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U.S. Airport Outlook 2013

Demand side:

Price of jet fuel: the price of jet fuel has risen dramatically over the last decade. For example at Cargolux, fuel makes up half of all global expenses. At current prices shippers are looking to transfer as much cargo to oceangoing vessels as they can.

Trade volumes: GDP is the best predictor of air cargo volumes. The fastest growing trade lanes are tied to the fastest growing economies, like those in Central and South America, whereas trade with Europe has been stagnant.

Competitive services: Time definite trucking has taken a big bite out of air cargo volume growth over the last several years.

Production locations: As more production shifts from the Far East back to the U.S. and Mexico, demand for air cargo is altered.

Free trade agreements: Recent free trade agreements signed with South Korea, Panama and Colombia should increase air cargo volumes in both directions over the coming years.

Supply chain strategies: Just in time inventory strategies rely on air cargo to make up for unplanned contingencies. However, after the series of supply chain disruptions over the last two years, firms are reevaluating the levels of safety stock they hold in order to avoid using costly air cargo.

Supply side:

Capacity: Air carriers have been consolidating and right-sizing their fleets in recent years and this has cut back capacity in the bellies of planes and freighters flying domestically and internationally.

Upgraded aircraft: Boeing and Airbus, the two largest manufacturers of freighter aircraft, have been delivering increasingly efficient planes allowing carriers to save on fuel costs.

Security requirements: After 9/11, U.S. authorities instituted stringent security requirements for air cargo screening. These requirements have continued to tighten and impose significant costs on the carriers and have the potential to cause serious time delays.

Regulations: The U.S. is piloting a project called Cargo Advanced Screening. Air carriers have warned that the new requirements could cause service disruptions. However, another project called e-waybill could smooth customs clearance and data tracking between all parties.