Air cargo continues its upward trend

The International Air Transport Association (IATA) announced August 2014 data for global air freight markets showing continued “robust”growth in air cargo volumes.

Carriers in all regions reported an expansion in volumes, but the Asia Pacific continues to be the strongest. 

“The outlook for air cargo is clearly getting better,” said Tony Tyler, IATA’s Director General and CEO. “However, there are some limiting factors on the extent of potential gains.”

According to Tyler, demand for air cargo is growing more slowly than global economic activity.

“Businesses are reported to have more confidence in the future, but the list of political and economic risks continues to moderate how that confidence translates into actual activity,” he added.

Cargo volumes rose 5.1% in August, compared to August 2013. Capacity grew at a slower pace of 3.4% from the previous year. This is the second strong month for cargo volumes in a row, following the 6.1% year-on-year rise recorded in July.

Carriers in all regions reported an expansion in volumes. Closely following improvements in world trade and business activity, airlines in the Middle East, North America and Asia reported the strongest growth in the 5-8% range. By comparison demand in Europe and Latin America lagged in the 1-1.5% range as a result of Brazilian economic weakness and EU sanctions on business with Russia, respectively.

IATA researchers noted that Asia Pacific carriers grew 6.3%, continuing the acceleration of recent months. Emerging Asia trade volumes have expanded volumes solidly in June and July. A notable rise in Chinese export orders bodes well for future demand growth. Capacity expanded 4.4%.

Andrew Herdman, Director General of the Association of Asia Pacific Airlines (AAPA) the region’s carriers are still facing very challenging business conditions, as surplus capacity and an intensely competitive pricing environment have constrained revenue growth and led to further erosion of margins.

“Airlines are carefully reviewing their fleet and network development plans, while maintaining a tight rein on costs in a bid to restore profitability and sustain further investments for the future.”