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African air cargo demand accelerates 7.2% in May

African air cargo demand accelerates 7.2% in May

Photo by Bloomberg

2nd July 2014

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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Demand for air cargo on African carriers increased by 7.2% year-on-year in May – considerably ahead of the average global demand growth of 4.7% year-on-year.

Air cargo capacity on the continent rose 7.2% over the same period, matching overall demand.

“Weaker growth in the major African economies in the first months of the year appears to be ending, which will hopefully fuel stronger performance in the months ahead,” the International Air Transport Association (Iata) said on Wednesday.

Cargo volumes, measured by freight tonne kilometers, were up across all regions, but with significant variations in performance.

Iata added that there were indications that world trade and business confidence were improving after weakness in the first quarter of this year.

In particular, Chinese manufacturing activity rebounded in May, with a corresponding rise in export order growth.

“After several months of wavering conditions in the demand environment, the outlook for global air cargo appears to be stabilising. That’s good news, but the sector still faces an uphill battle to restore competitiveness and increase its share of trade growth, but this will not be achieved with a business-as-usual mindset,” commented Iata CEO Tony Tyler.

He noted that the competitors to air cargo were “aggressively” innovating, cutting end-to-end shipping times and improving efficiency.

“There is tremendous potential in the e-cargo agenda to help shorten average shipping times by 48 hours from the current average of 6.5 days. Airlines have a pivotal role [to play] through expanding the use of e-air waybills. But success will need a united approach across the value chain,” he said.

Looking to regional performance, Asia-Pacific carriers recorded a strong increase in cargo demand of 5.3% year-on-year, as regional trade volumes picked up and signs emerged that the slowdown in the Chinese economy was easing.

Capacity grew somewhat faster than demand, at 6%, but the region still had the highest freight load factor, at 55.5%.

Demand for air cargo on North American carriers grew by a modest 2.4% in May, down on the April year-on-year growth rate of 3.5%, reflecting the general slowdown in the US economy in the first quarter.

“However, the latest data supports a return to trade and business growth,” Iata noted, adding that capacity for this region shrank 0.2% over the period.

European airlines’ air cargo demand expanded 3.4% in May, pointing to a consistent improvement in economic activity. Capacity increased 4%.

Middle Eastern carriers continued to see the highest rate of demand growth, expanding 9.3% in May, compared with the year before, as stronger expansion in developed markets combined with rising links to emerging economies to fuel growth. Capacity grew 10.6%.

Latin American airlines, meanwhile, recorded an increase in demand of 4.9% year-on-year, responding to a pick-up in trade growth.

“This may be a spike in business activity associated with the FIFA World Cup,” Iata stated, adding that capacity climbed 4.5%, slightly slower than demand.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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