Now that the worst of the crisis appears to be behind us, glimmers of optimism are increasingly being expressed by the industry. At the recent Air Cargo India, the mood was far more upbeat than it has been for the last few such industry gatherings during the height of the crisis last year. The optimism may be slightly skewed by the very location of the cargo event however, as India never reached the same depths of the economic quagmire that other economies around the world did.

And while optimism is rooting itself, there is a very sensible caution being exhibited by most carriers. Will the recovery hold, or will the euphoria of December peak volumes give way to collapse? The all-important tipping point of the Chinese Lunar New Year seems to herald further recovery as volumes continue to build and yields out of Asia continue to gradually strengthen post-Lunar New Year.

Opinions on the recovery are naturally divided, but one stark warning from Datamonitor (see News on page 24) goes as far as to suggest the possibility of the much dreaded ‘double-dip’ recession. Even at best, Datamonitor warns of a “slow recovery” taking “many years to recover to pre-recession levels”.

But of more immediate concern is the fragility of this recovery and the absolute vulnerability to oversupply in the industry. This has been a perennial weakness of the air cargo industry for a number of years, most visible in the China market leading up to the crisis of last year.

The biggest threat to this relative stability is over capacity in the market, and the possibility that airlines will try to reinstate parked aircraft too fast, further diminishing yields. Although virtually every air cargo executive espouses the strategy that the market has to be very sensitive about adding capacity back in, and keeping a tight rein on capacity growth is the only road to recovery, words and deeds often don’t equate.

A wild card in all of this of course, is belly capacity. There were some very sharp words uttered during the India event regarding, what is in international trade terms, ‘dumping’ by some carriers with large belly capacities.

In essence the complaint centred around the fact that for a passenger carrier, its excess belly capacity can be flogged off for whatever it can get and this spoils the market – utterly killing attempts in this current climate to restore yields to a respectable level – for the maindeck cargo players.

This may well be the case in the current environment, but under normal circumstances this argument losses efficacy as the market will demand a variety of differentiated services, ultimately attracting different segments of business and different rates.

In the meantime however, only time will tell how the recovery proceeds and fingers crossed, caution and restraint will continue to be the hallmark of industryplayers.