Presented by

Didier Lenormand
Director - Business Development
Customer Affairs
Market Trends in the Air Freight Industry
-A Chinese Air Cargo Industry Perspective
Market Trends in the Air Freight Industry
-A Chinese Air Cargo Industry Perspective
Air cargo is a growth market: Some industry trends
Asia and China are keeping the lead
What freighter aircraft for China
Air freight is a growth market
Passenger aircraft role in air freight will decrease
FTKs (billion)
500
66%
34%
59%
41%
Belly Holds
+4.8%p.a.
Dedicated
Freighters
+6.5%p.a.
Total Cargo
+5.88%p.a.
141.1
442.7
400
300
200
100
0
2003 2023
Traffic volume will more than triple over the coming
20 years
Nearly 60% of cargo FTKs will be flown on
US-Europe-Asia Pacific routes
Share of 2023 FTKs
(FTKs growth: average per annum 2003-2023)
Source: Airbus Global Market Forecast, 2004
9.76%
2
6
.
1
5
%

(
+
6
.
5
%
)
1
9
.
7
8
%

(
+
6
.
3
%
)
2
.
9
6
%

(
+
5
.
6
%
)
3
.
6
%

(
+
5
.
3
%
)
2
.
7
3
%

(
+
5
.
7
%
)
2
.
8
5
%

(
+
5
.
5
%
)
11.53%
0.5%
~9.9% Other flows
2
6
.
1
5
%

(
+
6
.
5
%
10.23%
(+4.3%)
(+4.9%
)
(+7.3%)
(+5.0%)
80% of air cargo traffic will be long-range,
intercontinental, hub-to-hub
The freighter fleet will more than double The freighter fleet will more than double
The freighter fleet will more than double
477
2,412
727
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2023
1,506
3,616
Number of aircraft
Conversions
New freighters
Retained in service
+4.3% p.a.
A large replacement requirement, 727 new
freighters and a market dominated by conversions
More than 3100 freighters will be delivered
189
391
913
919
0
187
142
398
0
200
400
600
800
1,000
1,200
Small jet
freighters
Regional
freighters
Long-range
freighters
Large freighters
919
1,100
331
Number of aircraft
789
Total new a/c
Total converted a/c
Total a/c
727
2,412
3,139
2004-2023
Regional operations: low utilisation
Mostly conversions
Long range flights: high utilisation
Nearly equal mix of new & conversions
2003-2023 freighter fleet by region
Latin America
2003 fleet 2023 fleet
67 183
Africa
2003 fleet 2023 fleet
38 88
Middle East
2003 fleet 2023 fleet
18 37
Asia-Pacific
2003 fleet 2023 fleet
173 592
Europe
2003 fleet 2023 fleet
230 466
North America
2003 fleet 2023 fleet
980 2,250
World
2003 fleet 2023 fleet
1,506 3,616
By 2023, the Asian fleets will have more than
tripled from their current sizes
Widebody freighters have grown in importance
World Freighter Fleet 1970~2003
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003
%

F
l
e
e
t
Wi debody
Si ngl e-ai sl e
44%
56%
and will continue to do so
Fleet at mid-year point. Includes factory built and converted aircraft. Source: Airclaims CASE
World international traffic - Densities
( Includes belly and freighter cargoes )
135
140
145
150
155
160
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
kg/m3
Standard
Average
Express
Beside the major changes in the freight industry,
on-board densities are stable around 155Kg/m
3
since 10 years
Source: MGI 2005
2005 - 2015 Main drivers of traffic growth:
Economic expansion of Asia/Pacific region.
Very large emerging economies are taking off.
China
India
Concentration of population, wealth, and industries
leading to higher local consumption.
Continued trade liberalization:
December 2001 : China becomes 143th WTO member
J anuary 2002 : Taiwan becomes 144th WTO member
J uly 2004: China-US bilateral allows five-fold increase of direct capacity by 2010
Global companies need global cargo services :
Lean inventory strategies : Just-in-Time, made-to-order call for frequencies
Relocation of production in low-labor-cost countries
Hub and spoke and direct interlined operations: compatible aircraft
Market Trends in the Air Freight Industry
-A Chinese Air Cargo Industry Perspective
Asia and China are keeping the lead
From the top 20 freight markets in 2023: 13 are
linked to Asia, representing 48% of world FTKs
0 10 20 30 40 50
Domestic USA
PRC - North America
Asia - North America
Europe - North America
North America - Europe
Asia - Europe
Domestic PRC
North America - Asia
PRC - Europe
Europe - Asia
Europe - PRC
J apan - North America
North America - J apan
North America - PRC
Europe - J apan
J apan - Europe
South America - North America
Africa - Europe
Europe - South America
South America - Europe
FTKs (billions)
2003 traffic 2004 2023 growth
The Asia/Pacific freighter fleet will more than triple
158
92
207
293
90
104
0
100
200
300
400
500
600
2003 2013 2023
173
592
Number of aircraft
Conversions
New freighters
Retained in
service
+7.4% p.a.
352
+5.3% p.a.
At 6.4%p.a. growth Asia will require in 2023 more
than three times more all-cargo aircraft than mow
A need for mid-sized freighter is not only feeder
services in Asia but a market in its own right
A fast growing regional cargo market exists within Asia and
it consists of:
Mail, parcels and documents
High value goods
J IT and supply chains
Valuable cargo
It is mostly high value - low density commodities
Intra Asia is a maturing market with specific requirements
Night ops is the preferred choice, late pick-up / early delivery: Belly
only capacity not adequate
Intra Asia is a volume driven market: Wide body aircraft are better
fitted
Intra-Asia will require a cargo fleet on its own right:
Not long-haul tag-ends nor simply belly-only services
Intra Asia : Late pick-up, early deliveries - a need
for dedicated night, all-cargo services
Only all-cargo aircraft can offer late afternoon pick-up
and more particularly, late night delivery flights
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
.
0
0
-
2
.
0
0
2
.
0
0
-
4
.
0
0
4
.
0
0
-
6
.
0
0
6
.
0
0
-
8
.
0
0
8
.
0
0
-
1
0
.
0
0
1
0
.
0
0
-
1
2
.
0
0
1
2
.
0
0
-
1
4
.
0
0
1
4
.
0
0
-
1
6
.
0
0
1
6
.
0
0
-
1
8
.
0
0
1
8
.
0
0
-
2
0
.
0
0
2
0
.
0
0
-
2
2
.
0
0
2
2
.
0
0
-
2
4
.
0
0
Intra Asian network: Departures
Hourly tonnes offered
FedEx
A typical belly only
operation
More main-deck cargo capacity is required in the
Chinese regional market
Years
Tonnes
19?? 20??
Belly capacity
Cargo traffic
Need for
Dedicated freighter
China will also follow this evolution with a fast
rising need for dedicated regional all-cargo lift
Air freight in China
The freight industry eyes at the large and fast growing
export driven long-haul market ex-China
However a domestic and a regional market exist
China is a large country about the size of Europe
Communications across China are not easy
Ground infrastructure serves the major cities inter-land only
Air transport plays an increasingly large role
Recent ACMI / orders for mid-size freighters witness this
necessity
More than 30 A300/A310 Freighters on order or in
service in Asia: A recognised role as regional aircraft
Air Hong Kong
8 A300-600RF
Air Macau
Wet-leased A300B4Fs
2 A300-600RP2F
AIRMACAU
China Eastern
Wet-leased A300B4Fs
3 A300-600RP2F in 2008
China Eastern
Dragonair
Wet-leased A300B4Fs
FedEx
A310F in regional operations
China Southern
China Southern
6 A300-600RP2F
Sagawa
1+1 A300-600RF
Traffic imbalance today: China-USA example
Large imbalance mostly due to consumer and high-tech goods:
Exports to imports, consumer goods: 10 to 1
Exports to imports, high-tech goods: 6 to 1
Airfreight,
China to US
1000Ts
2004
%
Consumer 326
238
94
76
75
3
Food 1 0%
812
40%
High tech 29%
Capital 12%
Intermediate 9%
Other 9%
Primary 0%
Total 100%
Airfreight, US to
China
1000Ts
2004
%
Intermediate 69
53
40
31
18
10
Food 4 2%
226
30%
Capital 23%
High tech 18%
Consumer 14%
Other 8%
Primary 5%
Total 100%
So far an export driven market
Source: MergeGlobal
Traffic imbalance the opposite case:
A mature market, Europe-USA
Moderate imbalance driven mostly by difference in capital goods flows
and consumer habits
Europe and USA have very similar level of development and production
capacities. Traffic tends to be fairly balanced.
Airfreight,
Europe to US
1000Ts
2004
%
Capital 343
272
271
177
144
79
Primary 21 2%
1308
26%
Consumer 21%
Intermediate 21%
High tech 14%
Other 11%
Food 6%
100%
Airfreight, US to
Europe
1000Ts
2004
%
Intermediate 285
209
184
132
82
69
Primary 34 3%
995
29%
Capital 21%
High tech 18%
Consumer 13%
Other 8%
Food 7%
100%
Source: MergeGlobal
As local demand grows, the Chinese traffic will
tend to become more balanced
China's industrial production continues to
grow fast
Industry share of real GDP, constant US$
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Bn$ US
USA
Europe
Chi na
Source: Global Insight
By 2020 Chinese output will exceed
that of Europe
More and more Chinese households will be
able to afford imported goods
0
20
40
60
80
100
120
140
160
180
200
1985 1990 1995 2000 2005 2010 2015 2020
Source: Global Insight
Millions household with PP incomes above 30K$, real 1997 dollars
History Forecast
USA
China
Chinese market will soon become a large consumer market:
Paving the way for more diversified and larger imports
reducing dramatically the current traffic imbalances
Drivers for Chinese airfreight
Just-in-time manufacturing export driven
Driving long-haul export growth
General economic development - not only for exports:
More high-value goods are purchased by Chinese consumers:
computers (+35% urban areas*), mobile phones (+72% rural areas*)...
A fast growing consumer market heading to improve traffic balance
Manufacturing moving to more remote cities with lower
labor cost
Beyond trucking reach from major gate-ways: Feeder role rapidly emerging
Emphasis on development of Western region
The Chengdu example: The next Chinese cargo gate-way?
(recently open cargo services with DLH and KLM)
On the long run we will see a dramatic improvement of the
imbalances of the traffic between China and
the rest of the world
* Source: China Statistical Yearbook 2004
Market Trends in the Air Freight Industry
-A Chinese Air Cargo Industry Perspective
What freighter aircraft for China
Frequencies are key to the industry: Hub and spoke
will sustain the market requirements for daily services
Hub and spoke is a key condition for daily services,
as a result
efficient interlining is becoming key to success - industry wide
Long haul operations : Between hubs with larger aircraft
Regional operations : Intermediate capacity for daily services
wherever it is required
Airbus wide-body freighters:
A310P2F, A300-600RF, A330-200F
Beijing
SIN
DXB
DEL
ANC
TAS
KHI
SVO
85% most adverse annual winds 85% most adverse annual winds
ISA temperature ISA temperature
3% Airways allowance 3% Airways allowance
Typical international flight rules Typical international flight rules
Highest MTOW, GE engines Highest MTOW, GE engines
General cargo configuration General cargo configuration
Max structural payload Max structural payload
A310-300P2F
39.6t, 3300nm
A300-600RP2F
48t, 2550nm
A330-200F
64.3t, 4000nm
Ideally suited for China, Asian & far beyond!
A330-200F: Development study
A330F: Flight operational commonality with the A380F
A320 family
A330 Family,
A350 Family &
A380
Cross crew qualification
Qualifying from one aircraft to another
Difference Training rather than a Full Type Rating
Mixed Fleet Flying
One pool of pilots flying different aircraft types
Reduces training time, reduces number of crews,
simplifies maintenance
A unique Airbus advantage
A380F : Designed with the airlines inputs
Airlines inputs for the A380F, since 1996, from
a knowledgeable group of major cargo players
A380F: more range = more lift, further
Full payload to LAX and AMS/CDG/FRA
Beijing
Amsterdam
Anchorage
Los Angeles
Vancouver
Sydney
Paris
Frankfurt
Out-bound winds
3% airways allowance
85% Annual Probability
ISA
A380-800F:
5600 NM @ 150 t
Out-bound traffic ex Beijing:
A380F with full payload to Los Angeles and Europe
A380F: More range = less aircraft in fleet
PEK
PVG
CDG
LUX
ANC
LAX
SEA
SFO
ORD
J FK
DFW
ANK
x
x
624 stops per year in PEK to/from Europe = 1,248 hours / year
676 stops per year in PEK from USA = 1,352 hours / year
1,404 stops per year in ANC to/from USA = 2,803 hours / year
Assumes current frequencies, 1 stop = 2 hour ground time & typical aircraft utilisation
Cutting technical stops in Beijing & Anchorage
saves 5,408 hours per year
Equivalent to 1.4 aircraft
A380F one aircraft, 3 design densities offering
similar revenue payloads
High volume layout: Express freight
37,870 cu.ft.*
Tare : 8,875 kg
Max revenue payload
140,820kg
Design density = 8.2 lb / cu.ft.
35,370 cu.ft.*
Tare : 8,375 kg
Max revenue payload
141,300kg
Intermediate layout
Design density = 8.8 lb / cu.ft.
31,990 cu.ft.*
Tare : 7,375 kg
Max revenue payload
142,320kg
High density layout: General cargo
Design density = 9.8 lb / cu.ft.
* excluding bulk
Close to the Chinese
market requirements
Close to the Chinese
market requirements
The A380F offers both high and low design densities
These densities reflect the specific traffic patterns ex
China
PRC-North America
110
120
130
140
150
160
170
180
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
kg/m3
PRC-Europe
110
120
130
140
150
160
170
180
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
kg/m3
World average
8.2lb/ft
3
(8.2lb/ft
3)
Low densities result from volumes
of apparel and other consumer
products.
High-tech equipment exports grow
faster, resulting in a slight increase
in densities
Increase in density have stabilized
at a low value, in line with trans
Pacific markets
Source: MGI 2005
A380F : Outsize cargo - it does carry them
WIDER than 747F door WIDER than 747F door
744F
744F
3.05 m
clear
3.40 m clear
2.62 m
clear
4.27 m clear
A380F
A380F
Large automobiles eg Mercedes S Class 5.2m long
Large cylindrical object 10m long x 2m dia.
Running loads permit weights up to 30t in this section
Bell 206 Jetranger
helicopter (9.5m long)
777F
777F
3.07 m
clear
3.58 m clear
WIDER than 777F door WIDER than 777F door
2.62 m
clear
4.27 m clear
A380F
A380F
A380F has the widest main deck cargo door
A380F upper deck cargo loader:
Where is the issue?
Airbus has facilitated an industry working group to
develop upper deck loader solutions
Meetings held between May 2003 and April
2005 involving
Airlines
GSE Manufacturers
Standardisation bodies
Handling agents
Solutions from 7 manufacturers are now being
offered on the market:
, Trefel, FMC, TLD
First 2 vehicule will enter in service with
FedEX in 2007
Upper deck loaders can indeed be used
for other wide-body aircraft:DC10F/
MD11F and Airbus wide body
Upper deck loaders are now in production and will be tested
before the A380F enters into commercial service
A380F: More efficient on the ramp smaller apron
deepth than 747-8F
6510sqm 6510sqm
Ramp space Ramp space Ramp space Ramp space
747 747- -400F 400F
Source: Boeing ACAP manual
5810sqm 5810sqm
Ramp space Ramp space
65m 65m
89.3m 89.3m
747 747- -400F 400F
Source: Boeing ACAP manual
5810sqm 5810sqm
Ramp space Ramp space
65m 65m
89.3m
A380 A380- -800F 800F
5840sqm 5840sqm
Ramp space Ramp space
73m 73m
80m 80m
747 747- -8F 8F
92.9m 92.9m
5810sqm 6350sqm
68.4m 68.4m
+16.6m
+16.6m
747-8F requires 9.2% more ramp space than A380F.
Back-of-stand clearance problems (with adjacent taxiway)
is also identified in Shanghai-Pudong airport for instance
To conclude
Cargo market will continue to grow strongly
World average +5.9% p.a. to 2023: traffic will more than triple
Asia and China will keep the lead of that growth pattern
Chinese airlines are emerging as major global cargo players
The Chinese economy has become a major global industry player
A strong middle class is emerging in China:
This will help balancing long-haul traffic
Freighter fleets will more than double world wide
Wide-body freighters will continue to dominate the market
From a Chinese perspective, the A380F is the best solution for
the Chinese airlines long-haul market growth requirements
(Thank You)
(Thank You)
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