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Air freight market grows in January, but yields to come under pressure

7th March 2016

Creamer Media Senior Deputy Editor

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The global air freight market has kicked off the new year with a solid performance as freight tonne kilometres (FTKs) in January rose 2.7% year-on-year, surpassing the all-time peak reached in February 2015.

The International Air Transport Association (Iata) on Monday said all regions, except Africa and Latin America, expanded in January, continuing on the upward trend that started at the end of 2015 and marking the fastest pace of growth since April.

However, a 1.8 percentage point fall in the freight load factor (FLF), with declines noted in all regions, indicated that yields were likely to come under further pressure, while an underlying weak trade performance made it unlikely that growth would accelerate significantly in the coming months.

“It is good news that volumes are growing, but yields and revenues are still under tremendous pressure,” Iata director-general and CEO Tony Tyler said in a statement on Monday.

The January air freight results showed that Latin American carriers experienced the sharpest drop in FTKs, declining 3.6%, followed by African airlines, which reported a 1.4% decrease in FTKs during January.

The African carriers posted the highest decrease in the FLF with a 4.8 percentage point drop to 22.6%, the lowest of any region, while Latin America recorded a 2.7 percentage point decrease to 32.9%.

Iata noted that Asia-Pacific carriers recorded a 1.3% rise in FTKs, but that the FLF fell 2.3 percentage points to 49.8% in January.

European airlines’ demand grew by 2.5% in January, with a 1.5 percentage points decrease in FLF to 41.6%, while Middle Eastern carriers resumed their strong growth trend, expanding 8.8% in January, with FLF declining 0.3 percentage points to 39.2%.

North American airlines saw FTKs expand 2.5% in January, with FLF at 34.6%, a fall of 1.4 percentage points.

Edited by Creamer Media Reporter

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