Asia air cargo market gets e-commerce boost

Strong e-commerce demand is fuelling Asia's air freight market, with the US-China trade war having minimal negative impact so far and in some cases even boosting shipments, industry executives said on Friday, reports Reuters.

E-commerce is growing at pace in populous Asia, driven by Chinese behemoth Alibaba Group Holding Ltd (BABA.N) and rival JD.com Inc (JD.O), as well as others such as Japan's Rakuten Inc (4755.T), sponsor of Spanish soccer giants FC Barcelona.

But the flow of goods has been threatened this year by the United States imposing import tariffs on billions of dollars worth of Chinese goods to redress what it regards as unfair trade relations - with China's government responding in kind.

"I think right now we are probably going to see a pretty strong fourth quarter," Randy Tinseth, Boeing Co's (BA.N) vice president for commercial airplane marketing, said on the sidelines of an industry conference.

"The economy today has been very, very strong. Frankly in anticipation of this geopolitical situation I think people are just going out and moving (cargo) quickly."

Asia-Pacific air cargo volume rose 4.8 per cent in January-August, showed data from the Association of Asia Pacific Airlines (AAPA). That was lower than last year's 9.8 per cent but came off a higher comparison base at a time of record shipments, said AAPA Director-General Andrew Herdman.

"Given this short-term effect of scrambling to meet deadlines for tariff imposition and so on we are seeing pockets - lanes and channels - where demand is stronger than expected. For the next several months the cargo picture remains relatively robust. The question is what will the outlook for next year be."

Asian airlines have an outsized role in air freight, accounting for nearly 40 per cent of the global market as the region is a major manufacturing hub and e-commerce is growing.

"E-commerce is changing the way people are buying stuff, especially in countries such as Indonesia and the Philippines," said Jean-Francois Laval, Airbus SE (AIR.PA) executive vice president, Asia sales.

"It is coming from China, from Korea, it is coming from other parts of the region. You need a huge amount of cargo space."

Boeing on Monday forecast air cargo traffic would double over the next 20 years, growing at an average rate of 4.2 per cent a year.

To meet that demand, the aircraft manufacturer expects the world freighter fleet to expand over 70 per cent to 3,260 planes. Around half of air cargo is carried in the bellies of passenger jets, with the remainder flown on dedicated freighters.