Strategic Analysis to Understand the Competitive Outlook of Air Cargo Market

Demand of air transport can be seen as increasing at global level. Rising number of e-commerce players globally is driving the overall market for air cargo market. Furthermore, rising demand of instant shipments through e-commerce players to deliver product in a shorter timeline is boosting the market growth. In addition, rising number of just in time product delivery is positively affecting the global market. Some of the key players operating in this market are Cathay Pacific Cargo, FedEx Express, DHL Aviation, and UPS Airlines.

The global air cargo market is likely to be worth US$143.9 bn by the end of 2027, expanding at a CAGR of 4.9% for the forecast period between 2019 and report. By end user, pharmaceuticals and healthcare is likely to exhibit tremendous growth opportunities to the air cargo market. One of the factors for this includes the delivery of urgent medical supplies to individuals affected during natural calamities and in war-torn areas. Geographically, Asia Pacific is anticipated to remain as one of the fastest air cargo market among other key regions.

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Huge Growth in E-Commerce Sector Will Boost the Air Cargo Market

It has been observed that global e-commerce sector is growing at a higher pace. This sector is anticipated to create immense growth opportunities for the air express industry in the years to come. Rising number of small medium e-commerce players in developing economies such as China, India, Mexico, Brazil and South Africa is driving the market growth. E-trailers are engaging in partnership with air carriers to serve international shipping needs as online shopping surges the demand for shipping orders across the world.

Another factor affecting the global air cargo market is, growing demand from just-in-time (JIT) manufacturers which is acting in favor of the air cargo market. Just-in-time manufacturing involves manufacture of goods just before they are loaded in trucks. JIT enhances operational efficiency and reduces inventory. In addition, JIT manufacturing practices help optimize utilization of resources and leads to improved inventory turnover. JIT manufacturing practices are increasingly being adopted to minimize spoilage and provide goods-on-demand.

Open skies policy in aviation industry will act as a favorable factor in air cargo market. It has been implemented to liberalize rules and regulations in the global aviation industry and calls for minimum government intervention. Air transport is the preferred mode for shipping perishables, chemicals, pharma products, and valuables, as it takes less time over other modes of transport and ensures timely delivery of time-sensitive, temperature-controlled goods most of the times. Moreover, this policy will boost the import export which will boost the air cargo market revenue.

Government Regulation Acting As Market Restraint

Different government policies in various countries are posing a threat to the industry. Political instability in several countries worldwide is likely to emerge as a challenge in the growth of air cargo market. Moreover, the soaring cost of aviation fuel which directly impacts cost of air freight is a key challenge to the overall market. Moreover, complicated custom policy in different countries is yet another challenge for e-commerce segment which can affect air cargo market in coming years.

The review presented here is based on the findings of a TMR report, titled “Air Cargo Market (Type – Air Freight and Air Mail; Service – Express, Regular), End User – Consumer Electronics, Retail, Third Party Logistics, Food and Beverages, Pharmaceuticals and Healthcare; Destination – Domestic and International) – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2019 – 2027.

The global air cargo market can be segmented as follows:

By Component

  • Air Freight
  • Air Mail

By Service

  • Express
  • Regular

By End-user

  • Consumer Electronics
  • Retail
  • Third Party Logistics
  • Food and beverages
  • Pharmaceuticals and healthcare
  • Others

By Destination

  • Domestic
  • International

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