Improving global economy propels air cargo growth, lifts industry outlook

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cargo planeGlobal airfreight markets showed accelerated growth in May, up 4.7 percent compared to a year ago and higher than the 3.8 percent year-on-year growth recorded in April, according to the International Air Transport Association (IATA).

The acceleration of growth reflects improved economic conditions, IATA said, noting that there are indications that world trade and business confidence are improving after weakness in the first quarter.

Cargo volumes were up across all regions in May, but with significant differences in performance.

In the Asia-Pacific, carriers recorded a strong increase of 5.3 percent year-on-year. “Regional trade volumes have picked up again, and there are signs that the slowdown in the Chinese economy is easing,” noted IATA. It added that Chinese manufacturing activity rebounded in May, with a corresponding rise in export order growth.

Regional capacity grew a little faster than demand, at 6 percent, but the region still has the highest freight load factor at 55.5 percent.

In other regions, Middle East carriers continue to see the highest rate of growth, expanding 9.3 percent in May compared to a year ago. Stronger expansion in developed markets is combining with rising links to emerging economies to fuel growth. Capacity grew 10.6 percent.

North American carriers grew by a modest 2.4 percent in May, down on the April year-on-year growth rate of 3.5 percent. This reflects the general slowdown in the U.S. economy in the first quarter. However, the latest data support a return to trade and business growth. Capacity was down 0.2 percent.

European airlines expanded 3.4 percent in May. The month-on-month rise was solid at 0.6 percent (compared to 0.3 percent growth recorded in April), pointing to a consistent improvement in economic activity. If GDP accelerates in the second quarter, that should support continued growth in airfreight volumes in the coming months. Capacity increased 4 percent.

Latin American airlines recorded an increase of 4.9 percent year-on-year, responding to a pickup in trade growth. This may be a spike in business activity associated with the FIFA World Cup, said the trade association. Capacity climbed 4.5 percent, slightly slower than demand.

African carriers’ demand increased by 7.2 percent in May, considerably ahead of the average growth of 2.9 percent for 2014. Weaker growth in the major African economies in the first months of the year appears to be ending, which will hopefully fuel stronger performance in the months ahead. Capacity rose 7.2 percent, exactly in line with demand.

“After several months of wavering conditions in the demand environment, the outlook for global air cargo appears to be stabilizing,” said Tony Tyler, IATA’s director general and CEO.

Although this is good news, he warned that the sector still faces an uphill battle to restore competitiveness and increase its share of trade growth.

Photo: Aero Icarus