The air cargo industry is likely to close the year with a limp as the growth in volume it achieved recently appears to have fizzled out, according to the International Air Transport Association (IATA).
Based on data for October, IATA said volumes measured by freight tonne kilometers rose just 0.5% compared to a year ago, following September’s faster growth rate of 1% year-over-year. Moreover, total cargo volumes in October stand 1.1% lower than the peak of the uptrend at the end of 2014.
“The outlook for air cargo continues to be very difficult. While there was some optimism from third quarter growth it has all but disappeared as the industry basically flat-lined,” said Tony Tyler, IATA’s director general and CEO.
Freight load factors have sunk to the 44% range, a level not seen since 2009, he added. “Early signs of improvement in export orders may bode well for trade and air cargo but this is unlikely to prevent air cargo finishing 2015 on a low note.”
European carriers, which drove recent improvements in air cargo growth, only managed an expansion of 0.2% in October. Asia-Pacific was up a little more with a rise of just 0.3% as trade growth in China and other key export economies remains disappointing.
Growth in the Middle East, although a robust 8.3%, was some 4.3 percentage points down on the average performance for the year to date.
The most significant decline in cargo activity was experienced by North American carriers, which reported a 2.4% fall in volumes. The smaller markets of Latin America and Africa also declined by 8.1% and 1.1%, respectively.
Looking ahead, Asia-Pacific carriers may see better demand in the next two to three months following a spike in Chinese export orders in October.
Despite a weak October, European carriers are expected to benefit from continued improvements in the Eurozone, especially trade activity to and from Central and Eastern Europe.
Meanwhile strong demand for airfreight in the coming months appears unlikely for North American airlines. “There are mixed signals from this market. Recent month-to-month results appeared to indicate a return to growth, but the latest manufacturing and export reports are poor,” explained IATA.
Recent air cargo growth in the Middle Eastern region continues to trend well below the rates seen for the first half of the year. Saudi Arabia and the UAE, among others in the region, have seen slowdowns in non-oil sectors, but growth rates remain robust enough to sustain solid demand for air cargo.
Year-to-date performance for Latin American air cargo is the worst of any region, contracting by 5.9%. Air cargo demand appears to be mirroring weakening consumer sentiment in key regional economies.
As for African carriers, despite the October result, the region is still the second fastest growing air cargo market for the year-to-date. Demand is holding up even with the under-performance of Nigeria and South Africa.
Photo: Montague Smith
