dnata says air cargo demand slump is a concern

Dubai air services provider dnata says softening demand and excess capacity in the market is a concern, but that it will nonetheless post modest growth in cargo volumes this year.
This week, dnata opened an integrated customer service centre for export cargo customers that includes airlines and freight forwarders in Dubai Airport Free Zone.
This week, dnata opened an integrated customer service centre for export cargo customers that includes airlines and freight forwarders in Dubai Airport Free Zone.

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Dubai air services provider dnata says softening demand and excess capacity in the market is a concern, but that it will nonetheless post modest growth in cargo volumes this year.

Speaking to The National, Gary Chapman, dnata’s president, said the company’s cargo volume is up by 4.5 per cent compared with the same period last year.

"We are still growing, although slowly," he said. "Globally, cargo is under pressure. In certain parts of the world, we are going to see a weakness, some reduction in Asia and Australia."

Air cargo growth in the Middle East has slowed to its lowest rate since the 2009 financial crash. According to the International Air Transport Association (Iata), this has been compounded by increased capacity, driving down freight rates.

Demand rose by 1.8 per cent year-on-year for Middle Easte carriers, while their freight capacity increased by 6.9 per cent year-on-year, the trade association said.

The Middle East has seen one of the greatest discrepancies between growth in demand and capacity. Globally, cargo demand grew by 3.9 per cent year-on-year in August and freight capacity increased by 4.1 per cent.

Chapman says this has put yields under pressure. “Given the overcapacity in the airline sector, the yields are under pressure… yields are down and that is never good for the travel business,” he said.

In the 2015-16 financial year, dnata handled 700,000 tonnes of cargo in the UAE. It expects to record a 5 per cent growth in volumes in the current financial year, said Bernd Struck, dnata’s senior vice president for the UAE cargo division.

This week, dnata opened an integrated customer service centre for export cargo customers that includes airlines and freight forwarders in Dubai Airport Free Zone.

The centre, which is integrated with government agencies such as Dubai Customs and Dubai Police, can handle 25,000 tonnes of export cargo a month. It features a cargo incident control centre from where cargo movements are monitored and a cargo acceptance area.

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