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SINGAPORE: Air cargo freight rates have increased between 30 and 50 per cent so far this year and they could rise further.
To stabilise the freight rates, market players want airlines to up capacity to cope with improving demand.
Speaking on the sidelines of an industry event on Friday, Changi Airport Group said freight volumes could return to pre-crisis levels in a couple of years.
The Executive Council Meeting of the Federation of Asia Pacific Cargo Associations is being held in Singapore.
It's getting more expensive to transport cargo by air and industry players said that's because freight carriers aren't ramping up capacity to meet rising demand.
Steven Lee, chairman, Singapore Aircargo Agents Association, said: In my opinion, I think it's because of the reduction in capacity. Some airlines are still parking their aircraft in the desert. And then of course the ocean carriers are going slow in selling so these factors are what aggravated demand."
Demand for air travel and freight has taken off this year as the global economy recovers.
The International Air Transport Association (IATA) said passenger demand grew at an annualised rate of nine per cent in the first quarter while air freight demand expanded by 26 per cent.
IATA added that Asia saw a 33 per cent on-year increase in air freight traffic in April.
Despite the rebound, industry players remain cautiously optimistic.
Albert Lim, Division Head, Cargo, Logistics Development, Changi Airport Group, said: "For this year we will probably still be below the pre-crisis level. But I think hopefully if the economic growth can be sustained and barring any unforeseen circumstances, hopefully over the next two to three years, we can recover to pre-crisis level."
However, observers believe that the industry is likely to continue to see volumes increase in 2010, at a similar pace to the first half of the year.
Overall, the air freight segment is seen to be more resilient.
IATA said the volcanic ash cloud which grounded flights across Europe in March did not hit air cargo as hard.
International passenger volume fell by 5.5 per cent in April while freight was less affected dipping just 0.5 per cent on month. - CNA/vm
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