iPhone 6 To Boost Air Freight Volumes

BMI View:   The rumoured launch date of the Apple iPhone 6 in September places upside risk to global air freight volumes in 2014. Air cargo companies' focus will be on routes from the Chinese airports of Zhengzhou Xinzheng International Airport and Shenzhen Bao'an International Airport, where Foxconn, the manufacturer of Apple products, operates factories - offering to boost air cargo throughput at both of these facilities.

A September 2014 launch date for the new iPhone 6 appears likely, with two versions of the model planned. The 4.7 inch screen version is expected to be shipped from September 2014 onwards, while the larger 5.5 inch 'phablet' could also be shipped around this time, but due to battery and manufacturing issues could be held back for shipment until early 2015. A new iPad Mini offering is also in the pipeline, but its shipment will likely be held off until after the iPhone 6 launch.

The rapid rollout schemes for new mobile models, with short lead times between product launch and sales drives mean that only air freight can meet this industry's supply chain needs. The rumoured launch of the iPhone 6 in September 2014 therefore offers to lift the global volumes of air freight, according to BMI's Freight Transport industry research team. This view has historic precedent, with global air freight levels turning positive in September 2012, during the rollout of the iPhone 5 - an improvement following the 3% decline recorded in the previous September.

Further Growth On The Cards
Global Air Freight Volume, % change y-o-y

BMI View:   The rumoured launch date of the Apple iPhone 6 in September places upside risk to global air freight volumes in 2014. Air cargo companies' focus will be on routes from the Chinese airports of Zhengzhou Xinzheng International Airport and Shenzhen Bao'an International Airport, where Foxconn, the manufacturer of Apple products, operates factories - offering to boost air cargo throughput at both of these facilities.

A September 2014 launch date for the new iPhone 6 appears likely, with two versions of the model planned. The 4.7 inch screen version is expected to be shipped from September 2014 onwards, while the larger 5.5 inch 'phablet' could also be shipped around this time, but due to battery and manufacturing issues could be held back for shipment until early 2015. A new iPad Mini offering is also in the pipeline, but its shipment will likely be held off until after the iPhone 6 launch.

The rapid rollout schemes for new mobile models, with short lead times between product launch and sales drives mean that only air freight can meet this industry's supply chain needs. The rumoured launch of the iPhone 6 in September 2014 therefore offers to lift the global volumes of air freight, according to BMI's Freight Transport industry research team. This view has historic precedent, with global air freight levels turning positive in September 2012, during the rollout of the iPhone 5 - an improvement following the 3% decline recorded in the previous September.

The launch of these new Apple offers upside risk to air freight volumes - good news for an industry that is in recovery. In January-May 2014 global air freight volumes have grown by 4.24% year-on-year (y-o-y) - a robust strengthening in growth, compared to the first five months of 2013, when global air freight levels were down 0.5% y-o-y.

Further Growth On The Cards
Global Air Freight Volume, % change y-o-y

During the iPhone 5 rollout BMI noted an increased interest from air freight operators in China's Zhengzhou Xinzheng International Airport, with new services being launched between the facility and major aviation hubs in Europe and the US. The airport offers supply chain options for the Zhengzhou Technology Park in Zhengzhou, one of the factories operated by Foxconn, the electronics contract manufacturing company which develops products for Apple.

BMI believes that Zhengzhou Xinzheng International Airport will be utilised again for the launch of the iPhone 6 as well as the rollout of the iPhone Mini and iPad Mini. Major air cargo operators such as Cathay Pacific Cargo, UPS Airlines, Air China Cargo and AirBridgeCargo already offer route options from the airport, but BMI expects interest from other airlines. Cargolux, the Luxembourg-based air freight operator, for example launched its first service to the facility in June 2014.

Zhengzhou Xinzheng International Airport's role in Apple's global supply chain will further boost air cargo volumes at the facility. The airport handled 255,712 tonnes in 2013, a y-o-y increase of 69%. BMI highlights that Zhengzhou Xinzheng International Airport's role in China's air cargo sector has been rapidly developing; in 2000 the airport was ranked 26th out of China's 100 cargo airports, while by 2013 the facility had climbed to 12th place.

On The Up
Zhengzhou Xinzheng International Airport - Cargo Volumes (Tonnes) & % change y-o-y

We believe that the Shenzhen Bao'an International Airport is also well placed to benefit from the rollout of new Apple products, with BMI's Telecoms industry research team projecting that Foxconn's Longhuu Science & Techonology Park in Longhua, Shenzhen will play a role in the production of the iPhone 6. Shenzhen Bao'an International Airport is one of China's largest air fright facilities, handling 913,472 tonnes in 2013, making it China's fourth largest air cargo facility.

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This article is tagged to:
Sector: Freight Transport, Consumer Electronics
Geography: China
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