Qantas has ditched plans to add a near-new Boeing 747 freighter aircraft to its fleet, due to continued weakness in the international air-cargo market.
The latest figures from the peak airline body show that while the global air-freight market grew modestly in July, cargo demand in the Asia-Pacific region fell 1.4 per cent, due partly to sluggish business activity in China.
Qantas had intended to take on the freighter this year, to replace a contract it has with US air-cargo company Atlas Air to lease an older jumbo and crew – known as a wet lease.
A wet lease Qantas has on another Atlas Air jumbo is also up in 2015.
The freighter was to have been painted in the Qantas livery.
Last week Qantas’s annual results gave an insight into the weak state of the freight market. Its freight division booked a 20 per cent fall in pre-tax profit to $36 million in the year to June, which the airline said reflected an 11 per cent fall in its international cargo capacity.
Qantas took full control of air-cargo business Australian Air Express late last year after an asset-swap deal which involved Australia Post buying the airline’s half share of road-freight business Star Track Express.
Its freight unit now has 13 cargo aircraft including three 747s, one Boeing 767 used on the trans-Tasman route, and four 737 freighters.
A large portion of freight is also carried in the bellies of Qantas and Jetstar passenger jets.
Despite encouraging growth in Europe, International Air Transport Association boss Tony Tyler said the weakness in the Asia-Pacific region and a deteriorating political situation in the Middle East gave “ample reason for concern”.
“It is premature to say that air cargo may be emerging from the doldrums of the past 18 months,” he said.
This year, airlines in the Asia-Pacific region have experienced a 2 per cent fall in air freight.
The air-cargo market tends to be the canary in the coalmine for airlines. In the midst of the global financial crisis in 2008, demand for freight fell considerably further and more quickly than passenger traffic.
Deutsche Bank analysts have warned that the near-term outlook for the global air freight market, particularly on big export lanes in Asia, remains bleak because of an oversupply in capacity.
Airlines are expanding their fleets of large aircraft such as A380 superjumbos, which will boost capacity in what is considered an already oversupplied market.
Separately on Tuesday, Qantas released traffic statistics which show that yields – or return on fares – from its international operations fell in July, due to foreign airlines such as Singapore Airlines boosting capacity on routes to Australia in response to the alliance with Emirates.
Yields from domestic operations, including Jetstar, were flat in July, compared with the same month last year.
This story Administrator ready to work first appeared on Nanjing Night Net.