Air freight steps in competition phase

At the 47th International Paris Air Show orders were placed for almost 700 new aircraft, with the overwhelming number of those being placed with Airbus.

Yields on Asia-Europe and the transpacific have plummeted, over-served by established carriers and new entrants such as Shanghai Airlines, Yangtze River Express and Great Wall.

At that same time, rising fuel and operating costs have made air cargo more expensive, bringing it within reach of ocean carriers.

The management of logistics has improved and enabled companies to keep low inventory levels served by rapid stock replenishment. Container ships are increasing in size and need to be filled, so the lines are aggressively soliciting cargo that traditionally went by air. Important point is that several lines are now offering time-definite services.

This is sending profitability plummeting on long-haul routes and forcing carriers to shift capacity to more profitable air routes. Air Canada went so far as to terminate its Toronto-Shanghai freighter service.