Tuesday, January 12, 2016

IATA Puts Brave Face on Latest International Air Freight Figures

Cargo Volumes May be 'Bottoming Out'
Shipping News Feature
WORLDWIDE – The International Air Transport Association (IATA) released data for global air freight markets that it says suggests that earlier declines are now ‘bottoming out’, consistent with trade volumes stabilising. Measured in Freight Tonnes Kilometres (FTK’s), air cargo volumes were down 1.2% in November 2015, compared to the year before, but total cargo volumes however, expanded compared to October 2015, and were higher than the low point in August. Tony Tyler, IATA’s Director General and CEO, said:

“The freight performance in November was a mixed bag. Although the headline growth rate fell again, and the global economic outlook remains fragile, it appears that parts of Asia-Pacific are growing again and globally, export orders are looking better. In fact, the downward trend in FTK volumes appears to be bottoming out. But there is a great deal of uncertainty. The current volatility of stock markets shows how much the health of the global economy, upon which air cargo depends, remains on a knife-edge.”

The negative year-on-year comparisons occurred across all regions with the exception of the Middle East, which posted 5.4% growth. Of the major markets that together comprise more than 80% of total trade, Europe was down 2%, North America by 3.2%, and Asia Pacific by 1.5%. The comparative weakness in these regions was driven largely because the performance in November 2014 was very strong. Latin American and African markets also fell, by 6.4% and 6% respectively.

Asia Pacific carriers saw a slight fall in FTKs of 1.5% in November compared to November 2014, and capacity expanded 3.2%. Compared to October, volumes expanded by a strong 1.9%. Over recent months, the declining trend in volumes has halted. Better demand in advanced economies is driving export growth in some countries, particularly in Japan whilst in China 2015 overall proved fruitful for some on the back of increased import volumes. Shanghai Pudong International Airport Cargo Terminal (PACTL) for example saw international imports rise by 9.4% to 602,004 tonnes.

By contrast, carriers in Europe didn’t see any improvement in volumes in November compared to October. But improvements in Eurozone manufacturing and export orders is likely to support air freight demand in the coming months for carriers in this region. There was a negative bias on the year-on-year comparison due to Lufthansa strikes, but IATA says it expected that the result would be weak even after these impacts. Demand was down 2% compared to a year ago with capacity rising 2.2%.

North American airlines experienced a fall of 3.2% year-on-year and capacity grew 5.8%. The market remains hard to read. A 0.4% expansion compared to October indicates that air cargo could be recovering. But export indicators are poor, making it hard to be optimistic for the coming months.

Latin American airlines reported a decline in demand of 6.4% year-on-year, and capacity expanded 1.9%. Few positive signals emerged from the markets in this region, with economic and political conditions in Brazil particularly weak. The comparison with October also showed a 1.4% contraction and air cargo demand appears to be mirroring weaker consumer confidence.

African carriers experienced a fall in demand of 6%, and capacity rose by 6.6%. Africa remains one of only three regions (with Asia-Pacific and Middle East) to record positive year-to-date growth for 2015. Demand is holding up despite the underperformance of Nigeria and South Africa.

Once again continued steady growth in air freight volumes carried by Middle Eastern carriers throughout the year has resulted in FTKs being 5.4% higher and capacity rise 9.2% in November compared to a year ago. Major economies in the Middle East, including Saudi Arabia and the United Arab Emirates, have seen slowdowns in non-oil sectors, but the rates of growth remain robust and this should help sustain solid growth in air freight demand for local carriers.