MIT ICAT Demand for Air Cargo Services Like demand for passenger air travel, demand for air cargo shipment is a“ derived” demand Primary drivers of air cargo demand include: Economic growth and trade(especially imports/exports) Relative prices of air cargo versus alternatives-ocean, truck, rail Difficult to quantify demand/supply accurately: No comprehensive sources of data on air cargo traffic and pricing Lack of published schedule data( unlike passenger airlines) Vertically integrated air cargo operators (like Fedex and UPS)only publish limited schedules for selected flights All-cargo carriers tend to operate flexibly based on daily/weekly demands Combination carriers provide joint supply of cargo and passenger capacityMIT ICAT MIT ICAT Demand for Air Cargo Services • Like demand for passenger air travel, demand for air cargo shipment is a “derived” demand. • Primary drivers of air cargo demand include: – Economic growth and trade (especially imports/exports) – Relative prices of air cargo versus alternatives – ocean, truck, rail • Difficult to quantify demand/supply accurately: – No comprehensive sources of data on air cargo traffic and pricing – Lack of published schedule data (unlike passenger airlines) – Vertically integrated air cargo operators (like Fedex and UPS) only publish limited schedules for selected flights – All-cargo carriers tend to operate flexibly based on daily/weekly demands – Combination carriers provide joint supply of cargo and passenger capacity