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Freight Battered by Conflicting Statistics

October 25, 2010

Freight continues to rebound according to IATA even if the figures for August were inevitably subdued compared to previous months due to lesser falls in the year before. However, there now exists concern that the market for airfreight is not so strong as might have been expected. Indeed, traffic from Asia is said to have overestimated in the peak run up to the Christmas period such that on key routes from Hong Kong and China there exists the possibility that overcapacity will once again re-emerge. Some estimates suggest that traffic volumes from some destinations are 25 percent lower than expected and that demand from Shanghai is notably flat. The reintroduction of freighter capacity on key routes – Cathay has reintroduced two previously idle B747-400Fs – may have been premature such that yields cannot be increased. The inability to increase load factors, if sustained, will limit the appetite for further capacity thereby potentially undermining the recovery of lease rentals. However, with the prospect of higher interest rates, rentals may yet increase in the near future.

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