Transcript click here to presentation

The Economic Downturn And The
Impact On Air Cargo
Ram C Menen
Divisional Senior Vice President Cargo
Air Cargo India
skycargo.com
Mumbai
2nd February 21
Economy Is Bouncing Back!!
World air cargo traffic growth has been resilient,
averaging 6.5% per year since 1970
15%
13.3%
12.2% 12.1%
12.1%
10.7%
10.5%
9.9%
10%
7.8%
5%
9.8%
9.6%
10.5%
10.1%
9.8%
12.5%
200
12.7%
12.2%
10.3%
9.3%
6.1%
5.8%
5.4%
8.5%
7.1%
6.3%
150
6.5%
5.1%
3.7%
2.4%
3.2%
2.6%
1.9%
0.9%
3.2%
1.7%
100
0.1%
2007
2005
2003
2001
1999
1997
1995
-2.1%
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
0%
-5%
-5.4%
-10%
50
-5.9%
0
% Traffic Change
Actual Traffic, Revenue Tonne Kilometers (RTKs)
Source: Boeing : 2008 world air cargo traffic data
World Air Cargo Traffic, RTKs, billions
250
1971
% Change in Cargo Traffic, Year-Over-Year
20%
Economic Cycles
2nd Oil
Induced
Economic
Crisis
20%
Oil Shock,
Financial
Crisis
Since 1978, 5.8%
250
Since 1988, 4.8%
Since 1998, 3.4%
15%
13.3%
12.2% 12.1%
12.1%
10.7%
10.5%
9.9%
10%
5%
12.5%
9.8%
9.6%
10.5%
10.1%
9.8%
7.8%
200
12.7%
12.2%
10.3%
9.3%
6.1%
5.8%
5.4%
8.5%
7.1%
6.3%
150
6.5%
5.1%
3.7%
2.4%
3.2%
2.6%
1.9%
0.9%
3.2%
1.7%
100
0.1%
2007
2005
2003
2001
1999
1997
1995
-2.1%
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
0%
1971
% Change in Cargo Traffic, Year-Over-Year
Asian
Economic
Recession
Gulf War I
Recession
-5%
-5.4%
-10%
50
-5.9%
0
% Traffic Change
Actual Traffic, Revenue Tonne Kilometers (RTKs)
Source: Boeing : 2008 world air cargo traffic data
World Air Cargo Traffic, RTKs, billions
1st Oil
Induced
Economic
Crisis
Technology
Market
Collapse,
Terrorists
Attacks,
SARS, Gulf
War II
Recession
World Containership and Air Cargo Traffic Have
Been Affected in 2009
World air cargo traffic,
RTKs, billions
World maritime dry cargo traffic in containers,
RTKs, billions
300
World air cargo traffic
World air cargo traffic
World maritime dry cargo in containers
2008 vs. 2007: -5.9%
12,000
2009 vs. 2008 -15.8%
200
Comparative traffic growth rate
1987-2007
1997-2007
Air cargo
5.6%
4.1%
Dry cargo in containers
9.9%
9.8%
8,000
100
4,000
World containership traffic
2008 vs. 2007: +5.7%
2009 vs. 2008 -14%
0
0
1987
1989
1991
1993
Source: Boeing : world air cargo traffic data
1995
1997
1999
2001
2003
2005
2007 2009F
World Air Cargo Declined By 3.4% in October 2009
Relative to Traffic Levels of October 2008
25%
Mo. % Change - History
12-Mo. Avg. History
15%
10%
5%
-10%
-15%
-20%
-25%
-30%
Sources: U.S. Department of Commerce, AAPA, AEA, ATA, and the Boeing World Air Cargo Forecast.
Ja
nu
ar
y
20
09
Ja
nu
ar
y
20
08
Ja
nu
ar
y
20
07
Ja
nu
ar
y
20
06
Ja
nu
ar
y
20
05
Ja
nu
ar
y
20
04
Ja
nu
ar
y
20
03
Ja
nu
ar
y
20
02
Ja
nu
ar
y
-5%
20
01
Ja
nu
ar
y
0%
20
00
Monthly Percentage Change Over Prior Year
20%
A Lot Of Capacity Has Been Parked…
130
5
120
Number of Freighter Aircraft
120
Stored
In-Service
110
100
90
80
70
60
38
50
2
29
40
14
30
0
20
10
16
3
0
5
6
100SF
200C
28
32
3
38
26
1
3
18
3
200F
200SF
Source: Ascend database, Boeing as of January 2010
300SF
400SF 400BCF 400ERF
400F
400LCF
Global Economy Has Now Reset Itself
2nd Oil
Induced
Economic
Crisis
20%
Oil Shock,
Financial
Crisis
Since 1978, 5.8%
250
Since 1988, 4.8%
RESET > REBOOT
Since 1998, 3.4%
15%
13.3%
12.2% 12.1%
12.1%
10.7%
10.5%
9.9%
10%
5%
12.5%
9.8%
9.6%
10.5%
10.1%
9.8%
7.8%
200
12.7%
12.2%
10.3%
9.3%
6.1%
5.8%
5.4%
8.5%
7.1%
6.3%
150
6.5%
5.1%
3.7%
2.4%
3.2%
2.6%
1.9%
0.9%
3.2%
1.7%
100
0.1%
2007
2005
2003
2001
1999
1997
1995
-2.1%
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
0%
1971
% Change in Cargo Traffic, Year-Over-Year
Asian
Economic
Recession
Gulf War I
Recession
World Air Cargo Traffic, RTKs, billions
1st Oil
Induced
Economic
Crisis
Technology
Market
Collapse,
Terrorists
Attacks,
SARS, Gulf
War II
Recession
-5%
-5.4%
-10%
50
-5.9%
0
% Traffic Change
Actual Traffic, Revenue Tonne Kilometers (RTKs)
Source: Boeing : 2008 world air cargo traffic data
Airfreight Rises Sharply During Q4 2009
Source: IATA Economics
Inventory To Sales Ratio
Freight Growth By Region
Source: IATA Economics
World Trade (All Modes) is Forecast to Resume
Growing at the pre-2002 Trend in 2010
60,000
30
Trade, USD, billions
20
40,000
10
30,000
0
20,000
-10
10,000
-20
0
-30
1995
2000
2005
Source: IHS Global Insight, September 15, 2009
2010
2015
2020
2025
Percentage change over previous year
Imports, USD, billions
Annual % change, projection, September 2009
50,000
Trends
The Inventories Push US GDP
Up By 5.7%
The U.S. economy grew at its fastest pace
in six years in the fourth quarter, expanding
5.7 percent as companies scaled back their
attempts to cut inventories, the U.S.
Commerce Department said Friday the 29th
of January 2010.
• Japanese factory output +2.6%
• German retail sales figures +2.8%
• UK consumer index remains +27
• Indian GDP growth forecast +7.3%
• US stock market has been stable for the
past 11 months and is expected to stay
this way during 2010
We Are Not Out Of The Woods Yet –There Will Be
Challenges….
Balancing the global economy
Dealing with environmental and
climate change issues sensibly
Dealing with paradigm shift in retail
markets: China, India vs. The World
Newly developing consumer markets
Air Cargo Will Grow
Airfreight will continue to grow with the main
driver being the advancement in the science
of supply chain management and, within this,
inventory and logistics management.
We need to get the air cargo business back
to sustainable profitability in order to ensure
Investments to bring growth capacity back
to the market
More Efficient 747-400 Freighters are
Replacing 747 Classic Freighters
Number of 747 Freighter Aircraft
350
300
260
250
400SF
747-400
series in
majority
279
400LCF
400F
400ERF
200
400BCF
300SF
150
200SF
200F
100
44 747F Classics
have been taken out
of service
since January 2009
50
Se
p
D - 03
ec
M - 03
ar
Ju - 04
n
S e - 04
p
D - 04
ec
M - 04
ar
Ju - 05
n
S e - 05
p
D - 05
ec
M - 05
ar
Ju - 06
n
S e - 06
p
D - 06
ec
M - 06
ar
Ju - 07
n
S e - 07
p
D - 07
ec
M - 07
ar
Ju - 08
n
S e - 08
p
D - 08
ec
M - 08
ar
Ju - 09
n
S e - 09
p
D - 09
ec
-0
9
0
Source: Ascend database, Boeing as of January 2010
200C
100SF
Focus Has To Be On:
Business partnerships and relationships
Looking for operational efficiencies
Provision of sustainable capacity to ensure
right capacity, at the right time, at the right
place to allow unconstrained growth
Cost efficiency thru better transparency and
transactional efficiency: “e-Freight”
Leveraging Technology Will Be Key
IATA e-freight: Benefits
Better for the environment
IATA e-freight will eliminate more
than 7,800 tons of paper
documents, the equivalent of 80
Boeing 747 freighters worth of
paper.
Up to US$4.9 billion annual net
benefits across the supply chain
Looking Ahead
• Asia Pacific is set to continue to lead the
way with China and India in the forefront
of growth
• Growth is also set to be above average
in the Middle East, Africa and Latin
America, however, it will be slower in
more mature markets like Europe and
Japan
Thank You
skycargo.com
Economic Growth in 2010 Is Likely To
Remain Geographically Uneven
Source: IATA Economics: www.iata.org/economics
Regional Airfreight Data Reflects The Uneven
Growth Data
Source: IATA Economics: www.iata.org/economics