Reality check for air cargo

The air cargo industry “is living in several different realities,” reports the International Air Transport Association.

The ability of airlines to recoup aggregated fuel costs is critical to staying in the black for the year, said IATA. Slower economic growth makes these challenges all the more difficult:

“It is certainly not the time to burden the industry with increases in other costs, including taxation,” said Tony Tyler, IATA’s Director General and CEO.

IATA is forecasting an industry profit of $4 billion for 2011 which is a 78 percent fall from the $18 billion that the airlines made in 2010. On anticipated revenues of $598 billion, this translates to a net industry margin of 0.7 percent.

Freight volumes have not grown since July-August 2010. May 2010 was the post-recession re-stocking peak, compared to which the June 2011 international freight market was 6 percent smaller.

So here’s the reality check: While world trade is expanding at 7 percent a year, the benefit is being realized more by modes of transport other than air.