Air Freight Continues Decline

Cargo demand is 4.7 percent below the same month in 2010 while passenger traffic shows a 3.6 percent rise over previous year levels


Geneva –  The International Air Transport Association (IATA) announced global traffic results for October. Cargo demand was 4.7% below the same month in 2010 while passenger traffic showed a 3.6% rise over previous year levels.

“Cargo is the story of the month. Since mid-year the market has shrunk by almost 5% and this is far greater than the 1% fall in world trade. Air freight is among the first sectors to suffer when businesses confidence declines,” said Tony Tyler, IATA’s Director General and CEO. While business confidence has declined considerably in recent months, industrial output has not. But in anticipation of weaker economic activity, there is a shift to cheaper and slower modes of transport.

In stark contrast to the decline in air freight, the trend for air travel remains upwards, but with very strong regional differences. Despite the deepening euro-zone crisis European carriers have showed above trend demand growth of 6.4%. “With Europe accounting for 29.2% of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations,” said Tyler.

Oct 2011 vs. Oct 2010

RPK Growth 

ASK Growth

PLF

FTK Growth

AFTK Growth

International                    

4.6%

7.1%

77.6

-4.8%

1.8%

Domestic

2.0%

2.4%

80.1

-4.4%

-0.7%

Total Market

3.6%

5.3%

78.5

-4.7%

1.3%

 

YTD 2011 vs. YTD 2010

RPK Growth 

ASK Growth

PLF

FTK Growth

AFTK Growth

International                    

7.2%

8.5%

77.8

-0.2%

5.7%

Domestic

4.1%

3.0%

79.4

-2.5%

-0.1%

Total Market

6.0%

6.5%

78.4

-0.5%

4.4%

International Passenger Markets

International air travel showed 4.6% growth over October 2010. This is in line with an overall upward trend, albeit at a slowing pace. International passenger load factors stood at 77.6%, down from the 79.5% recorded at the same time last year.

  • North American carriers saw international passenger traffic decline by 1.9% while capacity was almost the same levels compared to the previous October. One of the main drivers for the decline in traffic is capacity cuts by US carriers. International load factors stood at 80.1%, second only to Europe at 80.2%.
  • European carriers reported a 6.4% increase in international passenger traffic, below the 8.1% increase in capacity. The load factor of 80.2% was the highest among the regions. Half of all growth in capacity and traffic carried on international markets over the past year has been generated by European airlines. Despite the euro-zone crisis, the North Atlantic and intra-European passenger segments have been the strongest performers over the past year. The driver of this performance is most likely business-related travel generated by the strong export performance of the Northern European economies.
  • Asia-Pacific carriers reported a 3.8% increase in demand against a 7.5% capacity expansion resulting in a load factor of 75.2%. While Asia-Pacific airlines benefitted from the fast growth of Asian exports in the immediate post-recession recovery, in the past year, European exporters took the lead in export growth on the back of a weak Euro.  This is one of the causes of the relatively weaker performance of Asia-Pacific carriers compared to their European counterparts.
  • Middle East airlines reported the strongest growth in demand (7.7%) against a capacity increase of 9.5%. Load factors stood at 74.8%.
  • Latin American airlines showed the strongest capacity growth (10.4%) with a growth in demand of 6.7%. Load factors were 76.8%. When looked at in terms of year-to-date performance, the 10.5% demand growth recorded by Latin American airlines remains the strongest, followed by Europe (9.9%) and the Middle East (8.5%).
  • African airlines reported a 4.2% increase in demand, below the 5.9% growth in capacity. Load factors were the weakest among the regions at 68.2%.
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