Cargo Facts
SUBSCRIBE
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Wednesday, March 3, 2021
Log In
No Result
View All Result
  • Aircraft Leasing
  • Capacity & Demand
  • Carriers
  • E-Commerce
  • Engines
  • Express
  • Freighter Aircraft
  • Freighter Conversions
Cargo Facts
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Log In
No Result
View All Result
Cargo Facts
No Result
View All Result

Don’t point your finger at China…

David Harris by David Harris
July 8, 2015
in Capacity & Demand, Carriers, Strategy
Share on FacebookShare on TwitterShare on LinkedIn

224-LufthansaCargo777Fforcfnet“China woes threaten air freight industry, Lufthansa warns.”

That is the title of a news story published yesterday by Bloomberg. And if the title weren’t ominous enough, the lead sentence will surely grab your attention: “Lufthansa, Europe’s biggest cargo airline said it’s concerned that a stock market rout which wiped $3.2 trillion off the value of China’s top companies in less than a month is set to cripple the air-freight industry.”

You can imagine the rest. Doom and gloom, and it’s all China’s fault that our cargo business is suffering.

It’s no secret that China’s stock market has lost almost a third of its value in the last four weeks, and China’s position as the source of a significant portion of the world’s air cargo is also well known. But China is not Europe or the US, and the relationship between its stock market and its industrial output and overall economy is different from the relationship in Europe and the US.

And think about this: How would Lufthansa have reacted if China’s stock market was up 75% from a year ago, rather than down 30% from a month ago? It’s a relevant question, because, as pointed out yesterday by The Economist, both of those statistics are real. Yes, the market has fallen by almost a third in the last month, but that still leaves it up 75% year-over year. And further, the stock market is a relatively small part of the Chinese economy. Again according to The Economist, “the value of freely floating shares is about 40% of DGP, compared with more than 100% in most rich countries.”

This is not to say the market correction (or crash, or bubble-burst, or whatever you choose to call it) in China will have no impact on air freight, but rather to point out that there is more to the problems faced by the cargo departments of the big Western European combination carriers than what happens to the stock market in China. If the connection really were that close, then the doubling in value of the Chinese stock market over the year leading up to the crash should have sent cargo loads soaring at Lufthansa.

I don’t remember that happening, and am reminded of the old cliche “when you point your finger at someone else, remember that there are three fingers pointing back at you.”

Tags: Air Cargo StrategyAsia-Pacific CargoEMEA Air CargoLufthansa Cargo
Previous Post

First look at June

Next Post

FedEx to place massive freighter order?

Related Posts

LATAM accelerates expansion with up to eight 767-300BCFs
Freighter Conversions

LATAM accelerates expansion with up to eight 767-300BCFs

March 1, 2021
Cargo Facts Consulting verdict: Less than half of COVID-19 vaccines will move by air
Capacity & Demand - M

CFC: COVID-19 vaccine transport to generate 117,000 tonnes of airfreight

February 28, 2021
ATSG set to lease 24 more 767Fs through 2022
Aircraft Leasing

ATSG set to lease 24 more 767Fs through 2022

February 26, 2021
Next Post

FedEx to place massive freighter order?

Comments 5

  1. Kevin Sterling says:
    6 years ago

    Very well said David.

  2. Alan Hedge says:
    6 years ago

    The crisis may be overblown, but the increasingly desperate actions taken by the Chinese financial authorities speak volumes about the very real fears in Beijing of economic contagion from a stock market collapse.

  3. Harish Shah says:
    6 years ago

    Is the crisis overblown, the impact on the economic scenario from the stock market collapse will need to be seen.

  4. Anonymous says:
    6 years ago

    Hopefully domestic demand in China will hold strong despite this. Part of the strong increase this year (and most of the value being wiped out right now) might be attributable to private individuals investing their savings in the stock market for the first time.

  5. David Harris says:
    6 years ago

    One thing I should make clear is that my comment about pointing a finger at China was not aimed specifically at Lufthansa, but rather at Europe as a whole. As Middle East-based carriers say when European carriers complain about unfair advantages, “Don’t blame us, blame your own governments for not taking aviation as seriously as our government does.”

Leave a Reply Cancel reply

Your email address will not be published.

By subscribing you agree to our Terms of Use and Privacy Policy

Get Latest Issue

CARGO FACTS CONSULTING

DHL begins transferring 767 ops to Amerijet

2020 express volumes up amid lower yields

March 2, 2021
Production freighters throttle December freighter transactions

FedEx European hub changes to have major impact on airports and airlines

March 2, 2021
  • About Us
  • Help Center
  • Privacy Terms
  • ADA Compliance
  • Advertise

Follow Us

twitter twitter linkedin podcast

© 2021 Royal Media & Cargo Facts

No Result
View All Result
  • News
    • All News
    • Aircraft Leasing
    • Capacity & Demand
    • Carriers
    • E-Commerce
    • Engines
    • Express
    • Freighter Aircraft
    • Freighter Conversions
  • Data
  • Multimedia
  • Magazine
    • Issues Archive
    • Weekly Update
  • Events
  • Consulting
  • Subscribe
  • Log In / Account

© 2021 Royal Media & Cargo Facts

Go to mobile version