IATA reported a continued modest improvement in
air cargo markets for August 2013. August air freight demand was
up 3.6% on the previous year, considerably better than
year-to-date performance of a 0.7% expansion.
Demand for air freight began increasing slowly
from April, in line with strengthening business confidence, as
economic performance in Europe and the US showed signs of
improvement. The Eurozone economy, for example, stabilized in the
second quarter of 2013 and import volumes have improved. A strong
upswing, however, would require a significant improvement in the
cargo performance of airlines in the Asia Pacific region. They are
the largest players in global air cargo with a collective 38%
market share. Their year-on-year performance for August was
basically flat (-0.2%).
“There are some signs of improvement in demand,
but the air freight business remains very tough. Freight volumes
are only now reaching the levels of 2011 when the cargo business
peaked with revenues of $67 billion. This year we expect $59
billion of revenues from air cargo globally. That takes the top
line back to 2007 levels. But to earn that revenue, we will be
moving nearly 17% more cargo and dealing with a 40% hike in jet
fuel. The road ahead will be challenging,” said Tony Tyler, IATA’s
Director General and CEO.
The bulk of the August growth came from carriers
in Europe and the Middle East, while Asia Pacific volumes were
stagnant and African volumes fell significantly.
Asia Pacific airlines’ freight demand was
basically flat (-0.2%) compared to the previous August. That is an
improvement on the year-to-date performance which showed a 1.9%
decline. The “flatline” performance of the region’s carriers can
be largely attributed to a slowdown in emerging markets and a
deceleration of China’s growth over the first half of the year. A
rebound in trade growth from July (in response to the strength of
developed markets) could be an encouraging sign. However the
region’s carriers will be facing stiffer competition for long-haul
cargo. Airlines based in the Middle East, for example, have
expanded their cargo business significantly (12.7% year-to-date).
European carriers’ freight grew 3.4% in
August, with capacity up 4.2%. The European economy has started
growing again and imports have increased. Eurozone export orders
reached a 27-month high in August which should lead to strong
export growth in the months ahead.
North American airlines showed signs of a small
pick-up, with growth of 0.7%. There has been considerable
volatility in North American freight performance in 2013.
Year-to-date, North American carriers have seen cargo demand slip
Middle Eastern carriers continued the
strong growth that has been characteristic for the region all
year. In August year-on-year freight volumes were up 23.8%, though
this was exaggerated by the impact of Ramadan, which fell a month
earlier this year. Year-to-date growth stands at 12.7%. It appears
Middle Eastern freight growth has accelerated in recent months
(even when neutralizing for the impact of Ramadan). This has been
supported by improving demand in developed economies. Their
strategic location and efficient hub connections are making them a
growing competitor for air freight between Asia’s manufacturing
centers and European consumers, for example.
Latin American airlines grew their freight
volumes strongly, up 12.6% in August. Robust trade volumes in
Latin America (up nearly 8% in July since the start of the year)
are providing a solid foundation for expansion in air freight
African carriers experienced another
decline in freight volumes, down 9.7%. After a positive start to
2013, African air freight growth has slowed and is now up by just
0.7% for the year to date. Despite healthy trade volumes and
strong growth in many African countries, African airlines face
intense competition on key trade routes.
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