Last Year, Air Cargo Dropped 6%... Will It Rebound This Year?

On the 27th, employees at the Korean Air Cargo Terminal of Incheon International Airport are busily moving to load air cargo in subzero weather. / Yeongjongdo - Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Yu Je-hoon] Due to the aftermath of the US-China trade dispute and other factors, the air cargo volume at Incheon International Airport decreased by about 6% last year, marking the lowest level in three years. The aviation industry is anticipating a rebound this year as a 'thaw' is forming between the US and China, and improvements are expected in key industries such as semiconductors.

According to Incheon International Airport Corporation on the 10th, the air cargo volume (international flights) at Incheon International Airport last year was tentatively recorded at 2,764,350 tons, down 6.4% from the previous year. This is the lowest figure in the past three years (2,921,635 tons in 2017, 2,952,069 tons in 2018).

The decline was evident across all regions. Starting with Japan (-19.6%), whose relations worsened due to export restrictions from July, cargo transport performance deteriorated in all regions including the Americas (-7.3%), Europe (-5.3%), China (-5.3%), Northeast Asia (-4.6%), and Southeast Asia (-1.3%).

The biggest cause of the plunge in air cargo performance is attributed to the US-China trade dispute. A corporation official explained, "The US-China trade dispute, Japan's export restrictions, and Europe's economic recession combined," adding, "As a result, the export and import of intermediate goods with China and Japan decreased, leading to a reduction in the total cargo weight."

This year, a base effect is expected to appear. In fact, Incheon Airport's year-on-year air cargo performance has shown a narrowing decline trend in October (-5.7%), November (-3.4%), and December (-2.0%) of last year.

The International Air Transport Association (IATA) recently stated in a report on air cargo, "Although the annual global air cargo volume decreased, downward pressure is easing," and added, "Considering that the volume decreased at the end of 2018 to early 2019 and then stabilized, positive growth compared to the previous year can be expected in the near future."

The gradual recovery in the semiconductor and IT sectors is also a positive factor. Although semiconductors account for only about 3-4% of the total air cargo volume (by weight), they represent high-value, low-weight cargo that approaches 50% in terms of value. If semiconductor prices rise, rates increase, which can positively impact airline profitability.

However, there are still many cautious views that it is difficult to be optimistic about the situation. Professor Heo Hee-young of Korea Aerospace University said, "This year, the airport and aviation industry will face difficulties not only in the passenger sector but also in the cargo sector," adding, "The external trade environment is still not favorable, and above all, the domestic economy is in a state of recession."

This content was produced with the assistance of AI translation services.