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Freight demand remains robust, profit margins widen

29th June 2017

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Yearly growth in air freight tonne kilometres (FTKs) remained robust during the three months ended April, with airline heads of cargo increasingly positive about the outlook for the year ahead.

Respondents to International Air Transport Association’s (Iata’s) latest quarterly Cargo Market Analysis were also notably more positive about the outlook for yields, with the weighted score jumping above the 50 mark for the first time in nearly three years.

This emerged as volumes increased 10.6% year-on-year in the three months ended April, with European and Asian carriers accounting for more than two-thirds of the yearly growth rate.

On a route basis, FTK growth over the period was fastest on the international segments within Asia and between Europe and Asia, representing a respective increase of 16.5% and 14.5% year on-year.

Meanwhile, a combination of rising cargo yields and recent falls in fuel prices was lowering the breakeven load factor, Iata said.

“With achieved loads continuing to recover, and freighter utilisation increasing, profit margins are widening,” it said.

The report showed that payload capacity was more than 5 200 t during the first quarter of 2017, a 8% decrease on the 5 700 t registered in the first half of last year.

Cargo yields, including fuel and other surcharges, had increased 4.5% since bottoming out in mid-2016.

“With crude oil prices currently some 10% below where they stood a year ago, the breakeven cargo load factor has fallen,” Iata concluded.

Edited by Creamer Media Reporter

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