Home' Asian Aviation : AAV February 2011 Contents 20 AsianAviation | FEBRUARY 2011
Cargo carriers' road to recovery
passenger traffic is
rebounding after the
worst economic crisis of
recent decades, recovery
in the international
freight market appears to have stalled, even in the
normally buoyant Asian region.
Nevertheless, while the events of the past couple
of years have dented the local airfreight industry
and forced some airlines to put cargo growth plans
on hold, others are still proceeding with expansion
of their cargo eets, new facilities and cargo joint
ventures on the back of long-term optimism for the
sector. e near-term prospects, however, are not
good, according to the International Air Transport
Association (IATA), which describes recent freight
gures as "worrying".
IATA Director General and Chief Executive
O cer Giovanni Bisignani says: "Freight activity has
fallen 6 percent since May's post-crisis peak. What
we see in air cargo markets is inevitably re ected in
the broader economy." As international air cargo
accounts for 35 percent of the value of goods traded
internationally, it is a leading indicator of economic
The Association's figures for September 2010,
showed international passenger tra c grew 10.5
percent year-on-year in the month -- signi cantly
more than the 6.5 percent gain recorded for August.
By contrast, however, international freight tra c
recorded a 14.8 percent year-on-year increase,
signi cantly less than the 19 percent rise recorded in
Seasonally adjusted gures show that, compared
with August, passenger traffic expanded by 2.1
percent while freight markets contracted by 2.1
percent, says IATA.
e association says freight markets were expected to
weaken towards the end of the year, but the drop for
September was larger than anticipated.
"Consumer and business confidence remains
weak in many parts of the world. Re-stocking li ed
freight markets earlier in the year, but this has not
been followed by spending to solidify the economic
recovery. Compared with September 2009, freight
capacity increased by 11.9 percent, below the 14.8
percent increase in volumes, pushing cargo load
factors to 52.4 percent," says IATA.
Carriers in the Asia-Paci c region contributed
most to the drop in September gures, IATA said.
While airlines in the region recorded a 15 percent
increase in freight demand over the previous year, that
was signi cantly less than the 22.3 percent growth
recorded in August. is took the region's carriers
back to the pre-recession levels of early 2008 and,
with their 44 percent market share, contributed the
most to the global drop in freight demand.
"While September's passenger growth is reassuring,
the accelerating decline of air freight, including in
Asia, is an early indicator of some turbulence ahead,"
says Bisignani. Since September, the situation has
worsened, with IATA now reducing its full-year cargo
growth forecast to 18.5 percent, from its previous
19.8 percent outlook.
"The post-recession rebound drove a rapid
expansion for cargo earlier in the year but it ran out
of steam by the third quarter. Since May, overall
volumes fell by 5 percent. is will only pick-up when
consumers have bought the products that are already
on the shelves," says Bisignani.
Most profitable region
Asia-Paci c carriers are expected to post the largest
pro t in 2010 -- at US$7.7 billion, decreasing to
US$4.6 billion in 2011. While it remains the most
pro table region in the world, based on a strong
economic growth of 6.6 percent (outside Japan),
IATA points out that carriers in the region are
particularly exposed to uctuations in cargo markets.
"While this accelerated improvements in 2010,
the region's carriers will also be disproportionately
affected by the expected slowdown in cargo [in
2011]," notes IATA.
Despite the gloom, a number of airlines in the
region are planning for the upturn and looking to
capitalise on growth areas in the region, particularly
Singapore Airlines Cargo (SIA Cargo) and EVA
Air ways are both looking at China Cargo Airlines as
the springboard for building their Chinese freight
activities. SIA Cargo announced in late December
that it will purchase a 16 percent stake in the
Shanghai-based carrier for nearly US$50 million,
subject to regulatory and other approvals. e move
followed an announcement by Taiwan's EVA Air that
it will also acquire a 16 percent stake in the Chinese
operator, a er divesting its existing stake in Shanghai
Airlines Cargo International.
Under the deal, China Cargo will be restructured
as a limited-liability Chinese-foreign equity joint-
venture company. China Eastern Airlines will own
Asian cargo carriers are gearing up for long-term growth, despite a gloomy near-term outlook. Emma Kelly reports.
Cathay Pacific is committed to develop Hong Kong's airfreight hub role.
CATHAY PACIFIC AIRWAYS
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