Air cargo business showing signs of recovery with higher rates

Published: 9/21/1999

Russian air cargo carriers are forecasting a steady growth in volume and rates in their sector, as it bounces back from the August 1998 financial crisis. The crisis hit cargo operators hard, with a year-on-year 24% decline in volume in 1998, resulting not just from the crisis, but also from serious structural changes in excise that adversely affected the lucrative shuttle trader business. This was compounded by continued stagnation of the market post-crisis and the accompanying softness of cargo rates, as capacity chased business. Cargo tariffs have, however, begun to recover and are reported to be up by 30.2% since the beginning of the year in ruble terms. This suggests that air is faring substantially better than other means of transport. IndicatorIncrease since Jan 1999 Air cargo tariffs 30.2% Cargo tariffs by all means of transport 8.3% Consumer price inflation (CPI)29.5% Producer price inflation (PPI)40.8% Source: Rosstatagentsvo(Russian State Statistics Agency) For major operators, such as East Line, the rises are good news and even for Aeroflot, with less than 10% of its revenues in this area, it will represent a positive result in a potentially weak area, where it operates a cargo fleet that is becoming increasingly less competitive, due to age.

Article ID: 890