Air-freight markets continue recovery in February, IATA reports
April 05, 2014 00:00 By The Nation 3,366 Viewed
Global air-freight markets in February showed a 2.9-per-cent increase in demand from a year earlier. The first two months of 2014 have seen an overall 3.6-per-cent improvement in demand over the previous year. This continues the strengthening in cargo mar
“Cargo has had a positive start to the year. There is good cause for measured optimism for the cargo industry’s prospects in 2014. The 3.6-per-cent growth in demand recorded over the first two months of this year is a significant step up from the 1.4-per-cent growth in demand over the whole of 2013,” said Tony Tyler, IATA’s director-general and chief executive officer.
There are, however, some serious trends that are not in the industry’s favour. Companies continue to “on-shore” their manufacturing supply chains. The world’s top 20 economies implemented some 23 per cent more protectionist measures last year than in 2009. These factors are a major part of the reason there is not trade growth of 5-6 per cent, which there should be at the current level of domestic production.
Currently trade and domestic-production growth is running at about the same level. The World Trade Organisation’s agreement in Bali late last year gives hope for invigorated world trade. It is important that governments keep their commitments, Tyler said.
The vast majority of the growth in cargo was realised by airlines in the Middle East and Europe, which recorded 11.9-per-cent and 5.5-per-cent growth respectively compared with the previous February.
Regional performance was mixed. European and Middle Eastern carriers continue to grow strongly. North American and Asia-Pacific markets, on the other hand, were basically flat or declining.
Asia-Pacific carriers grew just 0.1 per cent in February compared with a year ago. As in 2013, the impact of Lunar New Year (which fell on January 31) may have dampened demand a little in February.
Regional trade growth in recent months has been improving, so stronger air-freight growth should be posted in the months ahead. Chinese economic performance, however, may be on the verge of a slowdown, which would restrict trade and freight demand. Capacity grew faster than demand, at 3.9 per cent.
North American airlines experienced a slight contraction of 0.3 per cent year on year. However, February business indicators in the manufacturing sector were close to a three-year high, suggesting that growth in exports and air-freight demand should resume. Capacity fell 1.9 per cent, which helped shore up the load factor to 35.1 per cent.
European carriers have seen a steady increase in demand since mid-2013. The February year-on-year growth rate of 5.5 per cent was only slightly down from the 5.8 per cent recorded in January. Business activity indicators are at their highest since 2011, and trade is growing particularly strongly in Central and Eastern Europe. Capacity was up 1.7 per cent.
Middle Eastern carriers continue to record double-digit growth in freight volumes, up 11.9 per cent compared with a year ago. Airlines in the region are benefiting not only from the stronger growth in developed economies but also from expanding trade with emerging economies. Capacity grew slower than demand, by 9.2 per cent.
Latin American airlines saw solid 6.1-per-cent growth in February, continuing a trend that started in the second half of 2013.
Indicators for Latin America as a whole are positive. Even the weakness in the region’s largest economy, Brazil, is expected to get a boost from the upcoming Fifa World Cup soccer tournament. Capacity in the region grew just 1.7 per cent.
African airlines’ freight volumes fell 5.2 per cent, continuing the weakness that has been apparent in the continent since the fourth quarter of 2013. African freight volumes are often volatile month to month, but carriers have seen downward pressure on demand from the slowdown in major regional economies, particularly South Africa. Capacity grew 5.5 per cent.