New air cargo markets such as India and Vietnam, along with some non-Asian destinations, are emerging but Frankfurt airport is still looking to Asia, and especially China, as a major market, officials with the airport and Lufthansa Cargo have told Asia Cargo News.

The Asian market is already highly relevant for Frankfurt’s cargo business, with more than 50% of the airport’s total cargo volume heading to Asia, Max Conrady, senior vice president for cargo development at Frankfurt Airport told Asia Cargo News.

The airport’s most relevant routes are to Shanghai Pudong, Incheon and Bejing, he said.

“The transported goods are mainly machinery parts, raw materials and capital equipment,” added Conrady.

This is corroborated by others working out of the German hub – especially Lufthansa.

“The most frequented lanes are between North America and Europe and North Asia and Europe. In Asia, the busiest cargo markets are China, including Hong Kong, Japan and India,” Florian Pfaff, Lufthansa Cargo vice president for Asia Pacific, said.

Looking forward, and despite recent hiccups in trade relations, Frankfurt as an airport is expecting no significant change – and has a cautiously optimistic outlook about the future.  “We expect a slight growth for our business between Frankfurt and Asia. Despite the difficult market environment, in the long term, Asia is an important growth market for us,” said Conrady.

This view was also endorsed by Lufthansa which, while diplomatically reporting recent trade disputes as “dampening factors,” also expressed optimism. “A solution to the underlying conflicts and tensions would be desirable, and we expect that the benefits of free trade are going to be recognized again,” said Pfaff.

There is an acknowledgement that the US-China trade war was, as Conrady termed it, “a continuous negative effect on the global world trade traffic figures in Frankfurt.” However, what is surprising is how much impact the trade dispute had on the facility’s Asia trade, which has declined by a noticeable 5.9% due to the trade conflict, he added.

Statistics from Lufthansa add detail to this.

Between January and September 2019, the airline had a cargo load factor of 68.71%, down 7.1 points compared to the same period in 2018, although in line with a 7% cut in revenue when measured by cargo tonne kilometres.

(Interestingly the only region of the world showing increased load factors was the Middle East and Africa, which grew by 4.3 points to 53.6%. All other regions, Europe, America, and Asia Pacific, registered declines of 5.9%, 4.9% and 7.1%, respectively.)

In terms of net traffic revenue, the decline was even more severe. January to September revenues for Asian cargo fell 14% to €699 million (US$769 million). This was double the 7% fall on the roughly equal America cargo trade worth €718 million (US$790 million) Lufthansa experienced in the same period.

Where there is a divergence is on where future trade lanes will be, with Lufthansa perhaps more Asian in its outlook – albeit with a wider idea of what Asian lanes are likely to emerge.

“The focus within our global route network is likely to remain on routes between Europe and North America and North Asia. Vietnam and India will certainly continue to play an important role within Asia alongside Japan and China including Hong Kong,” said Pfaff.

“We are selling our standard product portfolio in India with a focus on our cool service for temperature-sensitive goods. In Hyderabad specifically, Lufthansa Cargo currently operates three weekly MD-11F freighter connections via Mumbai. Currently, there is no indication of any specific commodity development other than pharmaceuticals. We will stay committed to the market in Hyderabad [because], basically, we see fundamentals for airfreight demand remaining solid, not only in Hyderabad but also across India,” he added.

What is also interesting is where other linkages are coming to the fore, with Pfaff adding the busiest lanes between South America and Asia are those between China and Brazil and those between India and Brazil.

By contrast, Frankfurt Airport is noticing a more African twist – one that is happening now, according to Conrady.

“We are noticing a really strong growth rate of more than 20% on routes to North Africa. Also, there is a strong growth rate on the Central African market, which is up 12.7%.”

The routes with the highest absolute growth rate are Abu Dhabi and Moscow Sheremetyevo, he said.

By Michael Mackey

Southeast Asia Correspondent | Bangkok