Thursday, February 3, 2011

IATA Report Air Freight Cargo Levels Rising

Oil Price and Bad Weather Are Limiting Factors
Shipping News Feature

WORLD WIDE – The International Air Transport Association (IATA) reported full-year 2010 demand statistics for international scheduled air traffic that showed a 20.6% increase in freight. Demand growth outstripped capacity increases of 8.9% for cargo. The freight load factor saw a 5.2 percentage point improvement to 53.8%. Compared to the pre-recession levels of early 2008, December air freight was 1% higher than pre-recession levels; however volumes have fallen 5% since the peak of the post-recession inventory re-stocking boom in early 2010.

Giovanni Bisignani, IATA’s Director General and CEO commented:

“The world is moving again. After the biggest demand decline in the history of aviation in 2009, people started to travel and do business again in 2010. Airlines ended the year slightly ahead of early 2008 volumes, but with a pathetic 2.7% profit margin. The challenge is to turn the demand for mobility into sustainable profits.”

Severe weather Europe and North America in December put a dent in the industry’s recovery. It is estimated that this shaved 1% off of total traffic demand for the month. Bisignani continued:

“The story this month is the sharp rise in oil prices. We predicted that 2011 would see a consecutive second year of profitability but with industry profits falling by 40% to $9.1 billion. This was based on an oil price of $84 per barrel (Brent). Fuel accounts for 27% of operating costs and a sustained rise in the oil price could spoil the party. With uncertainties in the Middle East, oil prices are now hovering near the $100 per barrel mark. For every dollar increase in the average price of a barrel of oil over the year, airlines face the difficult task of recovering an additional $1.6 billion in costs”

Freight demand growth varied wildly over the year from a high of 35.2% in May to a low of 5.8% in November. Overall the industry is trending towards normal growth pattern in line with the historical growth rate of 5-6%.

The regional variation in growth remains particularly marked. Latin American carriers recorded the highest full-year growth rate of 29.1%, followed by Middle East carriers (accounting for 11% of the market) at 26.7%, Asia Pacific airlines (with a 45% market share) grew by 24.0%, Africa at 23.8% and North America by 21.8%. Against these industry gains, Europe’s 10.8% growth stands out as exceptionally weak.

Dec 2010 vs. Dec 2009 FTK Growth        AFTK Growth

Africa                             -4.5%                 7.6%

Asia/Pacific                     7.9%                 6.9%

Europe                            3.0%                 4.5% 

Latin America                   3.8%               -8.9%   

Middle East                    14.7%               14.1% 

North America                  5.2%                 7.7% 

Industry                           6.7%                 6.7%

YTD 2010 vs. YTD 2009 FTK Growth        AFTK Growth

Africa                              23.8%               12.1% 

Asia/Pacific                     24.0%               14.3% 

Europe                            10.8%                 0.5% 

Latin America                  29.1%                12.6%  

Middle East                     26.7%                15.7%   

North America                  21.8%                 6.1%  

Industry                           20.6%                 8.9%

FTK: Freight Tonne Kilometers measures actual freight traffic

AFTK: Available Freight Tonne Kilometers measures available total freight capacity

FLF: Freight Load Factor is % of AFTKs used

IATA statistics cover international scheduled air traffic; domestic traffic is not included. International freight traffic market shares by region in terms of FTK are:

Asia-Pacific 45.4%    Europe 23.7%    North America 15.8%    Middle East 10.7%                   Latin America 3.2%   Africa 1.2%.

http://www.iata.org/Pages/default.aspx