MergeGlobal boss gives pessimistic view of air cargo

The next two years will not be plain sailing for airlines despite an encouraging recovery in the freight market since last fall, according to David Hoppin, managing director of transportand logistics analyst MergeGlobal. Airfreight shrank by an unprecedented 26 per cent in value terms in 2009, from US$60.7 billion to $44.9 billion. By February 2010, […]


The next two years will not be plain sailing for airlines despite an encouraging recovery in the freight market since last fall, according to David Hoppin, managing director of transportand logistics analyst MergeGlobal.

Airfreight shrank by an unprecedented 26 per cent in value terms in 2009, from US$60.7 billion to $44.9 billion. By February 2010, volumes were still nine per cent below the peak of two years ago and while Hoppin does not think a double-dip recession is inevitable, he did warn delegates at the Executive Summit of The International Air Cargo Association (TIACA) in Leipzig in May that he was “deeply concerned” about the macroeconomic situation in the US and parts of the Eurozone.

The US saw two consecutive years of declining consumption in 2008 and 2009, for the first time since the 1930s. High unemployment levels were also likely to remain through 2011 in North America and Europe. This reduced demand formajor lines of flown goods including clothing, electronic products and toys,he noted.Hoppin said the “debt-fueled spendingbinge of recent years” was over thanks tohigh level of household debt, which wasapplying “the force of gravity on consumerspending”.

Observing that as government stimulus packages are coming to an end and the restocking phase is winding down, growth will now be more muted with Hoppin predicting it will take until the second half of 2011 before the airfreight industry returned to its pre-recession level. Intercontinental trade as a percentage of world GDP will stay above the 10 per cent mark, but airfreight’s share has fallen to 3 per cent as the result of massive growth in deepsea container shipping, he said.