Airfreight markets in Africa mirrored the global growth average, expanding 5.9% compared with March last year, with the region’s markets remaining volatile despite expanding by 1.5% in the first quarter of the year.

The International Air Transport Association (Iata) released data on Monday showing that growth on the continent had been affected by a slowdown in the South African economy, while capacity grew broadly in line with demand, at 5.5%.

The global growth average for airfreight in March was up 5.9% compared with a year ago, while capacity grew 3.4% over the same period.

Iata said in a statement that, while this marked a significant improvement in volumes compared with March last year, much of the growth took place in the final quarter of the year.

“Since the beginning of the year, air cargo volumes have been basically flat. This plateau in volumes is consistent with the recent pause in improvements to business confidence and world trade,” stated the association.

REGIONAL PERFORMANCE

Looking to other regions, Iata’s data revealed that Asia-Pacific carriers grew 6.9% in March compared with a year ago, although it cautioned that some of the March growth would reflect a resumption of business activity after the break for the Lunar New Year.

Looking ahead, however, the continuing slowdown of Chinese gross domestic product growth was likely to, ultimately, impact trade growth and airfreight demand for local carriers.

Capacity grew by 7.5%, running slightly ahead of demand.

In Europe, airline cargo volumes expanded by 5.1% compared with March 2013, with measures of business activity in the eurozone pointing to continuous expansion since mid-2013, which was expected to be maintained.

Capacity expanded just 1.3%, strengthening load factors.

North American carriers grew 1.9% year-on-year, with the slower growth attributed to a weather-related disruption in the first quarter of the year.

“Business fundamentals in North America are strong, which should support greater airfreight volumes in coming months,” Iata noted, adding that capacity over the period declined by 0.3%.

Middle Eastern carriers, meanwhile, saw a 13.2% year-on-year rise in freight tonne kilometers, which came on the back of airlines taking advantage of growth in both developed and emerging markets.

Carriers in the region were expanding their networks and services, as well as broadening the range of goods they transported.

Capacity grew just 4.7%, taking the load factor to nearly 50%.

In Latin American, airfreight volumes were flat, as trade in the region deteriorated in early 2014, which could explain the slowdown.

Capacity rose by 2.3%, weakening the load factor.

CAUTIOUS OPTIMISM

Iata held that business conditions in the US and Europe, however, provided a reason to be cautiously optimistic for a resumption of growth in the months ahead.

Rising export orders, in particular, were expected to give positive momentum to US and European markets, but would be balanced against the impact of a slowdown in Chinese manufacturing, which was now in its fourth month.

This had already impacted exports from emerging Asian countries, which contracted in February.

“Cargo markets had a boost in the last quarter of 2013, but have now levelled off. It is a competitive industry with growing capacity chasing weak demand. The business cycle will eventually swing upwards. But the air cargo industry also needs to improve its value proposition if it is to attract growth when markets improve,” Iata cautioned.

Modernising air-cargo processes and infrastructure, it noted, would offer the potential to cut end-to-end shipping times by up to 48 hours.

“We cannot let market doldrums hold us back from this critical competitive gain,” commented Iata director-general and CEO Tony Tyler.

“In the 40 years since the introduction of the 747 freighter, the end-to-end shipping time for goods by air has remained unchanged at six to seven days. During this period, innovators have created a new value proposition for shippers and consumers based on an end-to-end model, speeding up deliveries by integrating the airline and ground components of freight, challenging the existing business model for many participants.

“Iata global head of cargo Des Vertannes has challenged the industry to cut the end-to-end air freight shipment time by 48 hours by 2020 to enhance the competitiveness and value of air cargo,” he said.