The APAC region holds the highest market share with more than 40% of the total market; China leads the way with 15% of the total market share and is expected to be top for years to come. The more mature markets, like North America and Europe have started to recover after the global economic meltdown and are showing promising signs of growth.
The rising fuel prices has a complex effect on this market, air transport has become more expensive with the rising fuel prices, however, it is also driving a need for more efficient planes which has created a market for advanced cargo only flights. Of the current global cargo fleet 61% has been converted from old passenger flights. However, this is changing gradually and will have an impact on the market as the performance, efficiency, and reliability of new, purpose-built freighters outweigh the lower purchase prices for converted large freighters, especially for intercontinental operations, where high cargo density, larger payloads, and extended range are crucial.
When cargo is shipped on commercial aircraft, they are packed into special containers under the passenger compartment. A Boeing 747-400 aircraft can accommodate 416 passengers along with 5,330 cubic feet of cargo. Likewise, as per Airbus, A350-1000 aircraft is capable of handling 21 tons of volumetric cargo and 31.3 tons of structural cargo along with passengers in a two-class configuration. Similarly, A350-800 can carry 19 tons of structural cargo and 13 tons of volumetric cargo along with main deck passengers. This segment of airfreight is expected to experience a growth in market share and revenue in the forecast period from the current 15% in 2017, as airlines like the Emirates plan to operate 140 more Airbus A380, which have significantly larger cargo space and passenger capacity.
The increasing Economic Activity and World Trade are the most important drivers for the global airfreight industry. Although the economic conditions have been very unfavourable in the past few years, air freight has remained an indispensable tool for the transport, for time sensitive commodities like perishables, live organs, low-weight goods including consumer electronics; high-fashion apparel; pharmaceuticals; industrial machinery; and high-value intermediate goods such as auto parts.
Key Developments in the market:
May 2018: Lufthansa Cargo placed orders for two Boeing 777Fs.
May 2018: Sniffer dogs have been redeployed at British airports, to check for explosive materials.
May 2018: United Airlines and Lufthansa cargo entered into a joint venture for routes between Europe and US.
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