Strong e-commerce need is fuelling Asia’s air market, with the U.S.-China < a href=https://www.business-standard.com/topic/trade-war target= _ blank > trade war having minimal unfavorable effect up until now and in some cases even increasing deliveries, market executives said on Friday. E-commerce is growing at speed in populated Asia, driven by Chinese leviathan Alibaba Group Holding Ltd and rival JD.com Inc, along with others such as Japan’s Rakuten Inc, sponsor of Spanish soccer giants FC Barcelona.
The flow of products has been threatened this year by the United States enforcing import tariffs on billions of dollars worth of Chinese goods to redress what it regards as unfair trade relations – with China’s federal government responding in kind.
“I think today we are most likely visiting a pretty strong fourth quarter,” Randy Tinseth, Boeing Co’s vice president for industrial aircraft marketing, said on the sidelines of an industry conference.
“The economy today has been really, extremely strong. Honestly in anticipation of this geopolitical scenario I believe individuals are just heading out and moving (freight) quickly.” Asia-Pacific air freight volume increased 4.8 percent in January-August, showed information from the Association of Asia Pacific Airlines (AAPA). That was lower than last year’s 9.8 per cent but came off a higher comparison base at a time of record deliveries, stated AAPA Director-General Andrew Herdman.
“Given this short-term result of rushing to satisfy due dates for tariff imposition and so on we are seeing pockets lanes and channels where demand is more powerful than anticipated.
For the next numerous months the cargo picture stays relatively robust. The question is what will the outlook for next year be.”
“E-commerce is altering the method individuals are purchasing things, specifically in nations such as Indonesia and the Philippines,” stated Jean-Francois Laval, Plane SE executive vice president, Asia sales. “It is coming from China, from Korea, it is coming from other parts of the area. You need a substantial quantity of freight space.”
Boeing on Monday forecast air freight traffic would double over the next 20 years, growing at an average rate of 4.2 per cent a year.
To meet that need, the aircraft maker expects the world freighter fleet to broaden over 70 percent to 3,260 planes.
Around half of air freight is brought in the tummies of passenger jets, with the remainder flown on devoted trucks.
Some big Asian freight providers consisting of Cathay Pacific Airways Ltd and Korean Air Lines Co Ltd rely on for around a quarter of revenue.
“In 2015 the freight market was exceptionally hot. In 2018 it still grew. The trade tensions worldwide will have some effects however we haven’t seen it yet. I see restrictions can be found in a very brief time. We are preparing for it,” Korean Air President Walter Cho informed press reporters on Friday.
“Anything from the U.S. to China and vice versa is going to be affected. We are looking at alternate markets to China and the U.S. also.”
Japan Airlines Co Ltd President Yuji Akasaka said the < a href =https://www.business-standard.com/topic/trade-war target=_ blank > trade war had actually made no modification to the cargo market to date and he just expected an
effect if”extremes” took place.”If it does occur it may affect us in the future but since today we haven’t seen it and hope it will cool down and return to regular,” he said through a translator.
“I heard one example … Seafood from the U.S. to China goes through retaliatory tariffs, so need in China is down.
Guess what? Demand for Canadian seafood is doing just fine.”
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