Air cargo volumes stagnated worldwide in October despite the build-up to the end-of-year peak season in global shipments, according to the latest figures from IATA.
Global cargo traffic measured by freight tonne kilometres rose just 0.5% in October compared to a year ago. Year-over-year expansion fell back from September’s faster growth rate, and total cargo volumes in October were 1.1% lower than the peak of the uptrend at the end of 2014, the airline association reported.
While global traffic grew just 0.5%, available capacity expanded by 5.7% in October, pushing the worldwide average airline load factor down to 44.8%. Over the first ten months of 2015, traffic was up by 2.6% and capacity by 5.8%, leaving the load factor at 44%.
"The outlook for air cargo continues to be very difficult. While there was some optimism from third quarter growth it has all but disappeared as the industry basically flat-lined. Cargo capacity has grown largely in lock-step with the continued robust demand for passenger travel. As a result, freight load factors have sunk to the 44% range—a level not seen since 2009. Early signs of improvement in export orders may bode well for trade and air cargo but this is unlikely to prevent air cargo finishing 2015 on a low note," said Tony Tyler, IATA’s Director General and CEO.
European carriers, who have driven recent improvements in air cargo growth, ran out of steam in October with a rise of just 0.2% while capacity rose 5.6%. Although this was a weaker performance than in recent months, improvements in the Eurozone are expected to continue, especially trade activity to/from Central and Eastern Europe, IATA said.
Asia-Pacific carriers saw a slight rise in FTKs of 0.3% in October compared to October 2014, while capacity expanded 2.9%. Trade growth in China and other key export economies remains disappointing, IATA commented. But Chinese export orders spiked in October, which could result in better demand for air freight in the next 2-3 months, it pointed out.
North American airlines experienced a decline of 2.4% year-on-year and capacity grew 6.0%. There are mixed signals from this market, according to IATA. Recent month-to-month results appeared to indicate a return to growth, but the latest manufacturing and export reports are poor. Strong demand for air freight in the coming months appears unlikely, IATA predicted.
Middle Eastern carriers, who have long driven overall market growth, saw demand expand by 8.3%, and capacity rise 11.6% in October. Recent air cargo growth in the region continues to trend well below the rates seen for the first half of the year, with the October figure some 4.3 percentage points down on the average performance for the year to date. Saudi Arabia and the UAE, among others in the region, have seen slowdowns in non-oil sectors, but growth rates remain robust enough to sustain solid demand for air cargo.
Latin American airlines reported a decline in demand of 8.1% year-on-year, and capacity expanded 5.0%. Year-to-date performance for Latin American air cargo is the worst of any region by some margin, contracting by 5.9%. Air cargo demand appears to be mirroring weakening consumer sentiment in key regional economies, according to IATA.
African carriers experienced a fall in demand of 1.1%, and capacity rose by 6.9%. Despite the October result, Africa is still the second fastest growing air cargo market for the year-to-date. Demand is holding up despite the underperformance of Nigeria and South Africa, the association noted.
