WEEKLY NEWS IS AIR CARGO LOSING


THE BATTLE FOR AIRPORT REAL ESTATE?


AIR CARG O WEEK


06


BY Tanmay TIWARY


AT many of the world’s fastest-growing airports, the cranes tell a clear story. They are clustered around new passenger terminals, expanded retail concourses and multi-storey car parks. Cargo facilities, by contrast, are often tucked away at the perimeter, operating out of infrastructure designed decades ago. As passenger traffic roars back, the question for air cargo is no longer theoretical: is freight being structurally deprioritised in airport master planning, especially in emerging markets where pressures are most intense? The timing matters. Global passenger traffic fully recovered in 2024, with IATA reporting that revenue


passenger kilometres surpassed pre-pandemic levels for the first time. Airports responded predictably. Capital expenditure cycles swung back to terminals and commercial assets that deliver higher and faster returns. Non-aeronautical revenues now account for around 40 percent of total airport income globally, and in some Asian hubs the share is even higher. Cargo, which typically contributes less than 10 percent of airport revenues directly, struggles to compete for scarce land.


Strong cargo demand, weak physical capacity Demand for air freight is not the problem. According to IATA, global air cargo demand measured in cargo tonne-kilometres grew 11.3 percent year-on-year (Y-o-Y) in 2024, exceeding the highs seen during the pandemic boom. Capacity also expanded, largely due to the return of passenger belly space. International belly capacity now represents roughly 55 percent of available lift, with freighters accounting for the remaining 45 percent. This recovery has masked a deeper structural issue: the physical space required to handle that cargo


efficiently is not expanding at the same pace. Airports that were designed around passenger flows are struggling to retrofit cargo infrastructure into constrained footprints.


Emerging markets feel the squeeze “Undoubtedly, air cargo does seem to be losing ground in the fight for airport real estate. With passenger numbers bouncing back strongly, airports are pouring money into fancy terminals, retail, and parking to boost non-aero revenues – often squeezing out cargo facilities. In emerging markets especially, old infrastructure and apron/terminal shortages are causing gridlock, hurting freight efficiency and trade edge long-term. Cargo needs dedicated space, but passenger priorities are winning out right now,” said Ravi Singh, chief research officer at MasterTrust. Asia-Pacific illustrates the imbalance clearly. Air freight volumes in the region grew faster than the


global average in 2024, driven by cross-border e-commerce, pharmaceuticals and electronics. At the same time, many major hubs in India, Southeast Asia and parts of Africa are operating close to land and airside capacity limits. Airports Council International has warned that without timely investment, congestion at


ACW 09 MARCH 2026


high-growth airports could become “structural rather than cyclical” over the next decade.


Congestion changes network choices For cargo operators, congestion is not just an inconvenience. Longer truck queues, limited freighter parking stands and fragmented warehouse layouts translate directly into higher costs and longer dwell times. Forwarders report that at some constrained hubs, average cargo dwell time can be 20-30 percent higher than at well-planned cargo gateways. In time-critical supply chains, that difference determines whether traffic stays or shifts. Airlines


increasingly factor ground handling speed and apron availability into network planning, even if it means flying longer routings to more cargo-friendly airports.


Real estate economics pressure margins The financial logic often favours passengers. Passenger terminals generate retail, food and beverage, advertising and parking income, all of which scale with footfall. Cargo facilities require large tracts of land, heavy upfront investment and deliver thinner margins to airport operators. G Chokkalingam, founder and


head of research at Equinomics Research, sees margin pressure as


unavoidable. “Yes it is going to be quite difficult for cargo service providers to make high margins in the short to medium terms. Their business growth would be better as compared to traditional airlines. But their margins would be under pressure till they succeed in building required airport infrastructure. Big cities offer better volume size for air logistics as compared to smaller cities. However, real estate prices have shot up substantially in the last 10 years in big cities. Hence their fixed costs would keep rising along with growth opportunities offered by e-commerce businesses. Thus, top line growth for them would be impressive but net margin pressure would persist at least for a few years.”


Planning today for trade tomorrow Some airports are attempting to rebalance the equation. Greenfield projects increasingly include dedicated cargo zones, logistics parks and multimodal links in their master plans. However, cargo phases are often delivered later than passenger terminals,


leaving operators to manage interim


bottlenecks. Digital tools such as e-AWB, now adopted by more than 80 percent of global air cargo, help at the


margins but cannot replace physical space. As volumes rise, apron, warehouse and landside access constraints resurface. Passenger-led capex cycles may be rational in the short-term, but the long-term risk is strategic.


Air cargo underpins high-value exports, resilient supply chains and e-commerce growth. Airports that continue to treat cargo as a secondary land use may find that trade, and the airlines that carry it, quietly move elsewhere.


www.aircargoweek.com


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