Softening Chinese recovery threatens peak season high

A SOFTER than expected China market, just when it ought to grow hotter, has airlines worried that the 2010 peak season may falter and undermine this year’s recovery in yield.

“We are seeing a slower situation in China all of a sudden, which was not expected. Shanghai is slower than expected, and Hong Kong as well. It seems a bit of a slowdown,” said Ulrich Ogiermann, chief executive officer of Cargolux.

He added that other Asian markets appeared to have maintained their previous momentum; only China seemed to be faltering.

With demand lagging the amount of capacity deployed by airlines in anticipation of a strong peak season, load factors and yields are suddenly under pressure, Ogiermann noted.

Other operators have also seen an unexpected softness in Asia’s largest economy, although they were quick to stress that the market should pick up in October after the public holidays, in a number of Asian countries summarily referred to as ‘Golden Week’.

“It’s true that the exports from China are slower than expected, but we need to keep in mind that there were some national holidays last week,” commented Charles Kaufmann (right), chief executive officer for North Asia and senior vice-president for airfreight, North Asia Pacific at DHL Global Forwarding. “We expect again stronger weeks to come from October 2010. The intra-Asia market is still very strong.”

James Woodrow, general manager of cargo sales and marketing at Cathay Pacific, attributed the softer than expected market conditions to the aggressive build-up of capacity rather than a slowdown in export momentum out of China.

For the full story read the latest free digital edition of Air Cargo News, no. 687 dated 4 October, here.