Air freight volumes stabilising

IATA    AAPA    FREIGHT VOLUMES

Global – Air cargo traffic is showing signs of stabilising, with May figures contracting less severely than previously, said the International Air Transport Association (IATA).

International freight traffic in May registered a 17.4% decline from the previous month, but is a marked improvement when compared to the 21.7% drop in April. Cargo demand has been declining in the -20% range and this could be one of the first signs indicating that a floor may have been reached, IATA said.

"We may have hit bottom, but we are a long way from recovery," said Giovanni Bisignani, director general and CEO of IATA.

According to IATA, freight volumes in May rose 3% above April levels as manufacturers begin adding to their product inventories in anticipation of an economic recovery. However, inventories remain 10-15% higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near future.

Freight volume on Latin American carriers were the worst hit with a 21.0% decline, followed by Africa (-20.0%), Europe (-19.2%), North America (-18.8%), and Asia Pacific (-18.1%). Middle East reported only a small decline at 3.7%.

Capacity adjustments in freight markets have been leveling up to demand declines. Freight load factors are 3.6 percentage points lower than a year ago, while freight yields fell 17% in the first quarter, reducing revenues by 35%. Given the incessant downward pressure on yields, even an improvement in May's volumes could come without an improvement in revenues, IATA said.

"We have lost several years of growth and yields are under severe pressure. Airlines are in survival mode. Cutting costs and conserving cash are the priorities," said Bisignani.

Bisignani continued, "Even if we look beyond the crisis, it is difficult to see a return to business as usual. This crisis is re-shaping the industry. The burden cannot be placed on airlines alone. All partners in the value chain must be prepared to change - reducing costs and improving efficiencies."

According to the Association of Asia Pacific Airlines (AAPA), international freight traffic for the month of May for its member airlines experienced a year-on-year decline of 18.6% (measured in freight tonne kilometres). 

With cargo capacity cut by 16%, the AAPA average international cargo load factor was 64.8%.

Andrew Herdman, director general of AAPA said: "The air cargo business remains severely depressed following the slump in international trade, but does appear to have stabilised. AAPA international air cargo traffic in May was down 18.6%, a slight improvement on the average decline of 23.2% seen during the first five months compared to the same period last year." 

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