Boeing sees rebound, long-term growth of air cargo market
The world’s air cargo market will expand more than 10 percent this year and is forecast to expand by an average of 6.2 percent a year over the 2003-2023 period, officials of Boeing said in a new report.
Presenting its biannual “World Air Cargo Forecast” at the Air Cargo Forum of the International Air Cargo Association in Bilbao Wednesday, the big aircraft manufacturer reported that growth in the worldwide air cargo business in the first half of this year was 11 percent.
“If the current momentum of world air cargo traffic growth is maintained through the end of 2004, it will mark the first double-digit percentage growth year for the industry since 1997,” said Marlin Dailey, vice president of sales at Boeing Commercial Airplanes. “We are experiencing prosperous times in this business.”
Air cargo growth in 2003 was curbed to 4 percent by concern over the Iraq war and the SARS crisis in Asia.
Boeing predicts worldwide traffic will more than triple in the next 20 years, from 156.5 billion revenue-ton kilometers (RTKs) in 2003 to more than 518.7 billion RTKs by 2023.
“Sustained economic growth, along with decreasing yields, contributes significantly to the growth of the air cargo industry,” Boeing said.
Growth in the Asian air cargo trades is expected to be higher than the 6.2 percent worldwide annual average. Boeing predicts the two-way Asia/North America trade will expand 7.2 percent a year over 2003-2023, while the Asia/Europe market would grow 6.7 percent a year over the same period.
The intra-Asia will grow 8.5 percent a year over 2003-2023, while the domestic China market “will be the fastest growing contiguous market in the world, averaging 10.6 percent growth per year,” Boeing said.
Thomas Crabtree, regional director at Boeing, said the forecasts take into account producers' tendency to outsource manufacturing to Asia. Stressing that this factor is hard to predict, he noted manufacturing is also expected to be transferred within Asia.
“The Asian tigers will find it difficult to compete against China,” he noted.
For more than three decades, air cargo traffic (measured in RTK) has expanded about 7 percent annually, or more than 2.3 times faster than the rate of GDP growth.
Another industry trend that is difficult to factor into the forecasts is the change in the mix of cargoes shipped by air, Boeing said. Crabtree cited the case of television sets, a cargo that is no longer shipped by airplane.
Other industry officials attending the Air Cargo Forum in Spain said the new economy favors products that have fast supply chains requiring the delivery speed of air transport.
“During the past several years, growth has been stimulated by service improvements, shipper awareness, success of the express and small-package business, and increasing recognition of air cargo benefits to global enterprises,” the Boeing report said.
Boeing said the North America/Asia market represents 20.5 percent of the world’s air cargo in ton-kilometers. The U.S./Asia market grew just 0.4 percent in 2003 over 2002, an untypical year characterized by the diversion of maritime traffic to air due to port closures that year.
Total North American air traffic, including the statistically dominant U.S. domestic market, grew just 0.7 percent in 2003, according to Boeing. But it is projected to sustain a 4.1 percent growth rate over the 20-year period from 2003 to 2023.
Boeing predicts the number of dedicated freighters will increase to 3,456 in 2023 from 1,766 in 2003, with a particular large jump in the number of widebody freighters.
Boeing also said air cargo generates worldwide revenues of more than $45 billion, and expands faster than passenger travel.