(Bloomberg) -- Urgent demand for medical equipment to fight the coronavirus has sent the cost of chartering aircraft skyrocketing and turned a typically humdrum process into an ultra-competitive auction.
“Chartered prices have been pushed up from less than $300,000 four to six weeks back to $600,000 to $800,000 in the last few days,” Anthony Lau, chairman and founder of logistics company Pacific Air (HK) Ltd., said in an interview Friday. “It is absolutely crazy.”
Usually, it would cost $300,000 to charter a Boeing (NYSE:BA) Co. 747 or 777 from Hong Kong to Europe in non-peak season, Lau said.
“The price is changing by the hour. We have never, ever experienced this.” -- Anthony Lau.
An unprecedented collapse in passenger demand is prompting airlines to use their fleets to transport more cargo, including medicines, as the coronavirus pandemic causes major disruptions to supply chains and exacts a heavy toll on the world. Infections globally have climbed above 720,000 and about 34,000 people have died from the virus.
The likes of Cathay Pacific Airways Ltd., Korean Air Lines Co. and American Airlines (NASDAQ:AAL) Group Inc. are hauling a greater amount of goods in the bellies of their passenger planes to keep up with demand. Cargo rates have risen over 10% in recent weeks.
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