2009 a tough year for air cargo

Global- IATA predicts air freight volumes globally to fall 5% in 2009, following a drop of 1.5% this year.

The dip has been blamed on the current financial crisis combined with rapid falls in cargo volumes over the past two months.

IATA said cargo traffic is expected to decline by 5%, following a drop of 1.5% in 2008. Prior to this year's decline, the last time cargo had witnessed a fall was in 2001, when a 6% drop was recorded.

Giovanni Bisignani, director general and CEO of IATA said, "The outlook is bleak. The chronic industry crisis will continue into 2009 with US$2.5 billion in losses [as] we face the worst revenue environment in 50 years."

According to IATA, Asia Pacific carriers will witness more than double the losses from US$500 million in 2008 to US$1.1 billion in 2009.

With 45% of the global cargo market, the region's carriers will be disproportionately impacted by the expected 5% drop in global cargo markets next year, said IATA.

IATA continued that the region's largest market, Japan, is already in recession, while its two main growth markets, China and India are expected to deliver a major shift in performance.

Chinese growth is expected to slow as a result of the drop-off in exports, while India's carriers, already struggling with high taxes and insufficient infrastructure can expect a drop in demand following on from the tragic terror incidents in November.

"Air cargo comprises 35% of value of goods traded internationally. The 7.9% decline in October is a clear indication that the worst is yet to come for airlines and the slowing global economy," said Bisignani.