ME carriers record double digit surge in air freight

Global demand, measured in freight tonne kilometers (FTK), rose 5.4 per cent in October compared to October 2013.

Dubai — Middle Eastern carriers recorded double-digit increases of 13 per cent in air freight in October, showing that the strong performance of air cargo in recent months is continuing, the International Air Transport Association (Iata), said on Wednesday.

“Carriers in the region have diversified, expanding their services in perishables and linking growing markets in Asia and Africa as capacity expanded 15.8 per cent,” Iata said while releasing October data for global air freight markets that show the strong performance of air cargo is continuing.

Global demand, measured in freight tonne kilometers (FTK), rose 5.4 per cent in October compared to October 2013. This out-stripped capacity which grew by 4.4 per cent. Compared to September demand grew by 0.7 per cent bringing freight volumes to a new record monthly high, the trade association representing and serving the airline industry world-wide said.

“The good results reflect the improvements in world trade and business activity which have been evident since the summer. World trade is growing steadily, supporting increased air cargo shipments. Regional differentiation in performance, however, is very apparent,” Iata said in a statement.

Carriers in the Middle East, Africa and Asia-Pacific saw demand grow faster than the global trend, while North America, Europe and Latin America grew more slowly. More significantly, however, carriers in all regions except for Europe improved on their year-to-date performance. Cargo demand for European carriers grew by a weak 1.4 per cent compared to the previous October, reflecting economic uncertainty and the impact of sanctions as a result of the Russia-Ukraine crisis, said Tony Tyler, Iata’s director general and CEO.

“We are now back to levels of demand not seen since the 2010 post-recession bounce-back. But the industry is still in the hot seat and under pressure to improve its value offering. Customer expectations have evolved dramatically,” said Tyler.

He said other modes of cargo have improved their competitiveness. “Shippers expect the efficiency of electronic processes that they experience in almost every other sector. And when shipping specialty products—such as those requiring cold chain control — they expect quality from end-to-end. The industry is investing to build its future by meeting these expectations,” said Tyler.

While Asia-Pacific carriersreported a 6.7 per cent increase in FTKs, boosted by the release of the iPhone 6, and solid increases in trade and exports from emerging Asian economies, European airlinesimproved cargo volumes by 1.4 per cent.

“Looking forward, the rate of growth in the Chinese economy continues to slow down which may impact on air cargo. The Eurozone economy only just avoided recession in the third quarter. Poor business confidence and the ongoing sanctions against Russia will continue to weigh on European cargo in the months ahead. Capacity expanded 4.4 per cent,” Iata said.

North American carriersrecorded an increase of 3.1 per cent. Growth was slower than the September figure of 5.4 per cent, but the overall trend is showing an acceleration on growth for the year-to-date (2.7 per cent). Underlying indicators are positive, which bodes well for increased cargo growth in the future. Capacity contracted 1.2 per cent. African airlines’reported strong growth of 9.6 per cent year-on-year as capacity fell 2.4 per cent. “Regional trade volumes are still volatile, but the improvement in key economies such as South Africa is supporting this improvement,” said Iata.

— issacjohn@khaleejtimes.com