Friday, August 28, 2009

IATA Forecast an Uncertain Future for Air Freight

Many Conflicting Factors Mean a Confused Outlook
Shipping News Feature

GENEVA, SWITZERLAND - The International Air Transport Association (IATA) announced international scheduled traffic results for July showing freight demand was down 11.3% compared to the same month in the previous year. The 11.3% decline in cargo demand for July was also a relative improvement over the -16.5% recorded in June and the -19.3% average for the first seven months of the year. Despite this improvement, the July freight load factor of 47.6% was lower than the 49% recorded in July 2008.

“Demand may look better, but the bottom line has not improved. We have seen little change to the unprecedented fall in yields and revenues. The months ahead are marked by many uncertainties, including the price of oil. The road to recovery will be both slow and volatile. In the meantime, the industry remains in intensive care,” said Giovanni Bisignani, IATA’s Director General and CEO.

All regions, except Africa, saw improvement in demand compared to June. The Middle East was the only region to grow comparatively showing a 1% improvement in July 2009 against the same month the previous year.

“The freight numbers tell an interesting story. The sector is being boosted as companies re-stock depleted inventories. Once inventories are at desired levels in relation to sales, improvements in demand will level off until business and consumer confidence returns. Given the large amount of debt in all sectors of the economy, instant relief is not in the forecast,” added Mr Bisignani.

The IATA CEO went on to reiterate that load factors might appear high but revenues were way down.