Airfreight markets show signs of renewed expansion

Airfreight has still been battling to stay ahead in March this year, with the International Air Transport Association (Iata) global traffic results showing that freight demand climbed an ultraslim 0.3% compared to the same month last year. Cargo demand, however, was affected by the timing of the Chinese New Year, which occurred in January this year, leading to stronger February shipments. But it took place in February 2011, leading to stronger March 2011 shipments, and weaker year-to-year comparisons. But, said Iata, compared to February 2012, March air cargo demand was significantly stronger by 2.2%. Oil prices have remained stubbornly above US$100/ barrel (Brent crude) for the past 14 months. “We have not seen such sustained high oil prices previously, with jet fuel prices having risen 8% since January,” said Tony Tyler, Iata’s director-general and CEO. “Considering that fuel now accounts for 34% of average operating costs, it’s an increase that hurts.” Meanwhile, freight capacity also climbed 1.7% year-on-year, above the rate of demand – placing pressure on load factors. But airfreight markets are now showing signs of renewed expansion, according to Iata, and freight tonne kilometres (FTKs) were over 4% higher in March than they were in the fourth quarter of 2011. Looking at the individual regions, Iata’s summary showed that Asia-Pacific and European airlines saw their freight traffic decline 3.1% and 1.9%, respectively, compared to a year ago. However, stars of the show were the Middle Eastern carriers, which had a 15.1% rise in demand, but with about four percentage points of that rise attributable to Arab Spring-related traffic suppression last year. African carriers also had a healthy month, with cargo traffic showing a 3.9% rise compared to the year-ago period. Latin American carriers’ traffic climbed 4.9%, while North American airlines’ demand rose 1.6% yearon- year.