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 - LM Editorial

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

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Article Topics

News · Air Cargo · Global · Infrastructure · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

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