Global cargo airlines market: $86.1 billion industry by 2018

Press Release   •   Aug 08, 2013 16:39 BST

The Global Cargo Airlines market primarily transports commercial cargo as well as time-sensitive freight and mail. Because the industry moves goods throughout the world, it is dependent on the level of international trade between countries. The industry is essential to international trade, granting it a degree of demand stability. As a result, industry revenue is expected to grow at an annualized rate of 2.1% in the five years through 2013 to reach $75.4 billion.

During the global downturn of 2008 and 2009, demand for goods and services weakened worldwide. This low demand led to a fall in production activity from manufacturing giants, like China, and a drop in the quantity of goods traded. Overall, demand for air freight declined considerably because of poor economic conditions in 2009; as a result, the industry's revenue plummeted 24.6% that year. However, companies around the world replenished their inventories in 2010, causing a dramatic rise in cargo demand, enabling revenue and profit margins to rebound. Due to greater freight volumes and higher prices, the industry has returned to a more sustainable growth rate, which includes an estimated increase of 2.9% in 2013.

The industry has low profit margins, which will continue to remain weak due to high fuel prices and slow economic activity in European countries; nonetheless, the weak margin is still an improvement on 2008 and 2009. Extremely high fuel prices pushed many airlines into operating losses in 2008. Then, in 2009, a sharp contraction in demand pushed more companies into the red. In 2010 operators started to experience more favorable demand conditions as manufacturing levels strengthened; however, rising fuel prices have continued to pressure profit margins. 

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