No slowdown as data shows solid Asia-Pacific air cargo growth

No slowdown as data shows solid Asia-Pacific air cargo growth

HONG KONG — Air freight carried by Asian carriers grew by a solid 12.8 percent in the first two months of the year compared to the same period in 2014, according to data from the Association of Asia Pacific Airlines (AAPA).

The pre-lunar new year shipment rush was early this year, with freight activity picking up in late January and the first half of February. But even though the comparisons were skewed, international air cargo demand registered a hefty 20.5 percent jump in February year-over-year.

“Air freight demand achieved an impressive 12.8 percent increase during the two month period, with robust demand for Asian exports, particularly to North America, where the recent port dispute affected some maritime shipping operations,” said Andrew Herdman, AAPA director general.

The solid February growth in demand outpaced a 12.6 percent increase in offered freight capacity, resulting in a 4.2 percent increase in the average international freight load factor to 65.2 percent, giving a welcome boost to carrier profitability.

"The demand outlook for Asian carriers remains broadly positive, supported by the benefits of lower oil prices,” Herdman said. But he warned that airlines in the region were are having to carefully match capacity growth with actual demand, all the while coping with the effects of increased currency volatility that was affecting both costs and revenues.

One of the carriers benefiting from the improving air freight market is Cathay Pacific, the world’s largest cargo carrier. The airline and its sister carrier Dragonair carried almost 30 percent more cargo in February than during the same month last year, and even added capacity to cope with the lunar new year surge in demand.

In the first two months of the year, tonnage at Cathay Pacific and Dragonair rose by 19.6 percent against a capacity increase of 16 percent and a 24.5 percent rise in revenue ton kilometres. Again, it was the North American demand that drove the cargo business.

Cathay Pacific general manager cargo sales and marketing Mark Sutch said the high year-over-year tonnage growth reflected the overall improvement in the world’s air cargo markets compared to early 2014, along with extra capacity added by Cathay Pacific in response to the increase in demand.

“February’s figures were spurred by a surge in exports prior to mainland factories shutting down for the Chinese New Year holidays. Demand fell away over the holiday period, as expected, but saw quite a rapid pick-up, particularly on the North American lanes,” he said.

Tony Tyler, director general and CEO of the International Air Transport Association (IATA), said 2014 saw the first significant boost in global volumes since 2010, a trend he expected to continue this year.

However, he said revenue remained below the 2011 peak, and yields fell for the fourth straight year. “I am a cargo optimist. But business improvement will only come by constantly improving the value of cargo,” he said in a statement.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.