September 2019 general cargo demand: generally dismal

Although some Asia-based carriers saw improvements in September 2019 cargo demand compared to August, almost unanimously, cargo traffic reported by combination carriers was lower in September 2019. This was no surprise given market performance for much of 2019 as air freight demand responds to slowing global trade related to increasing protectionism and trade friction, and the uncertainty of Brexit. Although Cathay Pacific and China Southern reported month-to-month improvements, traffic reported by European carriers was generally lower. When IATA releases its September traffic report later this month, Cargo Facts expects total market declines of around 4.0 - 5.0%. Turning to the results on a carrier-by-carrier basis: Asia-Pacific Cathay Pacific Group reported September traffic down 5.3% year-over-year to 961 million FTKs, an improvement from August, which saw cargo traffic drop 11.6% y-o-y for the month. Year-to-date, Cathay’s traffic is 7.0% lower compared to the first nine months of 2018, at 8.3 billion FTKs. Commenting on the cargo performance, Ronald Lam, Chief Customer and Commercial Officer said, “As anticipated, our cargo business showed signs of improvement compared to August as we stepped into air freight’s traditional high-demand season. Most markets saw a better month-on-month performance and we mounted a number of charter operations on top of our scheduled services to meet added demand for air freight coinciding with the release of new electronic products. However, the overall market remains challenging and competitive with tonnage carried and load factor for the year to date still significantly below the same period last year.” Singapore Airlines reported September cargo traffic down 9.7% y-o-y to 537 million FTKs, while cargo tonnage declined by 7.4% to just over 103,000 tonnes. Year-to-date, cargo traffic is down 6.6% to 5.2 billion FTKs. Air China Cargo’s traffic for September was 7.9% lower than in September 2019 at 395 million FTKs. Overall tonnage decreased 5.4% to about 124,000 tonnes. For the first nine months of 2019, traffic is down 3.5%, and tonnage is 1.9% lower than during the same period in 2018. China Southern ’s September cargo traffic rose 0.6% to 679 million FTK. Year-to-date through September, traffic remains 0.3% lower compared to 2018, at 4.9 billion FTKs. EVA Air’s cargo traffic, measured in freight tonne kilometers (FTKs), slid 1.5% year-over-year for the month of September to 379 million FTKs. Year-to-date through September, EVA’s cargo traffic is down 8.0% year-over-year, and tonnage is down 9.0%. China Airlines reported September cargo traffic down 12.0% to 451 million FTKs. Year-to-date, traffic is 10.2% lower at 3.9 billion FTKs Shanghai Pudong International Airport Cargo Terminal Co Ltd ( Pactl ) , reported September cargo throughput of 152,000 tonnes, down 5.2% from September 2018. The terminal’s smaller domestic cargo operation reported year-over-year growth of 11.3% in September to 9,800 tonnes, and is up 5.2% year-to-date. International cargo meanwhile, slipped 6.2% for the month to 142,000 tonnes and is 10.4% lower for the first nine months of the year. Year-to-date through September, PACTl’s throughput is down 9.7% to 1.3 million tonnes. Europe & Middle East Lufthansa Group reported a decline of 3.6% y-o-y in its September traffic to 889 million FTKs. The main inhibitor to growth can be traced to the carrier’s Asia-Pacific and Americas traffic, which declined 4.8% and 5.1% y-o-y, respectively, offsetting single digit growth in Europe and Middle East/Africa. Over the first three quarters of 2019, Lufthansa saw a 1.9% decline in its overall traffic to 7.9 billion FTKs. Air France-KLM’s September cargo traffic declined by 3.8% y-o-y to 698 million freight tonne kilometers (FTKs). Air France saw a decline in traffic of 8.4% y-o-y to 304 million FTKs, while KLM’s traffic for the month flatlined at 0.1% y-o-y growth to 394 million FTKs. For the first nine months of the year, the group’s total cargo activity was down 1.6% y-o-y to 6.3 billion FTKs. Year-to-date, Air France’s demand was up 1.3% y-o-y to 2.8 billion FTKs, while KLM saw a decline of 3.1% to 3.5 billion FTKs. International Airlines Group reported that group traffic dropped 9.1% y-o-y in September to 441 million FTKs. Traffic declined 6.7% y-o-y at Aer Lingus and increased 6.1% y-o-y at Iberia, which both account for a relatively small share of IAG’s overall cargo traffic. Meanwhile, traffic declined by 13.5% y-o-y at British Airways for the month, which accounts for most of the Group’s traffic. From January to September, IAG’s cargo traffic declined 1.0% growth y-o-y to 4.1 billion FTKs, compared to the same period the year prior. Turkish Cargo reported a 9.8% y-o-y increase in cargo volumes during September, to 134,500 tonnes. For the first nine months of 2019, cargo volumes are up 9.6% y-o-y to more than 1.1 million tonnes. Americas LATAM Cargo’s traffic for September declined by 4.2% year-over-year to 281 million RTKs. Year-to-date, traffic is down 1.1%. Load factors decreased 1.5 percentage points to 53.5% for the month, while available ton kilometers (AFTKs) for September saw a decrease of 1.5% y-o-y. Through the first nine months of 2019, AFTKs have decreased by 2.5%. Delta Cargo saw a drop in traffic of 10.5% y-o-y for the month, to about 168 million cargo ton miles (or about 270 million FTKs). Year-to-date, Delta’s cargo traffic is down by 9.0%.

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