Global airlines record 2.1% growth in cargo airlift in May

Compared to May 2014, growth in Freight Tonne Kilometers (FTK) was 2.1 percent globally, the slowest rate this year and outpaced by a capacity expansion of 4.3 percent, the International Air Transport Association (IATA) said in a new data released on freight market analysis.

On a year-to-date basis, freight volumes are up 4 percent on the previous year, but much of that growth was realised in the latter part of 2014.

According to IATA, carriers in most regions, with the exception of those based in the Middle East, saw weak growth or even contractions.

In aggregate, airlines in North and Latin America and Europe reported that their freight business was smaller in May 2015 than in the same month of 2014.

Carriers in Asia-Pacific experienced slow growth as a result of poor import/export performance.

“Cargo growth has undoubtedly come off the boil. The expansion in volumes we saw in 2014 has ground to a halt, and load factors are falling. Some economic fundamentals still point to a rebound in the second half of the year, but we have to recognize that business confidence is flat and export orders in decline. There is also the risk of a shock to the economic system of a ‘Grexit’ from the Eurozone,” Tony Tyler, IATA’s Director General.

African airlines experienced a 3.0 percent rise in demand and a 1.3 percent increase in capacity.

“Despite some volatility, the region is the third-fastest growing for the year-to-date. The under-performance of the Nigerian and South African economies may be outweighed by trade activity in the wider region”, Tyler added.

North American airlines reported a fall in demand of 2.9 percent year-on-year while capacity was cut by 4.2 percent. The May result is a continuation of the disappointing economic performance in quarter one. Stronger growth, however, is expected in coming months as the effects of poor weather and US seaport congestion fade.

Middle Eastern carriers saw demand grow by 18.1 percent, on the back of increased trade within the region, as well as shippers taking advantage of the Gulf carriers’ hub strategy. Capacity expanded 19.4 percent.

Sade Williams with Agency report