Operators allege unfair treatment as air freight soars

Date: 21/05/1998

By Chris Johnstone

THE 200-billion-ecu-a-year air cargo industry thinks it is getting a raw deal from the politicians and policy-makers.

European carriers say the sector's low political profile has allowed their US rivals to dominate an industry which is growing much faster than the passenger business.

Conventional air freight is expanding by well over 7&percent; annually, while the air express market boasts an 18&percent; growth rate.

The US is not only master of the express market through UPS and Federal Express, but also leads in the all-cargo sector, with carriers like Evergreen International Airline, Polar Air Cargo, Atlas Air and Southern Air Transport which boast large fleets of giant Boeing 747 freighters.

The cargo industry reckons the time has come for it to create a separate identity from the passenger side, with the International Air Cargo Association (TIACA) claiming bilateral agreements have been largely governed by protectionism and political considerations.

“Those who deal with the process and negotiate are largely influenced by passenger considerations and the voice of cargo is, alas, seldom heard,” it says.

Although 55&percent; of air cargo still flies in the 'bellies' of passenger jets, all-cargo operations are gaining in importance, with carriers such as Lufthansa, Air France and American Airlines establishing independent cargo operations with completely different priorities and goals from their passenger 'parents'. Cargo is a key feature of transatlantic alliances between Delta Air Lines and Swissair and Northwest Airlines and KLM.

The world's freighter fleet, both new aircraft and more especially conversions, will double by the year 2015 to 2,260 planes, exceeding the growth in the passenger fleet.

The European Commission favours a global air cargo deal, but fears US and Japanese hesitation will stifle any initiative. Its top aviation official Frederik Sorensen says extending the GATS (General Agreement on Trade in Services) to air cargo is a possibility, but adds that he does “not expect to see any results until the year 2004/5”.

A deal through the Organisation for Economic Cooperation and Development (OECD) is the only possibility.

Failing this, the Commission would have to gauge the level of interest in an international air cargo convention. But it acknowledges that this could only move ahead with Washington's support.