ABSTRACT

The air cargo industry has significantly changed since the introduction of aircraft in the early twentieth century. Air cargo, especially air mail, dominated the early commercial activities of airlines until the development of aircraft such as the DC-3 and the economics of air passenger travel took over. The Second World War saw a resurgence in air cargo, with military airlifts and post-war humanitarian operations (e.g. the Berlin Airlift). Despite facing two international oil crises in 1973 and 1978, the 1970s saw further development of the air cargo industry, with the birth of FedEx (a few years after DHL) and liberalisation of domestic air cargo markets in the United States (US) in 1977. In the last decade, the air cargo industry has been embroiled in antitrust behaviour by airlines, felt a significant drop in demand during the global financial crisis (GFC), and subdued growth during a period of high oil prices (above US$100 per barrel). Nonetheless, the global air cargo industry continues to play an essential role in international trade, annually shipping US$5.6 trillion of goods, over 52 million tonnes of freight, worth 35 per cent of all merchandise import value (Shepherd et al., 2016). The relationship between the air cargo industry and economic prosperity cannot be easily dismissed.