Mediterranean Shipping Co., the largest container line in the world, announced Monday it will launch an air cargo airline next year in partnership with freighter operator Atlas Air, joining rivals Maersk and CMA CGM as ocean carriers adding private airlines to diversify their service capabilities.
MSC said Atlas Air (NASDAQ: AAWW) will operate four branded Boeing 777-200 freighters under a long-term contract that bundles leasing of the aircraft with full services, including crew, flight planning and maintenance. MSC Air Cargo will begin commercial service in early 2023 with a single aircraft. It will be responsible for selling the cargo space and determining the routes flown.
Atlas Air is allocating four 777-200 cargo jets it ordered from Boeing in January to the MSC Air Cargo venture. It said the first plane is scheduled for delivery in the fourth quarter this year. The remaining aircraft will be received during 2023.
MSC said it appointed Jannie Davel, a former Emirates SkyCargo and DHL executive who most recently served as managing director-commercial at Delta Air Lines’ (NYSE: DAL) cargo division, to develop its air cargo business and roster.
“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 of container shipping,” said MSC Chief Executive Officer Soren Toft in a news release.
The 777-200 is a large, twin-engine jet capable of hauling a maximum payload of 116 tons on long intercontinental trips.
“We are pleased to welcome MSC as a new customer and look forward to supporting MSC as it develops its airfreight business and further enhances its position as a global leader in transportation and logistics,” said John Dietrich, president and CEO of Atlas Air Worldwide Holdings.
MSC made a joint bid with Lufthansa in January for ITA Airways, the state-owned Italian passenger carrier that emerged from the Alitalia bankruptcy. The Italian government did not accept the offer and is reportedly negotiating with other groups.
Ocean trend to air cargo
MSC is the latest ocean shipping line, flush with cash from more than two years of record profits, to offer air cargo service. The trend is part of a larger strategic shift by megacarriers to be one-stop logistics shops with the ability to provide integrated ocean, air, trucking, warehousing, freight forwarding and last-mile e-commerce delivery for large customers.
MSC is privately held and doesn’t report its finances, but using other carriers as a proxy would suggest that it has a very strong balance sheet it can deploy for investment purposes.
Maersk is doubling down on air cargo this year after operating Star Air for many years as a contract airline for express carriers such as UPS and Royal Mail. It has reorganized the operation into Maersk Air Cargo, which is focused on selling air cargo services directly to customers. It recently acquired Senator International, a German freight forwarder that specializes in airfreight. Maersk Air Cargo is also making an aggressive push to enter the U.S. market with the purchase of three new 767-300 freighters from Boeing, which it is transferring to Amerijet to operate on its behalf between Asia and the U.S., as originally reported by FreightWaves.
Last year Maersk leased three additional three Boeing 767-300 converted freighters and ordered two 777 long-haul cargo jets from Boeing.
Meanwhile, French shipping giant CMA CGM last year launched an all-cargo airline and now has four Airbus A330 widebody jets. It also ordered four 777 freighters from Boeing, two of which were delivered during the summer. Last November it placed an order with Airbus for four A350 extra-large aircraft and in May formed a cargo alliance with Air France-KLM.
The company also owns Ceva Logistics, one of the largest contract logistics providers in the world.
Maersk is different from MSC Air Cargo and CMA CGM Air Cargo because it has its own air operating certificate, pilots and mechanics, and owns most of its aircraft, making it a pure airline.
Other ocean carriers with long-standing air cargo operations are Taiwan-based Evergreen, which owns EVA Air, and Tokyo-based NYK Line, the parent company of Nippon Cargo Airlines.