Within the air cargo industry there are various economic factors which drive anticipated industry metrics. These can be broken down into two categories, macroeconomic and microeconomic, and are used to determine correlation for statistical metrics. Macro factors include global GDP, free trade, comparative advantage, overall credit conditions (driven by monetary policy), IT investment, outsourcing, and the market-oriented political environment. Micro factors include transportation costs, industry deregulation, industry consolidation, and infrastructure.
In addition, there are five primary demand drivers:

• High Value Density Products. High value products use air cargo to minimize inventory carrying costs, risk of damage, and theft.
• Physically Perishable Product. Low value products that have limited physical shelf life.
• Production Process Impairment. Medium or low value components or parts that are tied to a larger production process and cost of impairing the process is substantial.
• Service Process Impairment. Equipment or parts used to deliver a high value service will use air cargo to avoid service disruption and associated economic costs.
• Marketing Process Impairment. Products that are sold in very narrow time windows for promotional reasons and final demand is often unknown.

Outside of these drivers, there are constraints which effect air cargo growth as well. The most obvious would be economic recessions. These are by definition a contraction in economic activity of which the freight industry is a typical bellwether. This contraction results in reduced manufacturing production of goods due to reduced demand from consumers. Another area would be a trade barrier, with which governments exercise tariffs or protectionism designed to limit free trade opportunities. A third is aircraft regulations. Air cargo operators have used older aircraft that are more affected by new regulations on noise, emissions, and safety. Additionally, recent legislation regulating minimum flight time (1,500 hours) for US airlines’ newly hired pilots may lead to a pilot shortage. Finally, modal competition limits air cargo competition. Air cargo has tremendous speed advantage for long distances, but at the highest-cost option; trucks and ships are cheaper, but the speed advantage is lost.
The freight/express segment of domestic air cargo is highly correlated with capital spending. This means that as companies spend more money on capital expenditures (fixed assets invested in future benefits), more freight activity in this sector occurs. Industry growth is also tied to overall economic growth (fluctuations in GDP). This segment of domestic air cargo will be affected by price and substitution (such as email). Shrinking networks, elimination of unprofitable flying, and consolidation will result in opportunities for growth in the freight/express market segment.