Are we really back to “Normal”?

Full-year 2010 data from individual airports and carriers has been trickling in over the last few weeks, but we now have reports from the two main industry associations that track cargo worldwide. As shown in the two reports below, it appears that after a two-and-a-half year rollercoaster ride, we are back to something like the historic norm of 5% to 6% growth annual growth in air freight demand. We say “appears” because no one really knows for sure. But after a year of worldwide economic meltdown, and then a year of soaring recovery, growth in the last two months of 2010 stabilized, and early reports from 2011 indicate that January will likely follow this pattern as well. The problem, of course, is that the memory of the recession is still fresh, and most of us find ourselves looking uneasily over our shoulders, wondering if something big and nasty is sneaking up behind us again.

We’d appreciate hearing your thoughts on this. Are you seeing a return to some kind of stability in your corner of our industry? Or indications that the old patterns are going to be replaced with something new and different?

The following two items are excerpted from the current issue of Cargo Facts Update. We encourage those of you who do not already subscribe to the weekly Update, and its companion the monthly printed Cargo Facts newsletter, to click here for more information. 

International Air Transport Association reported international cargo traffic up 6.7% y-o-y in December, a significant uptick from the 5.2% y-o-y growth reported in November, but well down from the 25% to 35% increases seen early in the year when the comparisons were being made to the worst months of the recession. For the full year 2010, IATA said international cargo traffic was up 20.6% compared to 2009, with growth led by carriers from Latin America (up 29.1%) and the Middle East (up 26.7%). Among the major regions, carriers from the Asia Pacific reported international cargo traffic growth of 24.0%, followed by North American carriers (up 21.8%). European carriers lagged far behind, reporting just 10.8% growth in international cargo traffic. Cargo Facts has examined the IATA results for the last eight years and concludes that scheduled international FTKs for full-year 2010 were up approximately 5% over the previous peak year of 2007. We point out, though, that while 2010 represents a new peak, the recession cost the air freight industry the equivalent of two years of growth. According to IATA, growth rates have returned to historic levels of 5% to 6% per year.

Europe lagging? As indicated above, European carriers reported by far the lowest growth in international cargo traffic in 2010. However, data from the Airports Council International indicates that this is not because cargo volume moving to and from Europe was down. ACI reports international cargo volume up 21.5% in 2010 – relatively close to the 20.6% traffic increase reported by IATA. But where the ACI data differs is that European airports report 2010 international volume up 19.7%. What this indicates is that cargo flown to and from Europe increased at close to the worldwide rate, but that European carriers lost significant market share to their competitors in Asia, North America, and the Middle East.