The associated fee of shipping air freight world wide is slumping, but some firms say the world’s shift to flying goods world wide will keep the market attractive for years.
“I do not think it’ll give back share to other types of transportation,” Boeing CEO Dave Calhoun told reporters at an industry conference in Washington, D.C., last month. “I feel that it should get back to its earlier pace of growth.”
Air freight is a tiny a part of the general cargo market, but supply chain problems, travel restrictions and voracious consumer spending pushed the area of interest to the forefront throughout the pandemic.
Boeing and Airbus are each selling freighter versions of their newest wide-body planes, that are more fuel-efficient than older cargo jets, and demand to convert older passenger planes into freighters has been so strong some slots are booked up for years.
Traditional ocean freight firms like Maersk have recently gotten into the air cargo market. And passenger airlines have reaped the rewards of strong cargo demand throughout the Covid pandemic to complement traditional revenue streams.
 Belly cargo is unloaded from an American Airlines Boeing 787 Dreamliner at Philadelphia International Airport.
Leslie Josephs | CNBC
Air freight’s recent cost declines are a departure from a 12 months ago when frantic firms world wide drove air freight rates to record highs ahead of the year-end holidays as they paid as much as fly and avoid chaos in ocean shipping like clogged ports.
Now concerns in regards to the economy, shifts in consumer pandemic spending habits — e-commerce binges this summer gave way as an alternative to a stampede of vacation travel — and a rise in capability are pushing air freight rates downward.
Belly cargo carried in passenger planes has added to the world’s capability as travel demand, particularly long-haul international, has returned.
FedEx last month shocked investors by pulling its guidance and announcing major cost cuts, including removing air capability. Its CEO forecast a world recession.
“The most important single expected contributor in fiscal ’23 might be the changes we’re making to our express air network as we cut global flight hours,” FedEx CEO Raj Subramaniam said on an analyst call in September.
Consumers could have eased off of their cooped-up shopping frenzy throughout the height of the pandemic, but they are not prone to change into much less demanding.
“For those who have a look at the e-commerce segment of air cargo, that has grown significantly and that is probably not going to cycle back because we have all learned to amass things otherwise,” said Rob Morris, global head of consultancy at Ascend by Cirium, an aviation data firm.
