IATA confirms slowdown in air freight momentum
The latest data from the International Air Transport Association (IATA) for global air freight markets reveals a 3.3% increase in cargo volumes (freight tonne kilometres or FTKs) for April 2015 compared to the corresponding period last year.
IATA also identifies that there has been no actual growth in aggregated global cargo volumes since late last year. Also of note was a significant capacity increase of 5.5% in April, driving the load factor down to its lowest for the past 12 months.
At a regional level, only the Asia-Pacific and Middle Eastern airlines reported growth in April. North American carriers reported essentially flat demand, while Europe, Latin America and Africa all reported declines when compared to 2014.
April data also revealed a slowdown from the growth for the first quarter of 2015, which averaged 5.3%, in line with a recent weakening in world trade growth.
Despite a cyclical pick-up in the global economy, acceleration in trade and air freight demand is unlikely in the near term as business confidence and export orders flat or declining.
Tony Tyler, IATA’s Director General and CEO, explains: “After a volatile start to 2015, the market is settling down, and it is clear that momentum in air freight growth is being lost.
First there is the structural challenge of world trade no longer expanding at a faster rate than domestic production. Layered on top of that trend we now see a weakening of economic indicators in the crucial air cargo markets of Asia-Pacific and Europe.
“These factors point toward a need to kick-start trade by reversing protectionist trade measures. Implementing the Bali Trade Facilitation Agreement would be a good start, as well as commitments to help facilitate trade in emerging markets.”
European carriers saw demand decline by 0.3% in April, compared to a year ago while capacity grew by 5.0%. Recent improvements in European business confidence have yet to be reflected in air freight volumes. A firming-up of oil prices and the Euro has meant that positive momentum from the European Central Bank stimulus has faltered.
“After a brief optimistic period, the global outlook for cargo shows that once again the business is stagnating. But the good news is that with digital processes, new standards for pharmaceutical handling, and a focus on reducing end-to-end shipment times the air cargo industry is well-placed to stage a recovery.
Mr Tyler also reports that the Cargo Strategies session during the 71st IATA Annual General Meeting and World Air Transport Summit (Miami, Florida) will explore how the industry is going to make real progress on these initiatives.
Other topics under discussion at the AGM include: the relationship between airlines and manufacturers; what’s on the mind of the industry’s CEOs; what the next generation of travellers expects; cargo strategies; building the right infrastructure; and how investible are airlines.
Posted on: June 5th 2015