JAPAN: Japan’s air cargo sector in modest recovery mode
After 2009’s very steep falls in volumes, Japan’s airfreight sector is now enjoying a recovery, despite the repercussions of Japan Airline’s bankruptcy and ongoing restructuring, according to the latest report from Business Monitor International (BMI). BMI forecasts that cargo volume will rise by 2.5 per cent this year to 2.01 million tonnes, a small improvement […]
December 1, 2010
After 2009’s very steep falls in volumes, Japan’s airfreight sector is now enjoying a recovery, despite the repercussions of Japan Airline’s bankruptcy and ongoing restructuring, according to the latest report from Business Monitor International (BMI). BMI forecasts that cargo volume will rise by 2.5 per cent this year to 2.01 million tonnes, a small improvement after 2009’s 10.6 per cent slump, but nevertheless a move in the right direction. Airfreight carried will rise a little more strongly, up by 4.8 per cent to 5.81 billion tonneskms (FTKs). Business Monitor International (BMI) is forecasting a 2.5 per cent growth for Japan’s air cargo sector for the full-year 2010 to just over two million tonnes. The report went on to note that All Nippon Airways (ANA) expanded its regional freight operations by adding new flights to China, Hong Kong and Taiwan from 31 October 2010. Increased demand on these routes and reduced competition from the country’s largest air carrier Japan Airlines (JAL), which amid bankruptcy proceedings shifted its operations away from the cargo market, prompting ANA to add freighters. ANA will increase cargo services on the Tokyo Narita-Shanghai Pudong route from four to six a week. Flights between Narita and Taipei will also increase from three to six, while the airline will expand flights from three to four between Narita and Hong Kong. According to ANA, the company’s better-than expected forecast for 2010 lies in a lesser exposure to Western markets compared with many of its rivals, coupled with a strong focus on Asian markets. In particular, the company is banking on strong Chinese growth to boost long-term revenues. The head of ANA Cargo, Kiyoshi Tonomoto, as cited by Bloomberg, forecast intra-Asian sales to double to JPY200 billion (US$2.3 billion) in the next few years due to an increase in Chinese consumer demand for cars and other high-end goods. BMI said the macro environment facing Japan’s freight industry remained challenging as the country entered the fourth quarter of 2010. After over a year in office, the new administration of the Democratic Party of Japan (DPJ) had failed to make significant headway to reform the Japanese political and economic system, and was immersed in internal leadership struggles. The stagnant economy continued to be a major source of concern. BMI also continued to see a poor investment outlook, muted consumer spending and a downturn in exports, as Chinese and US demand was expected to falter. After falling by 5.8 per cent in the recession year of 2009, BMI estimates that Japanese GDP will grow by 1.9 per cent in 2010, but will dip down below 1 per cent in 2011. In real terms, Japan’s foreign trade (imports plus exports) slumped by 21 per cent during the global recession in 2009. BMI is predicting an 8.1 per cent recovery this year, followed by lower growth of 4.8 per cent in 2011, as we enter potential global ‘double dip’territory.