Logistics And Frieght Forwarding

Air freight market still looks grim despite some bright spots …

Air freight market still looks grim despite some bright spots

The condition of the air freight sector is rarely transparent and so it remains, with signs of a downturn mixed with some volume increases.

The background to the closure of Lufthansa1‘s Chinese joint venture Jade Cargo2 as well as Grand Star Cargo, which was a Korean Air3 joint venture, appears to demonstrate both the over-supply of capacity on China routes as well as depressed export volumes.

The other side of this equation has been the economic turbulence in Europe. Already weak, consumer expenditure has taken further hits; even in the economically stable markets of Northern Europe. This appears to be reflected in results from London Heathrow Airport’s cargo terminal which saw May volumes fall by 3.8% year-on-year; an acceleration of the 2.3% fall seen for the year so far in 2012. In contrast, passengers moving through the airport increased by 2.3%.

Singapore Changi International Airport reported similar results, with cargo volumes for May down by 2.8% on a year-on-year basis. For the year so far, volumes are down by 1.3%; but again passenger demand is up.

However, Hong Kong International Airport4 reported its first increase in total cargo volume in over a year, with a 1.1% rise for May. Drilling-down into the figures, it can be seen that much of the growth has come from increases in export business to the Middle East, South America and Southeast Asia. Europe and North America continue to have lower volumes as compared to 2011. Additionally, import volumes into Hong Kong remain subdued and the position for the past 12 months sees volumes still 4.5% lower.

So looking at these near-term results, it would appear that demand on European routes may continue to fall, although some other destinations such as Southeast Asia, the Middle East and South America may provide some growth. However, the ability of these destinations to compensate for falling consumer demand in western markets may be limited.

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Source: Transport Intelligence, June 25, 2012

(c) 2012 TI Briefing. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. TI Briefing is a service from Transport Intelligence Ltd. Transport Intelligence shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.


  1. ^ For more information on Lufthansa Cargo please visit our supplychainleaders.com portal (www.transportintelligence.com)
  2. ^ For more information on Jade Cargo please visit our supplychainleaders.com portal (www.transportintelligence.com)
  3. ^ For more information on Korean Air please visit our supplychainleaders.com portal (www.transportintelligence.com)
  4. ^ For more information on Hong Kong International Airport (HKIA) please visit our supplychainleaders.com portal (www.transportintelligence.com)
  5. ^ Print this brief (www.transportintelligence.com)

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