Boeing Air Cargo Forecast Signals Growth in Asia

SINGAPORE, July 10, 1995 -- Strong growth in Asian air cargo traffic is a key indicator of recovery in the world economy, according to James Edgar, Boeing Commercial Airplane Group regional director of cargo marketing, speaking at the "Air Transport in the Asia-Pacific: Challenges, Opportunities and Options" conference in Singapore. The conference is organized by the Singapore National Committee for the Pacific Economic Cooperation Council.

Edgar said cargo traffic on Asian routes experienced the highest rate of growth in 1994, exceeding 13 percent, outpacing the world growth rate of 12 percent.

Intra-Asia traffic is growing most rapidly, according to Edgar. "With its rapid industrialization and a well-trained, low-cost labor force, Asia will be responsible for 35 percent of the world's manufactured goods by the turn of the century. In addition, disposable income is going up, so the people of Asia are becoming major consumers and the Asian countries their own best customers."

As examples of the strong Asian traffic growth, Edgar said Asia to North America traffic grew 13.9 percent; Europe to Asia volumes were up 13.2 percent; and intra-Asia 15.9 percent.

Trends in air cargo tend to indicate wider economic trends, often leading the world into and out of recession, Edgar said. "A key reason for the growth last year was that most countries had moved through their economic low point and had begun to grow, adding strength and momentum to the recovery. Growth slowed somewhat in the last half of 1994, but with the world economy improving, we expect continued growth in air cargo," he noted.

Edgar said declining passenger yields also have forced airlines to look to cargo for additional revenue opportunities. Air cargo yields moved up slightly in 1994, reversing a long downward trend.

Edgar said international express service is emerging as a major factor in cargo traffic, mirroring its success in the U.S. market. In 1994, international express traffic grew 25 percent over 1993 and is projected to grow at 18 percent per year, capturing a 31 percent market share by 2014.

Boeing's 20-year outlook for the cargo industry predicts a 6.6 percent annual growth rate, up slightly from last year's forecast, Edgar said. To handle that volume, nearly 600 more large-capacity freighters (more than 50 tonnes) will be required by 2014. With most 707s and DC-8s retiring from service, 757- size airplanes also will be added, increasing the medium-size fleet by about 150 airplanes.