[021112.EN.AIR] Boeing Remains Bullish About 20-year-Outlook For Global Freighter Demand

BOEING CEO Jim McNerney has expressed optimism that the freighter market will in the long term be robust, however, we can expect a soft market in the near-term.

"While we are closely monitoring softness in the near-term market for air freight, our view that air freight remains a compelling long-term growth market hasn't changed," said Mr McNerney.

He also said the aircraft manufacturer has "pretty much" filled all of next year's delivery slots for its new 747-8 Freighter.

"We've moved the skyline around," he said. "I think as Atlas [Air] found some challenging business conditions, they did want to defer and cancel, in one case, a couple [of] airplanes, but we're in good shape through 2013."

Boeing has so far this year delivered 24 of its 747-8 freighters. "We expect additional orders and commitments for both [the 747-8F and Intercontinental passenger version] by year-end," said Mr McNerney.

A report by Aviation International News in New Jersey, quoted John Grant, executive vice president with market data specialist UBM Aviation, as saying that fragmentation among carriers has worsened the overcapacity problem in the air freight sector.

"It is easier for people to be opportunistic to move into markets that they weren't in 12 months ago, moving [freighter] capacity around to gravitate to those areas that are still somewhat profitable," said Mr Grant. "There are lower market-entry barriers in air cargo [than in the passenger sector] and the market is less regulated [in terms of route access]."

He is of the opinion that the air freight industry needs to make more intelligent use of available capacity and position itself better to match shifting demand.

"It's all about the commoditisation of the product and, while passenger airlines have become much better at revenue management, the cargo operators have found it harder to rationalise and consolidate," he added.

Source : HKSG.