Nippon Cargo is a argo airline whose main base is out of Narita Airport near Tokyo. In the past the airline was partly owned by All Nippon Airways and Nippon Yusen, Japan’s leading shipping company (commonly known as NYK), however, ANA sold their stake to NYK and NYK fully owns the company. The airline operates a fleet of 11 Boeing 747s and operates around the world. Their airline codes are KZ and NCA, and in this article, Nippon Cargo will be abbreviated as NCA.

What Happened to NCA?

On June 17, 2018, NCA announced the airline had grounded their entire fleet and suspended operations over significant maintenance issues. Specifically, the issues surrounded maintenance logs for one particular Boeing 747 aircraft. NCA has been rather forthcoming in explaining the reason behind the grounding, stating that an ‘inappropriate’ record of an oil line that lubricates the control surface movements on the aircraft’s wing.

The discrepancy in the maintenance logs was discovered by Japanese Ministry of Transportation officials during an on-site inspection earlier this month, and according to NCA, the issue came to light in April. That’s a pretty significant amount of time between the discovery of the issue and the actual reporting of the issue, and given NCA did not report the issue promptly to the Ministry of Transportation, it’s very much possible NCA will receive some sort of punishment for not reporting the discrepancy promptly.

According to Nikkei’s Asia Review, the Ministry began to inspect NCA’s 747s after a bird strike in 2017 and another in March of this year significantly damaged the airframes requiring “major repairs.” When the MOT didn’t receive prompt reports by NCA of the incidents, that’s when the inspections began.

How significant is this?

Pretty significant. NCA is a major shipper of computer and tech chips, according to the Nikkei Asian Review. NCA also ships cars and other expensive goods that can’t travel in the underbelly of a passenger airliner, so many Japanese companies shipping goods out of Japan are scrambling to reschedule or reroute their shipments overseas (particularly to the USA). The Nikkei Asian Review called the impact of NCA’s grounding ‘non-negligible,’ which implies the grounding of operations by NCA is going to have strong ripple effects in the airfreight market in Asia.

NCA reported on their website the shutdown could last a week, but the Nikkei Asian Review quoted NCA clientele as saying the grounding could last more than a week, and ripple effects could linger even longer. The Review says there’s already multi-week waiting periods for freight flights from China to Japan.

What do I think will happen?
In short, the maintenance logs of NCA’s 747s will need to be thoroughly reviewed not just by NCA but checked by MOT officials. NCA will be fined significantly, and because of the weeklong shutdown NCA will also lose out on a sizable amount of business, and their credibility among clients will suffer. Other cargo airlines, like Atlas Air, who has a major operation at Narita for DHL Express’s Asian operations, will probably increase operations to Narita temporarily to fill the demand…as much as they can, at least. But all in all, this does not seem to be a ground-shatteringly serious issue by NCA, and I’m certain operations will return to normalcy by the end of summer.

LINKS TO RELEVANT ARTICLES CITED:
NCA News Release on Grounding of 747 Fleet
NHK Article
Mainichi Shimbun Article
Japan Times Article
Nikkei Asian Review Article
CH-Aviation Article

-Zach

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