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IAG, Atlas execs voice hopes and fears at Budapest air cargo conference

EXPERTS differed at the recent Freighters and Belly Cargo conference in Budapest as their positive visions and fears for air cargo's future collided.

"Going forward, there will be more belly capacity than is needed," said IAG Cargo's Jude Winstanley, former head of freighters, reported London's Loadstar.

"As an industry we can self-regulate; we can't do anything about passenger tons coming, but we can take out freighters," he said.

Mr Winstanley, who now heads IAG Cargo's network, argued that having three 747-8Fs "just didn't work" as there had been a structural change in the market.

But Atlas Air chief commercial officer Michael Steen said: "It is too early to call whether it's a structural or cyclical change."

And if there were structural change, it was not a move away from freighters, but rather the overwhelming demand generated by global e-commerce that would drive air freight.

"The iPhone 6 had four million orders in the first 24 hours. But it's not just Apple. A lot of that business goes into the integrator pipeline. but a lot goes on commercial capacity too," Mr Steen said.

"By 2025 there will be 1.8 billion more people in the consumer class. And manufacturing is moving away from traditional passenger hubs look at Columbus, Manaus, Chongqing, Zhengzhou, Hanoi, he said.

And if there were any modal shift afoot, Mr Steen said it was not coming from sea freight as widely expected, but from 3D printing - and that would threaten sea freight more than air cargo.

"If you look at 3D printing; which mode will it affect first - I'd argue sea freight, which carries mass-produced goods - I think it will have a greater impact on ocean.

3D printing is a process for making a three-dimensional objects of almost any shape from an electronic data source in which successive layers are laid down under computer control.

Said Mr Steen: "E-commerce will be significant, but if we don't fix the bottlenecks we need to fix we will see more modal shift to express operators."

At the same time, he said, there will be demand for freighters, especially as express operators in China ramped-up operations.

On that point IAG Cargo's Mr Winstanley saw a role for freighters and express delivery integrators in that they could share main deck overcapacity.

Said Mr Winstanley: "We have shared capacity with DHL for 10 years - it works well for them and us. By sharing freighters we can make money and so can our partners."

He also said IAG could look at a similar model to its Qatar partnership with other carriers. "Sharing gives you higher aircraft utilisation and reduced risk," he said.