Air cargo volumes encourage, outperforming weak global trade

8th December 2016

By: Martin Zhuwakinyu

Creamer Media Senior Deputy Editor

  

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GENEVA – Although the global airfreight business continues to face headwinds from weak global trade, the International Air Transport Association (Iata) says there are encouraging signs that growth in air cargo volumes, which came in at 8.2% year‐on‐year in October, will endure into the new year.

This was the highest year‐on‐year growth in 18 months in airfreight demand, which is measured in freight ton kilometres.

Freight capacity, measured in available freight ton kilometres, was also higher year‐on‐year in October, registering a 3.6% increase.

Speaking at the association’s cargo media day on Wednesday, director‐general and CEO Alexandre de Juniac said the uptick in airfreight volumes had been more than anticipated and that purchasing managers were forecasting an increase in new orders going forward, which augured well for the industry.

“So, we enter 2017 propelled by some much‐needed positive momentum,” he enthused.

Iata senior economist George Anjaparidze explained that one‐off factors that positively impacted on the October results included a modal shift to airfreight following the collapse of the Hanjin Shipping Company in August.

There could also have been a last minute reliance on air transport as companies exercised caution in ordering as a result of weak market conditions earlier in the year.

Anjaparidze added that structural market shifts could also have underpinned a portion of the strong performance in October, including strong growth in cross‐border e-commerce and pharmaceuticals flows.

Further, preparations for increasingly popular events such as Black Friday and Cyber Monday could also have contributed to the surge in airfreight volumes.

While all airfreight markets except Latin America reported an increase in year‐on-year demand in October, the volumes varied considerably.

The Asia‐Pacific region saw a regional demand increase of 7.8% from the ‘within Asia’ air cargo market and on routes to and from the region, while capacity grew by 3.9%.

North American carriers’ freight volumes expanded by 3.7%, with capacity increasing by just 0.1%.

However, US exports continued to suffer from the strength of the dollar, which has kept the US export market under pressure.

Europe posted the biggest year‐on-year increase in airfreight demand – 13.4% – reflecting the sustained increase in export orders in Germany over the past few months and the ongoing weakness in the euro.

Airfreight capacity in the region increased by 5.9% year‐on‐year.

The Middle East market posted a 9.2% growth in airfreight volumes, with capacity increasing 4.2%.

African carriers’ freight volumes increased by 7.4%. However, capacity surged by 24.7% on the back of long-haul expansion, in particular, by Ethiopian Airlines.

Volumes in the Latin American market, which continues to be blighted by weak economic and political conditions, particularly in Brazil, the region’s largest economy, contracted by 0.1%, while capacity decreased by 1.8%.

Meanwhile, De Juniac said the drivers for stronger growth were sending a major signal for change in the air cargo industry.

“Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to freight is more critical than ever.”

* Martin Zhuwakinyu attended the Iata cargo media day as a guest of the association.

Edited by Creamer Media Reporter

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