Middle East carriers post 11% air cargo growth

Middle Eastern carriers have been responsible for over 37 per cent of the total increase in global freight capacity in 2014, Iata said.

Dubai: Airlines in the Middle East recorded the strongest air cargo demand surge of any region, expanding by 11 per cent in 2014, at a rate far outstripping the global growth of 4.5 per cent, data released on Wednesday by the International Air Transport Association, or Iata, shows.

Middle Eastern carriers have been responsible for over 37 per cent of the total increase in global freight capacity in 2014. — KT file photo

In 2014, airlines in the region, led by the three fastest growing carriers in the world including Emirates, Etihad Airways and Qatar Airways, have extended their networks and grown capacity by 11.1 per cent to make the Middle East a global hub for freight traffic.

In fact, Middle Eastern carriers have been responsible for over 37 per cent of the total increase in global freight capacity in 2014, Iata said.

December was exceptionally a strong month for Middle East air cargo with demand growth, measured by freight tonne kilometers (FTKs) rising by 11.3 per cent.

The global air cargo growth of 4.5 per cent in 2014 marked a significant acceleration from the 1.4 per cent recorded in 2013 over 2012, underscoring the robust economic recovery of the region.

For the global air cargo market, 2014 finished on a positive note with growth in December accelerating to 4.9 per cent compared to December 2013.

“The main drivers of the growth in 2014, however, were the Asia-Pacific and Middle East regions, which respectively contributed 46 per cent and 29 per cent of the expansion in FTKs. Growth was recorded in all other regions, but was particularly weak in Latin America.

“After several years of stagnation, the air cargo business is growing again. This is largely being driven by the uptick in world trade over the second half of 2014. Recent concerns over the health of the global economy and a corresponding fall in business confidence have not yet impacted air cargo. But it is a downside risk that will need to be watched carefully as we move through 2015,” said Tony Tyler, Iata’s director-general and CEO.

While Asia-Pacific carriers grew 5.9 per cent in December compared to December 2013, and 5.4 per cent for 2014 as a whole, North American airlines reported demand growth of 2.8 per cent in December and 2.4 per cent for 2014 as a whole.

“Volumes have benefitted from increasing import demand in addition to continuing manufacturing strength. Japanese and Chinese markets were particularly important contributors,” Iata said.

European airlines saw FTKs expand 2.3 per cent in December, and by two per cent in 2014 overall. The Eurozone remains weak and close to recession, with the effects of Russian sanctions also having an impact.

Latin American airlines reported FTKs falling 4.5 per cent in December, the only region to report a decline. The picture for 2014 as a whole was growth of 0.1 per cent. Latin American volumes have been affected by economic slowdown across the region, particularly in Brazil and Argentina. African carriers expanded FTKs by 12.2 per cent in December and 6.7 per cent for the year as a whole.  “Despite the improving growth trend, big challenges remain. Yields declined for the third straight year in 2014, with no immediate prospect of improvement. Cargo revenues remained basically unchanged at $62 billion, some $5 billion below their 2011 peak,” said Tyler.

He said to move forward, the industry is focusing on providing a stronger value proposition to meet evolving customer needs. “That’s what is driving efforts such as cutting shipping times, ensuring high-quality handling of temperature-sensitive goods, or benchmarking quality to improve customer transparency. It’s all about delivering value as a supply chain with a strong vision of the future,” said Tyler.

— issacjohn@khaleejtimes.com