Trade flows skew air cargo growth

Air cargo is benefiting from a cyclical upturn, but its growth has been uneven across several regions because of an imbalance in the direction of global trade flows, according to industry leaders at an annual conference, being held in Shanghai this year.

China's exports and US imports will be the biggest drivers for the air cargo industry in 2015, said Marco Bloemen, senior vice president of aviation consultancy Seabury Group.

"China is the key reason why the air freight market has grown. It provided 62 per cent of the tonnage increase last year and 40 per cent of that is hi-tech," said Bloemen. The outlook for that segment, along with demand from the US, would largely decide the prospects of the industry in 2015.

"The economic cycle is positive, but weak. And only some trade lanes are seeing strong growth," said Julie Perovic, senior economist of the International Air Transport Association (IATA). Freight traffic on the Asia-US routes grew the fastest among the key trade lanes in the past year and a half, but is still low compared to its peak levels in 2010, she added.

Asian carriers, in particular, have been carrying less traffic compared to five years ago, and this is likely due to competition from other carriers that have rapidly expanded their market share, Perovic said. According to the IATA, traffic as measured in freight tonne kilometres (FTK) has grown the most for Middle Eastern airlines, by 60 per cent compared to 2010, whereas Asian carriers saw a decline of 8 per cent.

"[Asia Pacific carriers] have yet to return to their 2010 level, but that does not mean they did not grow in the past year. They account for the largest proportion of global FTK, so it is important they return to strong growth," Perovic said.