World air freight returns to long-term growth pattern in December 2010

The air freight sector dropped back to ‘normal’ long-term growth rates in December 2010, partlydue to the impact of severe weather on operations, the latest traffic figures from IATA and

International air freight grew 6.7% in terms of airline freight-tonne-kilometres in December,according to IATA figures. This followed a 5.8% rise in November. These figures are in line withlong-term growth rates of 5-6% for air freight.

2010 closed with a 20.6% growth rate for the full year, reflecting the strong recovery in thefirst half-year compared to the slump in the six months of 2009 and then slower growth in recentmonths due to comparison with the already improving figures for the second half of 2009.

“Freight demand growth varied wildly over the year from a high of 35.2% in May to a low of 5.8%in November. Overall the industry is trending towards normal growth patterns in line with thehistorical growth rate of 5-6%,” IATA stated. Demand growth outstripped an 8.9% capacity increaselast year, and the average freight load factor thus saw a 5.2 percentage point improvement to53.8%.

Emerging markets remained the main growth drivers for international air freight last year, IATAnoted. Latin American carriers recorded the highest full-year growth rate of 29.1%, followed byMiddle East carriers at 26.7%, Asia Pacific airlines at 24% and Africa at 23.8%. North Americanairlines increased traffic by 21.8% but Europe’s 10.8% growth “stands out as exceptionally weak”,according to the airline association.

In December, Middle East airlines increased freight traffic by 14.7%, well ahead of all otherregions. Asia Pacific grew 7.9%, North America was 5.2% higher while Latin America grew by 3.8% andEurope by 3% but Africa dropped 4.5%.

“The story this month is the sharp rise in oil prices,” said Giovanni Bisignani, IATA’s DirectorGeneral and CEO. “We predicted that 2011 would see a consecutive second year of profitability butwith industry profits falling by 40% to $9.1 billion. This was based on an oil price of $84 perbarrel (Brent). Fuel accounts for 27% of operating costs and a sustained rise in the oil pricecould spoil the party. With uncertainties in the Middle East, oil prices are now hovering near the$100 per barrel mark. For every dollar increase in the average price of a barrel of oil over theyear, airlines face the difficult task of recovering an additional $1.6 billion in costs,” saidBisignani.

Separately, airports around the world saw a small resurgence in their overall freight volumes inDecember due to international shipments after a marked slowdown in growth since mid-2010, ACIreported. International freight (measured in tonnes) grew 6.8% but domestic freight was only 1.9%higher, leaving total freight growth at 4.9%.

For 2010 as a whole, total freight increased by 16.8%. This recovery was powered byinternational freight, which grew 21.5%, while domestic freight increased by a more modest8.9%.

Airports in the world’s largest region for air freight, Asia Pacific, increased their tonnage by6.2% in December, with international shipments up 7.4%. Full-year growth was 18.8%, including a22.4% rise in international shipments.

North American airports grew only 2.5% in December, with a strong 8.5% rise in internationalvolumes pulled back by a 0.4% drop in domestic business. For 2010 as a whole, the region had a 13%rise in total freight, including a 24.7% rise in international tonnage.

In Europe, airports had a 6.6% rise in freight in December, with international tonnage up 5.4%,and reported 19% growth for the full year, with a slightly higher rise for internationalvolumes.

Looking at this year’s prospects, ACI Director of Economics, Andreas Schimm, said: “It remainsto be seen whether air freight in 2011 will be able to hold on to the volumes reached during thefirst half of 2010. Growth rates were exorbitant at that time so remaining in growth territory fromnow on, which December results suggest, would be excellent news for the global economy, shippersand airports.”