Above average air cargo growth slows

Air cargo growth continues remain higher than in the last six years.

Global air cargo traffic increased 8.5 percent year on year in April, down from 13.4 percent in March, but well above the average annual growth rate of 3.5 percent over the past five years, the International Air Transport Association said.

All regions, expect Latin America, reported higher traffic, with Europe and Asia-Pacific accounting for more than 70 percent of the annual increase, according to the industry body.

Capacity growth, measured in available freight tonne kilometers, slowed to 3.9 percent in April from 4.2 percent in the previous month.

“Over the whole year, air freight is headed for a healthy growth rate of 7.5 percent, supported by strong pharmaceuticals and e-commerce,” IATA said.

Business confidence indicators remain consistently upbeat, driving “robust” year-on-year growth in the second quarter.

However, there are signs the cyclical growth peak has passed particularly given that the inventory-to-sales ratio stopped falling at the end of last year, IATA cautioned.

“Demand eased in April. Growth rates, however, are still much more robust than anything we have seen in the last six years,” said Alexandre de Juniac, IATA’s director general and CEO.

“That’s good news, but it should not be taken as a message that all’s well in air cargo. The industry’s antiquated processes need modernization.”

“With e-air waybill utilization topping 50 percent in April, progress is being made. And we must harness the momentum to drive transformational change across the way the industry operates.”

Asia-Pacific carriers, which account for 37.5 percent of the global market, grew volume by 8.4 percent in April, driven by rising export order books across the region. Capacity increased by 3.7 percent from a year ago.

European airlines posted a 12.9 percent increase, down from the 18.2 percent surge in March, but way above the five-year average of 3.5 percent. International traffic grew 13.1 percent as the weak euro continued to boost exports. Capacity was up 6.9 percent.

US carriers’ traffic grew 7.3 percent, outpacing a 2.1 percent increase in capacity.

“Seasonally adjusted volumes jumped in April. However, it is too soon to tell if this is the start of a lasting pick up,” IATA said.” The strength of the US dollar continues to boost the inbound freight market, but is keeping the export market under pressure.”

Volume at Middle East carriers rose just 3.1 percent, sharply down from 13.6 percent in March, largely due to weakening traffic with Asia.

Latin American airlines’ traffic contracted 1.9 percent in April as demand skirted a seven-year low and was down 18 percent from the peak in 2014. The region’s carriers reduced capacity by 0.2 percent, which limited the negative impact on their load factors.

African airlines grew traffic by 26 percent and capacity by 17.7 percent driven by surging demand on Asian trade lanes that has risen by 55 percent in the first four months of the year.

Contact Bruce Barnard at brucebarnard47@hotmail.com.