hese days a telescope may well be an airline manager's favorite tool to view the Pacific market. A closer perspective is far from pleasant. The traditional mini-peak associated with Chinese New Year was almost non-existent this year. Last year's peak season did materialize, after all, but two months later and much shorter than had been anticipated.

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It seems the Asian Tigers are really only kittens these days and the carriers that once scrambled over each other to push freighters into Shanghai are quietly putting planes into other markets, one or two at a time.

Just look at the business from Japan to Hong Kong - once a source of strength connecting two of the Pacific Rim's strongest air cargo markets, the lane is lagging.

"Japan has been really slow. It's down' about 7 percent year on year," said Jim Friedel, president of Northwest Airlines Cargo.

"Korea to the U.S. has been slow. It's down 15 percent year on year," he said.

Northwest's daily freighters to Taipei are still doing okay, he said. "True, a lot of business has moved to China, but Taiwan is a robust and growing economy. It's not the roaring market that it was during the dot-com years," said Friedel.

However, Taiwan's exports grew a slower-than-projected 5.5 percent in April, as U.S.-bound shipments fell for the second consecutive month. They declined 6.7 percent in April, following a 6.1 percent decrease the previous month. In part, this is due to a growing focus on intra-Asian trade, but both the International Monetary Fund and the World Bank recently predicted a slowdown in Taiwan's exports, driven by weaker U.S. sales.

Even Hong Kong, whose fortunes are buoyed by the torrent of Chinese exports produced in the Pearl River Delta's manufacturing zone, saw a slowdown in the first quarter after 2006 had produced a record 3.58 million tonnes of throughput at the airport, up 5.2 percent from the previous year. In the first two months of 2007, Cathay Pacific recorded a 0.7 percent decline in tonnage, while the airport's overall total went up a modest 1.5 percent.

Hong Kong Air Cargo Terminals, the dominant handler at Chek Lap Kok, saw a decline in both import and export volume in April, and posted a modest 0.3 percent increase in total throughput for the first four months of the year. Last year, HACTL enjoyed a 5.3 percent rise in volume to 2.56 million tonnes.

Ron Mathison, general manager and director of cargo at Cathay, attributes the sluggish market to a combination of softening demand, a glut in capacity and the one thing carrier executives have long dismissed but increasingly concede is happening: the migration of freight from air to ocean as a result of high air freight costs.

Aircraft with plenty of space, it appears, are flying over bustling ocean container terminals.

"China is not what it used to be. There's too much capacity out there," said Claude Morin, president of Air Canada Cargo.

Over the past year, several players have either entered the market or boosted their cargo flights across the Pacific.

The latest entrant is Jade Air Cargo, the Shenzhen-based joint venture in which Lufthansa Cargo holds a 25 percent stake. Having launched and subsequently expanded flights to Europe since its start last summer, Jade is poised to mount 747-400 extended-range freighter flights to Houston through Vancouver in June.

Jade initially will fly twice a week and probably move up to three weekly frequencies once it obtains permanent traffic rights for the service, said Reto Hunziker, executive vice president of sales and marketing.

"The Pacific market is not good at the moment," he said, "but Asia to Europe is not good either."

In fact, European carriers have shifted freighter capacity away from Asia because of a glut on the Asia-Europe sector. For now, Europe figures more prominently as an alternative for Asian carriers to bring their freighters back to base from the United States to the dire prospect of poor loads and low yields on the westbound sector across the Pacific.

Once it has full traffic rights, Jade may route some Houston flights over Europe back to Shenzhen, Hunziker said. Asiana, which stepped up New York flights this year following the arrival of a converted 747-400 freighter, now routes half of its New York freighters over Brussels back to Seoul.

Besides Chinese carriers such as Jade, Shanghai Airlines and Yangtze River Express, other Asian carriers are also stepping up their U.S.-bound flights.

Texas has been a major magnet over the past 18 months. Besides Jade, Houston has attracted new freighter flights by Korean and China Airlines, and Dallas/Fort Worth welcomed new all-cargo services by Cathay and Air China, while China Cargo Airlines and Singapore Airlines stepped up their frequencies to the airport.

Predictably, the rise in capacity is not helping airlines' bottom lines.

A year ago, United Airlines was looking to supplement its own capacity with main deck space on other carriers through interline agreements, but that scheme has slid to the backburner. "The way the market is now it makes no sense for us to link up with a freighter operator. We better concentrate on our own capacity," said Neel Shah, vice president of cargo sales and marketing.

The recent flurry of orders for new or converted 747 freighters from Asian carriers more capacity is poised to join the glut.

Korean Air alone is adding three 747-400 freighters to its line-up this year, while Cathay stands to receive two converted 747-400s this summer. They will be used to increase frequencies to New York, Dallas/Fort Worth and Atlanta, Mathison said.

But some carriers have scaled back their freighter activities on the Pacific.

Air Canada took out one MD-11 freighter to curb its Shanghai-Toronto flights from five to three per week last November, and Northwest took two 747-200 freighters out of service the following month. "You also have (Japan Airlines) and (Nippon Cargo Airlines) reducing or at least maintaining capacity as they phase out their -200s, and Air France is accelerating their retirement," said Friedel.

Friedel does not subscribe to the expectation of further capacity increases. "My crystal ball does not tell me anything yet. This is a cloudy year regarding capacity," he said.

The way capacity and demand have shaped up over the past months, Friedel would not be surprised if forwarders were to conclude that they do not have to line up charter capacity for the coming peak season.

Likewise, charter operators may decide the Asian arena will not be as lucrative for them as in the past and deploy at least some of their aircraft elsewhere. "Charters can be the wild card," he said.

Korean Air executives are not holding their breath in anticipation of the coming peak season. Recent years have established a pattern of flat and short peaks in many product categories, and this should continue, a spokesperson for the carrier said.

No airline seems to expect a surge in demand in the immediate future. The question for the carriers is how long the adverse market conditions are likely to prevail. Mathison, for one, is optimistic.

"Long term, we are still confident about the growth prospects in this part of the world," he said.

Tom Crabtree, regional director of marketing for cargo at Boeing, is confident of the long-term outlook. "The orders for freighters bear out that our customers don't think that there's going to be a sustained slowdown in cargo," he said.

Korean Air's order for five 747-8 and five 777 freighters at the end of last year, on top of a large 747-400 conversion program, suggests the world's largest international cargo carrier remains bullish about the market.

NCA, which upped its order for 747-8 freighters from eight to 14, also appears confident the market can generate sufficient freight to fill its 140-tonne planes. Going for a 777 freighter instead of the 747-8 was not an option, not only because of fleet commonality with the carrier's 747-400Fs.

"Most markets in the Pacific can support a full freighter," said Shawn McWhorter, executive vice president of NCA Americas.

But Air Canada has turned away from plans to field its own freighters across the Pacific in the near future. The airline recently increased its order for passenger 787s and simultaneously dropped the final two 777s due for delivery in 2009.

Originally they were supposed to be cargo aircraft. But the airline figures there are enough of those already in play.