Q2 Air Freight Figures get off to a Good Start in April

The International Air Transport Association (IATA) reported in its April air freight figures that there had been a 3.2 percent y-o-y rise in worldwide cargo traffic.
IATA’s figures are as always, based on freight tonne kilometers (FTK’s) flown.
Although international cargo traffic accounts for over 85 percent of the total tonnage flown, the first four months of this year continue to show a decline, with traffic down by almost 1 percent (0.7%) and from that, international cargo traffic has fallen by 1.2% January to April.

The gap is slowly closing  -  IATA
The gap is slowly closing - IATA

Is there a shift upwards in growth?
Probably not, as the April figures, as noted by the Dutch based WorldACD, show that April was cargo friendly due to having five Fridays and Saturdays in the calendar compared to April last year.

Is there then still too much capacity compared with stagnating demand from the market?
If we just look at the international air cargo movements for Q1 of this year, then one might think this is the case.
A comparison of FTK’s flown compared with available FTK’s (AFTK’s) shows quite some disparity.
The FTK’s flown were down by 1.2% for the first quarter and surprisingly the AFTK growth for the same period was up by 6.1%.

The growth in capacity on offer was most noticeable on the African continent.
Here AFTK’s rose by almost 25%, followed by the Middle East with an increase of 11.1%.
However, FTK’s flown in Africa were down by 1.3% but rose by 6.3% in the Middle East region.
The “milk-run” routes on the Asia Pacific show almost minus 5% on FTK’s compared to just a 4% increase on capacity on offer.

Cargo still holding its own?
One could imagine so although the continued decline on cargo flown on the Asia Pacific routes is a worrying sign and can and probably will reflect of trade movements throughout the rest of the world.

But, are we too pessimistic?
Going back to the April figures and the start of Q2, the picture may be seen as being brighter for the coming months.
FTK growth was +3.1% with the AFTK’s on offer almost on par to the first quarter (+6.2%) in almost all regions.

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Sluggish demand continues
There is definitely a lot capacity on offer and this trend will not noticeably slow down throughout the rest of this year as carriers continue to receive new long haul aircraft to cater for continued rising passenger demand but which offer better range and even better cargo (tonnage) capacity.
Remember - IATA sees the April growth as follows: “while growth appears to be stronger than in the preceding months of 2016, this is largely due to the disappearance from the comparison data of distorting factors associated with the 2015 strike at seaports on the U.S. West Coast.”

All in all, air cargo demand remains pretty sluggish and is again lagging behind in the high growth being experienced on the passenger side.
That’s not too bad either as carriers report higher passenger figures and revenues and this year’s prognosis shows most airlines heading for growing black figures in their books.

That gives cargo somewhat more breathing space and does not put it too much in the (negative) limelight.

Although the cargo figures and trends should worry airline managers into thinking where they might best readjust their sales.

John Mc Donagh

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