On the wings of a recovering market

While most airlines dread their shareholders’ meeting this year where they have to disclose their massive losses and huge cargo volume decline in 2009, thanks to increased cargo revenue spurred by the global economy’s recovery, lower fuel costs and a stronger South Korean currency in the fourth quarter, Korean Air Cargo is largely spared this fate. As the recovery gathers momentum, the airline is now focused on tapping positive business flows as well as developing new markets.

The enormity of crisis last year is by now well-known to industry players. International Air Transport Association (IATA) figures show the industry ending 2009 with cargo in a fullyear decline of 10.1 per cent – the largest ever post-war decline – with an average load factor of just 49.1 per cent.

“We are ending an Annus Horribilis that brings to a close the 10 challenging years of an aviation Decennis Horribilis. Between 2000 and 2009, airlines lost US$49.1 billion, which is an average of US$5 billion per year,” Giovanni Bisignani, IATA’s director general and CEO, says.

“The worst is likely behind us. For 2010, some key statistics are moving in the right direction. Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3 per cent. But fuel costs are rising and yields are a continuing disaster. Airlines will remain firmly in the red in 2010 with US$5.6 billion in losses,” he says.

But with economists in disagreement as to predictions of when exactly the world economy will fully recover from the recession, many have stuck withforecasts of a slow, gradual recovery for the air cargo industry. Some warn thatair cargo may not ever reach the previoushigh levels of growth witnessed prior tothe global financial crisis in mid-2008.