KUALA LUMPUR (Nov 28): Global cargo demand fell 4.7% in October, extended the decline since mid-2011 which was greater that the 1% fall in world trade, said the International Air Transport Association (IATA).
IATA director general and CEO Tony Tyler said on Monday that 'air freight is among the first sectors to suffer when businesses confidence declines'.
'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,' he said in a statement issued out of Geneva.
Tyler explained the''confidence of purchasing managers in the manufacturing sector had fallen to its lowest level since 2009.
He added this loss of confidence appeared to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight which showed a 4.7% decline in October compared to the previous year.
Tyler also said airlines had responded to weaker demand by cutting their freighter fleet.
However, this has not stopped a steady and substantial five percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft.
Based on the IATA statistics, Asia-Pacific carriers account for about 40% of global freight markets. However, while they are the most exposed to the volatility of freight volumes, they are still benefiting from the dominance of trade flows to Asia.
In October they posted the highest freight load factor (58.8%), a full 12.3 percentage points above the global average of 46.5%. This is a result of strong outward flows of freight from Asia which dominates the air cargo business.
As for the international passenger markets, IATA said there was a 4.6% increase in international air travel in October, up 4.6% on-year.
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.
International passenger traffic
IATA said 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%.
IATA director general and CEO Tony Tyler said on Monday that 'air freight is among the first sectors to suffer when businesses confidence declines'.
'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,' he said in a statement issued out of Geneva.
Tyler explained the''confidence of purchasing managers in the manufacturing sector had fallen to its lowest level since 2009.
He added this loss of confidence appeared to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight which showed a 4.7% decline in October compared to the previous year.
Tyler also said airlines had responded to weaker demand by cutting their freighter fleet.
However, this has not stopped a steady and substantial five percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft.
Based on the IATA statistics, Asia-Pacific carriers account for about 40% of global freight markets. However, while they are the most exposed to the volatility of freight volumes, they are still benefiting from the dominance of trade flows to Asia.
In October they posted the highest freight load factor (58.8%), a full 12.3 percentage points above the global average of 46.5%. This is a result of strong outward flows of freight from Asia which dominates the air cargo business.
As for the international passenger markets, IATA said there was a 4.6% increase in international air travel in October, up 4.6% on-year.
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.
International passenger traffic
IATA said 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%.
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