april2023 - 13

In 2022 industry-wide demand measured
by cargo tonne-kilometers slowed,
according to IATA, representing a 1.6
percent decline compared to prepandemic
levels in 2019.
lines reported that airfreight sales were down 35 percent YOY
in the fourth quarter of 2022, cargo still accounted for a higherthan-usual
share of the carrier's overall revenue. United also
logged $2.2 billion in cargo revenue, which, while down 7.5 percent
from 2021, is nearly twice as high as pre-pandemic figures.
For its part, Delta Air Lines reported that its cargo segment
notched record topline results. The company expects those revenues
to increase further in 2023 despite lower rates " as increased
capacity offsets the cargo yield environment, " the company said
in its fourth-quarter earnings call.
Economic Uncertainty Ahead
The looming threat of a global recession is prompting caution as
cargo operators monitor stagnating export orders and indicators
suggesting high inflation could well persist in the coming year.
" Any increase in volumes will only happen post recovery of the
stronger economies, which is likely towards 2H23, " according to
DHL's December airfreight report.
German logistics company DB Schenker, for example, has
reportedly reduced the number of flights on its freighter network
After a banner year in 2021, the airfreight market
presents a mixed picture heading into 2023.
has increased, according to DHL's January 2023 Airfreight State
of the Industry Report.
Market Overview
After a banner year in 2021, the airfreight market presents a
mixed picture heading into 2023. In its most recent forecast, Boeing
projected that air cargo traffic will grow by about 4 percent
annually through 2041, as e-commerce networks and industrial
production expand.
However, in 2022 industry-wide demand measured by cargo
tonne-kilometers (CTKs) slowed, declining 8 percent for the full
year compared to 2021, according to the International Air Transport
Association (IATA). That figure represents a 1.6 percent
decline compared to pre-pandemic levels in 2019.
Yet whether the glass is half empty or half full may depend
on your standard of comparison. For example, while United Airas
the gap between air freight demand and supply narrows.
" More capacity is coming to the market and consumer
demand has dropped due to the high inflation, " Asok Kumar,
executive vice president and head of global air freight for DB
Schenker, told The Hindu. " Now yields are higher than pre-COVID
but coming down because consumer demand is dropping. "
However, cargo operators that have shifted some business
out of the more volatile spot market - where big pricing swings
present deeper risks and rewards - could benefit if freight
demand continues to downshift. Large retail, manufacturing
and logistics customers that found themselves pinched by
soaring airfreight rates earlier in the pandemic, when capacity
was in short supply, are increasingly willing to lock in multiyear
contracts to guarantee transport space. These long-term
deals can provide stability for carriers in an uncertain economic
landscape.
Investing in Capacity
Despite the cloudy economic outlook, carriers and freight forwarders
with an eye on long-term growth are moving ahead
April 2023 || AviationPros.com || 13
PHOTOS COURTESY OF THE AUTHORS
http://www.AviationPros.com
april2023

Table of Contents for the Digital Edition of april2023
