The air cargo sector saw its income in October 2015 improve minimally over September but decline sizably compared to October last year, according to a new report from WorldACD.
For the second month in a row, worldwide average yield in October was an improvement from September, growing by 1% month-on-month (compared to 1.7% month-on-month in 2014). However, October logged a yield contraction of 17.5% compared to the same period last year.
The airline market data provider examined the notable yield deterioration not just in view of cargo trends but also of two important developments in 2015. “A lot is being made of the stark worldwide yield decreases we have witnessed. However, as stated before, the yield developments of the past 12 months are truly one-of-a-kind: they simply cannot be equated with an extremely serious downward trend in air cargo.”
WorldACD said volume in October 2015, while not spectacular, actually grew by 1.8%, slightly better than the comparable year-on-year figures for the past three months. For the period, Asia-Pacific posted cargo growth of 2%, Africa and Europe 4% each, and the Middle East & South Asia 7.5%. Volume drops, however, were registered in the Americas—2% in the north and over 10% in Central & South America.
But a comparison of the first three quarters of 2015 with the same period in 2014 showed that “getting a better understanding of the fortunes of air cargo will not be helped much by making YoY comparisons of yields-including-charges.”
This, said the report, is due to two developments: a stark drop in fuel prices dating back to a little over a year ago, and an increase in the use of all-in pricing.
Fuel prices worldwide have come down to less than 50% of what they were mid last year, noted the report. Worldwide US dollar yield including charges decreased by 14% in 2015 compared with 2014 as a direct consequence of lower fuel charges.
Since average prices per kilogram for all-in shipments remained stable as well, the report concluded that in terms of market development, “the weakness in 2015 has been insufficient volume rather than adverse yield developments.”
It also observed how the use of all-in pricing in air cargo has taken off, increasing from 11% of total shipments in 2014 to 17% this year. Comparing geographical markets, North America has further increased the use of all-in pricing, particularly for shipments to Europe. The origin Europe also saw strong growth, except to North America. Asia-Pacific seems much slower than other areas in adopting the new habit, said the report.
Photo: Tak
