Air cargo bosses remain optimistic about prospects for 2015 after a clear business upswing in the
first quarter of this year while airports are also seeing rising volumes.
Airlines expect better profits this year thanks to rising passenger and cargo volumes
combined with falling costs resulting from lower crude oil prices, according to IATA’s latest
quarterly survey of airline CFOs and heads of cargo.
Executives were confident that air transport volumes will continue to expand over the next
12 months, consistent with recent improvements in business confidence and economic growth in
developed economies, the survey showed.
“Respondents indicated that air freight volumes during the past 3 months were up on the year
ago period, which is consistent with the data which shows FTKs are increasing robustly,
particularly for carriers in Asia Pacific and North America,” IATA wrote in the quarterly report.
“The outlook for cargo volumes remains positive with 63 per cent of respondents expecting an
increase in demand over the next 12 months. This is slightly lower than the proportion in January
(71 per cent), but key indicators suggest that world trade and business activity should continue to
expand at moderate rates, which should in turn sustain growth in air freight volumes.”
However, executives continued to report lower cargo yields, with nearly 40 per cent
expecting a further decrease over the next 12 months, 47 per cent predicting stable yields and only
13 per cent foreseeing an increase.
“Cargo yields are showing similar developments (as passenger yields), with respondents
indicating declines in Q1. Fuel hedging has meant that some airlines are not yet benefiting fully
from the lower fuel price. There could be further declines in yields once hedging positions unwind,
if fuel costs remain relatively low. The results of the April survey suggest that yields will
decline during the year ahead,” IATA commented.
In its separate Financial Monitor for February-March 2015, IATA confirmed the surge in air
freight volumes last month, which was driven by temporary factors such as the sea-to-air modal
shift resulting from the US West Coast port strike, but the relatively flat trend for cargo load
factors with volume growth largely offset by increased bellyhold capacity on additional passenger
flights. Flown freight tonne kilometres (FTKs) rose 11.7 per cent in February, according to IATA
figures, with Asian carriers enjoying a 21 per cent increase.
The February trend and the US port strike impact were also confirmed by the latest monthly
figures from Airports Council International (ACI). Overall, air freight volumes at the world’s
airports grew 10 per cent in February as compared to the previous year. Volumes were up by 6.7 per
cent over the first two months of this year, a figure which takes out the impact of the Chinese New
Year being in February rather than January.
With many retailers seeking alternate modes of delivery due to the congestion at sea ports
along the western coast of the United States, air freight received a significant boost to volumes
for the month of February, ACI pointed out. Anchorage (ANC), Chicago (ORD) and Los Angeles (LAX)
experienced impressive growth of 47.6 per cent, 47.8 per cent and 21.9 per cent respectively. Given
that many Asia-Pacific airports act as net exporters of air freight with North American airports as
net importers, growth in international freight traffic for each region was 17.3 per cent and 26.9
per cent respectively.
ACI World Economics Director Rafael Echevarne commented: “February was a distorted month due
to extensive leisure travel during the Lunar New Year. The seasonal effect masks any potential
downside risks in air transport demand. Moreover, the resulting substitution effect of the sea port
crisis along the Pacific coast also gave air freight a strong boost.
“Regardless of these short term distortions, we have seen continued strong growth month
after month in 2014 and into 2015 on a consistent basis,” Echevarne continued. “Both passenger and
air freight traffic are dancing to the beat of their own drum in the face of on-going concerns of a
global slowdown. That being said, with reduced growth expectations in output in emerging markets,
we have yet to see the impact this will have on airport traffic in the coming months.”
