Asia’s carriers, airports report solid peak season volumes

Cathay Pacific Cargo has something to laugh about, with the carrier seeing a sharp upturn in volumes since June.

Asia’s airports and airlines are beginning to hit their peak season stride with rising air cargo volumes being reported for October and solid forward bookings expected for November.

The world’s largest air freight hub, Hong Kong, reported its cargo volume up by 7.1 percent in October compared with the same month last year, with 462,000 tons crossing its busy apron. The airport has handled 3.7 million tonnes from January through October, almost 2 percent up year-over-year.

The Hong Kong Airport Authority attributed the growth to the robust 13 percent year-over-year increase in transshipment. “Among the key trading regions, traffic to and from Europe and Southeast Asia increased most significantly during the month,” the authority said.

A heavy contributor to the growth at Hong Kong airport was Cathay Pacific, its biggest single source of air freight. In October, Cathay reported cargo traffic up 3.2 percent year-over-year to 985 million revenue ton kilometers, continuing a sharp upturn in volume since June. RTKs measure the number of revenue tons of cargo (freight and mail) carried and then multiplied by the distance. For the first 10 months of this year, Cathay’s cargo traffic was up 0.4 percent from 2015 to 8.7 billion RTKs.

Cathay’s general manager cargo sales and marketing Mark Sutch said demand was strong in October and the tonnage was continuing to grow. “We had some negative impact on our forecasts during the month from typhoon disruptions and unscheduled aircraft maintenance but overall exports from Europe, Asia, and mainland China were robust,” he said.

“The team continues to work hard to push up the yield, and the rates are getting back to peak season levels. The new twice-weekly service to Portland, introduced in early November, further strengthened our US network.”

In China, Shanghai Pudong International Airport Cargo Terminal Co., the largest handler at the airport, recorded its highest ever monthly total in October. Pactl handled 169,322 tons of air cargo, a year-over-year volume growth of 8.9 percent. Throughput from January through October was also the highest ever 10-month result in the terminal’s history, with 1.48 million tons handled during the period.

A steady rise in cargo tonnage from January to October also has Lutz Grzegorz, vice president of Pactl, predicting another big year for the Sino-German terminal. Pactl handled close to 1.76 million tons of air freight in 2015.

“We managed to significantly grow our international imports and domestic exports in the last couple of months. This is mainly due to the fact that the demand for high-value consumer goods picked up again,” he said. Grzegorz expects cargo volumes to continue to grow through November and December. “In line with this positive trend, we are confident of achieving another annual record by the end of 2016.”

The increase in domestic demand could be clearly seen in the cargo traffic figures of China’s flag carrier. Air China reported a 14.7 percent increase in domestic traffic that grew to almost 164 million RTKs in October. International traffic was up 8.2 percent to 498 million RTKs. The Beijing-based carrier's total RTKs in October increased by 9.4 percent compared with the same year in 2015, and cargo traffic was up 5.6 percent for the first 10 months of the year.

China Southern’s October traffic was up 6.4 percent to 612 million RTKs, with international traffic up almost 10 percent and domestic volumes down 6.9 percent. For the first 10 months of the year, the Guangzhou-based carrier’s cargo volumes were up 9.2 percent to 5.5 billion RTKs.

Shanghai-based China Eastern also extended its growth run, with October traffic up 5.1 percent compared with the same month last year to 490 million RTKs. International traffic was up 6.2 percent, and domestic traffic grew 2.5 percent. Traffic for the first 10 months was basically flat.

The International Air Transport Association and the Association of Asia Pacific Airlines have yet to release their October cargo results but it appears carriers are heading for a solid peak season this year, at least in volume terms.

However, when it comes to improving yields, that is difficult in the oversupplied air freight market. The industry has become saturated with bellyhold space as airlines upgrade their fleets to newer models with vastly increased below deck capacity, which is dragging down freight rates on many routes.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.