The world’s airlines can expect to see a 7% rise in cargo next year after a 13% drop this year butwill again make massive losses in 2010 due to a combination of low yields and rising costs, the
International Air Transport Association (IATA) predicted yesterday.International air cargo demand is expected to grow by 7% to 37.7 million tonnes in 2010(stronger than the previously forecast 5% in September), following a 13% decline in 2009, IATAsaid. But total freight volumes will remain 10% below the 41.8 million tonne peak recorded in 2007.After a dramatic 15% fall this year, cargo yields will only stabilise with a fractional 0.9% risein 2010, it added.
Cargo demand is rising faster than world trade as depleted inventories are rebuilt. Once theinventory cycle completes, growth is expected to fall back in line with world trade, the airlineassociation commented.
In its Q4 Cargo Market Analysis report, IATA wrote that the current economic revival is “veryuneven”, with a strong rebound in Asia and parts of South America but weak growth in developedmarkets. Yields are starting to improve with better load factors but low aircraft utilisation andforthcoming aircraft deliveries imply that capacity remains a threat to restoring cargoprofitability, it commented.
Overall airline revenues are expected to rise by 4.9% to $478 billion in 2010 compared to2009. But this will be 11% below the peak of $535 billion in 2008, IATA announced.
Following a decline of 4.1% in 2009, passenger traffic is expected to grow by 4.5% in 2010(stronger than the previously forecast 3.2% in September), bring total passenger numbers back inline with the 2007 peak. But passenger yields are not expected to recover from the 12% drop thisyear due to fewer business travellers and downgrading from business to economy classes.
On the cost side, an average oil price of $75.0 per barrel (Brent) is expected in 2010, upconsiderably from the $61.8 average expected for 2009. As a percentage of operating costs, fuelwill be 26% in 2010. This is considerably lower than the 32% of operating costs that fuel comprisedin 2008, but twice the 13% of operating costs that fuel represented in 2001-2002.
Airlines are thus now expected to make a combined global net loss of $5.6 billion in 2010,compared to the previously forecast loss of US$3.8 billion. For 2009, IATA expects a $11 billionnet loss.
“The worst is likely behind us. For 2010, some key statistics are moving in the rightdirection. Demand will likely continue to improve and airlines are expected to drive down non-fuelunit costs by 1.3%. But fuel costs are rising and yields are a continuing disaster. Airlines willremain firmly in the red in 2010 with US$5.6 billion in losses,” said Giovanni Bisignani, IATA’sDirector General and CEO.
