Cargo: The Unspoken Hero of the AirOctober 7, 2021
From November 14-18, 2021, SmartKargo’s CEO Milind Tavshikar and I will be attending the Dubai Airshow with the key leadership team members. We will be joining industry leaders from across the world as we contemplate and anticipate the future of air cargo. We are thrilled to be a part of this vital air cargo and global air traffic management event.
In a preview of what we’ll be discussing, we will highlight all the remarkable developments in technology in this space. I’ll be leading a panel on how to capitalize on e-commerce through the innovative use of air cargo with representatives from Dubai South, RSA National, and Group ADP. Milind will be speaking on various topics, including ways to adapt to the future of cargo and build a resilient cargo ecosystem.
Air Cargo Continues its Growth Trajectory Despite Pandemic
According to IATA, the July 2021 global air cargo demand was up 8.6% relative to 2019 as measured in cargo tonne-kilometers (CTKs). They also assert that current economic conditions support air cargo growth. Willie Walsh, IATA’s Director General, stated, “July was another solid month for global air cargo demand. Economic Conditions indicate that the strong growth trend will continue into the peak year-end demand period.”
Here at SmartKargo, we solidly believe the future of air cargo has incredible upside potential, and e-commerce parcel delivery on both narrow-body and wide-body planes will be a great source of currently untapped revenue for airlines worldwide. Pre-pandemic, there were approximately 38.9 million total global flights across domestic and international airlines. Due to the pandemic, the number of flights significantly decreased. However, we anticipate that with the acceleration of vaccinated passengers going back to air travel in 2022 and a substantial rise in e-commerce, those numbers will slowly continue their hastening back to pre-pandemic levels.
E-Commerce Revenue Potential by the Numbers
Because airlines can use existing fleets, current flight patterns, and already established security and warehousing, airlines are poised to tap into this great source of recurring revenue that will add to both top and bottom-line revenue.
Using our estimates based on existing partner outcomes, we anticipate that flights should resume to their pre-pandemic levels by 2022, and, assuming fifty percent of their fleet is comprised of narrow-body planes, there is a global opportunity of $649.3 billion in potential e-commerce revenue on an annualized basis for airlines.
We like to refer to this revenue growth potential as an “opportunity in the air.” As we have already begun to see with our current airline partners in Norway, Mexico, Canada, and India, the future of air cargo for e-commerce is one a burgeoning revenue driver and that has the potential to make up for weaker business travel and passenger sales on traditional passenger airlines due to large-scale events like the global pandemic we are currently facing. We have found a way to capture additional revenue—and that future, we believe, is e-commerce air cargo.