GLOBAL AIR CHARTER MARKET
shippers, governments and NGOs - that in the aircraft chartering world, everything is possible! YES WE CAN! could be our industry’s motto! So today when planning movements of outsized cargo, urgent cargo etc they know the air charter industry can perform! So ultimately there is less planning time and more last minute ‘must go now’ types of charters.
‘You will always have the “Just in Time” charters where manufacturers have now tailored their production to avoid storing any spares.’
How do you see the outlook for the charter market in 2014 – what challenges and opportunities lie ahead?
Justin: It’s always difficult to predict the charter market as it’s a niche. However, I think there is a quiet confidence amongst people in the industry that 2014 will be a year of growth. Maybe not the amazing growth of 10 years ago, but certainly growth.
Robert: The market will not change much compared to 2013 but it will be interesting to see how the carriers specialising in charters will fare as we had some very surprising closures in 2013.
Russi: 2014 has started well for us and I would foresee a generally good year for the industry. The charter market doesn’t normally suffer from over or undercapacity and the good brokers will always find solutions to a charter requirement, regardless of the time of the year etc. Going forward, opportunities lie with those companies that continually add real value to the contracting chain by offering a variety of services and professionalism.
Dmitry: The slow start to 2014 makes it difficult to predict what the rest of the year will look like. It is clear however that the charter market’s dependency on military and ‘extraordinary’ flying will be even less. All market participants will have to find ways to control their costs under growing pressure from competition and the challenging business environment. However,
those who find the right mix to offer new products that add value to the end user will prosper. We can see that O&G, Energy and Aerospace will remain among the main drivers of the market. The humanitarian and relief segment will be strong as well if African and Middle Eastern regions continue to develop in the way they are at the moment. Some of the projects which have been going strong on the lower end of the economic cycle are starting to come into the production stage now, so we might see more O&G projects moving from construction mode - which requires considerable transport spending - into the actual production and maintenance cycle where heavylift transport will only be required in cases of contingency or unit breakdown.
Tony: Airline cargo bosses are not that buoyant about 2014. The general feeling is that it will probably remain the same or possibly see a very small growth of between 0.5 - 1.0%. Most people are scepitcal of the annual growth in EU countries, and Brazil and India have also taken a dip. Unless people have money available, they won’t buy. If they don’t buy, then exporting nations don’t produce, and this is felt all the way down the logistics chain.
What trends do you see emerging in the way customers plan their use of air charter flights?
Russi: I think as an industry we have done very well over the years, advising and teaching our clients - forwarders,
Tony: You will always have the “Just in Time” charters where manufacturers have now tailored their production to avoid storing any spares, and therefore for anything not in the chain or broken, a response is required instantly. Production delays also create charter opportunities whereby an original plan to move by sea falls away as the goods are not finished in time, and therefore an air charter is the only way to deliver to the customer, and not receive heavy penalties. Charters are generally only required if cargo is late, outsize, off the beaten track or “live”!
Robert: Do we really need an air charter or can we move our equipment by sea? This benchmarking against ocean freight will increase further. Once the decision to move cargo by air has been taken, our customers usually require more consulting on-site.
Justin: This varies by sector. In certain sectors clients are starting to plan earlier for the possibility of charters being needed, which is obviously useful when the loads can be complicated or to challenging destinations. In saying that, the vast majority of charters occur in emergency unforeseen circumstances for clients, so in these cases planning will always be relatively last minute. That has always been and will continue to be a challenge, but at the same time that’s how brokers can add value, as they can assist clients and airlines in this planning process to ensure the operation goes smoothly for all involved.
| Page 2
| Page 3
| Page 4
| Page 5
| Page 6
| Page 7
| Page 8
| Page 9
| Page 10
| Page 11
| Page 12
| Page 13
| Page 14
| Page 15
| Page 16