question of the month


The Chinese air freight market has started this year quite disappointingly; how do you see it developing over the next few months?


RICHARD SMITH


Group freight director, Air Partner


“After a prolonged period of demand for air charter in response to shortages in scheduled capacity last year, Air Partner's Hong Kong office has certainly seen a softening of demand for charters in the first two months of 2011. “In fact, the usual pre-


Christmas peak traffic to both Europe and the US did not materialise in the 2010 season. We have, however, experienced a need for charters from South-east Asia to South America as Brazil’s strongly growing economy has prompted the need for chartered aircraft to supplement capacity. “As the major global


ROBERTO GILARDONI


Commercial director, Cargoitalia


“The last quarter of 2010 showed us signs of a market that was weaker than expected. Basically, we didn’t see any peak season, due to a lower growth rate and excess capacity. “And 2011 has confirmed a


importers of Chinese manufactured goods recover from recession, we expect demand will return to the market. And, because increased scheduled capacity often lags behind, charter services will again be required to bridge the gap when existing scheduled services are backlogged. “The real issue is timing and it is very unclear when


demand will rise and how quickly it will return. As a charter broker, our business is used to responding to unforeseen and unpredictable circumstances. “We are confident we will be able to provide


additional charter capacity at competitive prices, as and when the Chinese export market requires us to.”


“We expect demand will return to the market... the real issue is timing and it is very unclear when demand will rise”


disappointing trend: January and February have been slow, due to the holiday season in Europe and Chinese New Year. Now, after the Chinese New Year we are experiencing a weaker than usual start of business. “Several issues are


impacting demand, mainly due to the relatively weak momentum of China's manufacturing sector. This is probably due to a lack of workforce, tighter credit conditions in China, rising production costs and slower foreign demand. “Despite the current concerns, the forecast for the


“Basically, we didn’t see any peak season, due to a lower growth rate and excess capacity”


Chinese economy is still positive, so we believe that this particular phase should change in the coming months, even though market growth will be probably in single digits in 2011. “The launch of new hi-tech products is expected in


the second quarter, plus the seasonal growth in textile business should also help towards the end of the quarter. “We hope this will be an indication of a stronger


second part of the year with a peak season in the last quarter. It is, however, clear that the ‘no-worry’ approach we have seen in the past years in China, where strong growth was taken for granted, is not the case anymore. “We will need to monitor the market on a short-term basis and adjust capacity accordingly.”


2 AIR LOGISTICSCHINA 4


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