Jade Cargo focuses on future

Unable to escape the impact of the global economic crisis, China’s air cargo industry has felt the pain along with the rest of the global industry, but for China-based Jade Cargo it’s a time for action.

The speed with which the air cargo industry unraveled stunned everyone, and left in tatters the best laid plans of most cargo carriers. “At the end of last year our networkplan and budget was history,” says Kay Kratky, CEO Jade Cargo International,as he describes the rapid plunge of themarket.

“There was overcapacity in the market by at least 50 per cent, load factors on those routes that used to be the cash cows for the industry were declining dramatically and as a result, the industry started a throat cutting competition for pricing,” he said during a recent air cargo conference held in Shenzhen, China.

“We see companies operating for a zero fare, just asking for the surcharges. And this is not healthy. You can do it for a while, its just a matter of how much cash is left but this is not a sustainable model,” he says.

Overall, the cargo carriers have reduced capacity by 25-30 per cent and this process is still ongoing. “We’ll see if this capacity reduction is sufficient for the next weeks and months to come,” he says, noting that further reductions may be necessary and some carriers may also go out of business.