ACC Aviation: Leisure Travel Demand Spurs ACMI Market
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ACC Aviation has good news to share with ACMI (wet lease - aircraft, crew, maintenance and insurance) airline operators ahead of World Routes in Milan next week (October 10-12). Leisure travel for summer 2022 is looking strong and previous one to three-month contracts that have dominated the past 12 months, will give way to six-month plus bookings, once again.
“This is going to give the existing ACMI providers a lot of comfort, as well as newcomers to the sector,” states Director of Leasing Dave Williams. Approximately 20% of the 60-plus start-up airlines identified ACMI as their business model.
“Covid patterns have changed the way we go about our business – so there aren’t any clean models, or historic trends to draw on anymore. As a result, airline planning has been taking place three months at a time, throwing up even more opportunities for ACMI,” Dave Williams notes.
When airlines ramped up in July and got their aircraft readied, they were operating on fumes – determined to respond to short notice requests they typically wouldn’t take on. They were stymied by a shortage of crew, due to staff being out of hours, off work because of COVID or needing simulator time, as well as a lack of crew on standby. All of this added to more short notice ACMI requests.
“Every airline around the world has cut back its fleet and talent resources to become as lean and efficient as possible. This has put a strain on everyone,” suggests Dave. As well as being hindered by lack of flight crew, management have faced the dilemma of whether to bring in extra crew to commit to a flying programme, even if they had 30 or so aircraft sitting idle. ACMI is the best solution – delivering the most effective, flexible way for airlines to ramp up their capacity, to plan and bolt on demand.
“Since July, we’ve seen a lot of single-aisle short term and narrowbody ACMI activity being contracted quickly from operators eager to win new business,” he added. Markets across Central Europe and Scandinavia took the lead early, with competitively priced, inclusive tour programmes from Europe. The UK was four to six weeks behind then and three months on it still hasn’t caught up. However, the good news is that several airlines are starting to recruit again for flight deck and cabin crew.
“The big airlines may have trained up to 70% of crew and planned to use 70%, but the 30% redundant crew are still redundant and if needed to go into a short notice contract, they won’t be ready. Even the big, regular airlines we work with faced crew shortages in July and August.”
To add to the challenge, Dave highlights, charter operations are much more regulated now, rendering more administration for UK airlines who must secure permits to fly inter-EU, putting them at a disadvantage against their European counterparts.
Flexibility for ACMI operators is needed
“We would like to see a more flexible approach being made for ACMI work – especially if it gets more pilots back in the workforce – and this is something we look forward to discussing with existing and future airline partners, in Milan next week. (ACC Aviation is exhibiting at World Routes next week, Stand No 21). Careful fleet and resource management is crucial for airlines who must factor in low season and high season.
“Aircraft lessors increasingly recognise this, and we’ve been seeing a lot of flexibility from them since the pandemic, offering incentives like power by the hour. But it’s not just about aircraft - it’s getting seasonal crew trained and ready.”
ACMI airlines need seasonal crew for six months’ minimum. Not two to three months, and that’s been a big dilemma.
The most popular, best-for-economics ACMI single aisle aircraft are the B737-800 or Airbus A320, offering compatible crew availability. There aren’t so many B737 classics around for ACMI. Those that have been repossessed have swiftly found new homes.
Widebody market driven by long-haul demand, A330 popular choice
The widebody market is driven by long-haul demand and this is slowly beginning to return. It’s still unclear what exactly the long-haul market holds, but there are many aircraft that have been retired or phased out by the bigger airlines (B747 especially) in the last 18 months.
There are plenty of A330’s on the market available from leasing companies – many on attractive power-by-the-hour rates from lessors. The A330 is an enticing commodity. “We have seen a dozen or so A330s added into European ACMI carriers in recent months and many have turned to the cargo market, secured on interim ACMI or charter cargo contracts,” says Dave. Such wide-bodied units will be popular on charter for inclusive military lift, winter tours / sports teams and supporters / music / financial / roadshows etc.
Will the long haul ACMI return in high volume? That’s the question we can’t answer yet.