Tuesday, February 17, 2009

Thailand: Air cargo plunges by half as crisis takes its toll on exports

Urgent need arises to find new markets

By: NAREERAT WIRIYAPONG
Published: 16/02/2009 at 12:00 AM
Newspaper section: Business

Thailand's air cargo volume plunged by nearly half in January following the annualised fall of 23 per cent in the fourth quarter of last year as the deepening global financial crisis continued to sting exports.

According to the Thai Airfreight Forwarders Association (Tafa), total outbound cargo totalled 107,249 tonnes in the last three months of last year, compared with 140,074 tonnes in the same period of 2007.

Year-on-year export shipments started to drop in September before facing the one-week closure of Suvarnabhumi Airport in late November.

Inbound shipments also declined 25% year-on-year to 61,900 tonnes from 77,550 tonnes a year earlier.

"The January figures were worse than what we expected with outbound volume falling by almost 50% from a year earlier. This is partly because some shipments have been switched to marine services," said Kasem Jaliyawatwong, the Tafa president.

Even though air transport has resumed considerably since Suvarnabhumi reopened in early December, Mr Kasem said cargo volume had yet to return to normal levels because international tourist arrivals have shrivelled.

"Losing arrivals also means cargo shipments fall as they are buyers of Thai products," said Mr Kasem.

"Business travellers have also cancelled their trips to Thailand, possibly because they have postponed investments here or moved to other destinations."

Even though political uncertainties have eased since the new Democrat-led government was installed, confidence in the private sector for both Thais and foreigners will take time to revive, he said.

Tafa has almost 200 members including airlines that operate pure cargo flights such as Air France, Lufthansa, Singapore Airlines, Korean Air, Japan Airline, and All Nippon Airways (ANA).

Mr Kasem said February and March volumes could be worse due to the world slowdown. In order to spur export growth, the government should speed up penetrating new markets, namely Eastern Europe and the former Soviet republics.

Flag carrier Thai Airways International (THAI) expects cargo revenue of 27 billion baht this year, level with 2008.

Cargo revenue makes up 17% of its total income. Cargo is loaded on all passenger flights to 72 destinations globally.

THAI, which is 51% owned by the Finance Ministry, has undertaken a feasibility study to operate freighters in response to the government's policy to expand exports of farm products and perishable goods.

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