Air freight demand growth accelerates in September

september-2016-statsMany of the world’s major cargo carriers and airports have now reported their September results, and with only one exception the reports show increasing demand (the only carrier whose September results were not better than its year-to-date results was China Southern).

Based on these individual reports, we expect that when IATA publishes its summary of worldwide air freight demand for September, we will see year-over-year growth of about 6%.

Looking ahead, it appears that the October/November peak season is off to a strong start, and, while perhaps not rivaling the extreme peaks of the good old days, will at least be stronger than we have seen in recent years.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported September cargo traffic up 6.3% y-o-y to 922 million RTKs, continuing the sharp upswing that began in June after five months of declining demand. Discussing the September results, Cathay’s General Manager Cargo Sales & Marketing Mark Sutch said: “Overall cargo demand in September was fairly strong and tonnage continued to grow. Exports from Europe, Asia and Mainland China all saw good growth, while demand for freight on our North America routes was robust. The last week of the month, prior to the long national holiday in Mainland China, saw us break the company’s weekly uplift tonnage record. Although yield is down from the same period in 2015, we plan to maximize our freighter schedule over the last quarter as we expect demand to strengthen during the traditional peak season.” For the first three quarters of this year, Cathay’s cargo traffic was flat with 2015, at 7.72 billion RTKs.

Hong Kong International Airport reported cargo volume in September up 7.2% y-o-y to 394,000 tonnes – echoing the strong performance reported by Cathay Pacific, the Airport’s biggest customer. After a slow start to 2016, the gains that began in June have brought HKIA’s handle for the year to date up 1.2% to 3.23 million tonnes. Commenting on the September results, HKIA said: “Traffic to/from key trading regions in North America and Southeast Asia increased most significantly in September.”

Beijing-based Air China reported its September cargo traffic up 5.3% y-o-y to 580 million RTKs. The gain was driven by an 9.1% increase in domestic traffic to 157 million RTKs, while International traffic rose 4.4 to 417 million RTKs. The much smaller regional traffic was down 12.9% to 8 million RTKs. For the nine months of 2016 to date, Air China’s cargo traffic was up 5.1% to 5.09 billion RTKs.

Guangzhou-based China Southern Airlines reported September traffic up 2.6% y-o-y to 531 million RTKs. International traffic was up 2.6% to 362 million RTKs, while domestic traffic rose 2.8% to 167 million RTKs. The much smaller regional traffic was down 2.5% to 2 million RTKs. For the first three quarters of 2016, China Southern’s cargo traffic was up 8.8% to 4.42 billion RTKs.

Shanghai-based China Eastern Airlines reported September cargo traffic up 5.8% y-o-y to 433 million RTKs, extending its positive growth trend to four consecutive months. International traffic was up 8.0% to 332 million RTKs while the smaller domestic traffic fell slightly (down 0.7%), to 91 million RTK. For the first nine months of 2016, China Eastern’s cargo traffic was down 1.1% to 3.53 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported a 5.4% y-o-y increase in its September cargo handle to 143,000 tonnes. This is the seventh month of positive growth following lackluster results in the first two months, when Pactl’s handle was down 1.6%, and brings the total handle for the first nine months of 2016 to 1.43 million tonnes, up 3.0% over 2015.  International cargo in September was up 4.7% to 133,000 tonnes, while the much smaller domestic handle jumped 15.5% to 10.000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport).

Taiwan-based China Airlines reported September cargo traffic up 6.5% y-o-y to 438 million RTKs, reversing its long-term trend of declining demand. For the year through September, CAL’s cargo traffic was down 4.6% to 3.86 billion RTKs.

Taiwan-based EVA Air reported September cargo traffic up 2.8% y-o-y to 294 million RTKs, its fourth consecutive positive result after a year-and-a-half of declines.  For the first three quarters of 2016, EVA’s cargo traffic was down 5.7% to 2.60 billion RTKs.

Europe & Middle East

Lufthansa reversed its trend of declining air freight demand with a strong performance in September.

Lufthansa reversed its trend of declining air freight demand with a strong performance in September.

Demand recovery at Lufthansa that started in July and August, accelerated strongly in September, with Group cargo traffic up 8.2% y-o-y for the month, to 883 million RTKs. After two quarters of declining demand for cargo, Lufthansa reported traffic up 1.6% in July and 0.7% in August – certainly an improvement over the big declines, but hardly something to celebrate. The September results, on the other hand, have probably set the Champagne corks popping in Frankfurt. The growth was led by a 10.2% increase in traffic on the Asia-Europe lane to 423 million RTKs. The trans-Atlantic lane also did well, with traffic up 7.5% to 368 million RTKs, while traffic to/from the Middle East and Africa was up 1.4% to 61 million RTKs. For the first three quarters of 2016, Lufthansa’s cargo traffic was still slightly in the red, down 0.4% to 7.38 billion RTKs.

Air France-KLM continued its multi-year trend of declines, reporting September cargo traffic down 4.5% to 714 million RTKs. For the year through September, AF-KLM’s cargo traffic was down 7.1% to 6.71 billion RTKs. Of the two carriers in the group, Air France actually reported moderately strong growth in air freight demand, with September traffic up 5.8% to 300 million RTKs, but this was negated at the group level by a 10.7% drop at KLM, to 414 million RTKs.

International Airlines Group, like Lufthansa, reported accelerating demand for cargo in September, with Group traffic up 6.9% y-o-y to 448 million RTKs. Year-to-date IAG’s cargo traffic was up 3.0% to 3.99 billion RTKs. Subsidiary carrier British Airways reported strong growth, with traffic up 6.1% to 348 million RTKs, But Iberia topped this with growth of 13.9% to 90 million RTKs.

Passenger traffic may have taken a big dive in Turkey, but Turkish Airlines reported September cargo volume up 28.8% y-o-y to 77,000 tonnes. For the first nine months of 2016, Turkish’s cargo volume was up 19.5% to 636,000 tonnes.

Frankfurt Airport (FRA) reported its Septemb cargo handle up 5.9% y-o-y to 180,000 tonnes compared to the same period during 2015. For the first three quarters of 2016, FRA’s handle was up1.3% to 1.58 million tonnes.

Amsterdam’s Schiphol Airport reported its September handle up 1.9% to 140,000 tonnes. For 2016 through September, AMS’ handle was up 1.6% to 1.21 million tonnes.

London’s Heathrow Airport (LHR) reported its September handle up 5.9% to 126,000 tonnes. Year-to-date, LHR’s handle was up 2.1% to 1.13 million tonnes.

Americas

Cargo traffic continued to fall at Chile-headquartered LATAM Airlines Group, which reported September traffic down 8.8% y-o-y to 279 million RTKs. However, the decline was less steep than LATAM has been reporting for much of the year, and for the first three quarters of 2016, LATAM’s cargo traffic was down 10.7% to 2.50 billion RTKs.

United Airlines reported September cargo traffic up 15.7% y-o-y to 358 million RTKs, its sixth consecutive month of positive results after a shaky start to the year. For 2016 through September, United’s cargo traffic was up 4.1% to 2.94 billion RTKs.

American Airlines Group reported September cargo traffic up 9.8 y-o-y to 302 million RTKs. For the first nine months of 2016, American’s cargo traffic was up 2.2% to 2.56 billion RTKs.

Its big US competitors may have posted double-digit growth, but Delta Air Lines remains firmly mired in decline, reporting September cargo traffic down 7.4% y-o-y to 250 million RTKs. For the year through September, Delta’s cargo traffic was down 11.1% to 2.15 billion RTKs. The drop continues Delta’s pattern of reporting high-single, to low-double-digit growth for most of the year.

3 Comments

  1. Dennis J. Germaske says:

    What portion of total air freight is Ecommerce generated. If no category for ecommerce exist now is their a plan to begin compiling data on this market segment?

    Dennis J. Germaske

  2. David Harris says:

    Interesting question. E-commerce air freight data is difficult to find, but a rough estimate is that e-commerce currently makes up less than 10% of air freight by weight, and accounts for a bit under 8% of postal service revenue (including both ground and air). With today’s double digit annual percentage rate growth in cross-border e-commerce, the air freight share of e-commerce globally is likely to grow.

    But to get any kind of accurate data, you would first have to decide how e-commerce would be defined in the logistics chain. And then there is the problem of how industry participants could be compelled to collect such records and disclose them publicly.

    One group sincerely pursuing more precise data on e-commerce shipments is the world’s postal services.

  3. Dennis J. Germaske says:

    David, Many thanks for your message. I agree on the issues/problems that exist in capturing Ecommerce. When the issue gets serious enough I’m sure an answer will be found.
    I’m curious as to how you came up with your rough estimate of “less than 10% of airfreight by weight”.
    Do you have an estimate of volume?

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