Increased scrutiny of ecommerce may threaten high-flying air cargo
The strong year in air cargo has been credited to ecommerce – but “traditional” air ...
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CHRW: RUNNING HIGHMAERSK: STRONG HON: BREAK-UP APPEALCHRW: CLOSING QUESTIONSCHRW: HEADCOUNT RISK MID-TERM CHRW: SHOOTING UPCHRW: OPPORTUNISTIC CHRW: CFO REMARKSCHRW: GETTING THERE CHRW: SEEKING VALUABLE INSIGHTCHRW: 'FIT FAST AND FOCUSED' CHRW: INVESTOR DAY AMZN: NASDAQ RALLYKNIN: LOOKING DOWNPLD: FLIPPING ASSETSWTC: BOLT-ON DEAL
IATA claims global aviation is on course for a “decade in the black”.
However, the annual pace of growth in cargo is well below last year’s “exceptional” performance.
Despite the slowdown, the association remains relatively positive about future growth, albeit it at a slower pace.
“The expected 3.7% annual increase in cargo tonnage next year to 65.9m tonnes (up from 63.7m in 2018) would be the slowest pace since 2016,” it said.
“This reflects a weak world trade environment impacted by increasing protectionism. Cargo yields are expected to grow by 2%.”
Pointing to lower oil prices, alongside “solid, albeit slower” economic growth as drivers of profitability, it said next year would be the 10th consecutive year of profit.
Not only that, but 2019 would also mark the fifth consecutive year in which airlines had delivered a return on investment, with IATA chief executive Alexandre de Juniac sounding “cautiously” optimistic.
“We had expected that rising costs would weaken profitability in 2019, but the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” he said.
“So we are cautiously optimistic the run of solid value creation for investors will continue for at least another year; but there are downside risks as economic and political environments remain volatile.”
Regionally, North America is entering 2019 on the front foot, reporting the fastest rate of growth globally, with demand up 6.6% year on year for October.
And while all regions reported growth in October, Latin America only just got in on the positivity with a mere 0.3% upturn in demand.
“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018 – slow but steady growth continues despite trade tensions,” added Mr de Juniac.
“The growth of e-commerce is more than making up for sluggishness in more traditional markets, and yields are strengthening in the traditionally busy fourth quarter.
“We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note.”
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