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Australia Freight Transport Report Q1 2010
Market |
Logistics |
Report Type |
Market Research |
Country |
Australia |
Published |
16 November 2009 |
Number of Pages |
62 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Australia's national airline Qantas registered a 20.3% year-on-year (y-o-y) slump in cargo revenue to US$634mn in its fiscal year ended June 30 2009. This is believed to be the most significant fall since 2005. In the same period the airline's overall profit plunged 87% y-o-y to US$150.2mn. The Qantas Freight division posted a 74% y-o-y decline in operating profit to US$20.8mn in FY08/09. The airfreight industry has been hit hard in recent months by high fuel prices and declining traffic volumes, resulting in falling profits. Qantas is Australia's largest air carrier with a fleet of 190 aircraft including Boeing, Airbus and De Havilland planes.
We have lifted our GDP estimate for 2009 and now expect a marginal expansion (+0.3%) rather than a contraction (we had earlier expected shrinkage of 1.4%). We have also boosted the outlook for net year to growth of 1.9% (from an earlier 1.2% forecast), but we see 2011 weaker than at first expected (1.7% growth, against the earlier figure of 3.0%). For the new five-year 2010-2014 forecast we expect annual growth to come in at an average 2.5% which is a fraction higher than the 2.4% of the preceding five-year period of 2005-09. In other words, with adverse trends in the global economy, Australian growth will remain moderately strong. After a tough year in 2009 we expect commodity exports will lead to a recovery in demand for bulk shipping. Australian freight companies will have to adjust to the new conditions and some casualties and restructuring can be expected. But underlying demand for freight will remain sound. We expect overall freight carried, measured in million-tonnes-km (mntkm) across all modes, to grow an annual average of 5.5% over 2010-2014. According to our latest estimates transport and communications (T&C) GDP rose 0.3% in 2008 on a par with GDP. For 2009-2013 we expect the T&C sector, measured in value terms, to grow in line with the wider economy. Both should achieve average annual growth of 2.5%. The total value of T&C GDP will rise to US$71.0bn in nominal terms by 2014, representing 5.7% of Australia’s GDP.
In advanced economies freight transport tends to lag behind or grow at roughly the same pace as the economy as a whole. In Australia, however, there is continuing upside potential in the freight sector. This reflects the size of the country’s infrastructure development opportunities and the strong potential, once the recession has been negotiated, for the continuing growth of mineral exports. Airfreight, affected by the downturn in the global market, will see 3.7% average annual growth in freight carried. We expect rail freight to grow by 3.1% per annum with strong mining exports and infrastructure development coming into play after the current adverse international conditions improve. Road haulage freight carried will achieve average annual growth of 3.0%, a figure that takes account of a fairly slow 2009/10. Sea freight, coming out of the current recession, will grow an average of 8.6% per annum over the forecast period.
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