November traffic data: Signs of hope

Most of the world’s major cargo carriers and handlers have now reported their November data, and the results we have seen may indicate the beginning of a turnaround. Or, if not a turnaround, at least an indication that things are becoming a considerably less bad than they have been for most of this year. On the upside, Hactl, the world’s biggest cargo handler, reported its November handle up 9.3% y-o-y – its best-ever November handle, and the second-highest handle of any month (just 1.0% below the previous record of 261,000 tonnes set in October 2010). Likewise, China’s big three combination carriers all reported strong gains, and Hong Kong-based Cathay Pacific reported its first year-over-year gain of 2012. In Europe, Lufthansa reported its total November cargo traffic down 0.4%, which, while hardly a great result, is considerably better than what the carrier has been reporting for most of this year. As shown in the chart above, there are still plenty of negative numbers (and there will likely be more when Cathay Pacific and Singapore Airlines report their results), but there are also enough gains to hint that if Europe and the US can resolve their political/economic problems, and things in the Middle East do not become worse, there may be a real turnaround in the not-too-distant future.

To flesh out the snapshot captured by the chart, we present the individual results by region in greater detail, as follows:

Asia Pacific

Cathay Pacific Airways, after a year of declines, reported its November cargo traffic up 2.8% y-o-y to 817 million RTKs. The carrier’s General Manager Cargo Sales & Marketing James Woodrow said the gain was driven by “significant shipments of hi-tech consumer products out of key manufacturing centres such as Western/Central China and Vietnam.” However, while the modest uptick in demand allowed Cathay to operate “close to a full freighter schedule” in November, Woodrow was cautious about the future, saying: “We have not seen the kind of sustained year-end peak we saw in previous years and the market outlook continues to be uncertain, particularly from Asia to Europe.” For the first eleven months of 2012, Cathay’s cargo traffic was down 8.1% to 8.09 billion RTKs.

Hong Kong Air Cargo Terminals (Hactl, which handles over 70% of the cargo at Hong Kong International) reported its November handle up 9.3% y-o-y to 258,000 tonnes, with solid growth in all three categories: Export volume was up 8.5% to 143,000 tonnes, import volume was up 8.2% to 53,000 tonnes, and transshipment volume rose 12.6% to 51,000 tonnes. This is Hactl’s biggest-ever November handle, and the second-highest handle of any month – just 1.0% below the previous record of 261,000 tonnes set in October 2010. However, while it may be a record month in absolute terms, it only represents a 2.9% increase over 2007, an annual growth rate of just 0.6% – barely over half a percent per year. For the first eleven months of 2012, Hactl’s handle was up 1.5% to 2.52 million tonnes.

Beijing-based Air China reported November cargo traffic up 21.8% y-o-y to 455 million RTKs. The gain was driven by strong increases in both international traffic (up 22.1% to 348 million RTKs) and domestic traffic (up 20.% to 97 million RTKs). For the first eleven months of 2012, Air China’s cargo traffic was up 2.2% to 4.15 billion RTKs.

Shanghai-based China Eastern Airlines reported November cargo traffic up 4.1% y-o-y to 416 million RTKs. The carrier’s international cargo traffic was up 4.7% to 319 million RTKs, while domestic traffic was up 3.5% to 87 million RTKs. For the year to date through November, China Eastern’s cargo traffic was up 8.2% to 4.32s billion RTKs.

Guangzhou-based China Southern Airlines reported November cargo traffic up 18.9% y-o-y to 386 million RTKs, led by a 26.6% jump in international traffic to 255 million RTKs, while domestic traffic was up 6.1% to 129 million RTKs. For the first eleven months of 2012, China Southern’s cargo traffic was up 14.8% to 3.77 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its October handle down 4.1% y-o-y to 117,000 tonnes. International volume fell 4.7% to 104,000 tonnes, while the much smaller domestic volume was down 3.3% to 7,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the year through November, Pactl’s handle was down 3.7% to 1.19 million tonnes.

Singapore Airlines continues to report declining demand, with November cargo traffic down 8.8% to 578 million RTKs. For the year through November, SIA’s cargo traffic was down 5.5% to 6.28 billion RTKs.

Europe & Middle East

Lufthansa Cargo reported its November traffic down 1.7% y-o-y to 770 million RTKs. While this is hardly a great result, it is considerably better than what the carrier has been reporting for most of this year. For the Lufthansa Group as a whole, November cargo traffic was almost flat with last year (down 0.4%) at 893 million RTKs. For the year through November, Lufthansa Cargo’s traffic was down 7.9% to 8.05 billion RTKs, while Group cargo traffic was somewhat better off, down 6.0% to 9.39 billion RTKs. Given that the European economy has been in serious trouble for some time, Lufthansa has reason to be pleased, and is in fact forecasting modest cargo growth in 2013.

Air France-KLM reported November traffic down 5.4% y-o-y to 886 million RTKs, with the once-strong Asia-Pacific trade lane down 11.0% to 341 million RTKs and the trans-Atlantic lane down 3.2% to 361 million RTKs. The carrier reported a cargo capacity reduction of 5.2% for the month, while passenger capacity was up slightly, clearly implying that AF-KLM is reducing its main-deck operations. For the year through November, AF-KLM’s cargo traffic was down 6.4% to 9.70 billion RTKs.

International Airlines Group (IAG, parent of British Airways and Iberia) reported November cargo traffic down 1.7% y-o-y to 525 million RTKs, but as has been the case since the BA/Iberia merger, the monthly decline hides a huge difference in the performance of the two carriers. BA’s cargo traffic in November was actually up 1.7% to 418 million RTKs, while Iberia continued to report steep declines – down 13.0% in November to 107 million RTKs. For the year through November, IAG Cargo’s traffic was down 1.5% to 5.58 billion RTKs.

Turkish Airlines continued to report results other carriers can only dream about, with November cargo volume up 31.5% y-o-y to 40,000 tonnes. For the first eleven months of 2012, Turkish’s cargo volume was up 24.6% to 418,000 tonnes.

Frankfurt Airport (FRA) reported its November freight handle up 2.3% y-o-y to 182,000 tonnes – the first monthly year-over-year gain in 2012. For the year through November, FRA’s handle was down 7.3% to 1,85 million tonnes.

London’s Heathrow Airport (LHR) reported its November handle up 1.0% y-o-y to 124,000 tonnes. For the year through November, LHR reported its handle down 1.1% to 1.34 million tonnes.

Americas

LATAM Airlines Group (parent of LAN and TAM), reported November cargo traffic down 3.7% y-o-y to 414 million RTKs. The carrier did not break down the data by carrier, but did say the decrease in traffic continues to be driven by weaker imports into Latin America, especially Brazil. For the first eleven months of 2012, LATAM reported cargo traffic down 2.9% to 4.06 billion RTKs.

United Airlines reported November cargo traffic down 5.3% y-o-y to 288 million RTKs. For the year through November, United’s cargo traffic was down 6.6% to 3.30 billion RTKs.

Delta Air Lines reported November traffic up 0.6% y-o-y to 283 million RTKs, in line with its year-to-date performance. For the first eleven months of 2012 Delta’s cargo traffic was up 0.8% to 3.20 billion RTKs.

American Airlines reported November cargo traffic up 0.8% y-o-y to 212 million RTKs. While not a very large increase, it is a definite improvement over the declines reported in recent months. For the first eleven months of 2012, American’s cargo traffic was down 1.6% to 2.35 billion RTKs.