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Talking numbers

Airline Cargo Management’s annual survey provides a chance to take stock – and this year’s respondents see growth possibilities amid tough conditions

Surprisingly, given the tough conditions operators have been up against in the past year, 27.3% of respondents to the sixth annual Airline Cargo Management industry survey – a smaller sample than in previous years – said they expected their business to see growth of about 7% or more in 2017.


The next-most optimistic group were the 18.2% of respondents who predicted increases of around 5%, while just over a fifth of respondents (22.7%) said they expected growth of about 2% this year. Only one respondent predicted negative evolution [see figure 3].


Organic growth and new products were respondents’ predictions of the main development drivers for their businesses [see figure 5], and when it came to sectors, while general freight topped the board, 31.8% chose pharmaceuticals as one of the two products or sectors they would focus most on this year – the same percentage as chose express/parcels [see figure 8]. 


Clawing back some of the pharma business from sea shipping may be one way in which air freight companies will grow this year, agrees Stan Wraight, Senior Executive Director at aviation consultancy Strategic Aviation Solutions International. “Everyone I’m speaking to has put a lot of emphasis on airport facilities and ground handling companies’ ability to service the pharma business on the ground and in transit and try to get it back from sea freight.”


With high shipment values, the pharma industry is beginning to recognise that transportation by air might make more sense, he says. “I think a lot of the pharma companies are starting to realise that if the airlines can get their act together that air freight is a much better alternative than sea freight. The reason for that is the cost of funds. When you consider the capital that is tied up in sea freight it can get very expensive. If airlines can do something about ground handling, a great sales and marketing approach I think they can regain the traffic. I think that can be done and will be done as I see a great deal of interest on the airline and airport side in ground handling to get that right. I think this will be the year we’ll see it.” 


Perishables was one of the two most promising growth sectors for 27.3% of respondents. Thomas Rohrmeier, Regional Manager for the Netherlands and Luxembourg for Lufthansa Cargo, has seen perishables growth in his own region. 


“Perishables is a global growth field – there’s a growing middle class all over the world especially in Asia, who want the same choice in their supermarkets we are used to in Europe and not everything can be sufficiently grown in those regions. We will have an increasing trade in perishables globally and they have to go by air because a lot of it doesn’t last long enough to go on a ship. Locally speaking the Dutch agricultural industry is very advanced and perishables are about a third of my business already. That has the potential to grow – for example the Dutch just opened the Chinese market for perishables and they will start exporting bell peppers, tomatoes and berries to China.” 


Across sectors and regions, over two thirds (68.2%) of the 22 respondents to the survey said they experienced the ‘traditional’ end-of-year peak in volumes in October/November, while only 13.6% said they did not experience this uplift [see figure 2]. Some of the industry players who replied to our survey said that while they had seen a peak, it hadn’t been as pronounced as in previous years. 


“We do not cover all markets, but we did see a strong peak to China and Mexico, partly also to the US. The peaks seemed to be not so much the result of high demand but rather a result of reduced cargo capacity on these routes,” explained one senior air freight executive based in Germany. 


Alan Peacock, Director of New Zealand-based Flight GSE Ltd was one of the respondents counting on new products to bring growth this year. “I think we'll see a good year in 2017 as we're bringing out more products into the marketplace. For example we build crew stairs for B737 freighter aircraft – while we are pushing these fairly hard in our market, we've had five enquiries since Christmas.”


The company last year introduced its first towable main deck loader and its first belt loader. “We've also introduced our new website Between the website and the new products we think we are in for a pretty good year,” Peacock said. >>

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