After a solid start to the year, growth in air freight carried by African airlines weakened throughout mid-2013, with data for this region continuing to show significant volatility, making the establishment of a clear trend for the year difficult, the International Air Transport Association (Iata) stated in its market analysis of global air freight for November 2013.

While African airlines experienced a contraction of 1.2% year-on-year in November, they also recorded a 5% increase in volumes compared with October, which suggested an upturn in the recent growth trend.

The association found that, although trade volumes for the region continued to increase as local economies posted fast growth, competition on important trade routes from airlines registered in other regions remained “intense” and a lack of adequate infrastructure and political stability continued to hinder growth potential.

“Moreover, profitability prospects for African airline cargo business remain weak, with load factors falling further, from 34.8% in November 2012 to 31.1% in November last year,” Iata held.

Meanwhile, global air freight markets surged in November, with a 6.1% rise in global freight tonne kilometres (FTKs) compared with a year before, representing a solid improvement on the October increase of 4.4%.

“November is typically a strong month for air freight as businesses increase inventories for the upcoming holiday season, and global FTKs increased in November compared with October even after adjustment for seasonal factors.
“While month-to-month changes can show significant volatility, the increase in volumes in November, and recent past months, is consistent with improvements in the business environment,” Iata stated.

The strong global result was driven by a solid rise in freight volumes carried by Asia Pacific airlines, which constituted the largest share of global FTKs.

Airlines in this region saw a 4.9% increase in air freight volumes in November compared with a year before, in contrast to the 1% contraction seen throughout the year as a whole.

Over recent months, economic growth in China picked up and Asian trade volumes rebounded after significant declines mid-year, while improving demand for Asian manufactured consumer goods in North America and Europe also supported the rise in Asian trade and air freight volumes.

The November air freight results further showed solid growth for Middle Eastern and European carriers, rising 16.5% and 8% respectively compared with a year before.

The November performance of European airlines, at 1.7%, was above year-to-date growth, maintaining the steady improvements in demand over recent months and was consistent with the region’s emergence from economic contraction in 2013.

“Carriers in the Middle East have benefited from improvements in demand in Europe and solid economic and trade growth of nations in the Gulf,” said Iata.

Meanwhile, load factors improved in November after a continued decline throughout much of 2013, after being buoyed by the solid growth in demand and slower capacity expansion, resulting in a 0.8% rise compared with the prior month.

“Load factors are now finally above year-ago levels, supported by the improvement over the past two months, which could help alleviate downward pressure on cargo profitability,” the association noted.

Iata said the outlook for air freight markets continued to improve slowly, with business confidence sustaining an upward trend since mid-2013, and improvements in export orders over recent months now translating into an uptick in world trade growth.

It cautioned, however, that additional gains in trade growth had been limited by an increase in onshoring, which, if continued, could suppress further acceleration in both trade and air freight.