ATW Daily News

Bisignani: Air cargo demand decline 'shocking'

Wednesday March 4, 2009

IATA DG and CEO Giovanni Bisignani yesterday warned that air cargo demand "has fallen off a cliff" and projected that revenue generated by airlines from cargo in 2009 is likely to drop 9% year-over-year to $54 billion.

In remarks delivered by video to IATA's World Cargo Symposium in Bangkok, Bisignani said, "The continued decline in cargo markets is a clear sign that we have not yet seen the bottom of this economic crisis." He noted that air cargo, which represents about 10% of airline industry revenue, is 35% of international trade by value. IATA forecasts a 5% contraction in air cargo traffic year-over-year in 2009, a significant decline considering that it follows a 4% contraction in 2008.

Bisignani commented that the "shocking fall in demand" of more than 22.5% in both December and January (ATWOnline, March 3) makes projections of a 5% traffic drop and 9% revenue dip this year "look optimistic" and called for airlines to make freight transport as cost efficient as possible.

"As we battle this crisis, we must look for opportunities that will build our future with a more efficient industry. . .in crisis, customers will only get more demanding," he said. "To meet their expectations and build a solid future for the industry, change is required."

Noting that air cargo "security costs continue to rise" and "enforcement [varies] from country to country," he pushed for the industry to lobby governments to back away from "100% cargo screening," which the US claims it will initiate in 2010. "Scanning everything loaded onto the aircraft is a waste of precious resources," he said. "To be effective, we must identify the risks involved with a supply chain approach. . .We need a globally coordinated approach that looks at the entire supply chain."

He also called for faster implementation of e-freight. "We need to modernize the old paper-based processes of air cargo," he said. "Each freight shipment is accompanied by more than 30 documents." IATA e-freight trials are underway at 26 airports worldwide. "By 2010 our target is to have the capability to remove 64% of the paper from 81% of international shipments," he said.

by Aaron Karp

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