Global Air Freight Decline Slows in July

The year long decline in global air cargo slowed in July but revenue and freight rates remain under intense pressure, the International Air Transport Association said.

Freight volume fell 11.3 percent last month from July 2008, compared with a 16.5 percent year-on-year decline in June and a 19.3 percent average for the first seven months of the year, the Geneva-based industry body said.

Despite this improvement the July load factor, or capacity utilization, fell to 47.6 percent from 49 percent in July 2008.

"The stabilization of air freight demand in the first quarter and its improvement in the second quarter has helped reduce the rate at which excess capacity has been growing," IATA said. But "downward pressure on freight rates and revenues continued to intensify in July."

"Demand may look better, but the bottom line has not improved," said IATA Director General and CEO Giovanni Bisignani.

"We have seen little change to the unprecedented fall in yields and revenues. The months ahead are marked by many uncertainties, including the price of oil. The road to recovery will be both slow and volatile," Bisignani said.

All regions showed improvement in freight demand in July compared to June, and the Middle East was the only region which registered growth.

Asia-Pacific carriers carried 9.5 percent less freight in July. European carriers were down 16.2 percent and North American airlines 14.6 percent. Middle East carriers carried one percent more cargo than a year ago.

African airlines' freight traffic slumped 25.9 percent in July, following a 20.2 percent decline in June.

"The freight numbers tell an interesting story," Bisignani said." The sector is being boosted as companies re-stock depleted inventories. Once inventories are at desired levels in relation to sales, improvements in demand will level off until business and consumer confidence returns. Given the large amount of debt in all sectors of the economy, instant relief is not in the forecast."

Contact Bruce Barnard at brucebarnard47@hotmail.com.