Lufthansa Cargo sees overcapacity in global air freight market until 2012
November 27, 2007: 06:50 AM EST
FRANKFURT, Nov. 27, 2007 (Thomson Financial delivered by Newstex) -- Deutsche Lufthansa AG's cargo unit expects overcapacity on the global air freight market in coming years as supply grows faster than demand, unit product and sales chief Andreas Otto said.
Demand will likely grow an average of 5.4 pct a year until 2012, while supply will gain 6.1 pct a year, Otto said.
He also said the peak of freight out of China has already passed, and the annual growth rate until 2012 will likely be at 7.7 pct.
'The export boom in China is weakening,' he said.
One division that will still see demand rising faster than supply in the coming five years will be the express freight business, forcing logistics giants such as FedEx Corp (NYSE:FDX) to cooperate with cargo airlines.
Lufthansa Cargo and Deutsche Post World Net AG's DHL unit in September agreed to found a joint venture that will operate 11 Boeing (NYSE:BA) 777 aircraft for freight transport from 2009.
stw/mas/kf1
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Newstex ID: AFX-0013-21246336
http://money.cnn.com/news/newsfeeds/...3-21246336.htm
Couldn't understand if this was good news or bad news for FedEx? And why would we need to cooperate with cargo airlines to fly the freight.
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Lufthansa Cargo sees overcapacity in global air freight market until 2012
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