Air cargo demand set to slow
Rapid rebound from recession can't be maintained, claims IATA
International air cargo traffic growth will slow over the second half of 2010 and into 2011, following the sector’s rapid rebound from recession, according to the International Air Transport Association (IATA).
“Uncertainties are rising about the economic outlook with talk of a ‘double-dip’, but current conditions in cargo markets remain positive,” says IATA in its third-quarter Cargo E-Chartbook report.
“Air freight has entered a slower phase of expansion, but the pace of growth in both volumes and yields remains above trend. Revenues have been growing strongly and, in many regions, cargo profitability is back to pre-recession levels.
“The environment will get more difficult. Even without a ‘double-dip’, demand will slow and new capacity will put pressure on load factors and yields.”
International air cargo traffic grew at an annualised rate of over 20% in the first quarter of 2010, before it fell to 11% by July, but this still remains above the 6% world trade trend.
IATA found economic recovery was weakest in Europe with a “continued sub-trend growth”.
“At the buoyant end are the emerging economies in Asia, the Middle East and South America,” it said.
However, IATA added: “The surge of air freight in Asia and South America is now slowing, while trade across the Atlantic and from Europe to Asia is now catching up.”
It said that now the business inventory cycle was over, shipments by air were likely to slow.
“Peak reductions in inventories came at the end of 2008, when the recession caused a surge in the inventory-sales ratio. After that, business slowed the pace of destocking and, from mid-2009, started to rebuild inventory, which cased the surge in airfreight.
“Now that the inventory-sales overhang has disappeared, business will only add inventory at the pace of final sales. As a result, airfreight growth will slow to the single figure growth to final sales.”
IATA said consumer demand for electronics and other common air cargo products has not recovered in Europe and North America.
However, in China, “consumers continue to grow in confidence, unburdened by the debts and unemployment of western economies”.
The organisation said capacity was returning to the market, partly as a result of the expanding passenger fleet, but also because the freighter fleet was better utilised. So far, load factors remained high, it added.
“Uncertainties are rising about the economic outlook with talk of a ‘double-dip’, but current conditions in cargo markets remain positive,” says IATA in its third-quarter Cargo E-Chartbook report.
“Air freight has entered a slower phase of expansion, but the pace of growth in both volumes and yields remains above trend. Revenues have been growing strongly and, in many regions, cargo profitability is back to pre-recession levels.
“The environment will get more difficult. Even without a ‘double-dip’, demand will slow and new capacity will put pressure on load factors and yields.”
International air cargo traffic grew at an annualised rate of over 20% in the first quarter of 2010, before it fell to 11% by July, but this still remains above the 6% world trade trend.
IATA found economic recovery was weakest in Europe with a “continued sub-trend growth”.
“At the buoyant end are the emerging economies in Asia, the Middle East and South America,” it said.
However, IATA added: “The surge of air freight in Asia and South America is now slowing, while trade across the Atlantic and from Europe to Asia is now catching up.”
It said that now the business inventory cycle was over, shipments by air were likely to slow.
“Peak reductions in inventories came at the end of 2008, when the recession caused a surge in the inventory-sales ratio. After that, business slowed the pace of destocking and, from mid-2009, started to rebuild inventory, which cased the surge in airfreight.
“Now that the inventory-sales overhang has disappeared, business will only add inventory at the pace of final sales. As a result, airfreight growth will slow to the single figure growth to final sales.”
IATA said consumer demand for electronics and other common air cargo products has not recovered in Europe and North America.
However, in China, “consumers continue to grow in confidence, unburdened by the debts and unemployment of western economies”.
The organisation said capacity was returning to the market, partly as a result of the expanding passenger fleet, but also because the freighter fleet was better utilised. So far, load factors remained high, it added.
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