A weak November

Many of the world’s major cargo carriers and airports have reported their November results, and the overall pattern seems to be one of declining air freight demand. It will be another two weeks before worldwide data are available from IATA and WorldACD, but we expect both organizations to report flat or negative growth in demand for November, although strong results from carriers in the Middle East could push the industry into a slight overall demand increase.

Last year’s peak season was relatively strong, so we did not expect a big jump in demand, but the data so far available are not encouraging.

Now for the November details…

Asia Pacific

Cathay Pacific Airways reported November cargo traffic Down 3.2% y-o-y to 967 million RTKs, breaking an almost two-year record of year-over-year increases. For the first eleven months of 2015, Cathay’s cargo traffic was up 5.7% to 9.63 billion RTKs. Commenting on the November results, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “We entered the traditional peak period for airfreight in November, but overall demand fell short of our original expectations. We saw a decline in the tonnage carried compared to the same month last year, while yield fell short of expected peak-season levels due to an excess of capacity in the market. On the positive side, we saw good demand on transpacific routes, which remains our key area of strength, and also into and out of India. And our cargo terminal in Hong Kong recorded its highest monthly throughput since commencing operations.”

Hong Kong International Airport reported cargo volume down 3.1% y-o-y in November to 407,000 tonnes. Export volume was down 2.1% to 272,000 tonnes, and import volume fell 5.2% to 135,000 tonnes. After beginning the year on a positive note – combined January/February volume was up 7.2% – HKIA saw year-over-year declines in the next six months, and then small increases in September and October. With the return to negative growth in November, HKIA’s handle for the first eleven months of 2015 effectively flat (up 0.1%) with 2014 at 3.99 million tonnes. Commenting on the November results, HKIA said that among the key trading regions, traffic to/from the Mainland China and Southeast Asia registered the most significant drop in the month.

Beijing-based Air China reported November cargo traffic up 4.3% y-o-y to 570 million RTKs. This is the just the second time in over a year that the carrier has reported less than double-digit demand growth – and in most of that time the y-o-y increases were more than 20%. The slight November growth was led by a 5.4% increase in international traffic to 422 million RTKs, while domestic traffic was up2.4% to 139 million RTKs. Air China’s cargo traffic for the first eleven months of 2015 was up 16.2% to 5.97 billion RTKs.

Shanghai-based China Eastern Airlines reported November cargo traffic down slightly (0.3%) y-o-y to 421 million RTKs. International traffic for the month was down 2.3%% to 321 million RTKs, while domestic traffic was up 10.3% to 89 million RTKs. China Eastern’s cargo traffic has followed no discernable pattern this year, ranging from significant growth to significant declines, leaving the carrier to report traffic for the first eleven months of 2015 almost unchanged (up less than 1%) from last year at 4.42 billion RTKs.

Taiwan-based China Airlines (CAL) reported November cargo traffic down 1.4% y-o-y to 454 million RTKs. For 2015 through November, CAL’s cargo traffic was up 1.9% to 4.94 billion RTKs.

Taiwan-based EVA Air reported November cargo traffic down 19.3% y-o-y to 295 million RTKs. For the eleven months of 2015 through November, EVA’s cargo traffic was down 9.9% to 3.06 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co (PACTL, the biggest cargo handler at Shanghai’s Pudong Airport (PVG)) reported its November handle down 0.7% y-o-y to 146,000 tonnes. The decline was driven by a 0.6% fall in international volumes to 137,000 tonnes. Domestic volumes fell more steeply (down 2.4% to 10,000 tonnes), but since PACTL handles very little domestic cargo, this had almost no impact. The company made no comment on the November results, but Cargo Facts believes the decline was the result of a government-imposed ban on charter flights for the month of November at PVG. Absent this ban – during the peak-season period, when charter demand is particularly high – we suspect PACTL’s handle would have been up in line with its growth in recent months. But despite the slight decline in November, PACTL reported its cargo handle for the first eleven months of 2015 up 6.8% to 1.46 million tonnes, and is headed for another record year.

Singapore Airlines reported Novmber cargo traffic up 5.4% y-o-y to 543 million RTKs. This follows a strong 9.8% increase in October and a 4.4% increase in September, and it appears that SIA may finally have reversed a several-year trend of declining demand for its air freight services. For the year through November, SIA’[s cargo traffic was up 2.4% to 5.91 billion RTKs.

Europe & Middle East

Lufthansa Cargo reported November traffic down 12.1% y-o-y to 722 million RTKs. For the Lufthansa Group as a whole, November cargo traffic was down 12.0% to 853 million RTKs. Traffic was down on both major trade lanes, with the trans-Atlantic particularly hard hit – down 17.0% to 351 million RTKs – while  traffic to/from the Asia Pacific region was down 5.4% to 403 million RTKs. On the less busy Middle East/Africa lanes traffic was down 20.8% to 67 million RTKs. Regarding the big November decline, the company said it was impacted by ten days of announced and/or actual strikes: “Freight capacities at Lufthansa Cargo decreased significantly (-6.3%), foremost because of cancelled belly capacities.” While the strikes certainly caused some of the decline, it is hard to believe they could have accounted for all of it. For the first eleven months of 2015, Lufthansa’s Cargo traffic was down 2.8% to 7.72 billion RTKs. For the Lufthansa Group, cargo traffic was down 3.0% to 9.15 billion RTKs.

Air France-KLM continues to report steep falls in cargo traffic, with an 11.3% y-o-y drop in November to 762 million RTKs. While AF-KLM has been reporting dismal cargo results for some time, November was made worse by the terrorist attack in Paris. Commenting on the month, Air France-KLM said: “Cargo activity was primarily impacted by the additional security measures implemented at Paris-CDG airport following the attacks.” For the year through November, AF-KLM’s cargo traffic was down 8.5% to 8.26 billion RTKs.

International Airlines Group reported November cargo traffic down 4.6% y-o-y to 470 million RTKs (adjusted for the recent acquisition of Aer Lingus). Subsidiary carrier Iberia saw cargo traffic up 4.0% to 103 million RTKs, while IAG’s larger British Airways subsidiary reported traffic down 6.6% to 367 million RTKs. For the first eleven months of 2015, IAG Cargo’s traffic was down 4.1% to 4.78 billion RTKs.

Turkish Airlines reported November cargo volume up 9.1% y-o-y to 67,000 tonnes, continuing the carrier’s long-standing trend of strong year-over-year increases in demand. (Note that Turkish mis-reported its October traffic as being down almost 13%, but later corrected that to a gain of 3.6%) For the first eleven months of 2015 Turkish’s cargo volume was up 8.5% to 657,000 tonnes.

Frankfurt Airport (FRA) reported its October cargo handle down 3.6% y-o-y to 196,000 tonnes, likely dragged down by a series of strikes at Lufthansa. For 2015 through November, FRA’s handle was down 2.5% to 1.94 million tonnes.

London’s Heathrow Airport (LHR) reported its October handle down 3.1% y-o-y to 132,000 tonnes, continuing its year-long pattern of small gains and losses. For the first ten months of 2015, LHR’s handle was almost flat with last year – down 0.3% to 1.37 million tonnes.

Americas

Cargo traffic continued to fall steeply at Chile-headquartered LATAM Airlines Group, which reported November traffic down 13.7% y-o-y to 340 million RTKs. The company said cargo traffic continued to be “weak during the month of November especially in Brazil domestic and international markets. Additionally, weaker seasonal exports from Latin America contributed to the softness in demand.” As a result, the company added, “We continue to adjust cargo capacity through a reduced freighter operation, which resulted in a decline of 3.1% of cargo ATKs in November.” For the first eleven months of 2015, LATAM’s cargo traffic was down 12.1% to 3.47 billion RTKs.

United Airlines reported November cargo traffic almost flat (up 0.1%) y-o-y at 325 million RTKs, continuing a period of growth growth that began in late 2013. For the year through November, United’s cargo traffic was up 5.6% to 3.49 billion RTKs.

American Airlines reported November cargo traffic down 2.4% to 286 million RTKs. For the first eleven months of 2015, American’s cargo traffic was down 0.7% at 3.10 billion RTKs.

Delta Air Lines reported November cargo traffic down 12.2% y-o-y to 251 million RTKs. For the year through November, Delta’s cargo traffic was down 6.9% to 2.95 billion RTKs.