Home » Aviation, Breaking News » High oil prices undermine airfreight demand growth

Air freight markets are now showing signs of “renewed expansion,” but steep fuel prices are negating the positive results, said the International Air Transport Association (IATA).

Global traffic figures show that total demand by freight tonne kilometers (FTKs) in March 2012 was more than 4 percent higher than in the fourth quarter of 2011.

But compared with March last year, the size of the market was up just 0.3 percent this March due to the occurrence of the Chinese New Year in February 2011, which resulted in strong March 2011 shipments as factories reopened following the holiday period.

The March 2012 expansion, however, is bringing little relief to the bottom line because “yields are not keeping pace with the continued very high price of oil,” said Tony Tyler, IATA’s director general and CEO.

Oil prices have remained stubbornly above US$100 per barrel for the past 14 months, noted IATA. “Considering that fuel now accounts for 34 percent of average operating costs, it’s an increase that hurts,” said Tyler.

On a regional basis, Asia-Pacific and European airlines saw their freight traffic decline 3.1 percent and 1.9 percent, respectively, compared to a year ago.

North American airlines’ demand rose 1.6 percent year-on-year.

Latin American carriers’ traffic climbed 4.9 percent, while African carriers saw a 3.9 percent rise compared to the year-ago period.

Middle Eastern carriers had a 15.1 percent rise in demand, the healthiest performance among the regions, said IATA.

Photo: Alaskan Dude

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