Air Freight - Market Report

Released on = April 14, 2007, 4:09 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = Key Note estimates that the UK air freight market was worth
£726.1m in 2004, most of which is attributed to international services

Press Release Body =
Air Freight - Market Report

Key Note estimates that the UK air freight market was worth £726.1m in 2004, most of
which is attributed to international services. Domestic services have only a limited
role, since that market is dominated by road transport operators.

International air freight services are provided by companies based both in the UK
and overseas, with the latter having the largest share. Among UK players,
non-scheduled operations are showing the fastest growth, although scheduled airlines
such as British Airways, which offer air freight as a by-product of their passenger
operations, still provide most air freight capacity.

Positive influences on the market include: growth in world trade and the opening up
of new markets; a reduction in air freight rates as a result of competition between
airlines; the requirement to move component parts around the world faster and more
reliably; and changes in manufacturing processes that require the widespread
adoption of just-in-time (JIT) working practices. Furthermore, the service provided
by air freight operators has become such an integral part of the efficient operation
of today\'s economy that it is less vulnerable than some other markets to the effects
of recession.

Several subsectors are considered to be relatively immune to economic downturn, such
as the transport of luxury items purchased by consumers in upper income groups,
emergency medical supplies and emergency spares. Air freight operators also benefit
from growth in passenger travel, since it increases the amount of cargo capacity
available as a by-product in the belly holds of passenger aircraft. Consequently, a
worldwide network of cargo services has been created that offers high service
frequencies.

More negative influences include increasing congestion, both at airports and for
air-traffic control, and general concerns about the civil aviation sector\'s impact
on the environment in terms of noise and atmospheric pollution. There are also
threats from the low-cost carriers targeting the passenger market. As they gain
market share at the expense of the traditional (passenger-carrying) providers of
by-product belly-hold capacity, the proportion of total cargo-carrying capacity
could be reduced. Legislative and regulatory developments at national, EU and
international level remain of concern to many industry leaders; for example, the
burden imposed on airlines by the need to take responsibility for war risk insurance
and security, and the costs of inefficient infrastructure.

In recent years, the traditional scheduled airlines have been facing increasing
competition from the integrated express operators that are not committed to any one
form of transport in their mission to achieve timely and safe delivery of items to
their destination.

The air freight market has now largely recovered from the impact of the attacks on
the US on 11th September 2001 and has resumed its strong growth pattern.
Nevertheless, concerns remain regarding the impact of increased oil prices on
economic growth (the sector\'s main driver) and on fuel and oil costs, which form a
significant proportion of airline expenditures.

Key Note Market Reports
Invaluable aids to anyone needing to gain a highly detailed understanding of a
specific market for more informed decision- making.


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