Airfreight traffic continues to decline into October
November 29, 2011
The International Air Transport Association (IATA) announced global traffic results for October. Cargo demand was 4.7 percent lower than that of October 2010, while passenger traffic showed a 3.6 percent rise over previous year’s levels.
“Cargo is the story of the month. Since mid-year the market has shrunk by almost five percent and this is far greater than the one percent fall in world trade. Air freight is among the first sectors to suffer when businesses’ confidence decline,” said Tony Tyler, IATA’s Director General and CEO.
While business confidence has declined considerably in recent months, industrial output has not. But in anticipation of weaker economic activity, there is a shift to cheaper and slower modes of transport.
In stark contrast to the decline in air freight, the trend for air travel remains upwards, but with very strong regional differences. Despite the deepening euro-zone crisis European carriers have showed above trend demand growth of 6.4 percent. “With Europe accounting for 29.2 percent of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations,” said Tyler.
The confidence of purchasing managers in the manufacturing sector has fallen to its lowest level since 2009. This loss of confidence appears to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight which showed a 4.7percent decline in October compared to the previous year.
Airlines have responded to weaker demand by cutting their freighter fleet. But this has not stopped a steady and substantial five percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft.
Asia-Pacific carriers account for about 40percent of global freight markets and while they are the most exposed to the volatility of freight volumes, they are still benefiting from the dominance of trade flows to Asia. In October they posted the highest freight load factor (58.8 percent), a full 12.3 percentage points above the global average of 46.5 percent. This is a result of strong outward flows of freight from Asia which dominates the air cargo business.
Source: IATA
