Singapore Air CEO sees cargo market cooling

As the brewing trade battle between the US and China threatens to slow demand for air freight, the market also is likely to cool as demand gets in line with supply, according to the CEO of Singapore Airlines. “From a business perspective, we would like to see countries around the world to work together to grow the economy, rather than contributing to the slowdown,” Goh Choon Phong said. Last year “was a great year for cargo,” Goh said, as an unanticipated jump in demand outpaced capacity. Yet “even without these aspects of world-trade impact, you will be expecting people to put in capacity,” he said at Bloomberg’s headquarters in New York. As capacity and demand are more balanced, “you will also see some pressure on yield.” His comments shed light on another potential threat to cargo rates as carriers brace for a possible US-China trade war that could undermine a market that saw demand rise since Q4 2016. Asia-Pacific airlines control 37% of the global air-freight market, and Singapore Airlines has seven Boeing 747-400 cargo planes in its fleet. Meanwhile, Goh said, Singapore Airlines is well-positioned to contend with rising fuel costs. “We have a fairly consistent hedging strategy basically to manage, not to speculate, but to manage the volatility of oil prices,” he said in the interview, broadcast Friday in Singapore. “We’re fairly well hedged at the moment.”<br/>