IATA reports ‘bottoming out’ of air freight volumes

Data from the International Air Transport Association (IATA) relating to global air freight markets has revealed that air cargo volumes (measured in Freight Tonne Kilometres) were down 1.2 per cent in November 2015, compared to the corresponding month in 2014.

However, compared to October total cargo volumes expanded and were higher than the low point in August.  IATA is of the opinion that this indicates that the decline in cargo demand may be bottoming out.

With the exception of the Middle East, the negative year-on-year comparisons occurred across all regions.  Of the major markets that together comprise more than 80% of total trade, Europe was down 2.0 per cent, North America by 3.2 per cent, and Asia-Pacific by 1.5 per cent.

The comparative weakness in these regions was driven largely because the performance in November 2014 was very strong.  Latin American and African markets also fell, by 6.4 per cent and 6.0 per cent respectively.  Meanwhile, the Middle East region posted 5.4 per cent growth.

Tony Tyler, IATA’s Director General and CEO, commented: "The freight performance in November was a mixed bag.  Although the headline growth rate fell again, and the global economic outlook remains fragile, it appears that parts of Asia-Pacific are growing again and globally, export orders are looking better.

“In fact, the downward trend in FTK volumes appears to be bottoming out.  But there is a great deal of uncertainty.  The current volatility of stock markets shows how much the health of the global economy – upon which air cargo depends – remains on a knife-edge."

In more detail, IATA reports that:
• Asia-Pacific carriers saw a slight fall in FTKs of 1.5 per cent in November compared to November 2014, and capacity expanded 3.2 per cent.  Compared to October, volumes expanded by a strong 1.9 per cent.  Over recent months, the declining trend in volumes has halted.  Better demand in advanced economies is driving export growth in some countries, particularly in Japan.
• European carriers reported weaker demand in November, down 2.0 per cent compared to a year ago, and capacity rose 2.2 per cent.  Comparing November to October, the trend was flat, but there are indications that stronger manufacturing and export orders could support air freight demand in the coming months.
• North American airlines experienced a fall of 3.2 per cent year-on-year and capacity grew 5.8 per cent.  The market remains hard to read.  A 0.4 per cent expansion compared to October indicates that air cargo could be recovering.  But export indicators are poor, making it hard to be optimistic for the coming months.
• Middle Eastern carriers saw demand expand by 5.4 per cent, and capacity rise by 9.2 per cent.  Although the Middle East led the way as the only market showing positive growth, the rate fell to less than half the 11.9 per cent average growth for the year-to-date.  Falls in the oil price are impacting some economies in the region.
• Latin American airlines reported a decline in demand of 6.4 per cent year-on-year, and capacity expanded 1.9 per cent.  Few positive signals emerged from the markets in this region, with economic and political conditions in Brazil particularly weak.  The comparison with October also showed a 1.4 per cent contraction and air cargo demand appears to be mirroring weaker consumer confidence.
• African carriers experienced a fall in demand of 6.0 per cent, and capacity rose by 6.6 per cent.  Africa remains one of only three regions (with Asia-Pacific and Middle East) to record positive year-to-date growth for 2015.  Demand is holding up despite the underperformance of Nigeria and South Africa.