IATA numbers show gradual recovery in Western airfreight markets

A rare degree of optimism has emerged from the International Air Transport Association (IATA) with the news that air freight volumes have begun to rise.

The IATA airfreight traffic figures for August show a 3.6% increase in volumes as measured in freight-tonne kilometres year-on-year, a marked acceleration in growth for a year that was previously only looking at a 0.7% increase prior to August.

The driver of this growth is increased demand in Europe and North America. Europe saw growth of 3.4% year-on-year for August, up from 2.1% in July. North America saw a lower figure of 0.7% for August and IATA commented that the market has seen a high degree of volatility with the year-to-date seeing a fall of 1.2%. In Europe, this growth is seen in both higher imports and exports.

As has been the case for several years, the Middle-East was by far the most dynamic market, witnessing an extraordinary increase of 28% year-on-year for August, although this was affected by seasonal factors; the market grew at 12.7% on an annualised basis. IATA attributed this growth not just to higher local demand, but also to the growth of hub airports in the region.

In contrast, Africa saw a violent fall in volumes, down 9.7% and reversing the trend seen through the rest of the year. Latin America grew strongly with a 12.6% year-on-year increase for August.

However, Asia Pacific, which is the largest single regional market for air freight, remained more or less flat with a year-on-year fall of 0.2% in August 2013. As IATA observed, this market accounts for 38% of all demand and so the global market will not recover until Asia-Pacific shows some life.

The cloud on the horizon for the market generally was the continued decline in load factors. Even Europe saw capacity grow faster than demand.

Tony Tyler, IATA’s CEO, was cautious about growth, commenting: “There were some signs of improvement in demand, but the air freight business remains very tough. Freight volumes are only now reaching the levels of 2011 when the cargo business peaked with revenues of $67bn. This year we expect $59bn of revenues from air cargo globally. That takes the top line back to 2007 levels. But to earn that revenue, we will be moving nearly 17% more cargo and dealing with a 40% hike in jet fuel.”

Yet the trend in the air freight market does appear to reflect trends in the wider global economy, with recovery of demand in the US, UK, Germany and much of Northern Europe, but decelerating growth in many emerging markets.