The World’s Largest Container Line MSC Enters The Air Cargo Domain

Mediterranean Shipping Co., the most extensive container line in the world, is set to expand into air cargo with four wide-bodied, leased Boeing Co. freighters after it missed out in a bid for the most prominent Italian flag-carrier airline.

The new business is expected to be spearheaded by Jannie Davel, the ex-cargo managing director at Delta Air Lines. He has reportedly also been associated as an employee at Emirates and DHL. The 777-200Fs will be coming from Atlas Air which will fly them on behalf of MSC.

This is the first step into the market, and we plan to keep exploring several avenues for developing air cargo that complements the core business, the Chief Executive Officer of MSC, Soren Toft, mentioned in a statement on Monday.

Credits: MSC

The Swiss firm joins its French competitor CMA CGM SA in establishing its in-house air-freight fleet. CMA started flying its cargo jets last year — 2021, and in May 2022, with profits acquired during the ongoing COVID-19 pandemic, agreed upon in collaboration with Air France-KLM. This included a stake of about 9% in the debt-laden airline.

In 2021, A.P. Moller-Maersk A/S agreed to lease three Boeing 767 freighters and buy two 777Fs, to be managed and operated by Star Air, a well-known cargo specialist.

Still, news from MSC comes through as container shippers encounter a downturn with weaker demands pushing prices to their lowest in over two years. Air freight volumes were dipping and returned to pre-Covid-19 levels as of July, down by 10% from a year before.

MSC has spent 2021 boosting ship capacity while bidding for ITA Airways — an Italian state carrier- a strategy rejected in August 2022 by the outgoing government of Italy in favour of those from an investor group, including Delta and Air France-KLM.

It remains unclear if the sale decision will alter since now, Giorgia Meloni, who had reportedly opposed it, is set to lead the country’s most right-wing government since World War II, or if MSC continues to be interested.

References: Economic Times, Container News, MSC

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