Taking the strain

by BARRY GRINDROD  

December 1st 2012

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The red flags were raised earlier this year when Seattle-based consultancy, Air Cargo Management Group (ACMG), said unless air freight demand increased at historic rates, freighter fleets would need to be cut back and orders for new planes slashed, in the next five years. There could be bankruptcies or airlines may cease full freighter fleets, said ACMG. Read More »

SIA chief executive, Goh Choon Phong: freighters on the market

Certainly 2012 has not been a good year for Asia-Pacific fleets, which have a 40% share of the world market. Cargo giants, Korean Air (KAL), Cathay Pacific and Singapore Airlines (SIA) have all seen their revenue go south during the year.

Cathay and SIA have parked or plan to park aircraft in coming months. Cathay, in fact, has had a slight resurgence recently on the back of Christmas orders, but the volume is still below peak 2010 numbers.

Cargo revenue for the first half of 2012 was down 7.6%, compared with the same period in 2011. Yield declined 0.4%, while load factor fell away by 4.1 percentage points, to 64.3%.

Demand for shipments from the group’s two key markets, Hong Kong and Mainland China, was well below expectations. However, Cathay introduced three new cargo services to Zhengzhou, China (March), Hyderabad, India (May) and Colombo, Sri Lanka (December) during the year.

Losses at SIA Cargo tripled from a year earlier in the quarter ending September 30. It is parking one of its 13 B747-400 freighters from next month until May 2014.

CEO Goh Choon Phong told media recently that SIA would consider selling freighters if the offers were good enough. This also applied to passenger planes, he said.

Meanwhile, at Korean Air, cargo traffic was 8% down in the third quarter, compared with 2011.

Commenting on the statistics of Asia-Pacific carriers for the first nine months of 2012 (the latest figures available), the director general of the Association of Asia Pacific Airlines, Andrew Herdman, said: “For air cargo markets, after experiencing a 3.9% year-on-year volume decline for the first nine months of the year, September was a relatively good month, only marginally below last year’s figure.”

The question is: will it continue? Herdman said the operating environment for the region remained “quite challenging”. SIA’s chief Goh went further, describing the outlook as “very challenging”.