Home » Aviation, Breaking News » World cargo air freight continues to tumble—IATA

Declining business confidence and a switch to cheaper modes of transport caused cargo demand in October to fall 4.7 percent from the same month in 2010, the latest global traffic results from the International Air Transport Association (IATA) show.

“Cargo is the story of the month. Since mid-year the market has shrunk by almost 5% and this is far greater than the 1% fall in world trade. Air freight is among the first sectors to suffer when businesses confidence declines,” said Tony Tyler, IATA’s director general and CEO.

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, IATA said in a media release.

The confidence of purchasing managers in the manufacturing sector has fallen to its lowest level since 2009, it added. “This loss of confidence appears to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight.”

Airlines have responded to weaker demand by cutting their freighter fleet. But this has not stopped a steady and substantial 5 percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft, IATA said.

Asia-Pacific carriers account for about 40 percent of global freight markets and 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 percent), a full 12.3 percentage points above the global average of 46.5 percent. This is a result of strong outward flows of freight from Asia which dominates the air cargo business, said IATA.

In contrast, the trend for air travel remains upwards, as passenger traffic showed a 3.6 percent rise over previous year levels, but with very strong regional differences.

Despite the deepening euro-zone crisis, European carriers have shown above-trend demand growth of 6.4 percent. “With Europe accounting for 29.2% of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations,” said Tyler.

IATA said the economic prospects for 2012 are uncertain, “but the track record of aviation’s ability to act as a catalyst for economic activity is rock-solid.”

Tyler said: “Now is the time for governments to use aviation strategically to put economies back on track. Implementing a Single European Sky, delivering NextGen air traffic management in the US and supporting the commercialization of sustainable biofuels for aviation are examples of government action that would help secure the industry’s long-term success and economic benefits.”


Photo by Kossy@FINEDAYS

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