Asia Driving Growth in Air Freight

THE Asia Pacific region is set to lead a continued global growth in air freight volumes over the next four years, with average growth levels of 5.4% a year, according to latest forecasts from the International Air Transport Association.

Global air freight volumes, in comparison, are expected to climb by an average annual rate of 4.8% by 2011.

But IATA, which represents 240 airlines, says the air cargo sector will face increased competition from sea freight and other modes that will depress air cargo growth to below the 6.2% average annual growth rate seen between 2002 and 2006.

As a result growth in air cargo volumes will be under those of world trade and container shipping.

Announcing the forecasts in Damascus, IATA director-general and chief executive Giovanni Bisignani, said intra-Asian and Asian outbound air freight traffic accounted for 47% of total international air cargo volumes.

This will increase to 57% by 2011 as total international air cargo volumes rise to 36m tonnes, up 7.5m tonnes compared with the 28.5m tonnes seen last year.

But the airline organisation warns strong growth in the Asia Pacific region will increase the imbalance in trade volumes from and to that region. About 5.2m tonnes of air freight will be flown from Asia this year compared with about 2.8m tonnes of inbound cargo.

By 2011 this gap will widen with about 6.5m tonnes of export cargo compared with around 3.1m tones of import cargo. The Middle East will see the second highest growth between 2007 and 2011 of 5% per year.

Fastest growing Middle Eastern markets are expected to be Qatar, with 6.9% growth per year, and Saudi Arabia, where cargo volumes will climb by 6.2% annually.

In comparison, global international air freight volumes grew by 'a disappointing low 2.7%' in the first half of this year, Mr Bisignani said.

This followed strong competition from other modes including liner shipping, structural changes such as lighter manufacturing components in electronics and the arrival of new all-cargo airlines into the market such as Great Wall Airlines and the Lufthansa-Shenzhen Airlines joint venture, Jade Cargo International.

But Mr Bisignani added that growth rates picked up in May and June, led by airlines in the Asia-Pacific region, and the second half of the year should see an improvement in growth towards 5% a year.

Turning to other areas, Mr Bisignani said that airlines would again facedeclining yields from their air freightbusinesses as high fuel prices, coupled with increased capacity with the arrival of new freighters over the next four years,eat into margins.

But he added: 'With positive economic conditions and further demand growth, opportunities for profitable growth still exist.

'New routes and new aircraft can open up new geographical and product markets for air freight.

'The industry remains exposed to unpredictable, external shocks but the medium to long-term outlook for air freight growth is still positive.'

Mr Bisignani also warned there was a looming infrastructure crisis with unprecedented delays in the US and Europe 'where governments still have not cleaned up the mess in air traffic management with an effective single European sky.

'There is no panacea, but the starting point for a sustainable solution is a common vision for efficiency that is acted on by governments and industry. With infrastructure planning time lines measured in decades, there is no time to lose.'

'In total, infrastructure inefficiency from bottlenecks to inefficient processes adds 12% to our fuel bill and costs the environment 73m tonnes of unnecessary carbon dioxide emissions each year.'