China's domestic air cargo market recovers in March

EXPERTS speaking at the recent 6th China Air Cargo Summit in Guangzhou said that the Chinese domestic air cargo market showed a slow recovery in March after three consecutive months of decline.

But delegates to the conference also heard the international air cargo market remained in poor shape and will only recover in the third quarter at the earliest, said Xinhua's report.

Li Yang, director of industry distribution and financial services of International Air Transport Association (IATA) North Asia, said the air cargo industry is suffering a deep impact from the economic crisis. By the end of 2008, every major region across the world recorded a fall in air cargo volume. Asia Pacific, which was once the fastest growing region, registered a decline of 28.8 per cent, far surpassing the fall of 24.9 per cent in developed countries.

Statistics from IATA show that the world air cargo volume fell 23.2 per cent in January. Mr Li predicted that a five per cent drop will be experienced in the global air cargo movement in 2009 and it will probably take three to five years to recover 2007 volumes.

China Southern Airlines cargo manager Luo Laijun said this year's Canton Fair will be an indication of prospects for the air cargo industry. Most freight forwarders have divulged that many buyers in Europe and the US are planning to make a purchase in Asia Pacific because their inventories are close to nil.

Although Europe and US is encouraging buying local products to stimulate domestic demand, cheaper products from Asia Pacific market should still be the chief target of buyers, said Mr Luo.

Exports to Europe from China are increasing as China and Europe have closer economic ties and the exchange rate between yuan and euro is relatively steady. On the other hand, exports to the US are low because of the recent fluctuations in exchange rates of the two currencies, said Mr Luo.

The three largest carriers in China, China Southern, Air China and China Eastern, recorded a decline of more than 40 per cent in international cargo volume during the first two months of this year, while decrease in domestic cargo had narrowed to 20 per cent.

As of March 20, China Southern's statistics showed the domestic cargo volume had come near the level in the same period a year ago, while the international cargo sector registered a 5.8 per cent drop. Mr Luo estimated that the international cargo business will stay gloomy in the early half of year, but the situation might turn for the better in the latter half.

Source: Transportweekly