Tuesday 25th Oct 2016 - Logistics Manager

Air cargo growth slows

Air cargo has entered a slower phase of expansion but the pace of growth in both volumes and yields remains above trend, according to the third quarter report from the International Air Transport Association.

IATA predicts demand will slow and new capacity will put pressure on load factors and yields, nevertheless revenues have been growing strongly and, in many regions, cargo profitability is back to pre-recession levels.

The report said that although purchasing managers’ confidence is slipping, “it remains consistent with continued strong freight growth in the near term. Evidence suggests they are expecting a slower phase of growth ahead, not recession.”

In its quarterly survey of heads of cargo, IATA found that in July confidence over future revenues was still high.

The full third quarter report shows trade across the Atlantic and from Europe to Asia is now catching up with the surge of air freight in Asia and S America, although that surge has itself slowed. Domestic spending remains weak in Europe, but exports have started to accelerate due to business capital spending and the Euro’s weakness.

It says currency exchange rates have benefitted Asian airlines at the expense of their European counterparts due to jet fuel prices being denominated in US dollars. It sees no reason for any significant shift to these prices.

IATA reports that the very sharp recovery in air freight volumes from the lows of end-2008 has been fairly equally spread between using the capacity of freighters and passenger aircraft. Both are now above the previous early-2008 highs, with freight tonne km carried by freighters up eight per cent and for that carried in the bellies of passenger aircraft up one per cent.