The air freight market is going through a challenging phase: it is back to the pre-pandemic level and acting in a self-destructive manner, Frank Ziesemer, the CEO of the international air cargo company Strike Aviation Group claims.
According to him, the good thing about the current market situation is that it will separate the healthy and needed companies from those less needed.
“I am pretty sure that some of the air cargo carriers which are investing heavily in technologies and human resources will set the new standard for the entire air cargo industry”, he noted.
The CEO of Strike Aviation shares his insights on the air freight market ahead of the world’s largest trade fair for logistics and mobility – Transport Logistic 2023 – which will take place on May 9 to 12 in Munich. The four-day conference is the leading platform for international networking in the logistics industry and offers a wealth of expert knowledge.
Market-shaping trends
Frank Ziesemer points out that among the trends currently affecting the air cargo industry is the excess of new freighter aircrafts entering the market without a clear strategy for passenger or freighter market segments.
“During the pandemic, everybody was looking out for freighters, because passenger aircrafts were grounded. So, the airlines shifted towards cargo aircrafts without any clear strategy just to satisfy the market’s needs. Currently, air cargo carriers increase frequencies and capacities to gain market shares. Some of them do it without calculating the costs or profit and loss and without receiving any state aid, which could lead to unforeseen difficulties. However, air cargo carriers investing heavily in technologies and human resources will set the new standard for the entire air cargo industry,” Ziesemer anticipates.
There is also overcapacity of the passenger airlines in the market with the airlines coming back to the pre-pandemic schedule and acquiring new and larger aircrafts, for instance, A350 vs A330.
“For example, airlines like Iberia, and Finnair went back to the pre-pandemic schedule, and with the new aircrafts, they doubled their capacity, especially in the North Atlantic region. This all results in lower rates,“ the CEO of Strike Aviation added.
More narrow-body aircrafts
According to Ziesemer, another trend that will have a significant impact on the global airfreight market is that several passenger airlines, such as Jet Blue, are purchasing more brand-new narrow-body aircrafts (A321 XLR/extra-long range) to serve the North Atlantic market.
“These aircrafts can fly for non stop over the Atlantic, which means that they will begin to operate on routes from the North Eastern US and Canada to Europe, such as London, Amsterdam, Madrid, Lisbon, and Paris.
Because these aircrafts do not carry as much air cargo as wide-body aircrafts, they will have a remarkable and positive impact on the Airfreight Prices”, the CEO of Strike Aviation noted.
In the next five years, according to Frank Ziesemer, this action will significantly reduce the air cargo capacity on the North Atlantic routes between Western Europe and the northeastern regions of Canada and the US, as well as from Europe to the Middle East. Therefore, integrators like FedEx and UPS will profit from this move and enhance their positions in developing countries, as well as airlines like Air Canada because they have a mixed fleet of freighters and passenger aircrafts.
People and technologies
The Strike Aviation company, on the other hand, has a strong position in the market because it adheres strictly to the business plans of the airlines we represent and serves as a practical tool to develop those businesses.
“Our Main target is to help airlines in fulfilling their cargo budgets. Strike Aviation develops new routes and combinations of routes to increase the profitability for the carriers we represent. We anticipate creating new routes for our carriers and focusing on high-yield niches. I also believe that Strike Aviation is on its way to becoming the market leader when it comes to human resources and technology”, Ziesemer stated.
He claims that the absence of educated specialists in the air cargo sector is the main reason it is difficult to satisfy markets. Strike Aviation, however, has an advantage in this regard as it dedicates time to educate people internally.
“We attract young professionals by offering them the education, and they can improve their skills by working for our company. Resultantly, these specialists have the most extensive backgrounds in our business. Thus, we give our represented carriers a significant advantage by providing a team of competent personnel”.
As regards technologies, AI will play a bigger role in the air freight sector, but only if operational industrial standards are implemented and enforced in markets like Latin America and Africa.
“The EU, North America, and China’s populations are over aged, while Latin American and African countries with their young population offer more promising opportunities. At the same time, technology with the human factor and capital will work out for the benefit of all continents,“ Frank Ziesemer concluded.
