Air cargo operators are struggling to maintain profitability in the face of slower growth rates, high fuel costs and strong competition from other modes of transport, particularly in Europe. Airlines face heavy investments in new aircraft to modernise their fleets to improve fuel efficiency and to meet demand, which is still rising, albeit at slower rates than expected, as well as the higher growth rates forecast for the long term. Carriers are accelerating the withdrawal from service of older aircraft in order to cut operating costs.
Boeing, one of the duopoly big jet makers alongside Europe’s Airbus, blames much of the slowdown in growth rates on the steep rise in jet fuel prices since late 2004. In the longer term, however, it is still forecasting that world air cargo traffic will expand at an average annual rate of 6.1 per cent over the next 20 years, tripling traffic levels, with economic activity, measured by world gross domestic product (GDP), the main driver for air cargo growth.
