Improving economic conditions in Europe helped generate low growth for worldwide air cargo inJuly despite weak business in Asia and the outlook is now “cautiously positive”, IATA said
today.Global freight tonne kilometers (FTKs) were up 1.2% in July year-on-year, slightly better thanthe 0.9% year-on-year increase recorded in June, as growth in Europe and the Middle East offsetweakness in Asia, the international airline association said. The improvement was driven bydomestic markets in July, IATA figures showed. Domestic FTKs increased by 4.6% while internationaltraffic was only 0.7% higher.
As a result of the July performance, air freight volumes are at their highest level sincemid-2011. Capacity increased 3.4% versus July 2012, pushing load factor down to 43.3%. However,load factors have stabilised compared to earlier in 2013.
The world air cargo market has grown by a fractional 0.2% over the first seven months of 2013,with international traffic slightly lower but domestic business up 2.2%, the figures showed.
“The growth is encouraging, particularly in Europe. However, it is premature to say that aircargo may be emerging from the doldrums of the past 18 months. The weakness in Asia-Pacific freightmarkets and the deteriorating political situation in parts of the Middle East give ample reason forcontinued caution,” said Tony Tyler, IATA’s Director General and CEO.
In its monthly analysis, IATA pointed out that the factors supporting the current volumeimprovement “remain shaky” but described the overall outlook as “cautiously positive”.
“There have been slight improvements in global business confidence and a pickup in exportorders which should support a modest expansion of trade volumes in months to come. However,positive developments in Europe and the US have yet to translate into growing demand for Asianmanufactured goods, which will be an important determinant of air freight growth in the second halfof the year,” IATA commented.
At a regional level, airlines in Europe, the Middle East and Latin America were again the maingrowth drivers in July.
European carriers experienced a 1.5% increase in FTKs in July, while capacity climbed 3.5%. Julywas the second consecutive month in which air freight demand increased, giving rise to cautiousoptimism. Questions remain, however, regarding the eurozone’s ability to sustain growth, IATA said.Although the eurozone’s 18-month recession ended in the second quarter, performance among countriesvaries widely, with Portugal, Germany and France leading the expansion and Italy, Spain and theNetherlands showing contraction. Through the first eight months of 2013, FTKs rose 0.2%year-over-year.
Middle East airlines led all regions with a 14.4% rise in FTKs compared to July 2012, whilecapacity climbed 11.1%. Year-to-date demand was up 11.7%. The Middle East was one of just tworegions in which airlines saw demand growth exceed capacity growth. Part of the rise inyear-on-year growth rates in July is owing to the timing of Ramadan, which took place mostly inJuly 2013, while in 2012, most of the holiday occurred in August. Ramadan typically gives a boostto air freight demand for Middle Eastern carriers, as air transport of perishable foods and giftparcels increases to/from the region.
Latin American carriers’ cargo traffic was up 3.1% in July compared to a year ago, with capacityup just 1.7%. This result was broadly in line with the region’s performance during the first sevenmonths of the year, when FTKs rose 3.4%. Demand for certain Latin American exports has shown stronggrowth momentum over recent months, providing a solid foundation for expansion in air freightdemand.
In contrast, Asia-Pacific carriers’ cargo demand fell 1.4% compared to July 2012, while capacityclimbed 2.6%. Asia-Pacific airlines have seen air freight contract 2.1% through the first sevenmonths of 2013, the largest decline among regions. Business activity in China remains sluggish,with the Markit/HSBC Purchasing Managers Indices for manufacturing and export orders continuing toshow softness. Moreover, the weakness extends beyond China, with emerging Asia trade volumesshrinking almost 5% in the first half of the year.
North American airlines had another month of weak demand for air freight in July. FTKs fell 1.1%compared to the year-ago period, contributing to a 1.7% contraction in the first seven months of2013 versus last year. Signals out of the US are mixed, IATA noted. July’s performance representeda decline compared to June, but month-on-month growth rates have been especially volatile andrecent indicators suggest rising business confidence, in line with an improving economy.
African airlines experienced a 4.9% contraction in July year-on-year. Despite a relativelysupportive demand environment, reflected in the year-to-date FTK growth of 2.2%, airlines in theregion continue to face intense competition for their product.
