Mediterranean Shipping Co., the world’s largest container line, will expand into air cargo using four leased Boeing Co. wide-body freighters after missing out in a bid for Italy’s flag-carrier airline.

The new business will led by Jannie Davel, a former managing director of cargo at Delta Air Lines Inc. who has also worked at Emirates and DHL, with the 777-200Fs to be provided by Atlas Air, which will fly them on MSC’s behalf.

“This is our first step into this market and we plan to continue exploring various avenues to develop air cargo in a way that complements our core business,” MSC Chief Executive Officer Soren Toft said in a statement Monday.

The Swiss firm joins French rival CMA CGM SA in establishing an in-house air-freight fleet. CMA began flying cargo jets in 2021 and in May, swollen with profits generated during the coronavirus pandemic, agreed an alliance with Air France-KLM that included a stake of as much as 9% in the debt-laden airline.

A.P. Moller-Maersk A/S also agreed in 2021 to lease three Boeing 767 freighters and purchase two new 777Fs, to be operated and managed by cargo specialist Star Air.

Still, the news from MSC comes as container shippers confront a downturn as weaker demand pushes prices to their lowest in more than two years. Air-freight volumes are also dipping and had returned to near pre-Covid levels as of July, down 10% from a year earlier.

MSC spent the past year increasing its ship capacity while bidding for Italian state carrier ITA Airways, an approach that was rejected last month by the outgoing Italian government in favor of one from an investor group including Air France-KLM and Delta.

It’s not yet clear whether the sale decision will change now that Giorgia Meloni, who had opposed it, is poised to lead the country’s most right-wing government since World War II, or if MSC remains interested.

[bloomberg]