‘Shocking’ November results put airfreight industry in intensive care

Africa stood out as the only region to record freight growth (2.2%) in November last year, although carriers saw a decline from the 3.0% growth posted in October, according to the latest International Air Transport Association figures. International cargo volumes dropped 13.5% in that month while passenger traffic was down 4.6%. Plummeting business confidence and the continuing turmoil in financial markets indicates that the worsening trend is likely to continue in December, Iata predicts. Asia-Pacific carriers (representing 44.6% of global freight) were the greatest losers, with freight traffic in the region falling by 16.9% in November – the largest decline of any region. As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region’s carriers will be disproportionately (and negatively) impacted by the downturn in the global air freight market. Double-digit freight declines were also experienced by Latin American carriers (-15.7%), North American carriers (-14.4%) and European carriers (-11.0%). Freight traffic for Middle Eastern carriers turned negative (-1.6%), following 1.0% growth in October. “The 13.5% drop in international cargo is shocking. As air cargo handles 35% of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown. By comparison, this is the largest drop since 2001, in the aftermath of September 11,” said Giovanni Bisignani, Iata’s director general and CEO. “With no end in sight for the worsening global economy, the 2008 gloom will carry over into the new year. Relief in the oil price has been outstripped by the falls in demand and capacity cuts are not keeping pace. The industry is back in intensive care. Improving efficiency everywhere will be the theme for 2009,” said Bisignani.