Subscribe to our free, weekly email newsletter!


IATA braces for change

Major infrastructure developments are supporting China’s robust traffic growth, while airlines operating in most other areas of the world are struggling to maintain cargo service levels.
By Patrick Burnson, Executive Editor
June 06, 2012

As the International Air Cargo Association (IATA) readies itself for the Annual General Meeting in Beijing next week, analysts will be able to examine one of the few bright spots in global aviation. Major infrastructure developments are supporting China’s robust traffic growth, while airlines operating in most other areas of the world are struggling to maintain cargo service levels.

According to IATA, the world’s airlines are expected to make an aggregate profit of $3.0 billion in 2012 on $633 billion in revenues. That 0.5 percent net profit margin continues to make the airline industry vulnerable to external shocks.

“A European financial meltdown appears to have been averted for the time being but it has been replaced with other risks to profitability,” said IATA’s Director General and CEO Tony Tyler. “The industry continues to deal with a host of constant challenges including improving safety, environmental sustainability, and cost-efficiency.”

Eurostat confirmed that the Eurozone escaped technically moving into recession by the skin of its teeth as GDP was flat quarter-on-quarter in the first quarter of 2012 after contracting 0.3 percent quarter-on-quarter in the fourth quarter of 2011.

“However, this does not mask the fact that the Eurozone is exhibiting recessionary tendencies in most respects,” said IHS Global Insight Chief European and UK Economist Howard Archer.
“Indeed, Eurozone GDP was down 0.1 percent year-on-year in the first quarter.”

Meanwhile, some of the world’s most successful cargo airlines are reporting the EU’s crisis has been pulling them down.

In an interview with Dow Jones News, Tim Clark, President of Emirates airline, said international airlines face a “perfect storm” from high fuel costs, a slowing global economy and volatile exchange rates that could see many carriers forced to downsize.

“The euro is going south, the pound is going south, fuel costs are still too high,” Clark said.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Over $2 billion dollars in carrier overcharges go uncollected each year as shippers do not have the time or resources to collect refunds.

Last year at this time, retailers were relieved to learn that a tentative agreement on a new labor contract had been reached by dockside labor and management on the U.S. East and Gulf coasts. But not without considerable blood on the floor.

The National Retail Federation is encouraging maritime management and the union representing dockworkers along the U.S. West Coast ports to expedite pending contract negotiations and reach agreement on a new deal well in advance of the expiration of the current contract this summer.

SAP AG announced the availability of a new application to help centralize processing trade activities, SAP Global Trade Services, processing trade in China. 



Did you know that Supplier Portals can help companies reduce risk, improve compliance and enhance product availability? Download Amber Road's latest research report featuring research from Gartner.

Article Topics

News · Air Cargo · Global · Infrastructure · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA