Jevey Zhang, President, Hong Kong Air Cargo.
What are the short to medium-term prospects for the air cargo market?
The year-end industry growth figure for 2018 was 3.3%. But according to Hong Kong International Airport published data, although in 2018 the total cargo throughput increased 1.5% year-on-year to 5.1 million tonnes, it decreased from December. That month it handled 448,000 tonnes, a 5.2% year-on-year drop. And in January 2019, it handled 401,000 tonnes, a 4.2% year-on-year drop.
Uncertain global economic conditions have contributed to decreases in cargo volume. Imports and transshipments were impacted the most, registering 8% and 6% year-on-year drops, respectively. Among key trading regions, cargo traffic to and from Europe and Southeast Asia has decreased most significantly. However, a list of positive factors provide us with confidence, such as recent positive trade talks, favorable fuel prices and increasing demand for time sensitive and temperature-controlled air freight.
“Air freight is facing political, technical and economic challenges”
Are you happy with the facilities at Hong Kong Airport?
We are. However, due to slot constraints many of our flights are only able to fly night schedules. We look forward to additional slots with the commissioning of the third runway as soon as possible.
In brief... Hong Kong Air Cargo
- As a subsidiary of Hong Kong Airlines, the carrier operates 12 routes to and from Hong Kong
- Operating out of Hong Kong, Hong Kong Air Cargo has a fleet of five Airbus A330-200F aircraft
- Founded in 2017, the airline transports products in full accordance with IATA standards
How difficult is it to balance the trade flow and ensure full freighters on west-east routes?
The trade flow has suffered turbulence from time to time because of many factors. As an air cargo carrier based in Hong Kong, the answer to this is a broader approach and global optimization that will allow us to better integrate with the logistics supply chain. But there are key factors we must research before we take solid action, such as the Belt and Road Initiative and the development plan for the Guangdong-Hong Kong-Macao Greater Bay Area. We would also have to undertake research on political, economic, and cultural factors and on network segmentation to target the correct markets at the correct times.
What are the major challenges in the air cargo industry?
There are political, technical and economic challenges facing the air freight sector. On the political side, there is increasing protectionism around the world and policies and regulations relating to air cargo are inconsistent.
Technically, the industry has to learn how to improve service levels and increase capacity to keep up with the incredible growth of e-commerce demand, which has rapid shipping requirements. Disruptive technologies will also give rise to the economic challenge as the global logistics network and supply chain have become very dynamic. Keeping pace with new entrants will be hard. Also, although the fuel price is set to remain low for now, ultimately the price is unforeseeable.