Thu, 7 April 2016

Global Air Freight Continues to Suffer Headwinds

IATAs data for global air freight markets shows that air cargo volumes (measured in freight tonne kilometers or FTKs) suffered a 5.6% fall in February compared to February 2015.

It is important to note however, that the numbers are heavily skewed due to the impact of the US port strikes in early 2015 (which caused a spike in air freight) and Lunar New Year falling in February this year.

Comparing January and February 2016 performance to January and February 2014 reveals 6.3% volume in growthequal to a 3.1% annualized growth trend.

"The air freight business remains a difficult one. Februarys performance continues a weak trend. And there are few factors on the horizon that would see this change substantially. In the absence of an imminent resurgence of demand, the importance of improving the value proposition with modernized processesthe e-freight visionremains a top priority," said Tony Tyler, IATAs Director General and CEO.

African airlines FTKs declined by 1.7% in February compared to February 2015. The largest economies in the region, Nigeria and South Africa, have suffered from the commodity slump over the past 18 months.

Asia Pacific carriers, which carry almost 39% of all air freight, saw FTKs contract by 12.4% year-on-year in February. While this was the largest drop of any region, it also reflects the regions carriers having benefited the most from the 2015 US port strike. And the regions weak trading backdrop was exaggerated by the closure of many factories in Asia for the Lunar (Chinese) New Year Celebrations. In February Chinese export values fell 25%.

European airlines demand fell by 2.4% in February. Business surveys of the region, particularly in Germany, do not give an upbeat assessment of prospects in the region. This is in line with the trend since the Global Financial Crisis, European freight volumes are barely any higher than in 2008.

Latin American carriers expanded by 2.7% in February. Markets in the region remain under pressure and Brazil is in its worst recession in 25 years. Volumes on the North-South American routes, however, are holding up.

Middle Eastern carriers were able to continue their consistent growth trend despite the statistical noise, expanding 3.7% in February. Over the past six months the major carriers in the region have cut their rate of route expansion, which may account for the relative slowdown in freight volume growth.

North American airlines saw FTKs fall 4.0% in February compared to February 2015. Looking ahead, the prospects for cargo growth will depend on the balance between a stronger domestic economy supporting import growth and a strong US dollar dampening exports.

See other recent news regarding: IATA, Cargo, Freight

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