Air freight unaffected by trade war in October first look

October looks to be a difficult month for year-over-year air cargo traffic comparisons among the world’s major airports and carriers. A handful of outliers such as Turkish Airlines, China Southern Airlines, and Incheon Airport aside, most carriers and airports reporting traffic results for October noted declines, while those that did not decline were mostly flat with October 2017 levels. However, looking only at a year-over-year analysis paints a grimmer picture than the traffic numbers themselves suggest. The move into peak season is already providing month-over-month traffic increases for most carriers and airports, while the imposition of tariffs appears to have had a less dire impact on air cargo volumes through China than observers initially feared. Although traffic numbers are slightly weaker than in late 2017, this year’s peak season is poised to be another strong one for air freight.

To look more closely at regional performance for October:

Asia Pacific

Singapore Airlines reported a 0.3% decline in cargo traffic during October, to 636 million freight tonne kilometers (FTKs). Despite the decline, October’s traffic is still the highest so far in 2018, and by volume, Singapore Airlines’ cargo handle increased 1.7% y-o-y in October. Year-to-date, traffic was down by a slight 0.2% to 5.9 billion FTKs.

Beijing-based Air China reported October traffic up 1.4% y-o-y, to 704 million FTKs. Year-to-date, traffic is up 6.5% from the same ten-month period in 2017. International air cargo traffic increased 2.2% y-o-y in October, outpacing domestic cargo traffic, which was down 1.6%.  

Guangzhou-based China Southern Airlines reported cargo and mail traffic up 6.7% y-o-y in October, to 633 million RTKs. Year-to-date through October, traffic increased by 7.5% to 6.2 billion RTKs. An indicator of growing intra-Asia cargo volumes, international cargo and mail tonnage carried increased 10.4% y-o-y in October, outpacing international cargo traffic growth of 9.6%.

Taiwan-based China Airlines reported October cargo traffic up 2.9% y-o-y to 528 million RTKs – consistent with y-o-y growth in September. Year-to-date, China Airlines’ cargo traffic is up 3.5% compared with the same period in 2017 at 4.9 billion RTKs. Cargo yields were up 16.0% from October 2017 and 12.7% year-to-date.

Taiwan-based EVA Air rebounded in October with 0.6% y-o-y growth after four consecutive months of y-o-y traffic declines. Year-to-date, cargo traffic remained in positive growth territory –  though just barely (up 0.22%). Cargo yields, meanwhile, were up 17.0% y-o-y for the month, and 12.9% YTD.

Hong Kong International Airport (HKG) reported cargo and mail throughput up 2.8% y-o-y in October to 415,000 tonnes. Transshipments continued to be the main driver of growth, with such volumes increasing 7% for the month. Year-to-date, HKG’s cargo and mail handle remain 2.6% higher at 4.21 million tonnes.

For the month of October –  the second consecutive month –  Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the largest cargo handler at Shanghai’s Pudong Airport) reported a drop in y-o-y cargo throughput, with volumes down 2.5% to 164,000 tonnes. Inbound international cargo volumes led the decline, falling 7.3% y-o-y in October. Outbound international cargo volumes, meanwhile, rose 1.1%. Cargo Facts believes the drop in inbound international cargo volumes at Pactl may be a result of Chinese consumers delaying purchases until the “11.11” shopping holiday – and thus growth may return in November. Year-to-date, cargo handled by Pactl remains 3.4% higher at is still up 4.4% at 1.57 million tonnes.

South Korea-based Incheon Airport’s (ICN’s) cargo handle jumped 6.5% y-o-y in October to 263,000 tonnes. Year-to-date volumes are up 2.1% compared to the same period in 2017.

Europe & Middle East

Lufthansa Group reported October traffic down by 1.9% y-o-y, to 955 million RTKs, marking the fifth month in a row Lufthansa has reported declining cargo traffic y-o-y. Traffic was still up month-over-month by 3.5%, however, indicating that peak season is driving increases in traffic, though not at the levels seen in 2017. Year-to-date through October, cargo traffic is up 1.0% to 9.1 billion RTKs.

Air France-KLM reported a 3.2% increase in cargo traffic during October, to 791 million RTKs. Most of the increase was on the Air France side of the business, which increased 7.0% y-o-y, while cargo traffic on the KLM side was virtually flat y-o-y during the month. Cargo traffic for the first ten months of 2018 is up by a slight 0.6% y-o-y, to 7.1 billion RTKs.

International Airlines Group reported a y-o-y decline in cargo traffic for the second month in a row for October, as traffic fell by 1.9% to 517 million RTKs. Month-to-month, however, traffic was up 6.6%, suggesting a fairly strong peak season increase for the Group. Year-to-date, cargo traffic declined 0.8% to 4.7 billion RTKs. IAG’s two subsidiary carriers with the most cargo traffic – British Airways and Iberia – both reported y-o-y declines in October, at 3.0% and 2.7%, respectively.

Turkish Airlines reported yet another y-o-y increase in cargo volumes during October. Volumes were up 24.0% y-o-y for the largest increase since March, at 131,000 tonnes. Year-to-date, volumes for the carrier are up 25.1% to 1.2 million tonnes.

Frankfurt Airport (FRA) reported another month of declining cargo volumes during October, as the airport’s handle dropped by 1.0% to 193,000 tonnes. October’s handle was up 4.3% from September, in another example of the beginning of peak season driving month-over-month gains despite y-o-y declines. Over the first ten months of the year, FRA’s cargo handle is down 0.8% to 1.8 million tonnes.

During October, Amsterdam’s Schiphol Airport (AMS) continued its trend of y-o-y declines in its cargo handle, as slot shortages at the airport have pushed many carriers to move freighter operations to other airports in the region. The monthly cargo handle at AMS declined 1.6% y-o-y to 153,000 tonnes, which also makes for a month-to-month increase of 5.2%. Year-to-date, AMS’s cargo handle is down 2.4% to 1.4 million tonnes.

London’s Heathrow Airport (LHR) reported a y-o-y decline of 2.9% in its October cargo handle to 150,000 tonnes, for a month-to-month gain of 5.6%. From January through October, cargo volumes handled at LHR are up 1.0% to 1.4 million tonnes.

Americas

Chile-headquartered LATAM Airlines Group reported its first y-o-y decline in cargo traffic for 2018 during October, when traffic fell 1.4% to 314 million RTKs. As with most of the carriers that reported declining traffic compared to 2017, LATAM’s October figures still represent a month-to-month gain leading into peak season – compared to September traffic, October rose by 7.2%. Through October, cargo traffic is up 5.9% y-o-y to 2.9 billion RTKs.

Delta Air Lines’ October cargo traffic fell 2.9% y-o-y to 279 million RTKs, for a 2.2% month-to-month increase in traffic. Year-to-date, the carrier’s traffic is up 2.1% to 2.7 billion RTKs.

United Airlines’ cargo traffic fell 0.9% y-o-y in October to 277 million RTKs; however, that figure represents an increase of 10.5% from September RTKs. From January through October, the carrier’s traffic is up 4.2% at 4.1 billion RTKs.