Asia Pacific carriers post lower air freight volume in August

MANILA, Philippines - AsiaPacific-based airlines continue to experience weakness in air freight volumes in August as China’s manufacturing industry slows down, a report from the International Air Transport Association (IATA) said.

Latest data from IATA showed AsiaPacific carriers’ freight ton kilometers (FTKs) fell one percent in August even as capacity expanded 4.9 percent.

Although the contraction was less severe than in July, IATA noted it is hard to say if the decline has bottomed out considering the continued drop in export orders for Chinese manufacturing.

“Some of the key reasons for the earlier weakness – for example, downgraded growth expectations in emerging Asia, and the re-balancing of the Chinese economy toward domestic consumption – are still there,” IATA director general and chief executive officer Tony Tyler said.

Meanwhile, global freight markets have stabilized in August after two months of decline wherein air cargo volumes rose 0.2 percent compared to the same period in 2014, an improvement from the July performance where freight demand contracted 0.6 percent year-on-year.

“After declines in June and July, signs of a stabilization in air cargo are welcome. But all is not well. Total volumes are down two percent compared to the end of 2014. Even though world trade volumes have slightly picked up, the industry will have to work hard to match the strong finish to 2014,” Tyler added.

Furthermore, airlines in the Latin American region reported a large decline in demand of 7.3 percent year-on-year, reflecting the continued economic struggles of Brazil and Argentina, while regional trade activity has not created stronger air freight demand.

North American airlines experienced a decline of 3.3 percent year-on-year and continue to see significant falls in FTK volumes since the boost from modal shift due to sea port congestion earlier in the year.

“Some of the conditions that led to the decline in world trade this year – a combination of weaker than expected global economic growth, particularly in emerging markets, as well as shifts toward the domestic market in China – are persisting. There are some tentative signs that things won’t get worse – export orders have stabilized – but if the current trend were to continue, we would see negative year-on-year comparisons in the coming months,” IATA said.

On the other hand, Middle Eastern carriers saw the strongest growth with demand expanding 10.4 percent and capacity rising 14.3 percent. Although some economies in the region have suffered a slowdown in non-oil growth, overall expansion remains robust enough to sustain solid growth in air freight

European carriers, likewise, reported a rise in demand in August of 0.7 percent compared to a year ago and capacity rose 3.9 percent with the recent improvements in eurozone manufacturing business activity seen to support air freight demand.

African airlines which carry a small part of worldwide FTKs, recorded a 2.3 percent in August with regional trade activity supporting demand for air transport of goods.