Video of the week - Air cargo is now in one of longest ever slumps: slowing GDP growth and a drop in business and consumer confidence means the tough times will continue

10 March, 2020

In times of crisis air cargo can be the saviour with freighter aircraft packed with emergency supplies part of any advanced aid initiative. There are even some routes that succeed purely based upon a packed belly hold of cargo even if yields in the passenger cabin are weak. But, air cargo is still viewed by many passenger carriers as a 'stepchild'.

Changes in the global supply chain have certainly given cargo greater prominence. But, while international e-commerce continues to grow, overall air cargo demand continues to face headwinds from the effects of the trade war between the US and China, the deterioration in world trade, and a broad-based slowing in global economic growth.

We now have the coronavirus crisis which has seen airlines cull flights into mainland China, reducing capacity into one of the biggest air freight markets. But air cargo is also part of the recovery. Qatar Airways last month completed a much-publicised cargo convoy as five aircraft made up of two Boeing 747F and three Boeing 777F delivered approximately 300 tonnes of medical supplies to Beijing, Shanghai and Guangzhou.

Meanwhile, Singapore-based Scoot is resuming flights to China this week, but its passenger aircraft will be simply carry cargo as China works to rebuild its economic output and get supply chains back in place as it begins its recovery from the deadly virus that is now taking hold across Europe and North America.

Latest International Air Transport Association (IATA) data shows industry-wide cargo traffic, measured in freight tonne kilometres (FTKs), decreased 3.3% year-on-year in January, the tenth consecutive month of cargo volume declines. The year starts on a weak footing as the COVID-19 outbreak has severely disrupted global supply chains, even though it did not overly impact the January performance.

"Tough times are ahead," says Alexandre de Juniac, IATA's director general and CEO. "The course of future events is unclear, but this is a sector that has proven its resilience time and again," he says, perhaps rather optimistically.

This subject was one of the discussion topics at the CAPA Qatar Aviation, Aeropolitical and Regulatory Summit, which returned for a second edition in Doha in Feb-2020 where TIACA secretary general, Vladimir Zubkov; Pittsburgh International Airport vice president, air service development, Bryan Dietz; SEMIK chief executive officer Sebastian Mikosz; and Winnipeg Airports Authority chief commercial officer, Pascal Belanger; examined the forces and pressures shaping the business.