IATA July Report: Cargo shows continued improvement
IATA.org has recently released their airline industry report for the month of July and cargo volumes, while still down, did show some improvement as compared to earlier this year. July cargo numbers were down 11.3 percent compared to the same time period last year; however, the decline in cargo demand of 11.3 percent was a slight improvement over June’s -16.5 percent and the -19.3 percent average for the first seven months of the year.
IATA attributed the improvement in cargo demand to companies re-stocking depleted inventories. Although the numbers are improving, IATA does not foresee a quick rebound.
Once inventories are at desired levels in relation to sales, improvements in demand will level off until business and consumer confidence returns. Given the large amount of debt in all sectors of the economy, instant relief is not in the forecast,” said Bisignani.
In terms of regional volumes, all markets with the exception of Africa showed an improvement compared to June and the Middle East was the only market to show any growth.
Here is a breakdown by region:
* Falls by Asia-Pacific carriers, European carriers and North American carriers were 9.5%, 16.2% and 14.6% respectively.
* African carriers posted the worst performance at -25.9%. This was the only region to see a deterioration in freight demand compared to June when the region’s carriers posted a 20.2% decline compared to the same month in the previous year.
* Middle Eastern carriers were the only region to grow, posting a 1% growth in demand compared to July 2008.
* Latin American carriers posted a 1.2% fall in demand compared to July 2008.
Source – IATA.org
ATA Reports Sharp Decline in Air Cargo
The Airport Transportation of America (ATA) reports a sharp decline in international air cargo with volumes decreasing 20 percent in May compared to the same month in 2008. The report measures the decrease in revenue ton miles and is the 10th straight month of declining air cargo volumes.
According to the article, airline passenger volumes didn’t fare very well either.
The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today reported that passenger revenue[1] fell 26 percent in June 2009 versus the same month in 2008 – the eighth consecutive month in which passenger revenue has fallen from the prior year.
Is cargo recovery near?
Not according to Swiss Forwarder Kuehne & Nagel. According to an article from the company website, K&N does not expect a market recovery in volumes for sea and air freight in the short term. Kuehne & Nagel net earnings fell 16.2 percent during the first half of 2009 compared to the same time period last year.
Seafreight
K&N stated that although the global ocean market was characterized by declining volumes and fierce competition, the company was able to build upon their first quarter 2009 numbers by increasing volumes 10 percent from the 1st to 2nd quarter.
Airfreight
Although global cargo volumes have suffered greatly in 2009 (IATA figures show decline of 20% to 24%), K&N’s air cargo volume declined at a below market level of 19 percent. From the first to the second quarter 2009, K&N increased volumes by 10 percent.
Outlook
The Swiss Forwarder said it does not expect a substantial short-term improvement in the global economy and markets. “The company will therefore continue its focused dual strategy of disciplined cost management and market share expansion.”
IATA May Report: Cargo Shows Some Improvement
IATA.org has released their May international traffic results and air cargo is showing signs of improvement. After flat lining in the -20% range for the past 4 months, May’s decline in international air cargo was -17.4%.
Via IATA.org:
* In May, freight volumes rose by around 3% above April levels as manufacturers began to add to their product inventories in anticipation of an economic recovery. However, inventories remain 10-15% higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near term. Surveys of purchasing managers indicate we could experience a further improvement in air freight demand during June and July to levels that are 12-15% below last year’s levels.
* Most regions were relatively aligned in the severity of the freight declines. Latin American carriers were the worst performers with a 21.0% fall, followed by Africa (-20.0%), Europe (-19.2%), North America (-18.8%), and Asia Pacific (-18.1%). Middle East carriers were the exception with a 3.7% fall.
* Capacity adjustments in freight markets have been catching up to demand declines. Freight load factors are 3.6 percentage points lower than a year ago. Freight yields fell by 17% in the first quarter, reducing revenues by 35%. Given the continuing downward pressure on yields, even the improvement in volumes in May will likely come without a corresponding improvement in revenues.
