The air cargo sector in Europe and other regions is currently facing a summer lull as the global economy slows down, resulting in a decrease in cargo volume and a decline in demand for air cargo services. “This is partly due to the seasonality of the air cargo sector. It is usual that every summer, the number of flights and transportation capacity increases, along with the competition in the air cargo market. However, this year the market has stalled due to broader economic reasons, and this situation may continue for some time,” points out Andrius Antanaitis, Director of Business Development for Europe at Strike Aviation, an international air cargo company.
According to Antanaitis, the air cargo sector is among the first to experience negative economic impacts. “Sea transport representatives are the first to face this, as they must plan orders over a longer time frame, followed by the air transport sector. This year, we are noticing a combination of several factors: more flights, increased cargo capacity on planes, and, at the same time, a decrease in cargo volume due to high inflation and consumption. Such circumstances put more pressure on GSSA service prices and business profitability,” Antanaitis said.
The economic outlook has significantly deteriorated
IATA anticipates that air cargo demand was set to decline by 4% this year compared with 2022 levels. The organization stated that this reflected the ongoing challenging economic environment. The International Monetary Fund had recently downgraded its GDP growth outlook for the year to 2.8% from a previous forecast of 2.9%.
According to one of Strike’s executives, signs of a market slowdown were already visible at the end of last year: “There was some confusion due to several factors, including disrupted supply chains, the global economic slowdown, the risk of a global recession, high fuel prices, and the war in Ukraine.”
Similar trends prevailed at the beginning of 2023. Although there was an upswing in the air cargo market at the end of March and the beginning of April, it was not sustainable. “Participants of the Transport Logistic 2023 in Munich did not seem very optimistic – apparently, the indicators of recent months are not promising. Of course, some expect an improvement sooner, others later, but the expectations are the same – the slowdown will last longer.”
Strike is already preparing for a future upswing
How to make use of this complicated time? According to the interviewee, the most important thing is to focus on amortizing the losses, maintaining resilience, and sticking to the set goals as much as possible.
“Strike Aviation has always worked extremely closely with the airlines it represents, and we are currently working to strengthen these partnerships so that together we can react quickly to the changing market dynamics. We also place a high priority on regularly communicating with our clients and building strong relationships with them,” Antanaitis stated.
According to him, a long-term development and a future-focused approach allow Strike Aviation to remain calm even during the market slowdown: “We have foreseen these complicated circumstances and are prepared for them. Last year was a record year for many – freight volumes increased, and service prices remained high after the pandemic. Now we are adjusting to a different dynamic and going through a certain pause in growth. The market cannot always be on the rise – it is normal that after a period of great profitability, a period of slowdown follows.”
“We have a clear development strategy and are not deviating from it. We take the current situation in the market as an opportunity to prepare for a breakthrough that will happen sooner or later,” Antanaitis emphasised.
Strike Aviation has significantly strengthened its position in Latin America this year. Since March, the company has been representing the Polish airline company LOT Polish Airlines in Mexico and Costa Rica, while in May, Strike began to service Air Canada cargo flights from Toronto to/from Costa Rica.
