As China’s Golden Week holiday disruptions wind down, airlines are shifting more capacity to high-demand routes between Asia Pacific and North America, preparing for the busy Christmas season.
According to the U.S. National Retail Federation (NRF), holiday consumer spending is projected to increase by 2.5% to 3.5% over last year, with e-commerce expected to grow significantly by 8% to 9%, reaching up to $297.9 billion. NRF President and CEO Matthew Shay remarked, “The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year. The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth.”
Despite five fewer days between Thanksgiving and Christmas this year and potential impacts from recent hurricanes, NRF’s Chief Economist Jack Kleinhenz remains optimistic. “We remain optimistic about the pace of economic activity and growth projected in the second half of the year. Household finances are in good shape and an impetus for strong spending heading into the holiday season,” he noted.
Reflecting this optimism, air cargo capacity from Asia Pacific to North America rose 6% last week compared to the previous week, with capacity to Europe up by 4%, according to data from Rotate. Key routes like Shanghai to North America saw a 17.5% increase, and capacity from Hong Kong rose by 11.7%.
Cathay Pacific’s Chief Customer and Commercial Officer, Lavinia Lau, noted robust demand expected during the peak season, driven by e-commerce, hi-tech, and electronic goods from the Chinese mainland, Southeast Asia, and India, as well as perishables from the southwest Pacific and the Americas. In September, Cathay Pacific reported an 11% year-on-year increase in volumes, with a 10% increase year-to-date.
“We observed an uptick in our Cathay Fresh shipments from the southwest Pacific, Southeast Asia, and North America into Hong Kong and the Chinese mainland, driven by increased demand during the mid-autumn festival,” said Ms. Lau. “There was also an increase in shipments through our Cathay Priority solution due to growing demand for time-sensitive shipments to the Americas and Europe. From the Greater Bay Area, e-commerce shipments continued to be the key driver of our export tonnage.”
Despite increased capacity, rates remained stable. The TAC Index reported a week-on-week rate increase of 1.6% out of Hong Kong, with a 3.6% rise out of Shanghai.
The NRF cautioned, however, that new U.S. tariffs could impact consumer spending. Research by the Peterson Institute for International Economics found existing tariffs cost U.S. households between $1,500 and $3,000 annually, a figure that could rise to over $4,000 under a renewed Trump administration. Mr. Shay explained, “Tariffs are paid by the importer and not the producing country, and that is passed on to the consumer. It’s a tax paid by the consumer. Tariffs can be a useful temporary tool during trade negotiations, when used strategically and sparingly, to get benefits in a trade relationship.”
With demand and spending poised to remain strong through the holiday season, airlines and the retail sector are bracing for a busy end to the year, balancing capacity with consumer needs in this critical economic period.
Source: theloadstar.com