IATA reports tepid air cargo growth

Cargo demand was 0.6% above the level of September 2011.

By ·

The International Air Transport Association (IATA) announced global traffic results for September showing a continued slowdown in the rate of traffic growth.

Cargo demand was 0.6% above the level of September 2011.

The minor 0.6% year-on-year growth posted for air cargo is less significant than the 0.6% fall in air freight volumes between August and September which is more indicative of the trend, noted IATA analysts. This is the second notable month-on-month fall in air freight growth in as many months. This has eroded the stability in volumes achieved earlier in 2012. Capacity was trimmed 0.6% compared to year-ago levels. This strengthened the freight load factor slightly to 45.6% from 45.1% a year ago.

“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. Carriers in China, Latin America and the Middle East are growing strongly,” said Tony Tyler, IATA’s Director General and CEO. “Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes.”

IATA observed that in Africa, the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimize profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India.”

“Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80% since the start of 2012” said Tyler. “Even with that, airlines are expected to eke out a global net profit margin of only 0.6%. It’s a tough year.”

Brandon Fried, executive director of the Washington D.C.-based Airforwarders Association, said his constituents were seeing “relatively flat-to-modest increases in air cargo traffic in the next two months.

“However, many of our members focusing on niche markets including healthcare, oil and gas and manufacturing are seeing sizable demand for their services,” said Fried.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Air Cargo · Air Freight · Trade · All Topics
Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo