While the airfreight industry transports over $6.4 trillion worth of goods, 35% of world trade by value, it has often been a neglected part of the aviation sector, with the more glamourous world of passenger travel taking centre stage.
“I think that’s probably a fair assessment. I think airlines traditional were primarily passenger focused, having seen cargo as a subsidiary activity,” the International Air Transport Association’s (IATA) Director General Willie Walsh told Air Cargo Week.
“If you look back at the 10 year period from 2009-19, a time without too much disruption, cargo revenues represented about 12% of the overall amount taken by the industry. Some people dismissed this as small but, when you consider the net margin during that period was just under 4%, that share was critical” he explained.
When Covid hit, attitudes changed substantially, as cargo rose as high as 40% of total revenue in 2021, showcasing how the importance of the airfreight industry, with IATA working to reflect that in its own approach.
This was visible in Hong Kong, as the World Cargo Symposium (WCS) brought 2000 people, the most to ever attend an IATA event, to highlight the interest across the aviation sector in cargo and services related to it.
It all plays a role in altering the image of cargo from just containers that are based around the place to an important element of airline operations, something Walsh is keen to focus on in his role at the industry association.
“During the COVID crisis, the cash that cargo brought in was the difference between survival and failure. It was an essential lifeline that the industry had. It sparked a much greater appreciation for cargo,” Walsh outlined.
“I’ve brought that to IATA. I’ve always had cargo CEOs on my team. At British Airways and International Airlines Group, cargo was on the leadership, so I recognised that it was a critical part in terms of revenue.
“IATA has a dedicated cargo area. We don’t have a dedicated passenger department.
“At IATA, we are working to put a proper emphasise on cargo, with more and more representation on our board, including FedEx. Naturally, there are more passenger CEOs just by virtue of the sheer size of the passenger side of the business.
“But we try to make sure that airfreight gets well represented and well supported. For me, it’s a critical part of the whole industry”
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Lessons learned
Economic shocks and geopolitical challenges have been a constant in the aviation industry. From the financial crisis to the Covid pandemic to conflicts in Ukraine, Iraq, Syria, and Yemen, the industry has continually adapted to these challenges. Despite the ever-present hurdles, the industry remains resilient and adaptable, finding solutions to navigate through restrictions and uncertainties.
The ability to swiftly adjust to changing circumstances is a hallmark of the aviation sector’s resilience. Not succumbing to the fear of potential crises, the industry has been urged to focus on proactive planning and contingency measures.
“You can’t sort of sit back and hope things are going to return to normal, you have to take early action,” Walsh stated. “The speed at which they responded to the Covid pandemic was the difference between survival and failure for a lot of airlines.
“You can’t sort of sit back and hope things are going to return to normal, you have to take early action,” Walsh stated. “The speed at which they responded to the Covid pandemic was the difference between survival and failure for a lot of airlines.
“Of course, it went on much longer than anybody had expected. But the speed of reaction in a crisis is critical. Some people might argue that the industry overreacted, but I would strongly disagree.
“I think we were forced into taking measures to reduce costs in a way that we’ve never had to do before.
“The industry has learned a lot for the next crisis because there is always going to be a challenge in this industry. When the next shock happens, I would expect the industry to respond even better again.”
Unifying the industry
To fully realise the potential cargo has within the wider aviation sector, Walsh was clear that there needs to be a consistent approach, globally bringing together common procedures and regulations that enhance safety and ensure efficiency.
“Standardisation is absolutely essential. We’ve seen that everywhere we go. The more commonality we have, the better the industry is,” Walsh stated. “The benefit is significant for an international industry, knowing that no matter where you go in the world, the same rules will apply.”
Looking at the pandemic period, Walsh pointed to the chaos that was caused by trying to navigate unique rules and procedures, hampering the aviation sector’s attempts to keep afloat during the tumultuous time.
“The same crisis was facing every country but each nation did things differently. It was not just unnecessary but counterproductive. Everybody was totally confused. There was no benefit accruing from it. It would’ve been much more effective to have a single, consistent, understandable procedure that applied everywhere,” he outlined.
Reiterating the importance of collaboration Walsh urged stakeholders to recognise the importance of airfreight and provide the necessary, most effective available.
“One of the real benefits that industry bodies bring is being able to unite the industry and agree on a common approach forward,” he stated.
“This industry is very much interconnected, whether it’s on the cargo side or on the passenger side.
“Together, we can show airfreight is not just an asset within the industry. It has a core place in aviation.”
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IATA’s role
Leading an association of 320 airlines, or 83% of total air traffic, IATA has a clear duty in advocating for and encouraging development of the industry to tackle aviation issues and push the sector forward.
“We represent, serve and lead the industry. Although, I toned down the lead bit because our function is to represent and serve members, letting our members tell us what they want us to lead on,” Walsh explained.
“It’s important that the focus is on our member airlines rather than on us. We will do what they want us to do.
“There are times when it makes sense for us to take the lead and, often, that means saying things they would like to say but can’t
“I get paid to criticise governments and it’s something I enjoy. Airlines sometimes have to be very sensitive to that. I understand that having been an airline CEO.
“But we rely very heavily on the expertise that our member airlines make available to us. It’s being able to get their support, input and advice.”
