Airline cargo chiefs and CFOs expect better cargo business this year with rising volumes butmixed yield trends as world trade conditions gradually improve, according to a new IATA survey.
The more positive outlook follows a recovery in worldwide air freight in the second half of 2014driven by a revival in cross-border trade, especially for Asia Pacific and North America. TonyTyler, IATA’s Director General and CEO, said earlier this month that IATA expects air freightmarkets to expand by 4.5% this year, outpacing a projected 4% growth in world trade, although “manymacro-economic and political risks … continue to impact trade flows.”
A high 71% of respondents said they expect rising air freight demand over the next 12 monthsafter an acceleration in volumes in recent months. Just over 25% said they expected no volumechange and only 3% predicted a decline in 2015, IATA’s latest monthly Airline Business ConfidenceIndex showed.
This is the highest confidence level for air cargo prospects since early 2010 and comes after asteady improvement in the 12-month outlook since the start of 2012, according to the index.
Nearly 57% of airlines reported higher cargo volumes in the last three months, while 32% had nochange and 11% saw a decline, according to the index.
Given the recent improved demand, the decline in cargo yields slowed in Q4, 2014, the IATAsurvey found. However, cargo chiefs still anticipate weakness in yields over the next 12 months.One third predict a further drop in yields during 2015, 47% expect no change and only 18% predicthigher yields.
Asked about overall profitability expectations, 78% of respondents said they expected theirairline to make higher profits this year, while 12% predicted a drop and 10% expected no change.Key factors behind these expectations, according to the survey, are rising volumes and fallingcosts due to the dramatic drop in fuel prices.
IATA has not yet published full traffic figures for 2014 but over the first 11 months of lastyear global air freight grew by 4.4%, with international traffic up by 4.7% while domestic volumesincreased by 2.7%, based on airline figures.
Similarly, world airports achieved a 4.8% rise in tonnage from January to November 2014,including a 5.8% rise in international freight, according to figures from Airports CouncilInternational (ACI). In November, air freight traffic increased 4% year-on-year with internationalvolumes up by 5%.
