The European air cargo market is experiencing instability
In 2025, the air cargo market will face challenges due to the instability of the sector. This is the conclusion of analysts at Lufthansa Cargo.
According to the report, the air cargo sector will come under pressure from a number of factors. The most important of these is geopolitical instability. Despite this, the market will show growth, albeit insignificant. Heike Werner of Lufthansa presented the following expectations for the current year:
- demand for air transportation will grow by 3-5%;
- the growth in traffic volumes will be driven by the expected economic growth of 3.3% in emerging markets;
- India and Vietnam may become one of the main regions for the sector. Here, GDP will increase by around 4.3%.
The market will be further supported by the development of e-commerce. Freight traffic to Europe in this segment will grow by 12% annually. Shipments of pharmaceutical products will also grow, with the forecast for this sector being 3.3%. The dynamism in this case is due to the ageing of the population, which is particularly relevant for European society.
Semiconductor transport is in demand. In 2025, shipments in this sector will increase by more than 3%.
Challenges expected in the market
Despite growth in some segments, the air transport market will face challenges. The instability of global economic and political processes has a negative impact on logistics processes. We are talking about a rise in transport tariffs and a worsening of trade relations between several countries. However, experts believe that the market will be able to withstand this.
The air transport sector has always been rather unstable and sensitive to global changes. At the same time, it is highly flexible and able to adapt to new conditions. An example of this was the situation during the pandemic. The industry experienced first a surge in demand and then a downturn.
One of the limitations for European airlines was the difficulty of flying through the airspace of sanctioned countries. Now they have to plan routes to avoid these zones. This, in turn, enhances flight times and operating costs. At the same time, more than 10 million parcels arrive in the EU from China every day. And the volume of this flow is predicted to increase.
Another important factor for the market is the new tariffs imposed by the US. Other countries are responding with countermeasures. Members of the e-commerce sector are suffering as a result. They are faced with stricter delivery rules, which create additional difficulties.
Experts predict significant changes in 2028, when the European Union plans a major customs reform. This will affect processes in the air transport sector. Industry representatives should start preparing for these changes now.
