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Air cargo demand an overview - steve alterman

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  • 1. FEDERAL AVIATION ADMINISTRATION Annual Forecast Conference Washington, D.C. March 18, 2005
  • 2. AIR CARGO DEMAND: An Overview Stephen A. Alterman President Cargo Airline Association Washington, D.C.
  • 3. CARGO AIRLINE ASSOCIATION AIR CARRIER MEMBERSHIP
    • Board of Directors
    • ABX Air, Inc.
    • Atlas Air
    • Federal Express
    • UPS
    • Members
    • Air Transport International
    • Capital Cargo International
    • CNF, Inc.
    • DHL Express
    • First Air
    • Gemini
    • Kalitta Air
    • Kitty Hawk
    • USA Jet
  • 4. AIR CARGO OVERVIEW
    • Air Cargo Industry Segments
    • Bellies of Passenger Aircraft
    • Air Freight Forwarders
    • All-Cargo Aircraft
    • Regional Aircraft
    • All segments provide the services necessary to satisfy shipper demand.
  • 5. DEMAND DRIVERS
    • Time Definite Service (Reliability)
    • Speed
    • Traceability
    • Probably NOT Price
  • 6. DEMAND LIMITATIONS
    • Uncertain Economic Picture
    • Security Concerns
    • Escalating Fuel Prices
    • Necessary Fuel Surcharges
    • Price Competition from Other Modes
  • 7. HIGH VALUE COMMODITIES ARE TRADITIONALLY TRANSPORTED BY AIR
    • High-tech electronics
    • Human organs
    • Important documents
  • 8. WHAT THIS MEANS
    • While only approximately 2% of all freight moves by air, 45-50% of the value of freight transported qualifies as air freight
  • 9. WHO CARRIES THIS FREIGHT?
    • DOMESTIC TRAFFIC
    • 2004
    • Passenger Carriers – 24.1%
    • All-Cargo Carriers – 75.9%
    • Forecast Period (12 Years)
    • Passenger Carriers – 20.0%
    • All-Cargo Carriers – 80.0%
    • Source: 2005 FAA Forecast, March 2005
  • 10. WHO CARRIES THIS FREIGHT?
    • International Traffic
    • 2004
    • Passenger Carriers – 40.3%
    • All-Cargo Carriers – 59.7%
    • Forecast Period (12 Years)
    • Passenger Carriers – 36.4%
    • All-Cargo Carriers – 63.6%
    • Source: 2005 FAA Forecast, March 2005
  • 11. DOMESTIC v. INTERNATIONAL
    • Demand increasing more dramatically in international markets – particularly Asia
    • For 2004, FAA estimates approximately 45% more growth internationally (5.5% annually internationally v. 3.8% domestically). FAA March 2005 Forecast
    • 91% more annualized international growth than domestic for next twelve years – 2005-2015 (6.3% annually v. 3.3 %). FAA March 2005 Forecast
  • 12. DOMESTIC v. INTERNATIONAL
    • Relatively smaller domestic growth
    • Less than robust domestic economy
    • Mature industry
    • Greater international growth
    • Opening of new markets
    • Expanding Asian economy
  • 13. CONCLUSION
    • Demand for air cargo services continues to grow – especially in international markets
    • Industry members are well positioned to meet these growing demands
    • Governments must move to further open markets to allow carriers to meet the needs of the world’s shippers