FAA expects US all-cargo carriers to grab marketshare from belly rivals

The US Federal Aviation Administration (FAA) expects US air cargo carriers will record 3.5% per year demand increases over the next 20 years and that the country’s all-cargo carriers will continue to win marketshare.
In its annual market review and forecast, the FAA said air cargo demand at US carriers increased by 2.2% year on year in 2015 to 35.9bn revenue ton miles (RTM) on the back of a 3.3% increase in domestic demand to 13.1bn RTM and a 1.6% leap in international traffic to 22.9bn RTM.
International growth was affected by stagnation in Europe and a slowdown in China’s economic growth.
Air cargo RTM flown by all-cargo carriers comprised 78.1% of the total in 2015, with passenger carriers flying the remainder.
Total RTM flown by US all-cargo carriers increased 1.8% in 2015 while total volumes flown by passenger carriers grew by 3.6%.
Looking ahead, the FAA is expecting demand to grow by 4.5% in 2016 driven by steady US and world economic growth.
Total RTM is projected to increase at an average annual rate of 3.5% between this year and 2036.
Domestic cargo demand is forecast to grow 1.9% in 2016 as the US economic recovery continues. Between 2016 and 2036 domestic cargo RTM is forecast to increase at an average annual rate of 0.4%.
International growth is expected to rebound in 2016 to 6% as global trade growth resumes. Over the next 20 years, international cargo is forecast to increase an average of 4.7% a year based on projected growth in world GDP, with the Pacific region having the fastest growth, followed by the “other international”, Atlantic, and Latin regions, respectively.
The FAA said its demand forecasts are based on the assumption that security restrictions on air cargo transportation will remain in place and most of the shift from air to ground transportation has occurred.
In terms of US-based all-cargo and belly marketshare, freighter carriers are expected to cater for 90.8% of the market by 2036 based on increases in capacity and ongoing security considerations.
The share of international cargo flown by US all-cargo carriers increased from 49.3% in 2000 to 71.8% percent in 2015.
“Continuing the trend experienced over the past decade, the all-cargo share of international traffic flown is forecast to increase modestly to 78.1% by 2036,” the FAA said.
The all-cargo share for domestic traffic is forecast to grow to 90.8% by 2036.

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