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Air-cargo distribution is an ideal solution
  • Innovation & Transformation
    • Covid-19
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Planes ready to deliver vaccines

Andrew Lobbenberg

Article

  • Article

The aviation sector – devastated by COVID-19 – is the way to distribute anti-virus vaccines

Clinical trials of multiple coronavirus vaccines are now underway with pharmaceutical companies licensing and outsourcing production around the world. But getting vaccines to the people will be a challenge, especially if they must be transported quickly and at ultra-low temperatures. Air-cargo distribution seems an ideal solution.

The global freight industry and air-cargo sector is already preparing for the unprecedented task of distributing vaccines to the worldwide population.

Doses will have to be transported between continents. Air cargo is most efficient where speed is critical and when weight and physical volume are low relative to the goods’ value. Vaccines are ideally suited.

But temperature requirements and packaging are potential bottlenecks, both at airports and in the air. The first vaccine to announce successful trials requires distribution at -80°C and existing logistics might limit volume distribution to only about 25 countries covering around 2.5 billion people. However, at conventional temperatures, distribution to 60 countries with a 5 billion population is feasible.

And while an ultra-cool vaccine can be packaged in self-contained sealed units of 5,000 doses, chilled with dry ice, later vaccines requiring distribution at -20°C are suitable for containers of around 30,000 doses. And the viral vector vaccines and protein-based vaccines can be distributed at 2°C to 8°C.

Airlines have been signing contracts for new temperature-controlled containers. But dry ice is classified for air transport as a dangerous item: it turns to gas, displacing oxygen in the cabin. An alternative may be liquid nitrogen-cooled capsules that can keep products at -150°C for up to 10 days.

Aviation is a tightly regulated industry, from an economic as well as safety perspective. But while international passenger-route rights are typically limited to airlines from the two countries at either end, cargo-traffic rights are much more liberally regulated. Also, goods can be sent by indirect routes when passengers want to fly directly.

And given the importance of expediting distribution, governments will likely allow airlines to operate vaccine charter flights. The pandemic’s exceptional demands have already led to many unusual routings.

Availability of air cargo capacity should not be a constraint. IATA, the airlines’ trade body, has suggested that supplying the global population would require the equivalent of 8,000 jumbo-jet flights. Some estimates are lower, but the world’s top 20 air-cargo flyers alone operate nearly 1,000 wide-bodied freighters, so could make 8,000 flights in little more than a week – though vaccine production will probably take nine to 12 months.

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Normally, passenger flights carry half of air freight and this segment became even more important when business and leisure travel collapsed. The dry-ice danger means they may not double as vaccine freighters, but throughout the pandemic, most airlines have been flying modern wide-bodied passenger aircraft as belly-hold freighters, often carrying PPE, with seats removed. Even military planes might also be utilised.

But ground infrastructure is key to distribution. The main parcel companies are already building ‘freezer farms’ in Europe, the US and South America – banks of 600 freezers, each able to hold 48,000 vials at -80°C.

First published 29 November 2020.

Authors: Andrew Lobbenberg, Aviation analyst, HSBC

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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Andrew Lobbenberg

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