Impact Publications : AirCargo-254
Page 6 • AirCArgo AsiA-PACifiC APRIL-MAY, 2018 comment Infrastructure planning will directly impact on Aust’s logistics sector AUStRALIA has two pressing issues to address at present . Well, more than two but these ones are of far-reaching significance for the present day, the next 10 years and decades beyond: they are productivity and infrastructure and both impact directly on the freight and logistics sector. We’re making a reasonable effort at long last on productivity, as is new Zealand and some of our other Asia-Pacific regional neighbours. there’s lots more to do and we can learn from others; indeed we can work on many productivity essentials together. Infrastructure is more localised in terms of planning, even though some of it reaches regionally and globally, such as air and marine freight corridors, passenger services, telecommu- nications and the internet . Localised in terms of planning, especially. Building national infrastructure is complicated, costly and challenging. Establishing a new international air link is far from simple. Supporters have to assess its long-term revenue deliveries, sustainability and market appeal, as well as securing the nec- essary rights and setting up ground arrangements, staffing and administration. But it is relatively straightforward in comparison to the need for national transport and resources infrastructure that em- braces roads, rail lines, ports, airports, fuel lines, transport hubs and much more. Such an infrastructure is not only aligned to the national well- being, it is part of daily lives. As we report in this issue, Infrastructure Australia – a body that functions as an independent advisor – has a list of what it sees, with input from stakeholders, as priority projects and initiatives. A first read of the list might suggest that aviation, while well represented, is to some extent outweighed by other modes. that would be a misinterpretation. the evolution of Austral- ia’s 21st century infrastructure is a balanced affair. Air freight cannot prosper without efficient road networks and not just the main airport roads. Pick-up and delivery of air cargo con- signments can be affected by something as seemingly unrelat- ed as Melbourne’s ongoing problem of railway level crossings which cause congestion and delay for people and freight alike. What’s more, it is in the national interest – and sheer common sense – that some freight moves by rail, road or sea rather than air. Infrastructure is in every way a big picture. It affects everyone whether they are aware of this or not. And it’s ongoing – there will never be a point where we can sit back and say ‘well, that’s done’. But we can develop infrastructure to a point where it needs only building on or tweaking, rather than starting from scratch. We’re starting to make real progress. - Kelvin King Airline confidence index tips better ’18 bottom line THE LATEST International Air Transport Association (IATA) Airline Business Confidence Index survey conducted in early-April 2018 found 67 per cent of airline chief financial officers and heads of cargo indicated an improvement in year-on-year profitability in Q1 2018 compared with the same period in 2017. Importantly, the majority (61 per cent) reported that they expect their level of profitability to improve further over the coming 12 months. The positive outlook is being supported by robust demand growth, particularly on the passenger side of the business; 77 per cent of respondents expect passenger volumes to rise over the year ahead and just four per cent expect a decline. Some 42 per cent of respondents reported an increase in input costs in Q1, with a similar proportion also expecting increases in the year ahead. Many respondents again noted the impact of higher fuel prices as a key factor in their response this quarter. Both passenger and freight yields are expected to rise further over the course of the year ahead, with the upwards trend in the weighted average scores since their 2016 trough being maintained on this occasion. In terms of freight demand, 65 per cent of respondents reported a rise in demand in Q1 compared with a year ago – the strongest result in almost seven years. While the proportion who reported a decline increased to 11.5 per cent on this occasion, the weighted average backward-looking score remained close to its highest level since the post-GFC rebound in 2010/11. The outlook for air freight demand softened somewhat this month. Some 46 per cent of respondents – the lowest outcome in 18 months – expect an improvement in the year ahead (down from 63 per cent in the January survey). The same proportion expect volumes to remain unchanged (up from 30 per cent last quarter). Overall, the outlook for freight remains positive, but the survey responses are consistent with indications of a moderation in demand conditions after a very strong performance in 2 017 In a very positive outcome from the April survey, more than 50 per cent of respondents expect to increase employment over the next 12 months, the highest outright positive response in more than a decade.