Air Transportation Optimism ProspersFebruary 4, 2022
There is truly a reason to be optimistic – In case you had not seen UPS had a great quarter.
They beat expectations and beat FedEx and UPS with 97% on time deliveries over the holidays. The one thing I took away is, there are still great opportunities in the logistics market. Whether you are an air cargo company, airline, or e-commerce delivery – the opportunity is great, and the window is now.
There are still supply chain issues as the globe navigates Omicron and the pandemic. And we will continue to see these issues throughout 2022. We will see divergent changes in the globe. China has been in lockdown to stop the spread of Covid. Other Countries are beginning to move forward and dropping pandemic safety measures like Sweden. This will further open the opportunity for air travel as we get back to pre-pandemic travel levels. This will open further opportunities for airlines and extend into e-commerce specific revenue.
Air cargo is benefiting from the continuing supply chain issues. The challenges at many of the global ports provide an opportunity for Air cargo companies to take advantage of the congestion and Omicron supply chain disruptions. According to the International Air Transport Association (IATA), demand for air cargo rose by 7.9% in 2021 (compared to 2019) and is on track to grow by another 13.2% during the coming year.
We will see global e-commerce sales reach $5 trillion in 2022 and $6 trillion by 2024. And countries like Mexico, India, and Brazil are seeing significant growth rates of over 20%. This is an organic opportunity in many of these countries. Airlines do not need to worry about affecting their current partnerships, utilizing their excess space in the bellies of planes can drive a new revenue stream by using e-commerce delivery.
All of us in airlines and air cargo should all be optimistic. We see logistics providers generating great returns and utilizing technology to make the companies more profitable. Countries will open from the pandemic throughout the year and begin to look at air travel for family visits and vacations. The supply chain disruptions will continue to provide opportunities for air cargo and e-commerce. Although countries are opening, they will be opening at a different rate will means air transportation may be the best option in 2022.