World air freight stalls in March

Worldwide air freight traffic weakened in March and the improvement in air cargo growth ratesthat began towards the end of 2012 has stalled, figures released today by the International Air

Air freight, measured in Freight Tonne Kilometers (FTKs), was down 2.3% in March compared toMarch 2012. The global load factor slipped marginally to 46.7%, and capacity fell by 0.3%. Thefirst quarter of 2013 closed with a 1.1% drop in traffic. Global air freight volumes are now only1.5% above the October 2012 low point, down from the 3.5% rise that had been reached in January,IATA noted.

“The March decline in air cargo is most likely a temporary stall. The fundamentals for asustained improvement in air cargo volumes are in place. Business confidence continues to signalforthcoming expansion, and the solid increase in new export orders seen in 2013 should boost airfreight in the coming months. Much of the current weakness is coming from Asia-Pacific airlines.While the region is economically strong, the economies of its trading partners are not. Theeurozone is showing renewed weakness and the negative impact of US budget cuts is yet to be fullymeasured,” said Tony Tyler, IATA’s Director General and CEO.

Asia-Pacific carriers, which collectively comprise the largest players in air freight with acombined 38.5% market share, reported a 3.3% year-on-year fall last month. There was a 3% drop involumes in March compared to January this year. Although regional indicators are still solid, majortrade partners in Europe continue to be hampered by economic weakness and sovereign debt problems.Capacity also fell, down 2.8%, compared to a year ago.

North American airlines experienced a 5.2% decline in demand, the steepest fall of any region,while capacity was reduced by 2.7%. While domestic demand has supported regional cargo carriers,routes to Europe have been hit by declines in export markets.

European cargo markets fell 4.0% and capacity grew 0.4% in March. Several European confidenceindicators declined in March and much of Western Europe remains in or close to recession, IATApointed out.

Only the Middle East and Africa showed growth. Middle East airlines’ cargo traffic grew 10.5% oncapacity up 9.1%, continuing their remarkable start to 2013. The region has grown 12.4% faster forthe year to date compared with the same period last year. African cargo markets grew 3.2%,benefitting from strong growth in regional developing economies. Capacity, however, grew by 10.0%which led to the load factor declining to 25.0%, the lowest of all regions.

In Latin America, carriers saw demand fall 0.8% while capacity grew 2.6%. However, theunderlying economic growth trend in the region is still solid and airlines have maintained theimprovement in demand since late 2012. Export growth to North America and China is supportinginternational freight routes, IATA commented.