Abstract
Belgium-based Cargo B Airlines has ceased trading, it was reported in early
July. Niek van der Weide,
commercial executive vice-president, said the
airline had failed to attract investment. He added that load
factors had
been on target, but because of the current market condition, yields were too
low to make the
operation viable. The airline was not expecting any
improvement in the near future and low operating
charges, due to
increasing competition, had added to the problem, he said. Industry observers
believe
deteriorating market conditions and external cost pressure forced
the company to close. BMI points out
that the airfreight industry has been
battered in recent months by high fuel prices and declining traffic
volumes. We do not expect a recovery in 2009 as the global financial crisis
squeezes air cargo volumes.
In our latest Belgium Freight Transport
Report, the overriding story continues to be about the impact of
the
recession on the freight sector. We expect Belgian GDP to fall by 2.4% in
2009, and for there to be
near-zero growth in 2010 (+0.2%). As a result,
average annual GDP growth across the 2009-2013 fiveyear
forecast period
will be only 0.7%. We expect annual average growth in freight carried across
all
modes, measured in million tonnes-km (mntkm), to be 1.2% during the
forecast period. Despite the poor
market conditions, this rate will be
supported by greater infrastructure investment. Although we are
relatively
confident of the industry’s resilience, the risks to the freight sector
do lie on the downside,
particularly because of the intensity of the
European and global recession.
For the 2009-2013 forecast period, we
expect the value of activity in the transport and communications
sector to
continue outpacing the economy as a whole. It will achieve average annual
growth of 1.1%,
versus 0.7% for overall GDP. The total value of transport
and communications GDP will rise to US$34bn
in nominal terms by 2013,
representing 6.8% of Belgium’s GDP.
Our overall forecast for freight
carried in Belgium is for low growth based on a mature industry, good
infrastructure, a reduced economic growth rate, and the country’s
openness to foreign trade. We see the
best performing sector to be
shipping, which despite the downturn in trade levels in 2009 will benefit
from strong growth in subsequent years. Airfreight, which – with annual
average growth of 0.9% – will
come through another period of
relative turbulence in the sector. A smaller European carrier, SN Brussels
Airlines is likely to be absorbed by Lufthansa in the current round of
regional consolidation. If the full
takeover goes ahead over the next two
years, it will not necessarily be negative for airfreight volume
growth,
and could conceivably boost it further. Rail freight and pipeline throughput
are both expected to
grow by an annual average of 0.7%, on a par with GDP
expansion – this is due to new investment in
infrastructure. We see
road freight also in line with GDP, with an average annual growth of 0.7%,
reflecting the impact of the recession on freight demand. Inland water
transport will grow by an average
of 0.3% per annum.
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