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The increasing importance of the emerging markets

David Harris by David Harris
July 24, 2013
in News Archives
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Over the last eighteen months we have often pointed out the disparity in air freight demand reported by the big European, Asian, and North American carriers versus carriers from the Middle East and Turkey. We have reported many specific examples both here on the cargofacts.net website, and in our monthly and weekly publications, but the most traffic recent report from IATA sums it up quite well: In the first five months of 2013, overall international air freight traffic was down 0.5% compared to the same period in 2012, with carriers from Asia, Europe, and North America reporting declines of 3.2%, 0.8%, and 2.7%, respectively. But during this same five-month period, carriers from the Middle East reported their freight traffic up 10.9%.

When the question of why carriers from the Middle East are doing so well, when carriers from other regions are suffering, is brought up, two answers are usually offered:

  • These carriers are based in a region that is halfway between Europe and Asia, making it a natural hub for traffic between the two continents.
  • The Middle East carriers have built up huge fleets of cargo-friendly passenger widebodies, particularly 777s and A330s, and are able to use the bellies of those aircraft to carry cargo at a low marginal cost.

Both of these answers are relevant. Carriers like Emirates,

Saudia, Etihad, and Qatar have leveraged their geographic position and belly capacity to take market share from the traditional leaders. But the Middle East-based carriers (and nearby Turkish Airlines, as well) have also done something else that has contributed greatly to their success, and that is to focus considerable effort on expanding their presence in what are commonly called the “emerging markets.” Africa, Central Asia, India, and more recently, South America.

It doesn’t take much time looking at the belly and main-deck capacity offered by these carriers to cities – and not just the big cities – in the emerging markets to see that they have placed themselves in perfect position to capture the growing demand for air freight to and from these regions. Moving cargo from New York to Frankfurt, or Hong Kong to Amsterdam has never been difficult. But now it is almost as easy to move cargo from Harare to Hyderabad, or Astana to Jakarta, because at least one of the Middle East carriers will offer daily 777 or A330 service to just about any pair of cities you can name, via their hub.

Emirates has been the leader in this, under the guidance of their long-time cargo boss Ram Menen, and Cargo Facts is pleased to say that Ram, who retired just last month, will be speaking on the subject of the importance of the emerging markets at this year’s Cargo Facts Aircraft Symposium (21 – 23 October, in Seattle). If you have any interest in the rapidly-growing freight markets of Africa, India, Central Asia, and South America, you won’t want to miss this. Click here for more information or to register.

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