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IATA reports plateau in cargo growth for October

Dec 4 2015

As was expected, given the preliminary monthly traffic reports by many major carriers, global air cargo volumes, measured in freigxht tonne kilometers (FTKs), were flat in October 2015, rising by just 0.5 percent, compared with the same month last year. Freight load factors in October also fell to the 44 percent range, a level not seen since 2009, said Tony Tyler, director general and CEO of the International Air Transport Association (IATA)...

However, before melancholy sinks in, it should be noted that most of the global cargo growth in 2014 came during the U.S. West Coast port crisis and the beginning of peak season in the last few months of the year, making the year-over-year October comparison a less-reliable indicator of future performance.

Regionally, however, North American carriers ran out of steam in October, reporting a 2.4 percent fall in volume, y-o-y, with capacity growing by 6 percent. IATA said that, based on the most recent manufacturing and export reports, it is unlikely that strong demand in the region will return in the coming months.

Carriers in Europe saw a 0.2 percent rise in demand, with capacity up 5.6 percent compared to October 2014. This is not a strong performance, but IATA expects trade and activity to and from Central and Eastern Europe to improve.

Asia-Pacific carriers did slightly better than their European counterparts, reporting a 0.3 percent in FTKs y-o-y, with capacity expanding 2.9 percent. Trade growth in China and other key export economies in Asia remain flat, but Chinese exports spiked in October which could increase demand for airfreight in the next two to three months.

Although the Middle East saw growth of 8.3 percent y-o-y, that is down 4.3 percentage points on the average performance for 2015, to date. Capacity rose 11.6 percent, with Saudi Arabia and the UAE reporting slowdowns in the non-oil sectors. That said, growth rates remain strong, with a solid demand for airfreight expected to continue.

Latin American carriers continue to struggle, reporting a decline in demand of 8.1 percent, y-o-y, with capacity expanding by 5 percent. Latin America continues to have the worst results of any region, most likely due to the poor economies in Brazil and Argentina. The air cargo market has contracted by 5.9 percent, year-to-date, with demand falling in lock-step with the weakening consumer sentiment in many of the region’s key economies.

Finally, African carriers saw a fall of 1.1 percent in demand over one year ago, with capacity rising 6.9 percent. Despite this, Africa continues to be the second-fastest-growing air cargo market for the year thus far. Demand is holding up, even though Nigeria and South Africa are under-performing.

“Early signs of improvement in export orders may bode well for trade and air cargo, but this is unlikely to prevent air cargo finishing 2015 on a low note,” Tyler said.

 

By Linda Ball | December 3, 2015 | Air Cargo World
News Link: http://aircargoworld.com/iata-reports-plateau-in-cargo-growth-for-october/

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