Air Cargo carriers make less than trucking firms - IATA

The real winners in the air cargo industry are the freight forwarders.
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Airlines make less profit from transporting cargo than trucking companies, and just enough to cover their debts, according to a new report released by the International Air Transport Association (IATA).

The only real winners in the air cargo industry are the freight forwarders, reveals the Profitability and the Air Transport Value Chain report, which was published on Monday. Freight forwarders make, on average, a 15% return on their investment.

Earlier this week, IATA released figures for global air cargo markets showing that growth has continued to flatline in May, broadly following the trend of the last 18 months.

Global freight tonne kilometres increased just 0.8% in May compared to a year ago. Capacity, however, increased by 2.1% causing load factors to fall to 44.9% - their lowest level since the post crisis recovery. As about 60% of global air cargo utilises capacity in the belly of passenger aircraft, managing capacity at a time when growth in air travel is outpacing that of cargo is particularly challenging.

“It is getting harder to find optimistic signs for air cargo growth. The Middle East remains a bright spot, and the rate of decline in the Eurozone is easing. But this is offset by the weakening of expansion in Asia-Pacific. It is now clear that the positive global upswing in air cargo at the end of 2012 was an illusion. Air cargo, along with many parts of the world economy, appears to be in suspended animation at the moment,” said Tony Tyler, IATA’s director general and CEO.

IATA concluded that the stall in cargo markets appears to be the result of a recent softening in growth in developing economies, including China. Moreover, business confidence is flat globally and declining in some developing economies, meaning chances of a significant upturn in the near future is unlikely.

For more information on the report visit: www.iata.org

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