Boeing Predicts Return to Growth in Air Cargo Traffic

The Boeing World Air Cargo Forecast 2010/2011 predicts that world air cargo traffic will expand at a 5.9 percent annual rate over the next two decades, with worldwide air freight traffic expected to triple through 2029. Released earlier this month, Boeing's biennial report reveals that air cargo traffic rebounded strongly beginning in November 2009, and then continued on an upswing through the first eight months of 2010. As a result, Boeing predicts that world air cargo traffic will regain its 2007 peak by the end of this year. Boeing's data shows that the period from 2008-2009 marked the first time that air cargo traffic contracted for two consecutive years. The nearly 13 percent drop in cargo traffic in 2008-2009 reflected the steep plunge in industrial activity that accompanied the global economic downturn. Fortunately, industrial activity began to recover in August 2009. Then, monthly air cargo traffic statistics turned positive in November 2009, and the first eight months of 2010 have seen an estimated 24 percent growth in traffic, compared to the same period in 2009. "Economic activity world gross domestic product is the key driver of the air cargo market," Jerry Allyne, vice president, Strategic Planning and Analysis, Boeing Commercial Airplanes, said. "Following the recession and a year of recovery, world economic growth is forecast to average 3.2 percent over the next two decades." Of course, we now have to consider how this forecast will be affected by the air cargo terror threat exposed in October. Will increased security measures and the potential for longer transit times and higher costs change the demand for air freight? The Transportation Security Administration (TSA) seems committed to finding solutions that will not stifle traffic flows, but we have yet to see if the agency's preference will be overruled by legislators on Capitol Hill.