Global air cargo demand in May falls on critical economic conditions worldwide

Air cargo traffic around the world is showing a general downward trend with a 1.9% year-on-yearfall in freight demand for May 2012, in line with worsening global economic conditions, the

Compared to April, the freight market contracted by 0.4%. Since hitting the lowest point in thefourth quarter of 2011, air freight has improved by a small 1.5% but this growth was attributedmainly to the Middle East carriers, IATA explained.

The freight load factor stood at 45.3% in May, unchanged from the previous month but 1.2% belowMay 2011 levels.

Tony Tyler, IATA’s Director General and CEO, commented: “The airline industry is fragile. Reliefin oil prices provides some good news. Unfortunately, the softness in oil markets comes on the backof fears of deterioration in the European economy. Business and consumer confidence are falling.And we are seeing the first signs of that in slowing demand and softer load factors. This does notbode well for industry profitability. Airlines are expected to return a $3 billion profit in 2012on $631 billion in revenues. That’s a razor-thin 0.5% margin.”

In regional terms, European airlines recorded the sharpest fall in freight traffic by 5.7%compared to last year on a 1% rise in capacity. Asia-Pacific showed a moderate decline in Maydemand of 4.1% with a capacity drop of 1.7%, followed by North America with a 1.9% drop in demand,with capacity going down 1.6%.

Latin American airlines experienced a slight increase of 0.2% in demand, with capacity up 0.5%.The biggest increase was generated by the Middle East carriers with demand rising at double-digitrates by 12.4% exceeding the 11.7% rise in capacity. “Half of this year’s growth in cargo marketshas been captured by the Middle East carriers,” IATA added.

During the Rio+20, the United Nations sustainable development conference taking place in Rio deJaneiro, Brazil, last month, the global importance of the aviation sector was highlighted with22,000 delegates discussing the future of the planet.

“Whether bringing people together or moving cargo around the globe, aviation is vital to modernlife. The G-20 leaders recognised the critical role of aviation which is the backbone of travel andtourism that is a vehicle for job creation, economic growth and development. Now we needgovernments to move from recognition to action with tax policies that don’t kill growth, regulationthat enables growth and infrastructure to accommodate growth,” Tyler added.