dnata remains confident in global cargo market turnaround

Published: 23 February 2020 - 4:58 a.m.

Ground support group dnata is continuing to invest heavily in new cargo facilities around the world despite a slowdown in international air freight markets and its impact on profitability.

The global air freight market has been plagued by international trade wars, primarily between the US and China and lethargic economies.

New data from the International Air Transport Association (IATA) published this month showed that 2019 was one of the worst years in the air freight sector in the last decade in terms of volumes.

But dnata, which relies heavily on the cargo market, has continued to open new facilities at airports around the world to supplement its portfolio.

The group opened cargo facilities in three airports in the last 12 months, in Brussels, Heathrow and Karachi.

Stewart Angus, divisional senior VP for international airport operations at dnata, ceded that the double-digit decline in cargo volumes has impacted profitability but said the firm is continuing with its opening schedule.

“We opened three cargo sheds in the last year and we’ve got more in the pipeline,” he told Aviation Business. “We’ll also open up Charlotte in North Carolina as a new station for ground handling this May.”

Each new facility will be equipped with the latest technologies and comply with industry standards to ensure efficient and safe handling of all types of cargo, Angus said.

“We’ve just broken ground on a fantastic facility we’re building in Manchester which is expected to open by the end of this year, at a time when the cargo market is in decline.

“We’re in a lucky position in that we can take a long-term perspective on this because of our shareholding.

“Cargo is a cyclical market, even more so than economies. Even in the cargo boom two years ago we weren’t foolish enough to think it would carry on forever. We knew there would be another downturn in the same way that we know it will turn around in the future.

“Can I predict when that will be? No. Best guess – one to two years. The other thing about cargo sheds is that they are by their very nature, long-term investments. You’re typically taking out 15-year leases, big upfront cost, you’re investing for the long-term. It’ll bounce back, that’s the view you have to take.”

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