Cargo continues to flat-line : IATA

16 December 2015 02:38 am - 0     - {{hitsCtrl.values.hits}}

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The International Air Transport Association (IATA) released data for global air freight markets showing that air cargo volumes measured by freight tonne kilometres rose just 0.5 percent in October compared to a year ago. Year-over-year expansion fell back from September’s faster growth rate, and total cargo volumes in October stand 1.1 percent lower than the peak of the uptrend at the end of 2014. 
European carriers have driven recent improvements in air cargo growth, but they ran out of steam in October with a rise of just 0.2 percent. Other regions also underlined the weak October trend. The most significant decline in cargo activity was experienced by North American carriers, who reported a 2.4 percent fall in volumes. Latin America (-8.1 percent) and Africa (-1.1 percent) are smaller markets and also declined. Asia-Pacific was up, little more than Europe with a rise of 0.3 percent. Growth in the Middle East, although a robust 8.3 percent, was some 4.3 percentage points down on the average performance for the year to date.   
“The outlook for air cargo continues to be very difficult. While there was some optimism from third quarter growth it has all but disappeared as the industry basically flat-lined. Cargo capacity has grown largely in lock-step with the continued robust demand for passenger travel. As a result, freight load factors have sunk to the 44 percent range—a level not seen since 2009. 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,” said IATA Director General and CEO Tony Tyler.
Regional analysis in detail
Asia-Pacific carriers saw a slight rise in FTKs of 0.3 percent in October compared to October 2014, and capacity expanded 2.9 percent. Trade growth in China and other key export economies remains disappointing. Chinese export orders, however, spiked in October, which could result in better demand for air freight in the next two to three months.
European carriers reported a rise in demand in October of just 0.2 percent compared to a year ago and capacity rose 5.6 percent. Although this is a weaker performance than in recent months, improvements in the Eurozone are expected to continue, especially trade activity to/from Central and Eastern Europe.   
North American airlines experienced a decline of 2.4 percent year-on-year and capacity grew 6.0 percent. There are mixed signals from this market. Recent month-to-month results appeared to indicate a return to growth, but the latest manufacturing and export reports are poor. Strong demand for air freight in the coming months appears unlikely. 
Middle Eastern carriers saw demand expand by 8.3 percent, and capacity rise 11.6 percent. Recent air cargo growth in the region continues to trend well below the rates seen for the first half of the year. Saudi Arabia and the UAE, among others in the region, have seen slowdowns in non-oil sectors, but growth rates remain robust enough to sustain solid demand for air cargo.
Latin American airlines reported a decline in demand of 8.1 percent year-on-year, and capacity expanded 5.0 percent. Year-to-date performance for Latin American air cargo is the worst of any region by some margin, contracting by 5.9 percent. Air cargo demand appears to be mirroring weakening consumer sentiment in key regional economies.  
African carriers experienced a fall in demand of 1.1 percent, and capacity rose by 6.9 percent. Despite the October result, Africa is still the second fastest growing air cargo market for the year-to-date. Demand is holding up despite the underperformance of Nigeria and South Africa.
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