Subscribe to our free, weekly email newsletter!


IATA revises air cargo forecast for 2012

This is in marked contrast to the recent bullish news coming from one of the world’s largest aircraft manufacturers
By Patrick Burnson, Executive Editor
December 07, 2011

While Boeing is forecasting a long-term surge in air cargo demand, a more sobering view was expressed by The International Air Transport Association (IATA) yesterday.

The immediate short-term outlook is so dim, in fact, that IATA announced revisions to its industry forecast.

Spokesmen said profitability remains weak but unchanged at $6.9 billion for a net margin of 1.2 percent this year. Looking ahead to 2012, IATA downgraded its central forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 percent.

This is in marked contrast to the recent bullish news coming from one of the world’s largest aircraft manufacturers.

“World air cargo traffic will triple over the next 20 years, according to Jim Edgar, regional director of Cargo Marketing for Boeing. “And cargo rates should mirror demand.”

“From now through 2029, we expect world air cargo traffic to grow at an annual rate of 5.9 percent,” Edgar says. “Asia will continue to be at the forefront of the air cargo industry. Routes associated with Asia will continue to experience the world’s highest growth rates over the next 20 years, at 6.8 percent.”

But IATA maintained that the Eurozone crisis puts severe downside risk on the 2012 outlook as illustrated by the recently published OECD economic outlook. In a worst case scenario, should the Eurozone crisis evolve into a full-blown banking crises and European recession, IATA estimates that the global aviation industry could suffer losses exceeding $8 billion in 2012.

“The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion—the largest since the 2008 financial crisis,” said Tony Tyler, IATA’s Director General and CEO.

For the remainder of this year, Tyler was equally circumspect:

“The global forecast for 2011 is unchanged at $6.9 billion. But regional differences have widened, reflecting the very different economic environments facing airlines in different parts of the world. And the overall margin of 1.2 percent tells you just how difficult the battle for profitability in this business is.”

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

This legislation takes the same name of a previous bill rolled out in April 2014, which did not make enough traction to be signed into a law, and would replace the current authorization, MA-21, whose most recent continuing extension is set to expire at the end of May.

The wave that heavy e-commerce activity currently rides is not close to crashing anytime all that soon. And with that comes a heightened focus on the logistics-related aspects of e-commerce, specifically on the last-mile side of things.

Conveyors, shuttles and robots were on display, but as with last year's Modex, software is where the action is in today’s materials handling industry.

When assessing areas of risk facing their departments, nearly half (45%) of Chief Procurement Officers named supplier risk as a top concern, according to a new survey by Consero Group.

2014 was a very good year for the Port of New Orleans, and officials there are forecasting an even more robust cargo scenario in 2015.

Article Topics

News · Air Cargo · Air Freight · Global Trade · All topics

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA