Global Air Freight Logistics Industry Market Research Report from IBISWorld Has Been Updated

The Global Air Freight Logistics industry primarily transports commercial cargo as well as time-sensitive freight and mail; however, because the industry moves goods throughout the world, it is dependent on the level of international trade between countries.

For these reasons, industry research firm IBISWorld has updated a report on the Global Air Freight Logistics industry to its growing report collection.

The Global Air Freight Logistics industry primarily transports commercial cargo as well as time-sensitive freight and mail. “Because the industry moves goods throughout the world, it is dependent on the level of international trade between countries,” IBISWorld industry analyst Lauren Setar says.

The industry is essential to international trade, granting it a degree of demand stability. As a result, industry revenue is expected to grow at an annualized rate of 2.1% in the five years through 2013 to reach $75.4 billion.

Due to greater freight volumes and higher prices, the industry has returned to a more sustainable growth rate, which includes an estimated increase of 2.9% in 2013Lauren Setar, IBISWorld industry analyst

During the global downturn of 2008 and 2009, demand for goods and services weakened worldwide. “This low demand led to a fall in production activity from manufacturing giants, like China, and a drop in the quantity of goods traded,” Setar says. Overall, demand for air freight declined considerably because of poor economic conditions in 2009; as a result, the industry’s revenue plummeted 24.6% that year.

However, companies around the world replenished their inventories in 2010, causing a dramatic rise in cargo demand, enabling revenue and profit margins to rebound. Due to greater freight volumes and higher prices, the industry has returned to a more sustainable growth rate, which includes an estimated increase of 2.9% in 2013.

The Global Air Freight Logistics industry has a low level of market share concentration. In 2013, the four largest players include Air France-KLM S.A., Deutsche Lufthansa AG, Cathay Pacific Airways Limited and Korean Air Lines Co. Ltd.

Government regulation is the biggest factor behind the industry’s fragmentation because regulation limits the takeover of domestic airlines by foreign airlines. Airlines attempt to bypass this limitation through code sharing and alliances. Concentration is also low due to the high costs associated with operating aircraft and the capital required for technological advances.

Revenue is expected to rise in the five years to 2018. Faster growth is expected, mainly due to expansion in newly industrialized economies. Manufacturing output in China and other Asian countries is anticipated to increase during the period, which will contribute to growth in freight volume transported in the next five years.

Demand for merchandise is expected to increase considerably in newly industrialized economies, and this demand will continue to grow across developed countries, boosting demand for air freight logistics.

It is expected that freight service providers will also increase the average fare for their services, which will add value to sales. For more information, visit IBISWorld’s Global Air Freight Logistics industry report page.

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