What is going on in Europe?

While all indications are that carriers and airports in the rest of the world will report continuing strong cargo growth for August, Europe’s big three carriers are still appear to be operating in the cargo environment of two years ago.

As has been widely reported, Air France-KLM’s cargo operation has been losing money for several years, and traffic has fallen steadily. Lufthansa, while still profitable, reported minimal traffic growth in August and is still negative for the year through August. For its part, IAG Cargo  is reporting mid-single-digit declines.

August traffic details for AF-KLM, Lufthansa, and IAG are below, but even a quick look at their results raises the question: Why, if most big cargo carriers worldwide have been reporting steadily improving growth in their cargo traffic for over a year now, are Europe’s big three not getting their share?

Lufthansa Cargoreported August traffic up slightly (0.9%) y-o-y to 716 million RTKs. For the Lufthansa Group as a whole, July cargo traffic was up 1.6% to 854 million RTKs. On a regional basis, Group cargo traffic was up 3.6% to 370 million RTKs on the trans-Atlantic lane, up 0.6% to 386 million RTKs on the Asia-Pacific lane, and up 1.3% to 69 million RTKs on the Middle East/Africa lane. For the first eight months of 2014, Lufthansa Cargo’s traffic was down 1.4% to 5.62 billion RTKs, while Group cargo traffic was down 0.4% to 6.69 billion RTKs. Lufthansa said its total cargo capacity in August was up slightly (0.4%), and cargo load factor rose 0.8 percentage points to 66.4%.

Air France-KLM reported August cargo traffic down 1.7%% y-o-y to 833 million RTKs. Traffic was down on both the carrier’s major trade lanes: down 1.5% to 351 million RTKs on the trans-Atlantic, and down 3.1% on the Asia-Pacific lane. Traffic to/from Africa & the Middle East rose 1.7% to 125 million RTKs. The August result continues the trend of small gains and declines seen so far this year, leaving the carrier’s cargo traffic for the first eight months down 0.3% to 6.61 billion RTKs.

International Airlines Group reported August cargo traffic down 4.6% y‑o‑y to 438 million RTKs. Subsidiary carrier British Airways reported its traffic for the month down 6.2% to 361 million RTKs. Given that BA returned all three of the 747-8Fs it leased from Atlas Air in early April, and switched to a block-space deal with Qatar Airways involving a single 777F, the fact that BA’s cargo traffic has fallen only by mid-single-digit percentages since then gives a fairly clear picture of why the carrier was keen to terminate the leases on the three jumbo freighters. IAG’s other subsidiary carrier, Iberia, reported its July cargo traffic up 4.1% to 77 million RTKs, For the year through August, IAG’s cargo traffic was down 2.7% to 3.58 billion RTKs.