Supply Chain News / Air Cargo

Air Cargo to Rise at Rate Below Trend

October 8, 2012
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Everyone in the industry remembers when the phones stopped ringing.

In late summer 2009, they started ringing again and “2010 was, arguably the best year this industry has seen in terms of traffic growth – 18.5 percent – we hadn’t seen a year like that since 1965,” says Tom Crabtree, regional director, business development and strategic integration, Boeing Commercial Airplanes. It was also a good year for revenue growth, he continued. The industry achieved $77 billion in revenue in 2010.

Compare that $77 billion to about $488 billion for the passenger side, said Crabtree. Air cargo is a niche industry, making up about 14 or 15 percent of the total air transportation business if you look at cargo and people.

After a really good 2010, January 2011 was a high single-digit growth month, said Crabtree. Through March and April, the year didn’t look bad – though the period of Chinese New Year affected February which Crabtree noted, “could have been better.” However, May turned negative. “It is now October 2012,” he told a group attending The International Air Cargo Association conference, “we are in month 16 or 17 of this contraction.”

Traffic year to date is down 2 percent, he pointed out, based on figures through August 2012. Fuel prices were a recurring theme in the discussion of factors affecting air cargo volumes. At the same time, the Arab Spring uprisings, the Japan earthquake and flooding in Thailand all came into play – especially the flooding in Thailand which hit during a seasonal peak for air cargo.

“Air cargo is probably expected to remain below trend – long term growth rates – well into 2013,” Crabtree announced. Not everyone is affected equally, he continued. While the industry overall is down about two percent, but Asia-Pacific carriers are down about six percent. European carriers are down four percent. North American carriers are basically flat. The same is true for the express carriers. Middle East carriers are doing quite well, showing about 14 percent growth year to date.

Boeing forecasts by year-end, traffic will be down about one to 1.5 percent.

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