The air cargo outlook for the next five years is positive
A trend of accelerating growth and confidence in air cargo has marked 2014, with the worldwide level of freight tonne kilometers (FTKs) increasing by 4.7% compared to 2013. This follows three years of decline and sideways drift in freight volumes, and confirms the tentative signs of recovery noted in late 2013.
Both the industry and IATA expect solid, but not spectacular, growth in air cargo volumes over the next five years. The IATA’s forecast is for an average growth rate of 4.1% per annum.
It is the emerging markets and regions that are expected to deliver the fastest growth in air cargo volumes over the next five years, led by the Middle East and Africa. Strongest forecasted growth is foreseen on trade lanes between Asia and the Middle East, within the Middle East region, and between North and South America. Growth in mature markets of the North Atlantic and within Europe is expected to be well below the global average. Domestic operations, especially in China and in the US, will also form a large portion of future traffic.
At the top end of the air cargo market, integrators are taking an increasing share of the business.
Accelerating urbanization will increase the number of mega-cities and the emergence of mega-regions; regions anchored with one to three mega-cities of 10 million people or more. These mega-regions, mainly in Asia, create agglomeration of GDP and population and are expected to drive world trade.
Aviation will be critical to support the movement of people and goods between mega-cities and regions. However, the industry should strengthen its value proposition and competitiveness to ensure alternative modes do not capture the growth.