Global freight tonne kilometers increased just 0.8 percent in May compared to a year ago. Capacity increased by 2.1 percent, causing load factors to fall to 44.9 percent – the lowest level since the post crisis recovery.
About 60 percent of global air cargo utilizes passenger aircraft belly. With air travel growth outperforming cargo growth, it is challenging to manage capacity.
The stall in cargo markets appears to be due to a recent softening in growth in developing economies, including China. Business confidence is flat globally and declining in some developing economies, meaning chances of a significant upturn in the near future is unlikely.
Story continued after graph.
“It is getting harder to find optimistic signs for air cargo growth,” Tony Tyler, IATA’s director general and CEO, said. “The Middle East remains a bright spot, and the rate of decline in the Eurozone is easing. But this is offset by the weakening of expansion in Asia-Pacific. It is now clear that the positive global upswing in air cargo at the end of 2012 was an illusion. Air cargo, along with many parts of the world economy, appears to be in suspended animation at the moment.”
Europe and the Middle East were the standout year-over-year performers, but poor performance in Asia-Pacific and North America dragged growth down.
Asia-Pacific carriers had a difficult May. Growth in the Chinese economy is below expectations, but growth in Japan looks positive.
For European carriers, the trend in recent months has been little or no growth. The pace of economic decline in the Eurozone has slowed, and business confidence, while still negative, recorded a 15-month high in May. It is hoped that this improvement will ease the downward pressure on trade volumes and airfreight demand in coming months.
Demand for cargo shipments from the U.S. to Europe is still soft, and unlike the carriers in the Middle East and Africa, North American carriers are unable to buck the weak global trend.
Middle Eastern carriers had an aggressive hub strategy at the crossroads of East and West, and saw the growth of routes out of Africa to China. New routes from the Gulf to Japan are expected to benefit from an upswing in Japanese exports.
Latin American carriers experienced weakness in May that could reflect softening confidence indicators in the Brazilian economy. But overall export performance in Latin America is strong, so future months should see a return to solid growth.
For African carriers, the underlying growth trend is positive. Parts of Africa have some of the fastest-growing economies in the world, driving demand for high-value consumer goods. Growth on routes connected to the Middle East and Asia has more than offset the decline in demand for African goods from European markets.
Global freight tonne kilometers increased just 0.8 percent in May compared to a year ago. Capacity increased by 2.1 percent, causing load factors to fall to 44.9 percent – the lowest level since the post crisis recovery.
About 60 percent of global air cargo utilizes passenger aircraft belly. With air travel growth outperforming cargo growth, it is challenging to manage capacity.
The stall in cargo markets appears to be due to a recent softening in growth in developing economies, including China. Business confidence is flat globally and declining in some developing economies, meaning chances of a significant upturn in the near future is unlikely.
Story continued after graph.
“It is getting harder to find optimistic signs for air cargo growth,” Tony Tyler, IATA’s director general and CEO, said. “The Middle East remains a bright spot, and the rate of decline in the Eurozone is easing. But this is offset by the weakening of expansion in Asia-Pacific. It is now clear that the positive global upswing in air cargo at the end of 2012 was an illusion. Air cargo, along with many parts of the world economy, appears to be in suspended animation at the moment.”
Europe and the Middle East were the standout year-over-year performers, but poor performance in Asia-Pacific and North America dragged growth down.
Asia-Pacific carriers had a difficult May. Growth in the Chinese economy is below expectations, but growth in Japan looks positive.
For European carriers, the trend in recent months has been little or no growth. The pace of economic decline in the Eurozone has slowed, and business confidence, while still negative, recorded a 15-month high in May. It is hoped that this improvement will ease the downward pressure on trade volumes and airfreight demand in coming months.
Demand for cargo shipments from the U.S. to Europe is still soft, and unlike the carriers in the Middle East and Africa, North American carriers are unable to buck the weak global trend.
Middle Eastern carriers had an aggressive hub strategy at the crossroads of East and West, and saw the growth of routes out of Africa to China. New routes from the Gulf to Japan are expected to benefit from an upswing in Japanese exports.
Latin American carriers experienced weakness in May that could reflect softening confidence indicators in the Brazilian economy. But overall export performance in Latin America is strong, so future months should see a return to solid growth.
For African carriers, the underlying growth trend is positive. Parts of Africa have some of the fastest-growing economies in the world, driving demand for high-value consumer goods. Growth on routes connected to the Middle East and Asia has more than offset the decline in demand for African goods from European markets.