Time for the industry to reshape itself: IATA

The air cargo industry must sit down, take stock and collaboratively come up with a new business model and processes that fit the changing realities of the marketplace, the International Air Transport Association (IATA) told reporters at its annual media briefing. Donald Urquhart reports from Geneva.

Time for the industry to reshape itself: IATA

The world has changed dramatically in its just over 100 year history and yet the air cargo industry is still applying the same business model that it has relied on for at least the last four decades – certainly since the advent of the widebody aircraft – notes IATA’s director, cargo distribution, Glyn Hughes.

“We know we have a mature business model and we believe the industry must reshape – we need to take stock of where we are and what we need to do to reshape ourselves for new realities and future trends,” he said.

These changing realities are manifold and diverse and throw up many challenges, with Hughes noting that the global economic turbulence that has persisted over the last few years is likely to be an ever-present challenge for the air cargo industry. “Traditionally air cargo has always been the barometer of where the rest of industry is going but clearly we can’t say that anymore,” he notes, adding there is also increasingly innovative competition from different transport modes.

There is also the problem of the changing nature of the commodities that the air cargo supply chain transports. “We know the mainstay of air cargo is technology based – and of course technology is the greatest area of innovation in terms of production and manufacturing. As the technology that we use on a day-to-day basis becomes smaller, we might be carrying more of it by air freight, but what we’re carrying aggregates to less and less volume. This is certainly a significant impact as we go forward.”