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3pl ~ newsAir Cargo AIR CARGO OUTLOOK Most airlines should make money in 2006. In 2005 US airlines lost $8-Billion, European airlines broke even and Asian airlines made a $1-Billion profit. US airlines have lost $42-Billion in recent years but are forecast to cut losses to less than $5-Billion in 2006. Cost-cutting and great gains in efficiency have been offset by soaring energy costs. "..a projected profit in 2007 of US$6 billion would be a 1.5% profit margin that does not cover the cost of capital. The break-even price for crude went from US$22 per barrel in 2003 to US$34 in 2004 to US$48 in 2005. In 2006 we expect to break-even at US$50. But it is not until 2007 that we see a profitable break-even price of US$55", says IATA’s Director General and CEO, Giovanni Bisignani. "I"m turning more bullish on airlines after being negative for the last five years," says Julius Maldutis, of consulting firm Aviation Dynamics. "There"s a case to be made that 2006 will be a transition year and the industry will return to profitability in 2007." 2006 CHINA MARKET The China air cargo market is expected up 10% to 3.36 million tons. Passenger and cargo traffic grew 20% during 2005. Capacity expansion continues at a rapid pace. 2006 ASIAN MARKET OVERALL The Center for Asia-Pacific Aviation (CAPA) sees 2006 as a shake-out period for several key players "the quiet before the storm."- China and India will lead growth. - Hong Kong market will change as low-cost airlines force legacy carriers to re-think their business plans. - Singapore and Malaysia will see increasing low-cost airline competition. 2006 INDIA India expects air growth of 16% per year through 2010. New airlines have entered the market while existing airlines are going for significant fleet expansion/renewal. More new airlines are readying in the wings. Airfreight will continue to grow as infrastructure and politics allow. 2006 EUROPÉ In Europe the airfreight industry is steering into a difficult to predict year with volatility on all levels of the trade. There continues growing distrust between the formerly happily married partners, scheduled carriers and cargo agents. Both are impacted by industry concentration and consolidation. Ten new members of the European Union are ambitiously pushing their economies ahead. For air cargo dramatic concentrations threaten to tip the balance of business. Deutsche Post, DHL, Danzas (AEI) mega operations surge. More of the top ten logistics providers are global players. More freighters are controlled by powerful forwarders. The impression remains that even big multinational shippers and consignees prefer to deal with medium size and even very small forwarding partners because these firms still have people visible and caring about the customers and their respective needs. |
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