While the cargo industry has seen economic slowdowns in the past, what we experienced in the latter half of 2008 was unprecedented.
The outlook for 2009 is not much better. The economic crisis that started as a housing problem and a subprime mortgage issue in the U.S. has quickly become a global banking catastrophe. Lack of consumer confidence in the U.S. has led to drastically decreased spending, resulting in lower demand for production. And without manufacturing production, airfreight will continue to suffer.
This “global recession” is expected to continue for the next one to two years, creating a condition where only those airfreight companies that can operate with low costs can effectively compete in this environment. For airlines, this means that those operators with the most fuel-efficient, environmentally friendly aircraft will survive, leaving behind the operators that still rely on older, inefficient aircraft. Additionally, forwarders can no longer look toward the passenger belly aircraft as a source of cheap capacity. The introduction of new passenger airline security requirements for shipments from the U.S. will create many more issues, including higher costs and longer delays for screening.
Globally, we are entering an uncertain year that will include higher security measures, weakening market demand and more difficult access to capital markets. This will strain the already overtaxed and overburdened airline industry. There is a chance that fuel costs will remain lower, which will provide relief to everyone in the supply chain.
But the challenge for 2009 is clear: Lower consumer spending means less airfreight. Operating newer, more efficient aircraft will help airlines manage their costs. With the support of forwarders, those airlines that have invested for the future will remain viable for 2009 and beyond.