Tough year for airlines as cargo continues to contract

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Global air cargo traffic was up slightly in September compared to the same month a year ago, but this hardly dented the overall downturn in volume expansion, according to the latest results released by the International Air Transport Association (IATA).

The minor 0.6 percent year-on-year growth posted for air cargo in September is less significant than the 0.6 percent fall in air freight volumes between August and September, which IATA said is more indicative of the trend.

This is the second notable month-on-month fall in airfreight growth in as many months, and has eroded the stability in volumes achieved earlier in 2012. Capacity was trimmed 0.6 percent compared to year-ago levels and strengthened the freight load factor slightly to 45.6 percent from 45.1 percent a year ago.

IATA said the introduction of new consumer products such as the iPhone 5 could offset some downward pressure from the weak business environment.

All the major regions experienced year-on-year declines. Asia-Pacific carriers saw a 1.6 percent decline in demand in September compared to the previous year. This is an improvement over August, when demand dropped 5.3 percent but is still no progress compared to a year ago. Capacity dropped 3 percent.

North American airlines had a 1.1 percent drop in demand against a 3.1 percent drop in capacity. The load factor climbed 0.7 percentage points to 35.2 percent.

European airlines had a 0.4 percent decline in traffic, but capacity climbed 1.2 percent and the load factor dropped 0.7 percentage points to 45.6 percent.

Middle Eastern carriers had a 16.3 percent rise in traffic on a 6.9 percent rise in capacity, pushing up the load factor 3.8 percentage points to 46.1 percent.

Latin American airlines’ demand slipped 1.6 percent while capacity jumped 9 percent, resulting in a load factor of 37.8 percent, down 4.1 percentage points.

African carriers saw a 4.1 percent rise in demand with capacity up 1.4 percent, raising the load factor 0.6 percentage points to 24.1 percent, the lowest for any region.

Tony Tyler, IATA’s director general and CEO, forecast stronger headwinds ahead: “Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance … Even with that, airlines are expected to eke out a global net profit margin of only 0.6%. It’s a tough year.”

 

Photo: loop_oh