Air Freight Makes Slow Start This Year

The International Air
Transport Association (IATA) recently released data for global air freight markets showing a 32 per cent expansion in freight tone kilometers (FTKs) in January 2015, compared to the same month last year. The growth is slower than the average of 4.5 per cent recorded for 2014.
There was much regional variation in the January performance- Asia –pacific, Africa and Middle Eastern airlines expanded strongly but airlines in Europe and North America all reported demand contractions.
Although it is too early to be certain of a trend towards weaker air freight, there are at least two emerging factors which could negatively impact demand for air cargo in the coming months which include the fact that business confidence has been declining since mid 2014 and export orders tailed-off towards the end of the year.
“January was a disappointing start to the year for air cargo-and it is difficult to be too optimistic about the rest of the year given the economic headwinds in Europe and growing concerns over the Chinese economy. Add to that the continuing trend of onshore production and trade protectionism and 2015 is shaping up to be another tough year for air cargo”, said IATA’s Director General and CEO, Tony Tyler.
African airlines grew cargo volumes 5.2 per cent, the highest among other regions, while major economices such as Nigeria and South Africa are under, performing, regional trade activity is holding up. Capacity rose just 2.4 per cent strengthening the load factor.
Asia-Pacific carriers grew their FTKs 6.9 per cent compared to January 2014, supported by an improvement in regional import activity.
Japan’s expansion is helping regional volumes, but there could be concerns over the Chinese economy, which saw export orders contracting at the fastest pace in three years, capacity rose by 5.4 per cent.
European airlines saw volumes fall 1.2 per cent compared to a year ago. The Eurozone is facing deflationary economic headwinds  and the weakness of the Russian economy is also impacting demand. Weak home demand is not being offset by North Atlantic and Asian growth opportunities-capacity grew 36 per cent, further weakening the load factor.
North American carriers experienced a 1.0 per cent fall in FTKs. This decrease, however is most likely due to the strong result that occurred in January 2014. Underlying, trends for North American volumes are positive. Trade is growing and the month-to-month comparison of FTKs show expansion in January compared to December capacity fell 2.8 per cent, continuing the recent trend of improving load factor.

The New Commissioner of Police, Murtala Muhammed Airport, Dorothy Gimba (left), with the Managing Director, Federal Airports Authority of Nigeria (faan), Mr Saleh Dunoma, during her courtesy visit to faan’s Managing Director in Lagos. Photo: NAN