Boeing Forecasts Air Cargo Growth

Boeing has predicted that the global air cargo market will expand at a 5.2% annual rate over the next 20 years.
According to the company’s World Air Cargo Forecast 2012/2013, growth will be driven by a global gross domestic product (GDP) that will nearly double over the forecast period.  Trade is expected to increase through liberalisation of markets, while more efficient aircraft and infrastructure improvements will reduce the cost of air cargo.  Boeing released the biennial forecast at the International Air Cargo Forum and Exhibition 2012 in Atlanta.  It shows that air cargo traffic will grow over the long term despite current near-term market weakness and worldwide economic uncertainty.  Boeing says the industry languished following the 2010 recovery, posting slight declines in traffic in 2011 and thus far in 2012.
Tom Crabtree, Regional Director, Business Development & Strategic Integration, Boeing Commercial Airplanes, commented:  “Current industry uncertainty has brought a disparity of viewpoint concerning the future of the air cargo business, but economic activity – particularly world gross domestic product and industrial production – remains the key driver of the air cargo market.  Over the long term, indicators such as GDP growth at 3.2% and the need for greater operational efficiency will prevail in the marketplace.”
Boeing forecasts the world freighter fleet will increase to 3,198 aircraft from 1,738 by 2031 and it expects that large freighters – such as its Boeing 747 and 777 – will represent 36% of the fleet, compared to 31% today.  It believes that the “significant efficiency and capability” advantages of large freighters will enable carriers to manage their projected traffic growth without increasing the number of aircraft proportionately.  The company’s forecast also shows that freighter demand will be met by 935 new factory-built aircraft, valued at $250 billion, with 1,820 freighters coming from passenger-to-freighter conversions.  Conversions will account for about 66% of total demand.
“Air cargo is and will continue to be a vital tool for global businesses and commerce in the management of supply chains and bringing critical goods to market,” said Mr Crabtree.  Those markets connecting the Asia-Pacific region are predicted to lead the industry in growth, with domestic China and intra-Asia traffic experiencing the highest percentage traffic growth, at 8% and 6.9% respectively, over the 20-year forecast period.  North America-Asia, Europe-South Asia, Europe-Asia, and Europe-Middle East are also predicted to be above the world average.  Boeing adds that fuel costs are expected to be volatile, but are not anticipated to move significantly higher than current levels.  Additionally, it believes that shippers of such cargo as perishables and very high value commodities will continue to appreciate the speed of air cargo.