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Air freight markets see April growth

30th May 2016

By: Anine Kilian

Contributing Editor Online

  

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The International Air Transport Association (Iata) saw a 3.2% increase in air freight demand in April compared with the same period last year, according to demand growth results for global air freight markets, published on Monday.

The increase in demand was broad-based across all regions, with the exception of Latin America.

Yields remained under pressure, however, as April freight capacity increased by 6.6% year-on-year. 

The strongest growth occurred in the Middle East and Europe, with April demand up by 7.7% and 6.8% respectively, compared with April 2015.

Iata noted that, while growth appeared to be stronger in April than in the preceding months of 2016, this was largely owing to the lack of distorting factors included in the comparison data associated with the 2015 strike at seaports on the US West Coast.

Overall, the demand for air cargo remained soft and lagged behind the relatively robust growth on the passenger side of the business, largely driven by weak world trade.

The first quarter of 2016 saw the first yearly decline in trade volumes since the global financial crisis in 2009, and the World Trade Organisation predicted only sluggish growth for the remainder of 2016.

“While the April uptick in demand growth for air cargo is encouraging, the overall economic environment is not. The decline in global trade does not bode well for air cargo markets in the months ahead,” said Iata CEO Tony Tyler.

African carriers saw flatline freight growth in April this year, compared with last year. However, notably, on the back of long-haul expansion, the capacity for African airlines surged by 24.3% year-on-year, which was more than double the pace of any other region in recent months.

Asia-Pacific airlines’ demand for air cargo was basically flat, with a 0.1% rise in April compared with last year, while capacity expanded 2.8%. The largest factor impacting on this stagnation was weak trade—globally and in the region.

North American carriers, meanwhile, experienced a significant upward swing in year-on-year performance as the exaggerated effects of last year’s US seaport disruption wore off. Demand grew by 4% in April 2016 compared with the same period last year, which was significantly better than the 0.8% drop the previous month.

European airlines saw a 6.8% increase in freight volumes in April 2016, the highest growth since November 2013.

Europe’s strong performance corresponded with an increase in export orders in Germany over the last few months.

However, despite European cargo demand trending upwards, performance remained weak in historical terms. Seasonally adjusted demand in April 2016 was only 1.5% higher than mid-2011. 

Middle Eastern carriers saw demand expand by 7.7% and capacity rise 11% in April compared with the same period last year. Although carriers in the region continued to report the fastest growth in aggregate, the April growth rate was about half that recorded in April 2015.

Latin American airlines reported a decline in demand of 5.9% and a drop in capacity of 0.7%, as economic conditions continued to worsen, particularly in the region’s largest economy, Brazil.
 

Edited by Samantha Herbst
Creamer Media Deputy Editor

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