Recession worst since 1970s for air cargo industry

PHOTO/James MacPherson/AJOC
The world air cargo industry is in its worst slump in more than 30 years, mostly because of ailing Asian and domestic economies rather than from the impact of the terrorist attacks, according to Boeing Co. research.

But the slide should be short-lived, as growth is projected to increase to historic levels by next fall. Despite the largest dip in three decades, the Seattle-based aircraft maker still expects air cargo traffic to triple over the next 20 years.

"This recession is the worst the air cargo industry has seen since 1970,’’ said Tom Hoang, Boeing’s regional cargo marketing director.

World air cargo traffic levels are down 8 percent from January through September this year, compared to the same period in 2000, Hoang said.

"Even prior to the events of Sept. 11, the world air cargo industry had been in a state of recession,’’ Hoang said. "Sept. 11 fueled the current situation we’re in.’’

The world air cargo industry has enjoyed an average annual growth of nearly 8 percent annually over the last three decades, Hoang said.

The slump began a year ago, Hoang said, and is blamed on economic turmoil in Asia and the United States and the collapse of computer and telecommunications equipment sales, which represent about a quarter of all domestic air imports and exports.

The war in Afghanistan actually leveled some of the losses from the electronic equipment shipping slowdown, Hoang said.

"The U.S.-led coalition military ramp-up in the Mideast has absorbed a great deal of freighter capacity, at least temporarily,’’ Hoang said. New federal rules diverting mail and cargo from the bellies of passenger planes to freighter aircraft also helped.

Historically, Hoang said, growth in air cargo jumps significantly immediately after slow or negative-growth years.

Hoang said the company’s projections for air cargo growth over the years have nearly hit the actual numbers.

Ted Stevens Anchorage International Airport, one of the busiest cargo airports in the United States, uses projection data from Boeing and other aircraft makers to forecast future growth.

Last month, airport director Morton Plumb said a forecasted 6 percent annual growth in cargo operations in Anchorage is probably overly optimistic, and he pegged the number at about 2 percent annual growth over the next few years. The new projections lessen the need for airstrips to be built outside of the facility’s current boundaries by 2020.

Plumb said cargo activity from Federal Express and United Parcel Service was up in November compared with the same month a year ago. Passenger flights from Alaska Airlines, Northwest Airlines and Peninsula Airways also increased over the same period, he said.

"It’s been better than we expected,’’ Plumb said. "There are some positive indicators that provide for some cautious optimism.’’

Dave Carlstrom, director of marketing at Fairbanks International Airport, said passenger traffic in October was up 3.6 percent over a year ago and cargo levels there have remained steady.

Jack Walsh, an Alaska Airlines spokesman in Seattle, said the airline has kept all of its flights in Alaska since the events of Sept. 11. Ridership on the routes the airline serves Outside is down less than 5 percent, compared with a 20 percent average downturn for other carriers, he said.

"We’re very pleased with that,’’ Walsh said. "We’re still losing money, but we haven’t parked any of our airplanes in the desert and we haven’t laid off any people."

12/30/2001 - 8:00pm