Global air cargo traffic showed a continuing deterioration in demand in February, according to thetraffic statistics of the International Air Transport Association (IATA).
The international freight volumes in February were 22.1% below 2008 levels. This is the thirdconsecutive month at more than 20% below previous year levels with a 23.2% decrease in January anda 22.6% drop in December.
“Gloom continues. Freight traffic, which began its decline in June 2008 before passengermarkets were hit, has now had three consecutive months in the -22% to -23% range. We may have founda bottom to the freight decline, but the magnitude of the drop means that it will take time torecover,” said Giovanni Bisignani, IATA’s Director General and CEO.
According to the latest IATA figures, all cargo markets saw extremely weak demand continue asa result of the collapse in international trade in goods and the much lower shipping of componentsby manufacturers. However, the level of air freight appears to have found a floor over the pastthree months. The recently released Eurozone Purchase Managers Indices which are useful forwardlooking indicators for cargo traffic, showed a slight and unexpected improvement in March, althoughit remained in negative territory.
Middle Eastern carriers experienced the smallest fall in demand dropping by 4.8%. Inaddition, Middle East was also the only region to increase capacity (+5.4%).
Asian carriers, the largest players in cargo traffic, saw demand fall by 24.7% as the region’s high-value export-dependant industries were hard hit by falling consumer demand in the majormarkets of Europe, the US and Japan. Japanese exports have almost halved from February 2008 levels.
In Europe and North America, cargo demand also declined heavily by 23.1% and 21.8%respectively. Government stimulus plans have not yet rekindled consumer demand. Similar to theoverall downward trend, Latin American carriers experienced a demand drop of 22.8% driven byweakening demand for the region’s commodities.
Bisignani reminded governments that air transport is a catalyst for economic activity andcalled for policy changes to help them stimulate economies. “Governments are spending trillions tobailout the banks and trillions more to stimulate economies. By comparison, our requests togovernments are cost-effective and cheap. First, air transport needs a tax structure that will helppreserve industry jobs and allow air transport to play its role as a catalyst for broad economicactivity. Governments must repeal the US$6.9 billion in new taxes put on the industry in 2009 tohelp pay for banking bailouts – despite being branded as environmental measures. More broadlygovernments must replace the mindset of taxing aviation as a luxury or a sin with a strategicapproach that recognises and fosters the industry’s critical economic role in connecting people tobusiness and products to markets. Second, airlines need the commercial freedoms to be able to mergeor consolidate where it makes business sense – even across national borders.”
Bisignani also warned that the burden of the crisis requires an industry response. “This isnot just an airline crisis. Efficiency must be a priority for the entire value chain. A 25%reduction in landing charges at Singapore Changi Airport and a 50% reduction at Malaysian Airportsare major steps in the right direction. These are model programmes for others to follow,” he added.
“The priority for airlines around the world is survival – conserving cash and adjustingcapacity to match demand. This means re-sizing and re-shaping the industry to deal with the US$62billion (12%) fall in revenues expected this year. Airlines will be making some tough decisions tostay afloat as we head for industry losses of US$4.7 billion in 2009,” Bisignani concluded.
