Cargolux's Forson fear freighter boom will see air cargo bubble burst

CARGOLUX chief executive Richard Forson is exercising caution when it comes to freighter fleet investments, reports London's Air Cargo News.


Mr Forson takes the longer-term view of the air cargo industry and will not make million-dollar freighter fleet investment decisions based on the industry's current boom.


The Luxembourg-based cargo airline reported record revenues of US$4.4 billion in 2021, an increase of 40 per cent over the previous 12 months.


Regardless, Mr Forson is a realist who knows that the surging demand for air freight over the past two years was caused by the Covid crisis.


Meanwhile, the war in Ukraine with airspace restrictions, the zero-Covid policy in China, soaring energy prices, and global inflation could dampen consumer demand and cool air freight's market.


"Current market volumes are softening a bit in terms of demand, and I think this is driven principally by China's zero Covid policy that has had an impact on manufacturing, which in turn impacts all those manufacturing facilities outside of China and also consumer demand because they are not getting the finished products," said Mr Forson.


The Shanghai lockdowns have hit the supply chain in and out of China.


"We had to find alternative means of trying to reinstate frequencies when the lockdown kicked in," said Mr Forson.


Cargolux currently has two flights a week into Shanghai with loadmasters on board.


"Obviously we try to have our employees do as much as they can, but this situation has an impact on our operations and also on the distribution of goods out of Shanghai for export which are subject to restrictions as well," said Mr Forson.


The air cargo industry is now turning its eyes towards the traditionally busy fourth quarter.


"As you get into the peak season there are a lot of additional flights put into the system because of the cyclical nature of air cargo, but over the last two years the cyclical nature wasn't really there, it was full steam ahead throughout the year," he said.


Mr Forson declared that some cyclical cargo movements have returned this year and that demand remains high, although China lockdowns have a dampening effect.


"The exit of AirBridgeCargo capacity out of Asia through into Europe has been taken up very quickly by other freight operators. But to a certain extent that has been mitigated by the lockdowns which have forced airlines to reduce operations into and out of China," he said.


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Cargolux's Forson fear freighter boom will see air cargo bubble burst
Cargolux's Forson fear freighter boom will see air cargo bubble burst