lease 3 Boeing 767 freighters and purchase 2 new 777Fs, to be operated and managed by cargo specialist Star Air.

Still, the news from MSC comes as container shippers confront a downturn as weaker demand pushes prices to their lowest in more than 2 years. Air-freight volumes are also dipping and had returned to near pre-Covid levels as of July, down 10 per cent from a year earlier.

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MSC spent the past year increasing its ship capacity while bidding for Italian state carrier ITA Airways, an approach that was rejected last month by the outgoing Italian government in favour of one from an investor group including Air France-KLM and Delta.

It’s not yet clear whether the sale decision will change now that Giorgia Meloni, who had opposed it, is poised to lead the country’s most right-wing government since World War II, or if MSC remains interested. BLOOMBERG