Cooperation is the key driver
02 / 03 / 2015
THE latest half-year results for the air cargo industry’s two great players, the airlines and freight forwarders, reveal a market where volume increases are dampened by a “competitive environment” to use the jargon, or a rates battle to you and me.
The major purchasers of air cargo space, Deutsche Post DHL, Kuehne+Nagel and Panalpina, have shown respectable if not mind-blowing increases in tonnages booked, even if the returns were disappointing.
The outlook from the forwarder community has been generally optimistic for the rest of the year, but no one expects a return to the days of double-digit growth. Those are long gone.
For the air carrier side of the equation, we have seen SIA Cargo cut its first quarter loss to $18 million after achieving a better match in capacity to demand, while Lufthansa, Air France-KLM and IAG Cargo came out with half year figures that were a little subdued.
As one European cargo manager explained, Europe does not have too many freighters, it is a global problem. The forwarders, other than Panalpina with its two B747-8Fs, are asset light, ie they do not have freighters to pay for and fill. But even they are struggling.
The way ahead for airlines is greater collaboration between carriers, mixing belly-hold capacity with a limited and strategic use of freighters for routes where supplementary main-deck uplift is profitable.
As the industry works through this solution, and it may be painful, we should gradually see less red ink. That may also mean fewer, but more profitable, freighters.