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.
CARGO AIRLINE ASSOCIATION
AIR CARRIER MEMBERSHIP
Board of Directors Members
ABX Air, Inc. Air Transport International
Atlas Air Capital Cargo International
Federal Express CNF, Inc.
UPS DHL Express
First Air
Gemini
Kalitta Air
Kitty Hawk
USA Jet
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
Time Definite Service (Reliability)
Speed
Traceability
Probably NOT Price
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-tech electronics
Human organs
Important documents
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?
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 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
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. INTERNATIONAL
Relatively smaller domestic growth
Less than robust domestic economy
Mature industry
Greater international growth
Opening of new markets
Expanding Asian economy
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