Freighters: Going the way of the dinosaurs?

With ongoing global economic lethargy causing continued stagnation in air cargo markets and new capacity mostly in the form of passenger bellies, continuously being added, many have questioned the long term viability of freighters. But a recent industry panel comprised of key executives from all-cargo carriers, combination carriers and a freight forwarder, unanimously agreed freighters are here to stay, but that a market correction – possibly with casualties – is inevitable. Donald Urquhart reports from Hong Kong.

Freighters: Going the way of the dinosaurs?

As Robert Kunen, director Hong Kong & Southern China for Air France, KLM and Martinair Cargo notes, many legacy carriers – AF-KLM group included – are applying “very strict capacity management” to cope with the downturn. This generally means either reducing freighter services, or parking them – either on the tarmac or in the desert. “We are reducing our exposure to the downturn by focusing more on belly capacity than freighters, because the bellies are of course a shared cost with our colleagues on the passenger side, which is an advantage for us.”

He notes however that not all carriers are doing this and freighter capacity is still being added. “Therefore despite the economic improvements that we are expecting over the next year we do believe there will still be over-capacity in the market,” he adds.

Speaking from a freight forwarding perspective, Corey Mahjoubian, global airfreight director at Toll Global Forwarding noted that aside from the macro-economic factors at work, “we know that it’s going to be a challenge, just based on the supply and demand situation we find ourselves in.”

On the demand side he feels the industry is caught in what he describes as an ‘innovation gap’. While people now often own multiple cell phones, computers and flat panel televisions, these consumer electronics have nearly become disposable items. The question then he says, “is what’s the next industry, the next thing that’s going to drive air cargo. I don’t see it coming.”