|
 |
Temporarily down, but never out
As reported in previous editions of the AIT eNewsletter, the past 24 months have undoubtedly presented several worldwide challenges to the air cargo industry. For starters, several carriers and airlines experienced RIF's and strikes - some were threatened and some materialized: Lufthansa underwent a pilot's strike and British Airways a cabin crew strike; The unions representing Air France-KLM threatened to walk in protest of the company's plan on reforming its medium-haul operations; Cathay Pacific threatened a strike; and SAS avoided a strike by making a settlement with pilots and cabin crews to freeze salaries and reduce pensions.
We endured the earthquakes in Haiti and Chile, the volcanic eruption in Iceland. During the same week as the volcano eruption, India and Bangladesh were hit by a deadly storm, the Qinghai province of China was devastated by a 6.9 earthquake and Rio de Janeiro suffered more than 300 landslides in torrential rain.
Now, we are suddenly forced to contend with the next big crisis - the BP oil spill.
We have been battling a roller coaster economy in the US and worldwide. Meanwhile, the European Union has been attempting to keep the euro stable while simultaneously financially supporting some of its member states like Greece, Spain and Portugal in order to stop total collapse.
To cut their losses, some carriers either cut capacity by parking planes, reducing their flights or simply canceling flights as a short-term fix. As a long term solution, many carriers are merging while other airlines are outsourcing services to GSA's or outside contractors. An innovative long term solution is currently taking place in Hong Kong, where a US$ 206 million revamp of Chek Lap Kok's air traffic control system could shave 15% off aircraft taxi times. The solution saves not only on time, but also on cost for the carriers who use this airport.
The various airline strikes got the carriers thinking ahead and preparing a contingency plan in the event a strike really does occur. Lufthansa had such a plan in place during their pilot strike and because they had taken preventative steps to re-route cargo as needed, they only experienced two freighter cancellations during that period. It was a win/win solution for the carrier and customer alike during a precarious time.
As a result of the havoc caused by the volcanic ash in Europe and elsewhere, the AEA (Association of European Airlines) has lost confidence in the simulation forecasting by the VACC (Volcanic Ash Advisory Council) that they have relied on in the past. As a result, they are now looking outside their own area at other regions of the world who deal with volcanic ash eruptions to learn new methods of dealing with an incident like that in the future. In addition, the IATA (International Air Transport Association), consisting of 230 airline members, has called on the European governments and air navigation service providers to develop a more precise procedure to identify ash contaminated air space and allow more flights.
According to an article in Air Cargo World, a survey of small and medium-sized business
(SME's) indicates that US exporters remain upbeat, despite the economy. While 85% say the economy was their top concern, more than 78% still said they are confident international sales leads will materialize. Most would prefer to expand their business to Europe (36%), followed by Asia (22%) and through North America connections (22%).
According to Cargo News Asia, recovery is underway as the airfreight traffic rises. Hong Kong Cargo Terminals handled 10,080 tons of freight, setting a new record for daily volume by breaking the 10,000 mark.
Also last month, Asia Airfreight Terminal, the second air cargo handler in Hong Kong airport, reported tonnage of 60,044 tons, a growth of 65% compared with the same period last year. Hong Kong's freight surge, which came at a time when the market is traditionally rather quiet, was the latest indication that airfreight traffic has turned around from the slump we were experiencing a year ago.
Hong Kong's cargo growth is not an isolated phenomenon. The latest statistics from IATA show a 28.1% rise in global air cargo traffic in March. This pushed load factors up to 57.1%, the highest level recorded by IATA since November 2002. Asian and North American carriers are also pleased by the fact that westbound traffic across the Pacific, which has long been a cause for concern, has picked up as well.
When Corning, the industrial glassware and ceramics manufacturer, resorted to air transport in order to get its products to Asia during the first quarter of the year, our industry experienced another big win and positive sign of recovery. China accounts for 60% demand for one of Corning's main products - liquid crystal display glass. Traders and manufacturer's reliance on air transport demonstrates how much more competitive this industry is becoming. At the same time, it also reveals their irritation at the ocean carriers for what they perceive as an artificial capacity shortage and rate increases. These factors have translated into much more significant use of air transportation.
Cathay Pacific has left the 2009 slump behind and is back in expansion mode, with Miami being one of the hottest destinations for the Hong Kong based airline at the moment.
Rampant demand exists among consumers in Latin America for consumer electronics produced in Asia. Demand is particularly strong in Brazil; however, neighboring South American countries are also hungry for electronics, predominantly flat panel TV's.
As the long stage length rules out direct flights between production centers in China and Korea and markets in South America, US transit points are handling large volumes of this traffic. Miami, the premier gateway for Latin America, saw international air freight volumes soar 38.1% in March - more than five times the growth rate in domestic cargo that passed through the airport.
Despite the doom and gloom outlined above, through it all, two things become incredibly apparent. One, we truly are a global economy very much reliant on each other regardless of where we are positioned on the planet; and two, our will and spirit to overcome challenges is evident in many of the innovative solutions we have put into place for every obstacle put in our way.
PREPARING FOR TAKEOFF: A THOUGHT TO PONDER
The optimist invents the airplane and the pessimist the parachute.
- Gil Stern
If you have any questions or comments regarding the Air eNewsletter,
please contact Kathleen Lally from the AIT International Air Department. |
|
Back to top