Air freight sector starts 2015 slowly

Air freight sector starts 2015 slowly

IATA is predicting a challenging year for the air cargo sector, driven in part by the deflationary economic climate in the Eurozone and the slowdown in the Chinese economy

Data released by the International Air Transport Association (IATA) for global air freight markets identify a 3.2% expansion in freight tonne kilometres (FTKs) in January, compared to the same month last year.  The figure is well below the average of 4.5% recorded for 2014.

There was considerable regional variation in the January performance.  Asia-Pacific, African and Middle Eastern airlines expanded strongly, but airlines in Europe and North and Latin America all reported demand contractions.

Although it is too early to be certain of a trend towards weaker air freight, there are at least two emerging factors which could negatively impact demand for air cargo in the coming months:

  • Business confidence has been declining since mid-2014 and export orders tailed-off towards the end of the year
  • A reversal of the positive trade-to-domestic production ratio which boosted cargo volumes last year

IATA also reports that Europe airlines saw volumes fall 1.2% compared to a year ago.  The Eurozone is facing deflationary economic headwinds and the weakness of the Russian economy is also impacting demand.  Weak home demand is not being offset by North Atlantic and Asian growth opportunities.  Capacity grew 3.6%, further weakening the load factor.

Tony Tyler, IATA’s Director General and CEO, commented: "January was a disappointing start to the year for air cargo. And it is difficult to be too optimistic about the rest of the year given the economic headwinds in Europe and growing concerns over the Chinese economy.

“Add to that the continuing trends of on-shoring production and trade protectionism and 2015 is shaping up to be another tough year for air cargo," said Tony Tyler, IATA’s Director General and CEO.