International air cargo to and from Colombia increased from 384,979 tons in 2002 to 502,502 tons in 2008, a 31 percent growth in six years.
     The dynamism this sector showed went hand-in-hand with the positive performance of the Colombian economy. During the years from 2003-2007, the country saw the most significant economic growth in many years, with an average annual growth rate of 5.6 percent.
     At the end of 2008, the economy began to suffer the effects of the global economic crisis. Although initially it was thought that the country would be resilient against the international conjuncture, the Colombian government recognized that the economy was plunging into a recession. The national ministries have lowered economic growth forecasts for 2009 and 2010, which is now 0.5 and 2.5 percent, respectively.
     It is perhaps not too surprising that the United States is Colombia’s main foreign trade partner – whether one counts either legal or illegal trade flows. During the last three years, an average 27.0 percent of total Colombian imports came from the United States. Along this same period, the United States was the market for an average 37.0 percent of total Colombian exports. From 2007 to 2008, the United States accounted for an average 65 percent of total Colombian outbound and inbound international air cargo.      
     Therefore, as the economic conditions of the United States have not improved, foreign trade and total air freight to and from Colombia will continue to decline.
     However, despite the current uncertainty in the global economy, air freight volumes are expected to slowly regain their long term upward trends. Industry analysts recommend staying alert for economic changes, maintaining the contacts clients, establishing new ties, merging with other firms, and innovating with better services and lower costs to be able to stay on the competition under the current circumstances and when the world economies start to recover.
     During the last ten years, Colombia has confronted two serious recessions. In 1999, for the first time in 35 years, the economy showed a negative growth (minus 4.2 percent). As a consequence, most industries went through difficult times, which reflected in a general decrease of foreign trade figures. The construction industry experienced a major slowdown, inflation maintained a two digit growth and unemployment reached levels of up to 20 percent. The situation stimulated a significant decrease in international air cargo movement—from 448,000 tons in 1998—to an annual average of 390,000 tons in 1999-2000.
     In 2002, the economy began a slow but constant recovery. The GDP grew 1.9 percent in 2002 and achieved a 5.6 percent average rate of growth for the period 2003-2007. During 2002-2008, all economic indicators reflected the excellent performance of the economy. The following are some of the most impressive: foreign reserves jumped from US $10.8 billion to US $24.0 billion; the annual flow of direct foreign investment increased from US $2.1 billion to US $10.6 billion; total exports boomed from US $12.0 billion to US $37.6 billion; and imports increased three times from US $12.7 billion to US $39.7 during the reference period.
     However, the current global economic crisis started to have a negative effect on the Colombian economy during the last quarter of 2008. The Colombian Minister of Finance, Oscar-Ivan Zuluaga had maintained that the country was prepared to face the crisis and that the local economy was not expected to be very seriously affected. However, the National Statistics Department of Colombia admitted, on June 25, 2009, that the country's economic growth in the first quarter of the year contracted 0.6 percent. Since it was the second consecutive quarterly decline (the drop was 0.7 percent during the last quarter of 2008), Zuluaga further admitted that the country's economy had technically plunged into recession. Subsequently, the Colombian government lowered its economic growth forecast for 2009 and 2010, which are now 0.5 and 2.5 percent respectively.
      In the first trimester of 2009, a 13% deterioration of the country’s international sales was observed. This situation mainly took place because of a decrease in petroleum and other fuel sales to the United States, which fell 20%. It is worth pointing out that the loss is related to the reduction in the international prices of crude, since in volume, these exports have grown. When the country lost its surplus with the United States during the first months, it began depending more than ever on its trade with Venezuela. Thus, if the economic conditions of the United States do not improve, the exports of the country will continue to decline. Total imports have been reduced by the effect of the devaluation and smaller demand. By year end they will probably show a 14 % total reduction. Surprisingly, foreign investment maintained levels similar to the ones reached during the first quarters of 2006 and 2007, when an economic expansion was underway. Although investments in the commercial and industrial sector have suffered, capital inflows in the mining sector remain robust. Remittances have also been hit by the global situation but the decrease is only 7%.
     Undoubtedly, there is a direct correlation between the ups and downs of the economy and the air freight market. During the recession that affected the Colombian economy throughout 1997-2001, the market for outbound and inbound international air cargo in Colombia experienced a serious downturn when it decreased by 20.5 %, from 468,261 tons in 1997 to 372,338 tons in 2001.
     The recovery that this market experienced after 2002 went hand in hand with the previously depicted economic expansion of Colombia during the subsequent years. Total international air cargo to and from Colombia continuously increased from 384,979 tons in 2002 to 502,502 tons in 2008, a 31 percent increase in six years.
     The following factors contributed to the substantial growth of the Colombian economy during the last six years and also had a direct positive impact on the dynamism that the local freight market showed: improved security, low inflation policy, Colombian peso appreciation and stability, increase in petroleum price, the upsurge in demand for other basic commodities and minerals and the growth of foreign trade and investments.

      Another reason for the dynamism that the Colombian air freight market showed during the 2000 is the open-skies agreement for charter flights and air cargo activities that Colombia and the United States signed in March 2000. This agreement allows any airline designated by the U.S. government to operate all-cargo service between any point in the United States, via intermediate points, in both directions, to a point or points in Colombia, and beyond Colombia to points in the Western Hemisphere. Furthermore, the agreement allows any airline designated by the Colombian government to operate all-cargo service from Colombian territory to any point or points in the United States, including San Juan, Puerto Rico and beyond to Europe. There are no limits on the flight frequency or aircraft size.
      Currently, preliminary statistics put out by the Colombian Air Transport Association (Asociación Colombiana del Transporte Aéreo ATAC) and the Colombian Civil Aviation Department indicates that the Colombian international air cargo market has been seriously affected by the global economic crisis. Total inbound and outbound air cargo decreased by 24.1 percent during the first five months of 2009 when compared to the same period in 2008, which confirms something well known by industry sources: that the air cargo market is characterized by a high degree of volatility and that the general economic activity strongly determines the volume of goods to be transported.
     However, despite the current uncertainty in the global economy, air freight volumes are expected to slowly regain their long term upward trends. Industry analysts recommend staying alert for changes, maintaining the contacts with clients, establishing new ties, merging with other firms, and innovating with better services and lower costs to be able to stay on the competition under the current circumstances and when the world economies start to recover.

     Throughout 2003 to 2007, when the Colombian economy and foreign trade were significantly expanding, air freight firms already in the market had to subcontract additional charter service with other firms to cope with the demand. Several air cargo firms initiated or increased operations to and from Colombia. However, when the economy began to slide in 2008, some of them stopped serving Colombia or reduced the frequency of their flights. Currently, most firms have adopted a “wait and see” attitude and hope that the world economy will start to recover soon. Analysts recommend enduring the current market conditions, work out improvements in service and costs with clients and wait for better times.
     Currently, about 30 airlines provide international air cargo services to and from Colombia. The following were the airlines that accounted for most of air cargo to the U.S. and other regions during 2008:

     Other foreign airfreight carriers providing services to and from Colombia are: Air Canada, Continental Airlines, Servivensa, Lanchile, Lacsa, Varig, Aerolineas Argentinas, Lloyd Aereo Boliviano, Air Madrid, and Aeropostal.
     DHL, FedEx, and UPS (all from the United States), dominate the international express delivery service sub-sector and have established strategic alliances with the local firms that control the domestic market such as Servientrega and Deprisa (Avianca).      There are a number of medium and small domestic couriers such as DOMESA, TCC, Coordinadora, Saferbo, Redetrans and others, but most of them provide only ground transportation services.
     The U.S. share of Colombian outbound air cargo during 2008 was 58% of the total outbound market, followed by South America with a 17.3% share, Central America (including Mexico) with 10.9%, Europe with 7.6%, and the Caribbean with a 6.5 %.

Who are the key players?
•   COLOMBIAN ASSOCIATION OF FLOWER EXPORTERS - ASOCOLFLORES: The largest customer sector for air cargo services in Colombia is the flower growing industry. Colombia is the second-largest fresh-cut flower exporter in the world. More than 350 companies exported 222,000 tons of flowers during year 2008. Eighty percent of this cargo goes to the United States, twelve percent is sent to Europe, and eight percent to other destinations. During periods when the foreign demand for flowers increases significantly, the air transportation capacity becomes insufficient. Their contact information is:
ASOCOLFLORES:   Augusto Solano, Executive President, Carrera 9A No. 90-53, Bogota, D.C.- Colombia
Tel: (571) 257-9311 Ext. 0116. Fax: (571) 218-3693
info@asocolflores.org,       www.asocolflores.org
•   COLOMBIAN FEDERATION OF CHAMBERS OF COMMERCE – CONFECAMARAS: The second-largest end user represents commercial and industrial private firms. This segment includes textile, apparel, leather and food (perishable) sectors. Another important end user is the printing and graphics sector. Each of these industries has their own trade association.
Following is a brief description of some of these associations.
     CONFECAMARAS estimates that nearly 145,000 enterprises are involved in commercial activity. The largest group, by number of enterprises, is retail and wholesale in the sectors of foods, beverages and tobacco businesses (30 percent). Other large groups are: drugs, medicine, cosmetics and chemical products (20 percent); restaurants, cafeterias, and hotels (16 percent); textile and garments (14 percent); vehicles and accessories (10 percent). This Federation also estimates that some 35,000 companies comprise the manufacturing industry. Approximately 90 percent of the manufacturing industries are concentrated around six main metropolitan areas: Bogota, Medellin, Cali, Bucaramanga, Pereira-Manizales, and Barranquilla-Cartagena-Santa Marta.
•   ASOCIACION NACIONAL DE COMERCIO EXTERIOR - ANALDEX. The Foreign Trade National Association encourages and promotes Colombian importers. Its members include exporters, importers, logistical operators, and other suppliers of products and services to the foreign trade activity.
ANALDEX:    Javier Diaz, Presidente, Calle 40 No. 13-09 Piso 10, Bogota, D.C. - Colombia
Tel: (571) 570-0600
analdex@analdex.org       www.analdex.org
•   ASOCIACION DE PEQUENOS INDUSTRIALES - ACOPI. The Small Business Association groups 6,000 members (small and medium-size industries – SME) from eight industrial sectors.
ACOPI:   Norman – Antonio Correa, President, Carrera 15 No. 36-70, Bogota, D.C.- Colombia
Tel:/Fax (571) 320-4783/-84/-85
acopicomunicaciones@express.net.co     www.acopi.org.co
•   ASOCIACION NACIONAL DE INDUSTRIALES – ANDI. The National Bussines Association has more than a thousand active companies that belong to approximately 15 sectors of the economy. Contact information is:
ANDI:  Luis-Carlos Villegas-Echeverry, President, Carrera 13 No. 26-45 Piso 6, Bogota, D.C.
Tel: (571) 334-9620/281-0600. Fax: (571) 281-3188
comercial@andi.com.co      www.andi.com.co.

      The Colombian government started to reorganize the aviation sector during the 1990’s. Currently, the most important Colombian airports are being operated by private firms under 15-20 years concession contracts. The concessionaires invest in the modernization of the airports and administer terminals, runways, ramps, visual directional aids, signals, cargo facilities, other airport installations, and access zones. In exchange, Civil Aeronautics grants the concessionaire rights to income generated from: passenger and airlines fees; leases for airport space; rental of parking facilities and commercial areas and of land belonging to the airport.
     Under this scheme, the Colombian Civil Aeronautics Department’s role is being restricted to regulatory functions and control of Colombian air space. The following major airports are currently operating under concession contracts: Bogota, Medellin, Cali, Barranquilla, and Cartagena.

     Air Cargo News FlyingTypers leads the way again as the world’s first air cargo publication to connect the industry to the broadly expanding and interactive base for social commentary—Twitter.
     Here are updates from Twitter so far this week. To be added to this 24/7/365 service at no-charge contact: acntwitter@aircargonews.com

August 4:    Deal allows U.S. supply trains via Russia to Afghanistan.Russian Ruslans have moved non-lethal goods for a year even during Georgia war rift.

August 4:    New air cargo facility at Coimbatore (Tamil Nadu) India opened Monday Aug 3. Added parking bays & taxiway. Current action 3,100 tons annually.

August 4:    Quote of the tWeek: UN Sec. Gen. Anders Fogh Rasmussen (above) to some reporters: I’m told that in Brussels, the word “August” doesn’t exist; summer here is “June, July, Les Vacances. Thanks for coming.”

August 3:    Record set July 31. Emirates is now the world's largest operator of the B777 (78) & only airline to operate every model including two B777Fs

August 3:    Calling Hawaii "a dream destination," Hainan China's biggest private carrier wants 1X weekly PEK/HON this fall. Hainan (2008) flies PEK/SEA.

August 3:    Save a bundle with last minute fare deals by signing up on twitter for UAL & JBU "twares" and "cheeps". Stay tuned & trust luck & timing.

August 3:    Royal Jordanian profits of $10.8 million for the first half of 2009 although cargo tanked dropping 33 % year on year.

August 3:    CES, CSN, CXA,CHH, CCA, CSZ, CXN all opening offices in Taiwan as Cross-Straits flight begin.

August 3:    Lufthansa's takeover of Austrian gets EU approval as AUA is bleeding money, having lost $113 million during 2Q.