Tuesday, May 28, 2024
Charter sector climbs high amid challenging aviation outlook

Charter sector climbs high amid challenging aviation outlook

The charter sector finds itself navigating a complex landscape marked by a confluence of challenges: global trade dynamics, geopolitical uncertainties, fluctuating fuel costs, and the persistent issue of overcapacity. 

With this backdrop, rates within the charter market have experienced fluctuations over the past year, which was expected, although rates climbed higher than expected during the peak season. The surge placed pressure on customers, impacting their budgetary considerations and prompting a reassessment of their logistical strategies, although trade remained strong.

“The solution is to keep mobile as a company and pivot towards areas of the charter market that are doing well,” Dan Morgan-Evans, Global Director of Cargo at Air Charter Service (ACS), explained.

Far East impact

Increased volumes from the Asia-Pacific region have been a consistent catalyst for upward movements in rates. This surge is often attributed to various factors, such as increased production, consumer spending, or other regional economic activities. Monitoring these indicators and staying attuned to emerging trends will be paramount in anticipating market dynamics.

“Demand from the Far East during peak season always causes rates to climb but I think we will have to see how the first few months of 2024 pan out before we get a real idea of which way the market is going,” Morgan-Evans added. 

READ: Air Charter Service sees EV supply chain transform charter market

Airlines in the freighter market

The trend of traditional airlines venturing into freighter operations marks a notable evolution in the air transportation industry. This strategic shift is driven by a recognition of the growing demand for air cargo services and the potential profitability of expanding into this sector.

“Certainly, there have been past orders for freighters but I think a few of those plans have been put on the back burner or cancelled,” Morgan-Evans outlined. “Over capacity only affects part of the charter market negatively – and not significantly. More often it offers choice and value for money for the client.”

Filling the void

In the face of global conflicts and the subsequent suspension of operations by traditional carriers, the charter sector has remained resilient.

“Apart from relief missions and operations, it’s kind of business as usual,” Morgan-Evans stated.

Notably, the charter sector has played a crucial role in relief missions and support operations, particularly in conflict-ridden regions like Ukraine where the need for rapid and flexible transportation solutions is paramount.

“There was a very marked increase in emergency humanitarian flights in 2023. Firstly, the world has been pretty unstable, whether politically or through climate change,” he continued. “But also ACS has looked to improve its aid offering, with Ben Dinsdale heading up this sector now as Director of Government & Humanitarian Services – having a global oversight enables us to better service the clients and in a more coordinated way.”

READ: Importance of regional representation

Global outlook

While the broader airfreight industry is facing a potentially shaky future, the charter segment concluded 2023 on an encouraging note. Customers, confronted with the uncertainties of a changing world, increasingly turned to charters as a reliable and flexible transport method, solidifying its status as a go-to option during turmoil.

“I think we have seen customers understand the benefits of charters in an uncertain world. Through the pandemic it became the go-to transport method and with time-critical demands of the modern world it has become a necessity for many,” Morgan-Evans explained.

“I’m confident there will be plenty of opportunities in 2024 – our focus I will keep under my hat but my job will be to help grow our newer offices like Mexico and perhaps open elsewhere in the world – watch this space.” he continued.

Picture of James Graham

James Graham

James Graham is an award-winning transport media journalist with a long background in the commercial freight sector, including commercial aviation and the aviation supply chain. He was the initial Air Cargo Week journalist and retuned later for a stint as editor. He continues his association as editor of the monthly supplements. He has reported for the newspaper from global locations as well as the UK.

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