Chinese Pressure in European Auto Market Sends Air Cargo Margins Soaring

The global automotive industry is undergoing a profound structural transformation as China tightens its grip on the supply chain for electric vehicle (EV) components and batteries; this situation directly impacts the logistics strategies of Europe-based manufacturers and the cargo revenues of the aviation sector.

Continental Shift in Supply Chains

Chinese manufacturers are not limiting their presence in the European market to finished vehicles but are also taking control of the critical component supply process. This move creates new risks for Europe's automotive supply security while altering the structure of logistics costs.

■The share of Chinese companies in the European battery market could exceed 50% within the next 5 years.

■Automotive manufacturers in Europe plan to increase air cargo usage by 20% to shorten supply lead times.

■The necessity to prefer air bridges over sea freight for the transportation of critical minerals and chips is emerging.

Surge in Air Cargo Operations Premiums

From an aviation logistics perspective, this situation stands out as a factor positively impacting volume and revenues on Asia-Atlantic routes. High-value and time-sensitive automotive components constitute a high-yield segment for airlines.

■Players like Lufthansa Cargo and Turkish Cargo are revising their cargo capacities in response to demand from the automotive sector.

■Air Freight spot cargo rates are trading at a premium of 10-15% per ton on the China-Hamburg route.

■Utilization rates of passenger aircraft cargo capacity (belly cargo) are reaching 90%, contributing to sector profitability.

Gökberk Uçar: The spread of Europe's dependency on China into the automotive supply chain signals a 'golden age' for aviation logistics. In particular, the need for certified cargo aircraft for transporting dangerous goods (DG) such as lithium-ion batteries will be the most important shield protecting operational margins.