THE US$63 billion global air freight industry may face a fresh squeeze on profit margins unless it goes digital, warns International Air Transport Association (IATA) chief Tony Tyler.

Mr Tyler, former CEO of Hong Kong's Cathay Pacific Airways, said the global industry must adapt itself so not to "do more work for less money" as the goods transported worldwide are becoming increasingly sensitive and high-value, requiring greater speed, tighter security and absolute temperature control.

Revenue remains $5 billion below their 2011 peak in spite of a 4.3 per cent increase in global air cargo volumes in 2014, Mr Tyler told executives at the industry's annual conference in Shanghai, reported Hong Kong's South China Morning Post.

"While growth in volumes is welcome, it is not being matched by an improvement in yields and revenues," he said.

Mr Tyler expects yields to fall for a fourth year in a row in 2015 as the industry struggles with a slowdown in global trade.

A rise in demand for shipping pharmaceutical products in temperature-controlled environment will offset some of the declines in other lines of business, but it will not offset all of them, Mr Tyler said.

"Pharma logistics is now a $50 billion market that has been a boon for air freight," he said. IATA is developing a standard certification for cool-chain processes in order to help improve the air cargo industry's competitiveness in a fiercely competitive sector.

But electronic efficiency was key to the industry's ability to stay profitable, Mr Tyler said. "The transition to paperless air cargo will open up countless efficiencies and opportunities for improved service delivery," he said.

IATA is pushing for a 45 per cent penetration rate of e- airway bills (e-AWB) this year, after what he said was a breakthrough year in 2014 that saw the rate surge to 25 per cent.

Last year 53.5 million tonnes of cargo was handled globally, with Hong Kong, the world's largest air cargo hub, handling four million tonnes of the total.

Global head of cargo at IATA, Glyn Hughes, said the special administrative region has been a clear leader in e-AWB and the handling of special goods with sophisticated technology.

Shanghai Pudong airport, which is threatening to take over Hong Kong's leading position with 3.6 million tonnes of air cargo handled in 2014, is expected to catch up very soon in paperless handling since that became possible in November, Mr Hughes said.

"I believe it will happen very quickly this year as the government has the will, which is key to getting things going in China."