Strongly improved outlook
According to the International Air Transport Association’s Airline Industry Forecast 2014–2018, which it published at the end of October, international cargo volumes are likely to grow at an annual rate of more than 4% in the coming five years. Emerging markets, led by those of the Middle East and Africa, are set to be the fastest-growing regions in the world.
«Air cargo remains as vital to the global economic system as ever,» said Tony Tyler, Iata’s director general and CEO, commenting on figures recently presented by his body. «This year, more than USD 6.8 trillion worth of goods – equivalent to 35% of total world trade by value – will be transported around the world by air. It’s good news to see a forecast for a return to growth for the air cargo sector, after several years in the doldrums. An average of more than 4% growth for the next five years would be a marked improvement on the performance of recent years. Since 2011, for example, growth (in freight tonnes) has averaged just 0.6% per annum,» Tyler elaborated.
Risks no dampener on outlook
Despite all of the positive indicators on show, however, Iata is not turning a blind eye to the risks which also exist for the global economic outlook – which will naturally also apply to airfreight. Protectionism, in particular, represents a constant threat to global trade.
According to information provided recently by the World Trade Organization (WTO), the considerable amount of 112 new trade-restriction measures were enforced by group of twenty governments of the world’s largest economies (G20) in the six months between November 2013 and May 2014.
Furthermore, risks stemming from geopolitical uncertainties, the volatility of oil prices and competitive pressures coming from other modes of transport, such as rail and shipping, threaten to darken the positive forecast for airfreight. «The air cargo industry certainly cannot afford to be complacent,» Tyler warned.
Increasing ability to compete
To improve the industry’s ability to compete the association is urging its members to slash their average transit times for goods transported to 48 hours by 2020. To achieve this target, the sector must further upgrade its processes, improve its quality and reliability and expand the range of services it has on offer.
One cornerstone of the efforts is the e-freight project, which aims to free airfreight consignments from the burden of using paper. The first stage, that is to say the industry-wide roll-out of the electronic air waybill (e-AWB), is progressing well. Iata has said that the e-AWB’s share of all AWBs was greater than 19% in September, which means that the industry is well on target to achieve 22% for the entire year.
Where the industry is growing
The USA and the UAE will both generate more than 1 million t in additional airfreight in 2018 compared to today’s figures. The hubs in Dubai, Abu Dhabi et al. will thereby replace Germany in third place in the process (see table 1). The world’s biggest growth markets will be found outside of the saturated regions of North America and Europe – although the latter can again expect to post further strong cargo activity expansion in the future (see table 2).
Amongst the countries that generate more than 100,000 t of airfreight today, Iran will post the biggest growth rate – namely 7% per year. The starting level is admittedly low, however, considering that the increase translates into only 44,000 t more and a total volume of 156,000 t in absolute terms in 2018. As for India, the forecast growth of 6.8% per annum will mean 622,000 t in additional airfreight annually. The three following growth countries, Bangladesh (339,000 t), Ethiopia (319,000 t) and Nigeria (276,000 t), are also in the group of emerging markets. Special mention in the Iata forecast is also given to Qatar. The emirate’s annual growth rate of 5.7% corresponds to an increase of 361,000 t in absolute terms, to a total of 1.48 million t in 2018.