Global airfreight in 2018 is expected to see continued gains in both cargo volumes and profits, according to forecasts from the International Air Transport Association (IATA).
Global industry net profit is expected to rise to $38.4 billion in 2018, an improvement from the $34.5 billion expected net profit in 2017. Cargo volumes are estimated to increase 4.5 percent to 62.5 million metric tons, compared to the 59.9 million metric tons in 2017.
IATA found that the cargo business continues to benefit from a strong cyclical upturn in volumes, with some recovery in yields. Volumes are expected to grow by 4.5 percent in 2018, but down from the 9.3 percent growth of 2017.
“The boost to cargo volumes in 2017 was a result of companies needing to restock inventories quickly to meet unexpectedly strong demand. This led cargo volumes to grow at twice the pace of the expansion in world trade [at 4.3 percent],” said IATA.
Cargo yields are expected to improve by 4 percent in 2018, albeit slower than the 5 percent in 2017.
“While restocking cycles are usually short-lived,” said IATA, “the growth of e-commerce is expected to support continued momentum in the cargo business beyond the rate of expansion of world trade in 2018.”
Cargo revenues should reach $59.2 billion, up 8.6 percent from 2017 revenues of $54.5 billion, the association said.
“These are good times for the global air transport industry. Safety performance is solid. We have a clear strategy that is delivering results on environmental performance,” said Alexandre de Juniac, IATA’s director general and CEO. “More people than ever are traveling. The demand for air cargo is at its strongest level in over a decade. Employment is growing. More routes are being opened. Airlines are achieving sustainable levels of profitability. It’s still, however, a tough business, and we are being challenged on the cost front by rising fuel, labor and infrastructure expenses,” he said.
IATA also noted that the industry still faces longer-term challenges and governments need to step up and improve the playing field for air carriers.
“Aviation is the business of freedom and a catalyst for growth and development. To continue to deliver on our full potential, governments need to raise their game—implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand,” said de Juniac.
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