2016 ends with surging cargo demand

  • David Harris
  • January 17, 2017
  • 0

December 2016 stats v3Many of the world’s major cargo carriers and airports have now reported their December results, and all indicators point to extremely strong growth in air freight demand — likely the strongest in years.

A quick look at the chart at right gives the impression that double-digit growth has become the norm. After a more thorough look, it is clear that not all carriers are in the double-digit club, but even those carriers that reported declines are doing better than they have all year. That is, the declines reported by Air France-KLM, LATAM, and Delta are smaller than in the past. This, combined with the big gains reported by most of the carriers and airports, points to strong overall demand growth.

It will be another two weeks before we get a full picture of December air freight demand from IATA and WorldACD, but, based on what we have seen so far, we expect worldwide year-over-year growth of close to 10%.

And now for the details:

Asia Pacific

Cathay Pacific Airways reported December cargo traffic up 6.1% y-o-y to 1.01 billion RTKs, continuing the upswing that began in June after five months of declining demand. And we point out that while traffic increased only 6.1%, cargo volume rose 9.9% to 174,000 tonnes, indicating stronger growth on intra-Asia routes than on Asia/Europe or trans-Pacific routes. Discussing the December results, Cathay’s General Manager Cargo Sales & Marketing Mark Sutch said: “The seasonal peak for airfreight carried into December, with exports from Mainland China, Asia and the Americas seeing encouraging year-on-year growth. Demand from our home market of Hong Kong was also sustained. Overall tonnage grew ahead of capacity, with our load factor improving month-on-month. The demand for perishables, machineries and e-commerce products persisted, while our new freighter services to Portland and Brisbane West Wellcamp have also been well received by the market.” For the full year 2016, Cathay’s cargo traffic was up 0.8% from 2015, to 10.68 billion RTKs.

Hong Kong International Airport reported cargo volume in December up 11.3% y-o-y to 435,000 tonnes. After a slow start to 2016, the gains that began in June have brought HKIA’s handle for the full year up 3.2% to 4.52 million tonnes – a new record. Commenting on the results, HKIA said: “The strong growth in December cargo throughput was largely driven by transshipments and exports, which registered 15% and 12% year-on-year growth, respectively. Amongst the key trading regions, traffic to / from Southeast Asia, North America and Europe increased most significantly in the month.”

Beijing-based Air China reported its December cargo traffic up 11.4% y-o-y to 655 million RTKs. Both domestic and international traffic fared well for the carrier during the month. Domestic traffic rose 12.0% to 160 million RTKs while International traffic rose 11.3% to 485 million RTKs. The much smaller regional traffic rose 4.1% to 10.3 million RTKs. For the full year, Air China Cargo’s cargo traffic was up 6.6% to 6.99 billion RTKs.

Guangzhou-based China Southern Airlines reported December traffic up 15.7% y-o-y to 595.6 million RTKs. International traffic was up 16.7% to 423 million RTKs, while domestic traffic increased 13.1% to 170 million RTKs. The much smaller regional traffic jumped 34.8% to 2.4 million RTKs. For the full year 2016, China Southern’s cargo traffic was up 9.9% to 6.22 billion RTKs.

Shanghai-based China Eastern Airlines reported December cargo traffic up 1.4% y-o-y to 455 million RTKs, extending its positive growth trend to seven consecutive months after a long period of declines. International traffic was up 2.0% to 345 million RTKs while the smaller domestic traffic was down 1.2%, to 92 million RTK. For all of 2016, China Eastern’s cargo traffic was up 0.2% to 4.87 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported a 12.0% y-o-y increase in its December cargo handle to 158,000 tonnes, with the growth coming despite the CAAC’s ongoing ban that restricts Pudong from adding new flights. International volume for the month was up 12.8% to 147,000 tonnes, while the much smaller domestic volume was up 2.5% to 11,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the full year, Pactl’s cargo handle was up 4.5% to 1.67 million tonnes.

Singapore Airlines reported December cargo traffic up 8.8% y-o-y to 625 million RTKs, an continution of the trend of solid gains it has seen over the past year. For the full year 2016, SIA’s cargo traffic was up 5.8% to 6.86 billion RTKs.

Taiwan-based China Airlines reported December cargo traffic up 12.7% y-o-y to 495 million RTKs, the fifth month of increased traffic after a long period of declining demand. However, for the full year, CAL’s cargo traffic was still negative, down 1.2% to 5.32 billion RTKs.

Taiwan-based EVA Air reported December cargo traffic up 9.9% y-o-y to 317 million RTKs, its seventh consecutive positive result after a year-and-a-half of declines. For the full year, EVA’s cargo traffic was still down 2.1% to 3.57 billion RTKs.

Europe & Middle East

The demand recovery at Lufthansa that started in July and August accelerated strongly in December, with Group cargo traffic up 8.3% y-o-y for the month, to 845 million RTKs. The growth was led by a 12.4% increase in traffic on the trans-Atlantic lane which grew to 377 million RTKs. The carrier’s other major trade lane, connecting Europe to the Asia-Pacific region, did not quite hit double-digit growth, but still performed strongly, with traffic up 7.3% to 375 million RTKs. Traffic to/from the Middle East and Africa fell sharply (down 6.4%) to 61 million RTKs. For the full year 2016, Lufthansa’s cargo traffic was up 1.4% over 2015 to 10.07 billion RTKs.

Air France-KLM continued its multi-year trend of declines, reporting December cargo traffic down 1.6% to 737 million RTKs. For the full year, AF-KLM’s cargo traffic was down 6.3% to 8.44 billion RTKs. Of the two carriers in the group, Air France actually reported strong growth in air freight demand, with December traffic up 7.8% to 332 million RTKs, but this was negated at the group level by an 8.2% drop at KLM, to 445 million RTKs.

International Airlines Group, reported December cargo traffic up 3.4% y-o-y to 480 million RTKs. IAG’s total cargo traffic in 2016 was up 1.2% to 5.45 billion RTKs. Subsidiary carrier British Airways reported December cargo traffic up 4.9% to 365 million RTKs, while Iberia’s cargo traffic was flat with December 2015 at 103 million RTKs.

Turkish Airlines continues to report astonishing growth in cargo volume, even as passenger traffic shrinks. The carrier reported December cargo volume up 23.2% y-o-y to 85,000 tonnes. For the full year, Turkish Airlines’ cargo handle rose 21.1% to 876,000 tonnes.

Frankfurt Airport (FRA) reported its cargo handle up 7.6% y-o-y to 189,000 tonnes in December. For the full year 2016, FRA’s handle was up 1.8% to 2.15 million tonnes.

Amsterdam’s Schiphol Airport reported its December handle up 10.4% to 149,000 tonnes. For the whole of 2016, AMS’ handle was up 2.5% to 1.66 million tonnes.

London’s Heathrow Airport (LHR) reported its December handle up 5.1% to 134,000 tonnes. For the full year, LHR’s handle was up 3.0% to 1.54 million tonnes.

Americas

Cargo traffic continued to fall at Chile-headquartered LATAM Airlines Group, which reported December traffic down 2.1% y-o-y to 321 million RTKs. This is less bad than what LATAM has been reporting for much of the year, but LATAM remains one of the few major carriers to report declining traffic during a period of generally strong gains. For the full year, LATAM’s cargo traffic was down 8.7% to 3.47 billion RTKs.

United Airlines reported December cargo traffic up 15.5% y-o-y to 378 million RTKs, its ninth consecutive month of strong gains after a poor start to the year. For the whole of 2016, United’s cargo traffic was up 7.3% to 4.10 billion RTKs.

American Airlines Group reported November cargo traffic up 12.5% y-o-y to 319 million RTKs. For the full year, American’s cargo traffic was up 4.7% to 3.54 billion RTKs.

Its big US competitors may have posted double-digit growth, but Delta Air Lines remains firmly mired in decline, reporting December cargo traffic down 3.5% y-o-y to 241 million RTKs. For the full year, Delta’s cargo traffic was down 9.7% to 2.89 billion RTKs.

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