Air freight demand drops in October with additional impact from Hurricane Sandy

Airlines around the world reported a decline of over 2% in freight volumes in October comparedto September continuing the downward trend over the last 3 months with Hurricane Sandy additionally

Even though airlines reduced air freight capacity over the last month by 0.9%, it was not enoughto compensate for the significant fall in volumes of 2.2% compared to the previous month. “As aresult, freight load factors have started to fall to levels not seen since 2009. However, effortsmade by airlines to reduce capacity should mitigate some of the downward pressure on cargo loadfactors,” the association said.

The freight demand in October was 3.5% down year-on-year compared to October 2011 after being up0.9% in September while the freight load factor dropped to 46.1% from 46.7% a year ago. Theseresults are consistent with developments over recent months as consumer and business confidenceweakened in major economies and world trade slowed further down.

The weakness in demand was particularly felt with Asia-Pacific airlines recording a 6.8% declinein October demand compared to the previous year. IATA noted that this was the steepest decline forany region last month. Capacity was down 4.6%. “Between September and October, two-thirds of thedeclining global air freight volumes has come from Asia-Pacific carriers, as demand for Asianexports declined in the weak global economy,” it said.

Following the downward trend from Asia, North American airlines saw their demand drop by 5.3%,with a 5.4% reduction in capacity. European airlines had a 4.3% decline in traffic but a slower1.7% decline in capacity. Since the fourth quarter of 2011, airlines in Europe have seen only a 1%rise in demand.

In contrast, Middle East carriers experienced strong demand growth with a 13.4% rise in trafficon an 8.6% rise in capacity helping to raise the load factor 2% to 46.4%.

Latin American airlines recorded a slight increase in demand of 0.9% but this was exceeded by an8.6% hike in capacity that pushed the load factor down 3% to 39.3%. African carriers saw a 0.5%decline in demand and a 2.7% rise in capacity. The load factor of 26.6% was the weakest for anyregion.

IATA also highlighted the impact of the Hurricane Sandy for the aviation industry in October. Intotal, nearly 17,000 flights were cancelled at the five most affected airports including the threeNew York area airports of John F. Kennedy, Newark and LaGuardia as well as Washington-Dulles andPhiladelphia. At the peak of the storm on Monday 29 October, 8-9% of global seat capacity wasgrounded, IATA pointed out.

Tony Tyler, IATA’s Director General and CEO, commented: “The human toll and physical destructionof Hurricane Sandy remain foremost in our minds. It also dealt the airline industry a $0.5 billionblow at a time when it can least afford it. At the same time, the disruption of thousands offlights demonstrated just how connected the aviation industry has made the world. Direct flightcancellations reached airports as far apart as Singapore, Johannesburg and Santiago. Meetings werecancelled, shipments delayed, conferences postponed and supply chains disrupted. A smoothfunctioning of the aviation industry is a critical component of modern life that is often taken forgranted.”

Global air transport provides jobs for some 57 million people and supports $2.2 trillion ineconomic activity by connecting people and goods on 35,000 routes, according to theassociation.