Cargo ‘on the edge’

ON the eve of the TIACA conference in Atlanta (US) cargo operators will be celebrating survival according to IATA predictions.
IATA (International Air Transport Association) announced an upward revision to its global aviation outlook for 2012 but it was crumbs of comfort for the cargo sector.
Fuel, a slow economy and over capacity are casting a long shadow over the industry.
“On the cargo side of the business, demand has fallen into negative territory from the 0.3 per cent expansion anticipated in June,” says an IATA spokesman.
“Cargo is expected to finish the year with a 0.4 per cent contraction on 2011 levels. 
“For the first eight months of the year, cargo capacity grew by three percentage points ahead of demand. With about half of airfreight traveling in the bellies of passenger aircraft, matching cargo capacity to demand is challenging. 
“The weaker supply/demand environment has led to a more pessimistic outlook for cargo yields which are expected to average at two per cent below 2011 levels.”
IATA had predicted a flat performance.
Tony Tyler, IATA chief, says: “Asset utilization has fallen in the weaker cargo market, adversely affecting Asia-Pacific airlines in particular, where this business makes up a larger share of total revenues.
“Even six years ago, generating a profit with oil at US$110/barrel (Brent) would have been unthinkable. The industry has re-shaped itself to cope by investing in new fleets, adopting more efficient processes, carefully managing capacity and consolidating. But despite these efforts, the industry’s profitability still balances on a knife-edge.”
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