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Boeing on Go With Air Cargo

Updated with closing share price.

SEATTLE ( TheStreet) -- Boeing (BA - Get Report) shares were higher Wednesday after the company said it sees its air cargo shipments business returning and Asian/Pacific traffic growth continuing.

Shares closed Wednesday at $50.53, up $1.03 or 2.08%. Year to date, Boeing shares are up about 18%.

In air cargo, "things are improving and we're hopeful, but there's still a way to go yet," said Jim Edgar, Boeing's regional director for cargo marketing, at the Asian Aerospace Expo in Hong Kong, according to Reuters.

Edgar said cargo growth typically leads economic and passenger growth by three to six months, Reuters reported. "This year, we're anticipating a deeper decline and it'll be the first time in history that we'll have two years of decline back to back," he said, but "the decline is slowing."

In a recent report, the International Air Transport Association said that both air freight and passenger numbers are starting to rise off their lows, with both up more than 3% in July from the previous month. "Freight is being driven by the inventory cycle," IATA said. Freight capacity in July was down 8.1% from a year earlier. Freight capacity utilization in July was 47.6%, up from 40% in January, but still several points lower than a year ago.

Cargo has been a sore spot for many carriers, especially those with a strong Asian presence. On a July earnings call, United (UAUA) CFO Kathryn Mikells said second-quarter cargo revenue declined 49%, reflecting reduced freight and mail volumes, "with the Japan market being among the hardest hit." Lower fuel surcharges were also a factor, she said.
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