Business inventory cycle drives global airfreight growth

The air cargo industry is
regaining ground lost in the
recent recession, with the
International Air Transport
Association (Iata) recording
strong demand in February.
While the 26.5% growth in
February is healthy, the direct
year-on-year comparison gives
off a bit of a false message.
Iata pointed out that cargo
hit bottom in December
2008, with little improvement
realised by February 2009.
The association reckons that
cargo traffic has a further 3%
to recover in order to return to
pre-crisis levels.
“We are moving in the
right direction,” said Giovanni
Bisignani, Iata’s directorgeneral
and CEO. “In two to
three months, the industry
should be back to pre-recession
traffic levels. This is still not a
full recovery. The task ahead is
to adjust to two years of
lost growth.”
Looking at international
cargo demand, measured in
freight tonne kilometres (FTK),
Iata noted that the European
airlines were benefiting least
from the strong upturn in
airfreight volumes. The region
showed year-on-year growth
of just 7.2%, compared to the
26.5% average.
It was completely the other
way round in North America.
Iata said that, despite the
sluggish US economy, North
American airlines have seen a
rebound of 34.1%.
That compared favourably
with the 34.5% growth
experienced by Asia-Pacific,
the Latin American airlines,
which recorded growth of
41.9%, and 33.1% in the
Middle East.
Africa, meantime, nearly
stole the prize for star
performer, with a thumping
growth figure of 36.5% – a
rate which was only beaten by
the Latin American air cargo
industry.
The bulk of the expansion,
according to the association,
was therefore attributed
to businesses restocking
inventories.
Indeed, it noted that the
strong global airfreight upturn
had been largely driven by the
business inventory cycle.
“We can expect this part
of the cycle to wear out in the
second half of the year when
inventories reach normal
levels,” said Bisignani.