Air cargo traffic rises, but demand still soft

Air cargo traffic rises, but demand still soft

Global air cargo traffic grew 3.2 percent in April, but yields remain under pressure as airlines boosted capacity by 6.6 percent from a year ago, the International Air Transport Association said.

Demand grew across all regions, except Latin America, with the Middle East and Europe posting the strongest growth rates of 7.7 percent and 6.8 percent, respectively, according to the industry body.

“While growth appears to be stronger than in the preceding months of 2016, this is largely due to the disappearance from the comparison data of distorting factors associated with the 2015 strike at seaports on the U.S. West Coast,” IATA said in its latest monthly traffic report.

Overall cargo demand remains soft and lags behind the “relatively robust” growth in passenger traffic.

Cargo’s underperformance is largely driven by weak world trade, according to IATA. Global trade volumes fell by 1.7 percent between the final quarter of 2015 and the first quarter of 2016, the first annual year-over-year decline since the global financial crisis in 2009.

“While the April uptick in demand growth for air cargo is encouraging, the overall economic environment is not,” said IATA Director General Tony Tyler.

“The decline in global trade does not bode well for air cargo markets in the months ahead.

Demand in Asia-Pacific, which accounts for almost 40 percent of the global market, edged up by just 0.1 percent from April 2015.

North American cargo airlines experienced a significant upward swing in year-to-year performance as the exaggerated effects of last year’s West Coast port disruption wore off, IATA said. Demand grew by 4 percent in April compared with a 0.8 percent decline in the previous month.

Latin American airlines reported a 5.9 percent decline in demand as economic conditions continued to worsen, particularly in Brazil, the region’s largest economy.

Contact Bruce Barnard at brucebarnard47@hotmail.com.