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FEDERAL AVIATION ADMINISTRATION. Annual Forecast Conference Washington, D.C. March 18, 2005. AIR CARGO DEMAND: An Overview. Stephen A. Alterman President Cargo Airline Association Washington, D.C. Board of Directors ABX Air, Inc. Atlas Air Federal Express UPS. Members

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Presentation Transcript
federal aviation administration

FEDERAL AVIATION ADMINISTRATION

Annual Forecast Conference

Washington, D.C.

March 18, 2005

air cargo demand an overview

AIR CARGO DEMAND:An Overview

Stephen A. Alterman

President

Cargo Airline Association

Washington, D.C.

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

CARGO AIRLINE ASSOCIATION AIR CARRIER MEMBERSHIP
air cargo overview
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.

demand drivers
DEMAND DRIVERS
  • Time Definite Service (Reliability)
  • Speed
  • Traceability
  • Probably NOT Price
demand limitations
DEMAND LIMITATIONS
  • Uncertain Economic Picture
  • Security Concerns
  • Escalating Fuel Prices

Necessary Fuel Surcharges

Price Competition from Other Modes

high value commodities are traditionally transported by air
HIGH VALUE COMMODITIES ARE TRADITIONALLY TRANSPORTED BY AIR
  • High-tech electronics
  • Human organs
  • Important documents
what this means
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
who carries this freight
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

who carries this freight10
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

domestic v international
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
domestic v international12
DOMESTIC v. INTERNATIONAL
  • Relatively smaller domestic growth

Less than robust domestic economy

Mature industry

  • Greater international growth

Opening of new markets

Expanding Asian economy

conclusion
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