As 2012 opens, we are concerned about the increasing signs global cargo traffic is softening.
Cargo traffic is typically a leading indicator of passenger traffic, both on the decline and subsequent rise. Cargo traffic fell 25% globally at the start of the Great Recession and passenger traffic soon followed. Cargo traffic began to recover before passenger traffic as the world edged out of recession.
But now, there are several indicators cargo traffic is softening again. IATA figures show traffic is on the decline. Additionally, there have been several developments at individual airlines.
Airbus and Boeing are ramping up production dramatically on the A320 and 737 lines, with backlogs stretching to 2017. A330 and 777 production is also increasing.
Although both companies successfully managed their skylines through the Great Recession with little noticeable disruption, the last thing they—or the airline industry in general—need is another economic downturn.
Boeing is already watching the cargo traffic closely, but as yet says it is too soon to say if passenger traffic will follow.
Our caution flags are up and waving. We don’t like what we are seeing.