Boeing executive speaks out on Latin American airfreight growth
In addition to projecting that Latin America will emerge as an aviation hotspot in the coming decades, Boeing has singled out Brazil as a key nation contributing to its growth. But it’s Brazil’s presence in the airfreight market that really has one Boeing executive talking.
If there’s any region that’s generating buzz in the airfreight market, it’s Latin America. And for good reason, says Russell Tom, regional director of air cargo marketing for Boeing — the market has posted double-digit growth in a time when many other nations have experienced losses.
“As the Latin American economies have grown and developed, so has the Latin American air cargo market,” Tom told Air Cargo World . In fact, the region experienced 17 percent cargo growth in both North America and Europe in 2010.
Although the Latin American freight market took a hit in 2008 and 2009, it bounced back in a big way in 2010, Tom said. “By the end of 2010, air cargo traffic in each market exceeded the pre-recession levels of 2007,” he explained.
Of the Latin America region, South America accounted for more than two-thirds of its cargo business. Beating out Central America and the Caribbean region in total tonnage, South America has become a global hub for airfreight.
Still, one country stands out among all other South American nations in terms of airfreight growth: Brazil. With an aviation market currently valued at $85 billion, Brazil accounts for 20 percent of the South American-North American airfreight market share and 44 percent of the South American-European market. Even more impressive, Brazil’s airfreight market is projected to grow exponentially in the years to come.
“From 2009 to 2029, the Brazil-North American air cargo market is forecasted to grow at an average annual rate of 6.8 percent, and the Brazil-Europe air cargo market is forecasted to grow at an average annual rate of 6.9 percent,” Tom said. This is slightly higher than overall Latin American-North American and Latin American-European growth projections, which anticipate a 5.8 percent increase in airfreight annually.
Tom believes the Brazilian domestic market is also poised for growth. “Between 1995 and 2009, it grew at an average annual rate of 4 percent, despite the economic downturn and earlier global economic slowdowns,” he said. And if current projections are correct — anticipating 6.3 percent annual growth — Brazil’s domestic cargo sector will gain even more market share in the next two decades.
“As the largest Latin American economy and with forecasted economic growth above the global average, the Brazilian air cargo market is expected to continue to expand and grow,” Tom told Air Cargo World . He also points to future events hosted in Brazil as an impetus to growth. “The upcoming World Cup and Olympic games should provide, at least, an additional short-term stimulus to the Brazilian air cargo market,” he said.
In related news, Boeing has projected that Latin American carriers will demand 2,180 new aircraft over the next two decades, outpacing the rest of the world in terms of aviation growth. The airline manufacturer also projected that Latin American air travel will increase 6.9 percent over the next two decades, spurred by a yearly economic growth rate of approximately 4 percent.
The cost of procuring the aircraft needed to meet both increased passenger and freight demand is estimated at $210 billion. Of the Latin American nations, Brazil is expected to lead the aviation sector in demand, accounting for 40 percent of this projected value.