Global air freight markets in January showed a rise in freight tonne kilometers (FTK) of 2.7% on the corresponding month last year, according to the latest data released by the International Air Transport Association (IATA).
"This continues the improving trend witnessed toward the end of 2015, and is the fastest pace since April of last year. The freight load factor (FLF) fell 1.8 percentage points, however, indicating that yields are likely to come under further pressure," the Geneva-based trade body said.
Total FTKs in January surpassed the previous all-time peak reached in February 2015. All regions except the smallest markets of Africa and Latin America expanded in January, but all regions reported declines in the FLF.
But IATA warned: "Despite this good start, the underlying weak trade performance makes it unlikely that growth will accelerate significantly in the coming months."
Commenting on the data, IATA’s Director General and CEO, Tony Tyler, said: “It is good news that volumes are growing, but yields and revenues are still under tremendous pressure. Air cargo plays a vital role in our globalized and fast-paced world in which trade is the foundation for long-term prosperity.
"Removing barriers to trade is a win-win. It will shore-up the foundations for stronger economies. And an improved business environment for air cargo will help facilitate much needed technology and process investments so that the industry will be an even stronger catalyst for growth and development. A third of the value of goods traded internationally are delivered by air. But the value of air cargo goes much deeper in the prosperity that it creates in supporting jobs and economic opportunity."
IATA's regional analysis of global air freight markets showed that Asia-Pacific carriers, which comprise almost 39% of all air freight, expanded by 1.3% year-over-year (although the international freight figure was a much lower 0.2%). The FLF fell 2.3 percentage points to 49.8%, still the highest of any region. "Emerging Asia trade contracted in the second half of 2015 and in general trade to and from Asia-Pacific is weak," the Association underlined.
European airlines’ demand grew by 2.5% in January but the FLF fell 1.5 percentage points, to 41.6%. "Growth may have been flattered by the volatility and weakness seen a year ago. The growth trend for volumes looks weak for the months ahead, so there is a strong possibility that Europe could slip back into negative growth."
North American airlines saw FTKs expand 2.5% in January compared to January 2015. The FLF was 34.6%, a fall of 1.4 percentage points. "Following the spike in volumes due to last year’s West Coast ports strike, air freight from the US across the Pacific fell away. On the other hand trade with Europe, particularly imports, has increased."
Latin American carriers continued the weak performance of recent months, declining by 3.6%. The FLF fell 2.7 percentage points, down to 32.9%. "Brazil, the region’s largest economy, has struggled, particularly with the fall in the price of oil and other commodities."
Middle Eastern carriers resumed their strong growth trend, expanding 8.8% in January. The FLF was broadly stable, declining just 0.3 percentage points to 39.2%. "The region’s airlines continue to enjoy strong growth, helped by large-scale network and fleet expansion."
African airlines’ FTKs declined by 1.4% in January compared to January 2015, and the FLF was 22.6%, down 4.8 percentage points, and the lowest of any region. "The largest economies in the region, Nigeria and South Africa, are heavily dependent on energy industries and have been hit hard by the slump in global commodity prices."
Meanwhile, market data specialist WorldACD has noted in its latest monthly bulletin that January 2016 gave little cause for cheer in the air cargo business.
"Year-on-year (YoY) January showed a volume increase worldwide of no more than 0.3%. Europe was the exception, just as it was in the second half of last year, with volume growth of more than 5% outbound and 1.5% inbound. Although Asia Pacific as a region hardly grew, its business to and from Europe thrived (+8.8% and +10.6% respectively)," it said.
"Whilst yields normally drop between December and January, this year’s MoM (Month-on-month) decrease of 6.6% (in US$) was slightly smaller than last year’s. The January US$-yield drop was 16% YoY, a figure not compensated for by lower jet fuel prices, even though these prices decreased by around 30% YoY. Only Central & South America managed to generate the same yield YoY."
WorldACD's monthly report also highlighted the projected strong growth in the Indian market following a statement from an advisor to the Indian government earlier this month that the country expects its air cargo industry to grow by over 180% in the next 15 years.
"Its (India's) growth percentages for the year 2015 are more than double the worldwide average: +4.1% outbound, +4.7% inbound. And for January 2016 the YoY volume growth is even higher: 4.4% and 7% respectively. With yields (in US$) moving along with the worldwide changes, one could say that its starting point is good."
WorldACD added: "The UK is still the most important outbound market, but its dominant position is dwindling. Other leading inbound markets, Hong Kong, Germany and China East have strengthened their position with double-digit growth. The latter two even managed over 20% YoY growth in January. Importantly, there is a good overall balance between India outbound and inbound."
