Tuesday, January 10, 2012

Global Air Cargo Market to Remain in the Doldrums

Air India Cargo, Cargoitalia and Jade Cargo are the latest carriers to have recently ceased operations. This will perhaps become a trend this year as more will likely shut down if air cargo does not improve. However, much is dependent on Europe’s debt crisis and the general global economy.

2011 is appearing that it will end on a down note for members of the Association of Asia-Pacific Airlines (AAPA) who year-to-date through November has witnessed an almost 5% decline in cargo. The Association of European Airlines (AEA) may report a slightly positive year, but that is only because of stronger demand earlier in the year. In November, the association reported a 4.4% decline in cargo for the month of November compared to November 2010. The US export markets were all positive and will likely end the year on a positive note. The US domestic market, however, looks like it may report a negative year as, through September, US domestic air cargo was down over 5%.

IATA expects little, if any, improvement for 2012 as Europe’s economic problems persist, weighing down the rest of the world. According to IATA, North American airlines should see some profitability because of their ability to cut capacity. In Asia, IATA expects strong profits from high load factors on China’s expanding domestic market.