Ocean freight colossus Mediterranean Shipping Co. said Thursday it has acquired a majority stake in AlisCargo Airlines SpA and plans to take full control of the Milan-based company in early 2024, underscoring the seriousness of its air cargo strategy even as the international freight market languishes in a sustained trough.

AlisCargo was founded in 2019 by Domenico Alcide Leali, the former founder of Air Dolomiti, a passenger airline that was acquired by Lufthansa 20 years ago, and other partners, according to its website. It offered charter flights and dedicated transportation under long-term contracts using two Boeing 777-200 passenger aircraft with seats removed to allow for loading shipments on the main deck. 

The deal was first reported in the local Italian press. Mediterranean Shipping Company and AlisCargo issued a joint announcement confirming the sale, but it was not widely distributed or posted on MSC’s website. The statement said the deal will be finalized once AlisCargo is cleared to restart operations and receives a fifth 777 quasi-freighter. 

AlisCargo began operating in August 2021 after receiving its European air operators certificate. The startup carrier’s website says it has four aircraft, but aviation database and news site ch-aviation shows it only had two aircraft in the fleet. The news outlet said one of AlisCargo’s main customers was Italian passenger airline ITA Airways, which has agreed to sell a 41% share to Lufthansa. 

The stripped-down planes do not have the same capacity or ability to carry heavy loads as a fully converted freighter and the European Union Safety Agency last summer ended an exemption allowing cargo on the main deck in passenger aircraft. Planes must now undergo an approved structural modification to carry cabin cargo.

The Loadstar reported in January that AlisCargo asked Italian authorities to suspend its license as a cost-saving measure while it works to acquire aircraft that comply with the new rules. 

MSC, the largest container shipping line in the world, did not provide more details about the deal or AlisCargo’s operational status. 

“The acquisition of a majority share in AlisCargo Airlines is a step towards expanding MSC’s Air Cargo solution capabilities, and ultimately providing our customers with a quality and consistent offering. I am equally proud that we have found a partner that shares a common vision with us and has built a strong foundation for which we hope to further develop,” said Jannie Davel, who heads MSC Air Cargo. 

Italian newspaper Corriere Della Sera reported in June that MSC was in talks to acquire AlisCargo. 

Switzerland-based Mediterranean Shipping Company established MSC Air Cargo last year to supplement its core ocean shipping service and hired all-cargo operator Atlas Air to operate four factory-built 777-200 freighters on its behalf. Atlas Air previously ordered the aircraft and owns them. The first aircraft began intercontinental revenue service in December. Atlas Air received the second freighter from Boeing last month and expects to receive the remaining two by January.

Earlier this year, MSC Air Cargo selected France-based ECS Group to provide auxiliary marketing of the freighter space in Europe and North America. 

The addition of AlisCargo will transform MSC Air Cargo into a true cargo airline with its own air operator certificate and a fleet of five aircraft, plus the four Atlas Air freighters under its control.

The MSC investment comes at a challenging moment for all-cargo airlines. Air cargo demand has fallen 7% to 10% since March 2022 as supply chains recovered and the global economy slowed. Conditions have marginally improved in recent months, but airfreight data provider Xeneta said Thursday that volumes in July worsened 2% month over month as capacity recovered 7% from a year ago. Reports from various researchers suggest that demand in the last two weeks is about 5% lower year over year. Shipping rates are more than 40% cheaper than the prior year. 

AlisCargo said that it selected Milan Malpensa airport as its base because of its strategic location in a key manufacturing sector of Italy and large road network that will enable it to quickly reach customers across southern Europe by truck. 

The use of partially modified passenger aircraft as full-time cargo aircraft has fallen out of favor since the coronavirus pandemic, when there was a severe shortage of cargo airlift and airlines were willing to repurpose aircraft because passenger flying came to a standstill and cargo rates skyrocketed. But the light-duty freighters are expensive to operate, especially when fuel prices are high, because they have less room for freight and require manual loading through narrow passenger doors. Pure freighters have large cargo doors that can easily fit large containers and pallets of consolidated shipments.

Aviation authorities temporarily granted airlines permission to fly with cargo in the cabin to allow for delivery of essential economic services and vaccines during the pandemic, when supply chains were significantly disrupted. 

Click here for more FreightWaves and American Shipper articles by Eric Kulisch.


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