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Air Cargo Ends 2014 on Positive Note

Travel News Asia Latest Travel News Podcasts Videos Thursday, 5 February 2015
 

IATA's full-year air cargo data for 2014 shows a demand in growth of 4.5% measured by freight tonne kilometers (FTKs) compared to 2013.

That is a significant acceleration from the 1.4% recorded in 2013 over 2012.

Air cargo market expansion gathered momentum as 2014 progressed. The year finished on a positive note, with growth in December 2014 accelerating to 4.9%, compared to December 2013.

The vast majority of the growth in 2014, however, was in the Asia Pacific and Middle East regions, which respectively contributed 46% and 29% of the expansion in FTKs. Growth was recorded in all other regions, but was particularly weak in Latin America.

"After several years of stagnation, the air cargo business is growing again. This is largely being driven by the uptick in world trade over the second half of 2014. Recent concerns over the health of the global economy and a corresponding fall in business confidence have not yet impacted air cargo. But it is a downside risk that will need to be watched carefully as we move through 2015," said Tony Tyler, IATAs Director General and CEO.

Performance varied widely by region with the most significant growth being recorded by airlines in Asia Pacific and the Middle East. All regions, with the exception of Latin America, reported a strengthening of demand in December.

Asia Pacific carriers grew 5.9% in December compared to December 2013, and 5.4% for 2014 as a whole. Volumes have benefitted from increasing import demand in addition to continuing manufacturing strength. Japanese and Chinese markets were particularly important contributors. Overall in 2014, capacity expanded 5.7% leading to a slight fall in load factor to 55.4%, although this remains the strongest load factor of any region.

North American airlines reported demand growth of 2.8% in December and 2.4% for 2014 as a whole. After a slow, weather-affected start to the year, growth accelerated, driven by import and export demand. Carriers in the region cut back capacity in 2014 by 0.5%, helping to underpin the load factor (35.3%).

European airlines saw FTKs expand 2.3% in December, and by 2.0% in 2014 overall. The Eurozone remains weak and close to recession, with the effects of Russian sanctions also having an impact. Load factors also fell in 2014 as capacity expanded 3.0%.

Middle Eastern carriers enjoyed the strongest growth of any region, expanding 11.3% in December and 11.0% for the year as a whole. Airlines in the region have extended their networks and grown capacity by 11.1% to make the Middle East a hub for freight traffic. In fact they have been responsible for over 37% of the total increase in global freight capacity in 2014.

Latin American airlines reported FTKs falling 4.5% in December. This was the only region to report a decline. The picture for 2014 as a whole was growth of 0.1%. Latin American volumes have been affected by economic slowdown across the region, particularly in Brazil and Argentina. Capacity grew by 0.3% in 2014.

African carriers expanded FTKs by 12.2% in December and 6.7% for the year as a whole. Although major economies Nigeria and South Africa underperformed during parts of 2014, regional trade activity held-up, supporting demand for air transport of goods. Capacity rose just 0.9% for the year as a whole, helping to strengthen the load factor.

Cargo Innovation in Shanghai

"Despite the improving growth trend, big challenges remain. Yields declined for the third straight year in 2014, with no immediate prospect of improvement. Cargo revenues remained basically unchanged at $62 billion, some $5 billion below their 2011 peak. To move forward, the industry is focusing on providing a stronger value proposition to meet evolving customer needs. Thats what is driving efforts such as cutting shipping times, ensuring high-quality handling of temperature-sensitive goods, or benchmarking quality to improve customer transparency. Its all about delivering value as a supply chain with a strong vision of the future," said Tyler.

This focus on value is delivering change. For example, in 2014 electronic air waybill penetration reached 22% and airlines are targeting 45% penetration by the end of 2015.

An initiative to encourage further industry innovations will take center stage at the World Cargo Symposium in Shanghai on 10-12 March with the launch of the Air Cargo Innovation Awards.

"If you have a stake in air cargo, the World Cargo Symposium is the place to be in March as we lay the foundations to energize the sector, recapture market share and grow revenues," said Tyler.

IATA, Air Cargo, Cargo, Freight

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