Five Year Cargo Forecasts Shows Optimism all Round

Boeing, IATA and ACMG have indicated their optimism on air cargo growth during the coming 4-5 years.
But, it’s not only these traditional forecasters who are looking at a rosier future for air cargo. The industry as a whole seems to be shaking off the misgivings of the past two years and taking a brighter outlook for things to come.

Up to 3,000 additional freighter aircraft will be needed between now and 2033, predict forecasters  /  source: Boeing
Up to 3,000 additional freighter aircraft will be needed between now and 2033, predict forecasters / source: Boeing

Is this still wishful thinking or have we indeed turned the economic “turndown corner”?

Plenty of present upsides
Things are looking much better – that’s at least what IATA, and Boeing are saying.

 

  • September airfreight volumes went up by 5.2% and this is even better than the August rise of 3.8%.
  • The Asia Pacific markets as well as North America are giving stronger economic performance during the past months.
  • Asia Pacific FTKs rose by a good 5.7%, much of this thanks to the transport of the new Apple I-Phone 6.
  • Global trade has expanded faster than last year, but noticeably slower than global GDP. A warning signal.
  • Business confidence continues to show growth, but watch out for still unpredictable political and economic surprises.
  • Pharmaceutical and perishable transport revenues continued their upward climb and increased by almost 10% in September. This product segment remains a shooting star as pharma has now gained a 3.5% of total market share and perishables between 8%-9%.
  • WorldACD in their market data rundown for September show also interesting so called “country pairs” performance. For example, Germany - South Africa airfreight grew by a staggering +67%, China - USA Midwest by +58% and Japan - USA Midwest by +45%. What’s going on in the U.S. Midwest?
  • Europe remains a troublesome market. Much of the slowdown there has been put at the door of “high unit costs and inflexible labor, thus stunting growth. However, Europe is not really doing badly at all. It’s apparently the only region which is showing year on year yield improvements according to statistics at hand. All other regions are said to be still showing a decline in yield.

So where does all this lead us to?
Airfreight growing at an average of 4.1% per annum through 2018.
That’s the message IATA gives to trade and is backed by Boeing with their (ever) optimistic airline freighter growth figures.
Tony Tyler stated that “an average of more than 4% growth for the next five years would be a marked improvement on the performance of recent years.”
But, is he actually predicting that this growth will come about?
The present figures are optimistic and boost confidence in air cargo development going forward.

At the ACMG workshop in Miami figures were put on the table that between 2,000 to 3,000 freighter aircraft will be needed between now and 2033.
That’s a 20 year forecast!
It’s not said how many of these will be needed or ordered by the integrators, who now have the lion’s share of all freighter aircraft in service.
Their business is still growing rapidly and their involvement in the movement of “hard cargo” also remains positive.
Take them out of the picture - and how then does the market demand for freighter aircraft look, or even develop.
Presently there are around 1,600 freighters of all types in service. Predicting double the amount by 2033 is ironically positive, but should be backed up by solid economic figures.
Can one predict that over a 20 year period? Especially when we consider the very changing political and economic climate we live in.

Dangerous optimism?
Not really! - We have to look forward and do all possible to expand the importance and growth of the air cargo industry.
Innovation and a new generation of air cargo management who will be in  a position to tackle what’s “around the corner” - is needed.
And - also some luck, peace and continued inter-changing societies which will boost world trade and understanding.

Yes, let’s remain positive, work today’s revenue growth into a better yield return for the airlines and continue to work faster on getting rid of unnecessary regulatory stumbling stones which continue to slow our industry down.

Take it step by step, not be prone to optimism only and who knows, maybe the 3,000 freighters will be plying the friendly skies in 2033.

John Mc Donagh

 

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