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Ingrid Lobo: Quality Improvement Management, Lufthansa Cargo, Dubai, United Arab Emirates
Mohamed Zairi: European Centre for TQM, University of Bradford, Bradford, UK
1 An analysis of the air cargo industry
Air cargo industry projections
The world air freight industry is expected to more than triple in the next 20 years, growing at an average of 6.7 percent per year and significantly outpacing passenger growth in all major markets. This prediction comes from David F. Pierce, Regional Director of market revenue analysis for Boeing commercial airplane group, Chairman of the Research and Development Committee for The International Air Cargo Association (TIACA), and an industry official well known for his annual predictions about the industry.
In the year 2015, air cargo carriers will fly more than 375 billion revenue tonne kilometers (RTK) annually - more than three times the amount flown today. Air freight shipping is increasing primarily because:
- The fluctuating US dollar has increased the demand for US goods overseas.
- Labour costs and interest rates remain low, as fuel prices tend to vary.
- Businesses worldwide have seen the need for express cargo shipping.
The greatest growth, Pierce said, will occur in the intra-Asian freight markets, followed by North America-Asia, Europe-Asia and Australia-Asia, and North America-Europe. Intra-Asia growth will be 9 percent, Pierce predicted, while the world average is expected to be 6.7 percent per year.
Pierce also observed that the US domestic express market has become the standard for the industry, far outperforming mail, charter and scheduled freight. The international express market share will continue its expansion, he said, growing as much as 40 percent between 1995 and 2015.
While the market grows, the industry yield trends, reflecting productivity efficiencies and intense competition, will continue to decrease, going down about 2.5 percent per year. Currently, air cargo revenues are about one-fifth the total air logistics revenues in the $200 billion industry of air logistics. Air cargo accounts for about 16 percent of the revenue of passenger airlines, Pierce said.
As the world air cargo capacity grows 5.7 percent annually, the traffic will grow 6.7 percent. Freighters that carried 35 percent of the air cargo in 1995 will be carrying 44 percent by 2015, Pierce said. This represents a freighter fleet requirement of 1,334...