Abstract
This study presents a paradigm shift in the air cargo market based on Korea and Incheon Airport’s empirical data. The air cargo market has traditionally handled expensive items and has been a supplier-oriented market. There has been little room for individual customers in this market. However, “value” gradually replaces “price” in this market. The value depending on consumer preferences significantly impact air cargo demand. Consequently, items transported by air cargo are changing, and airlines and other market participants are revising operation policy. Economic growth may be losing its dominant power as the main growth engine in the air cargo market. This study identifies the weakened link between air cargo increase and economic growth based on the Granger causality test. COVID-19 calls for a deeper understanding of the paradigm shift in the market for sustainable air transport because COVID-19 will further stimulate it. In this regard, the air cargo business, which maintains a stable trend even during COVID-19, is seen as a new opportunity for the aviation industry. Since sustainable air transport requires an accurate understanding of the paradigm shift in the air cargo market, this study enhances our knowledge of the paradigm shift and provides significant implications for sustainable air transport.
Highlights
There are several fundamental beliefs in the air cargo market
The price-oriented paradigm has affected the decisions of air cargo market participants
This study focuses on the two areas of the literature; transport mode selection and the link between economic growth and air cargo quantity
Summary
There are several fundamental beliefs in the air cargo market. A widely accepted truth is that air cargo service is expensive. Korean Air, one of the world’s largest cargo airlines, flies empty planes to eastern Canada instead of spending time filling the load space The Lululemon t-shirt, famous for its yoga attire, sells for $19 online, but consumers who want to wear it are willing to pay $5 to $10 for air cargo These examples show that consumers’ taste for eating live lobsters and consumers’ preferences for Lululemon T-shirts affect demand in the air cargo market. Retailers and large suppliers can approach fast delivery through air transport from a product competitiveness perspective instead of a transport choice perspective Technologies such as cold chains, block chains, and big data can be leveraged as a channel for consumers to express their tastes and preferences
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