Sluggish economy grounds air freight volumes

All indications from the Air Cargo Operators’ Committee are that airfreight volumes are down and that the immediate outlook remains bleak. This is the view of Alwyn Rautenbach, executive manager of cargo at Airlink. “Both domestic and international cargo for South Africa has been down for the last two months. It's a reflection of what is happening in the broader economy. Without reasonable economic growth, I doubt the airfreight industry’s prospects can be turned around soon,” he said. He added that airfreight was a leading indicator of economic growth, and was an industry that would improve before anyone saw real evidence of economic growth. According to the International Air

Transport Association (Iata), African carriers saw freight demand decrease 8.5% in February 2019, compared to the same month in 2018. The Association added that seasonally adjusted international freight volumes were lower than their peak in mid-2017. But despite this, they are still 25% higher than their most recent trough in late 2015. “We’ve seen the global cargo market shrinking by around 5% from where it was in the middle of last year,” said Brian Pearce, chief economist at Iata during a speech at the Association’s AGM in June. “We’ve seen a collapse in international trade following the imposition

of tariffs by the US, China and other countries since the first part of 2018. International trade is shrinking today and clearly, that is very bad for the cargo business.” Pearce, however, remains cautiously optimistic. “Global GDP growth still looks fairly healthy. Governments have been responding to weaknesses in trade by getting money into their economies and, in the first part of this year, global growth looked reasonably good.” One southern African carrier told FTW that it had planned to convert an old passenger aircraft into a dedicated freighter, due to the restrictive weight and size limitations on

cargo that are dictated by its passenger aircraft. However, the idea has since been postponed and the money spent on other operational matters. The carrier indicated that it would likely return the aircraft and acquire a new 72-seater passenger aircraft instead. The same carrier has introduced

a regular road freight service to Johannesburg to transport “anything” that its passenger planes cannot carry, except dangerous goods. Without reasonable economic growth, I doubt the airfreight industry’s prospects can be turned around soon. – Alwyn Rautenbach