SIA CEO expects demand pressure on cargo yields

The balance between capacity and demand is expected to put pressure on yields, Goh Choon Phong said.

Bloomberg reports that Singapore Airlines’ CEO Goh Choon Phong sees demand as a pressure to cargo yields, which is outside the threats of slower air freight arising from trade tensions between the US and China.

“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,” he said in an interview. Last year “was a great year for cargo,” he added, as an unanticipated jump in demand outpaced capacity.

“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. “When capacity and demand are more balanced, you will then see lighter load into overall load factor. You will see pressure on yield.”

Goh’s 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 in which demand has risen since the fourth quarter of 2016.

Shares of the Singapore flag carrier declined 0.4% to $10.97 as of 9:11 a.m., trimming its gain this year to 2.8%.

Read the full report here.