The industry's future growth will mainly be due to expansion in newly industrialized economies
Los Angeles, CA (PRWEB) June 09, 2013
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. “The industry is essential to international trade, granting it a degree of demand stability,” IBISWorld industry analyst Lauren Setar says. 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.
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 Global Air Freight Logistics 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, which are Air France-KLM S.A., Deutsche Lufthansa AG, Cathay Pacific Airways Limited and Korean Air Lines Co. Ltd., account for slightly more than 20.0% of industry revenue. 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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IBISWorld industry Report Key Topics
The industry includes businesses that provide air transportation for commercial and private cargo, on either scheduled or nonscheduled routes. It includes air transportation that is part of a national postal system but excludes door-to-door courier services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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