Airline Demand falls after slowdown

DELTA AIRLINE

Air freight at west coast ports suffered from a slowdown and unfortunately it has still not fully recovered. According to Delta air lines Inc. there was a 20% decrease in revenue which indicates that U.S handlers are finding the prices harsh and in turn this seems to be causing the decrease. The strike of the west coast port has ended yet the effects remain on the cargo airlines. 

Statistics have been provided to further emphasize the decrease and tough effect of the slowdown on the air line. Last year Delta’s cargo revenue was $244 million yet from the quarter to September it had dropped to $196 million, decreasing by a 10% fall in three months.

Ed Bastian, the president of Delta stated that the cargo business and passenger business are going through the same issue. Domestic and local seems safe and steady while internationally, it’s decreasing.

PASSENGERS

Although the airlines went through a high in business early in the year while all the port disruptions went on, it seems that the boost only lasted up till summer. Trade groups report the increase slowly trailed off leaving a lower revenue then before the west coast port disruptions.

When it comes to domestic Cargo then the airline does succeed others yet in regards to freight volume it falls behind. Freight volume leaders are United Continental Holdings Inc. as well as American Airlines Group Inc. after these two comes this airline which is based in Atlanta. 

Although more of Deltas running system is based on Trans – Atlantic routes rather than pacific trade lanes statistics show that united and American faced less declines then Delta. 

US AIRLINES

Out of all the U.S airlines the first to have third quarter income has been Delta. With cargo becoming less essential handlers are looking for other opportunities and investments to make up for the loss they seem to be suffering and the decrease in what is the core of the cargo industry, the passenger business.

Looking at the statistics it’s important that Delta take progressive steps to avoid a further fall in revenues. 2007 had reached a peak of $1.7 billion yet last year’s cargo revenues totaled a mere $934 million. This has been a significant blow to Delta and the financial crisis and west coast port disruptions, strike and slowdown seems to have had its effect on the financial earnings and cargo revenues of this particular airline quite heavily.

What on Earth is happening at UPS?

                                   UPS predicts a 5% rise in Air Cargo

UPS AIR CARGO

The costs of air cargo and ground cargo has been raised by about 5 per cent when it was previously declining. The UPS will show us an increase. An Atlanta based company will be raising rates by about 5 per cent and road delivery costs as well as air cargo globally will also rise by 5 per cent more or less. For reliable and cost effective air cargo services to caribbean contact with www.cargotocaribbean.co.uk 

These rates need to be increased according to some, in order to cover labour charges and the cost of equipment as well as receiving a good enough reward for what it provides. Though customers will see the rate slightly higher than average it doesn’t look any more likely to decrease.

GRAPH BAR

This is not the only areas where increase will be seen in the industry. UPS also intends to charge more for fuel and depending on the type of delivery prices will increase. Heavy packages will now cost more and the fuel price will go from 4.75 per cent to 5.25 per cent. The cost of air cargo and global packages will increase by 1.5 per cent.

Normally costs of fuel change monthly and are related to the prices of diesel and airline fuel. This means that with lower prices the UPS revenue suffers and the low fuel prices means that the cost of the company drops and although it has increased revenue it’s not always suited to UPS.

ROAD SERVICES

From January to June 2015 revenue shot up to $2.26 billion which meant there was a 65% increase over just a year. Last year results suffered a loss as health plan costs meant $665 million had to be paid out.

Company shares have increased by 94 cents reaching $103.80.  This has decreased by about 7 per cent in 2015 with the previous year’s showing a 20 cents growth.

FinnAir Explores Asia

            Finnair Continues to Explore New Routes in Asia

finnair

It is understood that the Finnair is struggling to further develop its network in the Asian region. In Asian region Finnair is also taking interest in expansion of business as well as traffic by opening more bellyhold routes to Guangzhou and Fukuoka. Finnair also wants to construct the route in Asia in such a way that in which Fukuoka links to Japan and Guangzhou links to China.
Finnair is determined to open this route before the coming summer season in 2016. According to the chief executive and president of Finnair Pekka Vauramo that it is their vision to increase their traffic twofolds in the Asian region by 2020.

Finnair route

He further states that these two destinations would be important for their airlines assisting them in getting their aim. Finnair has maintained its standard and tradition of fast connections between Asia and Europe. According to Pekka Vauramo, Finnair is enthusiastic to further enhance their network for the Asian and
Europen markets soon.According to the Finnair, they are going to announce a direct route to Fukuoka which is located in the southern region of Japan. They will open this new route for Fukuoka Japan in the summer season of 2016. 

This  new service from the new route will make Finnair rank high as compared to the other European airlines. Finnair is the only European airline which flies to different cities of Japan. According to a sources, Finnair is ready to offer its services to other four cities of Japan, which includes Osaka, Tokyo Narita and Nagoya.
Finnair is also ready to open a new route to China.

Fukuoka

The airlines stated that it is going to run its passenger flight services to China from its own hub Helsinki. Further, the new service will start its job from Helsinki to Guangzhou China. Guangzhou will be the sixth destination for Finnair in China.
According to Finnair these two destinations Guangzhou and Fukuoka will be offered using Airbus A330 airlines. Finnair is ready to link Guangzhou and Fukuoka to further 60 destinations around the world via their own Helsinki hub.
Check out www.cargotoindia.co.uk before hiring cargo services from UK to India any other company.

DHL raises a concern

China and Europe to become air cargo competitors

 

DHL AIR CARGO

DHL Eastern European operations have raised a concern for those in the air cargo industry stating that the China Europe services are attracting more attention from customers and is becoming increasingly popular to shippers.

Many customers are attracted to the China Europe rail service and it’s becoming a more accepted option by the day. According to Kerem Inanc this could be because of the emphasis on CO2 emissions and the speed of the rail services.
 

RAIL CARGO

Although it is rumored that rail services from china did not consist of high margin goods Kerem disregarded this as just a rumor. The rail services are improving and considering how the services used to be we can see that there has been significant progress. According to the spokesperson all types of goods of high value can be shipped and the aim is that the rail services will eventually be able to handle any goods.

As stated above the low emissions and brilliant speed that these rail services operate at remain a huge factor in the growing popularity. Other air cargo services take longer and also have many capacity restrictions which can be avoided when shipping by rail.

The air cargo industry has all but been warned that the china Europe services intend to exceed their demand and become at the forefront of the shipping business. 

CHINA RAIL 

With the rail services all measures are taken to ensure they are as reliable as possible and prices are kept at a rate that will keep them attractive to shippers. Kerem Inanc further stressed the issue of cost by stating that the rail prices of the coming month are known to operators beforehand.

The modes that provide more information to shippers are more likely to be successful and air cargo is thought to be lacking in data and technology.

The increase in rail popularity could also be due to the fact that in air cargo the temperature varies more than in sea freight. Not to mention that costs are 20% less the air modes. For Columbia – Europe services the cost went up to 40% less than air freight and the infrastructure was better in rail services.

However it’s not all bad for air freight as a significant amount of people still prefer to use air services whether due to the freighters or the type of market. Fruit is mostly sent by air cargo and it’s not expected that rail services will overtake this particular market.

.