Air freight volumes out of Asia remained weak in July, leading to overcapacity on some lanes andforcing airlines to look at moving capacity to other markets.
Preliminary traffic figures for July released today by the Association of Asia Pacific Airlines(AAPA) showed a continuation of recent trends, with international air freight volumes carried byAsian airlines decreasing by 4% compared with July 2010. The level of air freight capacity remainedsimilar to the same month last year, reflected in a 2.9 percentage point decline in the averageinternational freight load factor to 66.9%.
A source at freight forwarder Kuehne + Nagel told CEP-Research: “Presently, there is anovercapacity situation, especially in China, and some airlines are moving capacity elsewhere – toAfrica for instance.” He said the overcapacity, combined with the current difficult economicdevelopments in Europe and the US, was causing air freight rates to drop, a trend expected tocontinue if new cargo aircraft such as the B747-8F are delivered later this year.
These comments reflect those recently made by TNT Express in its second-quarter results, inwhich it said “volatile” Asia-Europe demand and increased market capacity had put pressure onAsia-Europe rates, and suggested that the company would reduce the amount of its own capacity thatit would fly on the Asia-Europe sector this autumn.
Asia’s largest cargo airport, Hong Kong, last week reported a 6.1% drop in overall freighttraffic in July, including an 8% drop in exports and a 9% fall in imports, with volumes down 2.9%year-on-year for the first seven months of 2011. Meanwhile, Seoul’s Incheon Airport reported a 4.8%decline last month, with export volumes down 9.9%.
As reported by CEP-Research last week, Hong Kong airline Cathay Pacific – including subsidiaryDragonair – saw cargo volumes fall 8.6% last month, leaving year-to-date volumes down 5.2%. Thecarrier said there had been little change from the previous month’s market situation, with weakdemand continuing out of both Hong Kong and Mainland China. It expected the markets to remain softthrough to mid-September.
The world’s largest cargo-carrying airline, Korean Air, blamed the decreasing level of exportsof IT products such as computer monitors and cell phones for a first-half year-on-year cargodecline of 8.4%, although it said exports of automotive-related parts and semiconductors saw agrowth during the reporting period. While outbound cargo traffic recorded a decrease of 30%,traffic from Japan, America and Europe recorded increases of 13%, 8% and 12%, respectively.
