Airfreight: Long Stagnation?

(VLR) Nearly 35% of world trade value comes from air freight industry. However, airfreight has not only showed signs of going down…

Nearly 35% of world trade value comes from air freight industry. However, airfreight has not only showed signs of going down…

UNCERTAINTY REMAINS…

According to Association of Asia-Pacific Airlines (AAPA), due to uncertainty of global trade flows, the international air cargo demand in 2012, as measured in freight tonne kilometers, decreased 3.4%

The weak demand led to the decrease in capacity of 3.2%, which also led to a 66.5% decrease of the international cargo index in 2012.

The dismal signs remains despite a few signs of certainty in the end of 2012 and the early of 2013 – when the demand increased in the period of New Year.

It can be seen that international freight demand in the region of Asia Pacific fell 4 % in the first quarter of 2013, and in April, the number fell 0.8 % during the same period last year, making international cargo flow in the first four months fall 3.2%.

Singapore Changi Airport – one of the busiest airports in the Asia Pacific- had a 2.1 percent decline in airfreight movements for the first four month of 2013 compared to a year ago. Only 434,000 tons of cargo was handled.

To deal with the situation, Singapore Airlines Cargo (SIA Cargo) is grounding another of its planes – a Boeing 747-400 – in this July of 2013 due to the lingering overcapacity. The Boeing 747 will be put into storage in Victorville, California from next month until May 2014. This is the second one of SIA Cargo’s to put into storage. The first was in December 2012.

"Fuel prices remain high and we continue to see weakness in the air cargo market due to industry-wide overcapacity, which has put pressure on rates," SIA Cargo President Tan Kai Ping said in a statement, "We will continue to monitor market conditions closely and make further capacity adjustments as required."

Russian cargo carriers reportedly are struggling with the air cargo downturn.

Polet Airlines stopped operating its IL-96-400T freighter aircraft, although it will keep its AN-124s. And Aeroflot, too, appears to be having trouble, with plans to return three MD11Fs to their lessor or to park them.

The situation of airfreight has been relatively clouded with many challenges from high fuel prices to threatenings from the dismal global economy.

GOOD SIGNS AHEAD?

Most airlines and airports have been struggling with the lingering stagnation of the airfreight industry. However, there are still good signs of recovery ahead.

Dubai International airport reported a growth of 11.5% in the first fourth months compared to the same period last year, with 784,832 metric tons. “It is very clear that our growth rate has picked up and that should continue at a similar pace into the next quarter and beyond,” Paul Griffiths, CEO of Dubai Airports, which operates Dubai International, said in a written statement.

Saudia Cargo’s additions will form part of its fleet of 15, which includes four MD11s, two B747-8Fs, seven B747-400s and two B747-200 aircraft. Of these aircraft, 12 will be used for Saudia’s scheduled freighter services, and three B747s will be used for the airline’s charter business.

Volga-Dnepr (Russia) has recently invested more than $100 million on its fleet of five IL-76TD-90VD freighters. The craft are more fuel efficient and less noisy than than the older IL-76 planes, which had been banned in Australia, Europe, Japan and North American. The planes also have an increased range and payload.

Especially, Aerospace One S.A., (Greece) will offer wide-body freighters for charter or ACMI lease. The fleet, which is already in operation, will use 747-200s and new 747-400 jumbo jets. Founder Jaideep Mirchandani said Aerospace One S.A. will target charter businesses worldwide specializing in the freighter transport of heavy loads. And it will build cargo bridges between continents, initially Asia and South America via Europe.

Investments in new planes for higher requirements of optimization show good signs of the industry’s recovery in the coming time.

Boeing reported a 20% raise in net income with USD 1.1 billion despite revenue down 2.5% compared to the first quarter last year. The raise came from the deliveries of 777s and 737s. The addition of four 777s and three 737s has been delivered in the first quarter compared to the same period last year. 777s is the most expensive twin-engines jet of Boeing.

The airfreight seems to be on its way over the recession and to a new period.

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