Airlines will play 'key role in the distribution' of COVID-19 vaccines: analyst

The airline industry will play a crucial role delivering coronavirus vaccines worldwide after pharmaceutical companies like Pfizer (PFE) win approval for their pandemic fighting inoculations. “This is sort of an all hands on deck for distribution,” Cowen Managing Director and senior research analyst Helane Becker told Yahoo Finance Live.

The International Air Transport Association (IATA) recently urged governments worldwide to prepare for vaccine delivery. “Air cargo plays a key role in the distribution of vaccines in normal times through well established global time and temperature sensitive distribution systems.”

However, IATA cautions that “delivering billions of doses of vaccine to the entire world efficiently will involve hugely complex logistical and programmatic obstacles” such as building refrigeration storage units.

A woman holds a small bottle labeled with a "Coronavirus COVID-19 Vaccine" sticker and a medical syringe in front of displayed Pfizer logo in this illustration taken, October 30, 2020. REUTERS/Dado Ruvic

Pfizer announced earlier this week that its experimental vaccine, which proved 90% effective at preventing COVID-19 in recent trials, must be stored at sub-zero temperatures.

An airborne armada

Airlines like New York-based Atlas Air Worldwide Holdings (AAWW) will be among the global airborne armada eventually shipping billions of doses of vaccine, according to Becker. The cold storage requirements make it difficult.

“This is going to be one of the biggest challenges for the transportation industry,” Michael Steen, chief commercial officer at Atlas Air told the Wall Street Journal last month.

Atlas Air has the largest fleet of 747 freighters in the world but that alone won’t be enough. Becker said Atlas Air, FedEx (FDX) and United Parcel Service (UPS) will all be enlisted to deliver vaccines.

“UPS has the largest freezer farms I think in the world. They've got one big one at Louisville, Kentucky, which is their US Air hub, and they have one in the Netherlands,” which Becker said prepares them for the upcoming distribution task.

UPS (UPS) stock is up 42% year-to-date. FedEx (FDX) is up 77% and Atlas Air (AAWW) is up 87%. “We think Atlas has legs, the stocks really performed well,” Becker said.

IATA said the job ahead is enormous. “Just providing a single dose to 7.8 billion people would fill 8,000 747 cargo aircraft.”

U.S. carriers shipped 58,000 tons of cargo a day before the pandemic and passenger airlines like American Airlines (AAL) and United Airlines (UAL) will be needed, according to Becker. “American and United also have cold storage facilities. American in Philadelphia and United in New York, so they'll be able to participate,” she said.

As the world anxiously awaits approval of effective coronavirus vaccines, IATA’s Director General and CEO Alexandre de Juniac described what lies ahead “Safely delivering COVID-19 vaccines will be the mission of the century for the global air cargo industry.”

Adam Shapiro is co-anchor of Yahoo Finance Live 3pm to 5pm.

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