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While The Industry Crumbles, One Airline Is Making Money Hand Over Fist Shipping Pigs To China

Courtesy of ZeroHedge

While most of the aviation industry has been decimated as a result of the pandemic and its ensuing stay-at-home orders, one airliner is making money hand over fist in an unexpected way: shipping pigs to China in 747 Jumbo Jets.

Volga-Dnepr Group has flown more than 3,000 breeding pigs to China from France this year, according to Bloomberg. They are flown almost 6,500 miles in wooden crates and are being used to restore livestock levels in China. From there, they are being used to address the country's pork shortage.

The country's swine shortages were exacerbated by the pandemic and China has imported almost 255,000 tons of pork from the U.S. in the first four months of 2020 alone. That number exceeds the 245,000 it imported in all of 2019. 

Volga-Dnepr Group also has been shipping masks, hazmat suits, medical equipment and street-disinfecting equipment to places like Russia and Germany. The company saw its sales skyrocket 32% to $630 million this year.

Alexey Isaykin, who holds a $700 million stake in the company, said: “Global aviation is going through its most challenging time ever, but for cargo carriers like us it’s a chance. Previously, more than half of all aviation cargoes were carried in the luggage compartments of passenger planes. With this supply vanishing from the market, demand for cargo airlines surged and prices more than doubled.”

While demand for air freight has dropped 28%, capacity has fallen by 42%. This could help the company tack on even more revenue, he says, predicting a $2 billion annual run rate. 

Shipments for the aerospace industry have fallen by about 33%, he says, but medical goods now make up more than half of global air freight. Online shopping firms like Amazon.com and Alibaba are also seeing outsized growth. Some of the demand may prove to be short-lived and freight rates are starting to decline slightly. Regardless, Isaykin expects volume and prices to remain above pre-virus levels. 

“The geography of our shipments is expanding, following the spread of coronavirus. We just started shipping Chinese medical goods to Africa and are getting first inquiries from Latin America. I think India will be next,” Isaykin said.

He concluded: “An interesting trend is gaining traction now — we call it the medieval period of the 21st century — when strategically important production facilities are being relocated to reduce dependence on China. I am expecting this trend to accelerate toward year-end.”


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