Until last April, air cargo analysts were fairly positive with their industry forecasts on the back of consumer confidence and demand. However, by mid-year, trade tensions between China and the US took a toll on sentiment leading to a change in stance. Annual growth in global airfreight volumes remained in negative territory through the first six months of 2019, with only positive growth coming from markets in Africa and Latin America.
However, when peak season demand for cargo improves later this year, freighters are expected to carry most of the payload. “A slowing cargo growth rate, in and to itself, is not necessarily a precursor to a slowing freighter aircraft market but just one many potential markers. We are seeing demand for freighter aircraft soften but it remains active. Geo-political and distant signs of a recession are, in my opinion, driving airlines to proceed with caution when making fleet decisions,” reasons Robert Convey, SVP-sales and marketing, Aeronautical Engineers Inc (AEI).
The air cargo market has proven resilient in both good and challenging economic times. Between 1980 and 2018, air cargo traffic growth (RTKs) has averaged 5.3 percent per year, notwithstanding multiple economic and industry downturns. This growth is based on the economic fundamentals that support air cargo, such as a growing global economy, a growing consumer base, and the diversification of manufacturing locations and shifting supply chain flows. Even with the recent air cargo market growth pullback, Boeing projects air cargo traffic growth of 4.2 percent per year over the next 20 years.
This story is from the October 2019 edition of The STAT Trade Times.
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This story is from the October 2019 edition of The STAT Trade Times.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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