World air cargo growth sees small improvement

  • December 4, 2013
There was a small improvement in airfreight growth in October, according to the International Air Transport Association.

Compared to October 2012, global freight tonne kilometers rose 4 percent, with growth in all regions except Africa.

The gradual expansion continues a trend that began in the third quarter as airfreight markets have responded to better economic confidence and improved consumer demand.

But performance varies significantly by region. Middle East carriers reported the most impressive growth. European and North American airlines reported growth below the long-term cargo growth trend of 5-6 percent.

Asia-Pacific carriers grew marginally. The pick-up in Chinese growth and trade volumes across the region indicates that Asia-Pacific, which is the largest airfreight region by market share, is potentially poised for continued expansion.

Europe and the Middle East combined have carried three quarters of the cargo increase over the past six months.

“Since mid-year, we have seen modest but sustained growth in cargo fed by stronger business confidence and improving trade flows,” Tony Tyler, IATA’s director general and CEO, said. “Air cargo is still a very tough business. Matching capacity to demand has been difficult in an environment where passenger traffic is growing more robustly. There is some evidence that the fall in load factors has stabilized, but yields remain under pressure.”

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The average load factor for October was 46.4 percent, which is an improvement on the year-to-date load factor of 44.8 percent. This is still several percentage points below 2010 when they peaked at more than 50 percent.

Asia-Pacific carriers’ traffic grew 2 percent, with capacity up 4.1 percent. Asian cargo volumes benefited from a resurgence in trade across the region, fueled by a stronger Chinese economy where manufacturing activity hit a seven-month-high.

Both export and import volumes rose strongly in emerging Asian markets, reversing a mid-year decline. This bodes well for further growth in airfreight in the months to come. 

European airlines expanded FTKs by 4.4 percent, maintaining the steady improvement in recent months, as the continent continued to emerge from recession. The recovery remains fragile. Weak growth for the remainder of the year should support a further modest expansion in European FTKs. Capacity grew by just 3.6 percent. 

North American carriers rebounded from their September contraction to record a solid rise of 3.7 percent, despite the 17-day federal government shutdown. Although activity in the U.S. manufacturing sector has been increasing for the past three months, the expansion is much slower than at the start of the year. The outlook remains difficult. 

Middle Eastern carriers grew 12.3 percent compared to a year ago. After the year-over-year slowdown in September caused by Ramadan, freight growth in the Middle East resumed its strong upward trajectory. Capacity increased by 12.1 percent.

Latin American airlines grew by 1.5 percent year-over-year, a slowdown from the rate in September. However, the year-to-date growth rate remains the second-fastest of all regions, supported by a 10 percent increase in regional trade volumes. Competition from European and U.S. carriers on routes from Latin America affects carriers from the region.

African carriers experienced the only decline in October compared to October 2012, falling by 2.7 percent. Growth in airfreight carried by African airlines has seen a slow decline for several months. Although trade volumes for the region continue to increase, competition on important trade routes is strong and lack of adequate infrastructure and political stability continue to hinder growth potential.

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