Summary

The Latin America Air Freight Industry is expected to grow from USD 1.04 billion in 2024 to USD 1.28 billion by 2029, at a CAGR of 4.22% during the forecast period (2024-2029).

Key Highlights

• The air trade in Latin America is growing with increase in capacity addition and demand for fresh Latin American perishable goods across the globe. However, the archaic regulations and slow growth in infrastructure are hindering the continent from realizing its full potential. EcoEconomic instability coupled with widely divergent travel restrictions, newly imposed taxes, and a lack of government financial aid was to make for a rather uneven recovery from the downturn driven by the COVID-19 pandemic.
• As per the data released by the International Air Transport Association (IATA), in August 2022, the region had a 9.0% increase in freight volumes for airlines compared to August 2021. Among other regions, Latin America witnessed a significant growth rate. The growth is mainly attributed to the offering of new routes and capacity. The region is also expected to invest more in aircraft for air cargo in the upcoming months. When compared to August 2021, capacity has increased by 24.3%.
• Unlike other rivals who are still feeling the consequences of Russia's war in Ukraine and the lifting of strict Chinese lockdowns, American Airlines saw an increase in revenue in May of this year. Latin American carriers outperformed all other regions in May, outperforming the general declining trend with a rise in cargo volumes of 13.8%. According to IATA, "Airlines in this region have demonstrated optimism by launching new routes and capacity, and in certain cases investing in more aircraft for air cargo in the coming months." When compared to 2021, the region's capacity increased by 33.3% in May.
• The air freight sector is currently experiencing a number of difficulties, including planes being grounded, routes being cut, and a drop in demand. Compared to the pandemic era, certain global air freight corporations are indicating a slackened demand.
• In contrast to the booming consumer demand that characterized the preceding two years, the air freight sector is currently facing a decline in customer demand, notwithstanding the time of year. Simply expressed, due to a number of circumstances, air freight companies anticipate a subdued fourth quarter in 2022. These include the broken supply chain, the protracted war, the slowdown of the world economy, and the possibility of a worldwide recession.

Latin America Air Freight Carriers Market Trends

Growth of E-commerce increase the transport service

As per a recent report by DHL, cross-border e-commerce is one of the major opportunities for logistics providers due to the lower density of physical retail space, limited product availability, high penetration of smartphones, and purchase savings throughout the region. The industry continuously innovates to leverage the latest technologies and develop fraud protection solutions and authentication technologies that allow key players, merchants, and banks to identify online shoppers by leveraging solutions such as biometric data for identity authentication. Several factors are behind this growth, the most important being the large numbers of millennials making purchases and the massive proliferation of smartphones.

In Latin America today, social commerce is starting to overtake e-commerce. More than half of the Latin American shoppers polled in Brazil, Colombia, and Mexico engaged in social commerce. Comparing social commerce to traditional e-commerce, such as official corporate websites or marketplace websites like Amazon, Rappi, or MercadoLibre, the latter is gaining ground in Latin America.

The increased selection of payment options was cited by more than 40% of customers from Brazil, Colombia, and Mexico as a key advantage of social commerce. Nearly one-third of social commerce transactions in Argentina, Colombia, and Mexico involved currency coupons obtained from convenience stores. This demonstrates that, in addition to relying on bank transfers, cards, and PayPal, even tech-savvy social media users favor cash as their preferred payment option.

Brazil Evolving as an Important Market for the Growth in the Air Freight Industry

Brazil's assistance of air cargo through its customs and border regulations ranks 52nd out of 135 countries in terms of the E-freight Friendliness Index (EFFI) globally. The air cargo transportation market has grown considerably in the country due to its various benefits, such as greater speed and safety in the movement of products inside and outside the country.

The Brazilian aviation industry is a top 10 export destination for U.S. aerospace products. Brazil has the 5th largest airspace in the world and is one of six countries globally that manufactures commercial jets. Aerospace products and parts are the second-largest sector for U.S. exports to Brazil. U.S. companies exported USD 6.808 billion in 2022, a nearly full recovery from the pre-pandemic high of USD 7.021 billion in 2019.

In addition to being an attractive destination for U.S. exports, in 2022, Brazil was also the largest South American source of Foreign Direct Investment (FDI) into the United States, according to SelectUSA, the U.S. Government’s investment promotion program. Additionally, the U.S. Bureau of Economic Analysis indicates that the Brazilian stock of job-creating FDI in the United States stood at USD 30.6 billion in 2022 when measured by the market of the ultimate beneficial owner or UBO.

One of the key advantages of air freight is its dependability. Even though weather conditions can affect flight schedules, the availability of daily flights makes it simple to board the following trip. Consolidating shipments might be assisted by a knowledgeable air freight forwarding business. Combining airport terminal pickup, customs brokerage, cargo delivery, and affordable air carrier rates can help simplify logistics administration. Vendors can then concentrate more on expedited shipping in this fashion.

Latin America Air Freight Carriers Industry Overview

The Latin American air freight industry is moderately fragmented in nature. However, the industry is dominated by some of the major players like FedEx, UPS, Emirates, and many more. The growing demand for air freight transportation services has opened new challenges for air cargo service providers. E-commerce also pushes air cargo toward greater visibility and transparency throughout the supply chain, with Brazil being the biggest market. Companies like Azul focus on expanding their presence in the country via collaborations and partnerships with e-retailers like Amazon.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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Table of Contents

1 INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study

2 RESEARCH METHODOLOGY
2.1 Analysis Method
2.2 Research Phases

3 EXECUTIVE SUMMARY

4 MARKET INSIGHTS AND DYNAMICS
4.1 Current Market Scenario
4.2 Market Overview
4.3 Market Dynamics
4.3.1 Drivers
4.3.1.1 Extension of new air routes and capacity
4.3.1.2 Constant Need to Transport Temperature-Sensitive Products
4.3.2 Restraints
4.3.2.1 Market Uncertainty
4.3.3 Opportunities
4.3.3.1 Implementation of Several Software Solutions
4.4 Value Chain / Supply Chain Analysis
4.5 Porter's Five Forces Analysis
4.5.1 Bargaining Power of Suppliers
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Threat of New Entrants
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Government Regulations and Initiatives
4.7 Supply Chain/Value Chain Analysis
4.8 Technology Snapshot and Digital Trends
4.9 Spotlight on Key Commodities Transported by Air
4.10 Elaboration on Air Freight Rates
4.11 Insights into Key Ground Handling Equipment in Airports
4.12 Review and Commentary on Standards and Regulations on the Safe Transport of Dangerous Goods
4.13 Brief on Cold Chain Logistics in the Air Cargo Sector
4.14 Impact of COVID-19 on the Market

5 MARKET SEGMENTATION
5.1 By Services
5.1.1 Transport
5.1.2 Forwarding
5.1.3 Other Services
5.2 By Destination
5.2.1 Domestic
5.2.2 International
5.3 By Carrier Type
5.3.1 Belly Cargo
5.3.2 Freighter
5.4 By Geography
5.4.1 Brazil
5.4.2 Mexico
5.4.3 Argentina
5.4.4 Colombia
5.4.5 Rest of Latin America

6 COMPETITIVE LANDSCAPE
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 FedEx (Federal Express)
6.2.2 United Parcel Service
6.2.3 Emirates Skycargo
6.2.4 Aeromexico
6.2.5 Cargolux
6.2.6 LATAM Cargo
6.2.7 Qatar Airways
6.2.8 Azul Cargo Express
6.2.9 Kuehne + Nagel
6.2.10 IAG Cargo
6.2.11 Avianca Cargo
6.2.12 DHL
6.2.13 United Airlines
6.2.14 American Airlines
6.2.15 Delta Airlines
6.2.16 Copa Airlines*
6.3 Other Companies

7 KEY VENDORS AND SUPPLIERS (AIRCRAFT MANUFACTURERS, TECHNOLOGY PROVIDERS, CARGO HANDLING EQUIPMENT MANUFACTURERS, ETC.,) IN THE AIR CARGO INDUSTRY

8 FUTURE OF THE MARKET

9 APPENDIX