Air Freight Outlook: Nothing But Up

The competition facing Samsung and other such companies for international air capacity is projected to grow through the foreseeable future. As with air cargo lift from Asia to North America, freight movement between countries within the Pacific Rim is growing and is projected to continue. For the first six months of 2006, according to the International Air Transport Association (IATA, www.iata.org) Asia/Pacific traffic was up 4.8% while North America showed a 6.2% increase over 2005 figures.

Strong as cargo movement is within and from Asia, IATA reports that while international freight traffic for the first half of 2006 has climbed 5.2% year over year, the most vigorous growth in FTKs (freight tonne kilometers) during the period was experienced in the Middle East where traffic shot up 19.3%.

In agreement with IATA's projections, Boeing (www.boeing.com) expects Chinese shipments to be grow 10.8% per year over the next 20 years, and intra-Asian freight to grow 8.6% per year. As for other markets, Boeing expects that over the next two decades air cargo will grow 6.1% per year. Asia-North America traffic is projected at 7.1% and Europe-Asia at 6.9%. Growth will be slower in domestic North America, intra-Europe and Latin America markets.

In order to meet continuing increased demand for air cargo capacity, the world freighter fleet will double from 1,789 aircraft at present to 3,563 by 2025. Nearly 62% of new freighter additions will be widebody aircraft, nearly two-thirds of which will have capacity of 40 tons or more. Some 75% of freighter fleet additions by 2025 will be modified passenger and combi aircraft. The remainder will be newly produced freighters.

The need for air freight capacity— including and particularly for vertical industries such as apparel, hi tech electronic equipment and pharmaceuticals, among others—will continue to grow and remain a top of mind occupation for shippers. Producers of aircraft are aware of the needs and are working to meet the increased demands for shipping space.