The International Air Transport Association (IATA) has released data for global air freight markets showing that air cargo volumes (measured in Freight Tonne Kilometers, FTK) were down 1.2% in November 2015, compared to November 2014.
Total cargo volumes, however, expanded compared to October 2015, and were higher than the low point in August, which the trade body says indicates that the decline in cargo demand may be bottoming out.
IATA noted that the negative year-on-year comparisons occurred across all regions with the exception of the Middle East. Of the major markets that together comprise more than 80% of total trade, Europe was down 2.0%, North America by 3.2%, and Asia-Pacific by 1.5%.
The comparative weakness in these regions was driven largely because the performance in November 2014 was very strong. Latin American and African markets also fell, by 6.4% and 6.0% respectively. The Middle East region posted 5.4% growth, IATA added.
“The freight performance in November was a mixed bag. Although the headline growth rate fell again, and the global economic outlook remains fragile, it appears that parts of Asia-Pacific are growing again and globally, export orders are looking better,” said Tony Tyler, IATA’s Director General and CEO.
“In fact, the downward trend in FTK volumes appears to be bottoming out. But there is a great deal of uncertainty. The current volatility of stock markets shows how much the health of the global economy – upon which air cargo depends – remains on a knife-edge,” he added.
At a regional level, Asia-Pacific carriers saw a slight fall in FTKs of 1.5% in November compared to November 2014, and capacity expanded 3.2%. Compared to October, volumes expanded by a strong 1.9%. Over recent months, the declining trend in volumes has halted. Better demand in advanced economies is driving export growth in some countries, particularly in Japan.
European carriers reported weaker demand in November, down 2.0% compared to a year ago, and capacity rose 2.2%. Comparing November to October, the trend was flat, but there are indications that stronger manufacturing and export orders could support air freight demand in the coming months, IATA noted.
North American airlines experienced a fall of 3.2% year-on-year and capacity grew 5.8%. The market remains hard to read. A 0.4% expansion compared to October indicates that air cargo could be recovering. But export indicators are poor, making it hard to be optimistic for the coming months.
Middle Eastern carriers saw demand expand by 5.4%, and capacity rise 9.2%. Although the Middle East led the way as the only market showing positive growth, the rate fell to less than half the 11.9% average growth for the year-to-date. Falls in the oil price are impacting some economies in the region.
Latin American airlines reported a decline in demand of 6.4% year-on-year, and capacity expanded 1.9%. Few positive signals emerged from the markets in this region, with economic and political conditions in Brazil particularly weak. The comparison with October also showed a 1.4% contraction and air cargo demand appears to be mirroring weaker consumer confidence.
African carriers experienced a fall in demand of 6.0%, and capacity rose by 6.6%. Africa remains one of only three regions (with Asia-Pacific and Middle East) to record positive year-to-date growth for 2015. Demand is holding up despite the underperformance of Nigeria and South Africa.
Meanwhile, according to the latest figures from air cargo data specialist, WorldACD, monthly air cargo volume dropped year-on-year (YoY) in November 2015 for the first time since June 2013, falling 0.9%.
“Even when viewing the last three months together (November had five Sundays and Mondays, traditionally not the best cargo days), there is no escaping the facts: firstly, September-November showed a YoY volume growth of 1% only, well below the YoY increase of 2.6% until August, and secondly, November was weaker than October, for the first time since 2011,” it said.
As for trends in US$ yields, although these improved for the third month in a row (in November), the 1% increase was smaller than the usual yield improvement from October to November, WACD noted. However, the month-on-month (MoM) yield increase was in line with last year’s when taking into account the major exchange rate effects.
WACD underlined that it was not all bad news thanks largely to air cargo markets from China and Hong Kong. “Together, these usual growth engines account for almost 30% of worldwide revenues. Their exports by air to Europe had been below previous year’s volumes for a good part of 2015, but over the past months this negative pattern was reversed,” it said.
Another positive trend was the North American market. “The destination North America had already performed well since the beginning of 2015 and continued that trend towards the year’s end. And the yield developments (in US$) were even more encouraging.”
Turning to Asia Pacific, WACD noted that contrary to recent figures from other sources, it observes “rather positive yield patterns” for air cargo originating in this region between August and November, with increases of 17% to Europe and 10% to North America.
“However, intra-Asia Pacific air cargo suffered. YoY volumes were down by 4% in November, and by 1.3% for the last three months. And coupled with that, the average US$-yield in the area fell by 4% since August 2015,” WACD revealed.
As for other regions and how they have fared since August, volumes from Africa, Europe and the Middle East & South Asia (MESA) grew more than average (up by 4%, 4% and 2% respectively). More than 60 airlines are now reporting their figures in WorldACD’s database.
