A recovery in the works?
This month’s edition of Payload provides an interesting glimpse into the current state of the industry and where it could, perhaps, be headed.
January 30, 2014
By Donald Urquhart
This month’s edition of Payload provides an interesting glimpse into the current state of the industry and where it could, perhaps, be headed. The latest International Air Transport Association (IATA) figures show a small but glimmering light at the end of what has seemed like and endless and very dark tunnel. Consecutive months of cargo demand growth – albeit fairly small – have continued to grow gradually larger and perhaps most important for the global industry, Asian demand growth has finally returned.
What the future holds for Asian growth is unclear, as China’s preeminent status as the world’s manufacturing capital – while unlikely to drastically change in the short term – is clearly changing as the country’s economy grows and evolves. Rising labour costs, a rapidly growing domestic market and shifting of manufacturing to other locations – either for diversification of production or for lower labour cost – is clearly happening as we speak.
The rise of the BRIC countries continues but as the recent Agility Emerging Markets Logistics Index has highlighted, Asia’s developing countries are likely to continue growing faster than other emerging markets, despite stumbles by India and caution signs in China. This points again to the familiar refrain that the intra-Asia market will soon be the place to be and next year it will likely get a boost when the Association of Southeast Asian Nations (ASEAN) economic integration takes effect. This is certainly being watched closely by Asian carriers, such as Garuda Indonesia which is also featured as this issue’s cover story. For Garuda its been a roller coaster ride over its 65-year history, but judging by its transformation over the last few years, looks set to be riding high going forward.