Asian airlines grounded by IATA report
Air freight in Asia might not be taking off anytime soon.
The International Air Transport Association’s (IATA) Financial Monitor for June and July has shown deterioration, with Asian-based airlines taking the biggest hit.
Second quarter net profits for the airlines reporting figures so far total $1 billion, which follows first quarter losses totaling $1.8 billion.
The Flight Monitor reports states that debt and continued inflation has forced governments to tighten economic policies, with jet fuel prices being another concern. Worries on fuel supply, particularly with the situation in Libya, have offset potential demand reductions.
Business travel has been a major growth factor for airlines, according to the IATA, but a sharp fall in business confidence could hurt an air freight market that continues to be stagnant.
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There is some good news stemming from the report, however. European airlines have shown modest growth at this preliminary stage, and an upward trend in air travel looks to be continuing despite lower levels for June.
According to the report, air travel volumes could expand 4-5 percent this year, which is a good thing because hundreds of new planes are scheduled for delivery this year. Capacity will rise thanks to the addition of more than 1,300 planes to the industry.
In the United States, airlines have fought rising fuel costs with an uptick in passenger yields, which have risen back to pre-recession levels. While Europe and the United States are offered some good news in the IATA report, the rapidly growing Asian market could hit some air freight turbulence throughout the rest of 2011.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany