October blues… Or: Peak season? What peak season?

Many of the world’s major carriers and airports have now reported their October cargo data, and, as shown in the chart at right, the news is not especially good, particularly in light of the fact that October 2011 was a bad month and so the comparison should have been an easy one.

As for the carriers and airports that we normally include, but which have not yet reported, early indications are that Singapore Airlines and Singapore’s Changi Airport will continue to show declines, while Dubai should report reasonably strong growth. Overall, however, it appears that demand for air freight continued to be weak in October.

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 reported October cargo traffic down 2.8% to 782 million RTKs, although cargo volume was up 1.9% to 139,000 tonnes. Commenting on the monthly figures, the carrier’s General Manager Cargo Sales & Marketing James Woodrow said: “We saw a small uptick in demand in October, driven by the launch of a number of new hi-tech consumer products out of key manufacturing centers in the region. Following a lull in demand over the long National Day holiday period in Mainland China, we were therefore able to operate close to a full freighter schedule by the end of the month. However, in the longer term, demand from Asia to Europe will continue to be affected by the economic fragility in a number of euro-zone countries.” For the first ten months of 2012, Cathay’s cargo traffic was down 9.1% to 7.28 billion RTKs.

Hong Kong Air Cargo Terminals (Hactl, which handles close to 80% of the cargo at Hong Kong International Airport) reported its October handle up 2.1% y-o-y to 240,000 tonnes. The increase came despite a 4.5% drop in export volumes to 129,000 tonnes, as imports were up 5.7% to 53,000 tonnes and the increasingly important transshipment volume jumped 14.7%, also to 53,000 tonnes. Hactl’s handle for the first ten months of 2012 was up 1.0% to 2.26 million tonnes, with a 10.6% increase in transshipment volumes overcoming decreases in exports and imports of 1.5% and 3.2%, respectively.

Beijing-based Air China reported October cargo traffic up 6.1% y-o-y to 405 million RTKs. The gain was driven by a 9.9% increase in domestic cargo traffic to 84 million RTKs, although international traffic still grew by a healthy 4.9% to 312 million. For the first ten months of 2012, Air China’s cargo traffic was almost flat (up just 0.1%) with last year at 3.69 billion RTKs.

Shanghai-based China Eastern Airlines reported October cargo traffic down 3.8% y-o-y to 390 million RTKs. The carrier’s international cargo traffic was down 4.1% to 299 million RTKs, while domestic traffic was up 1.1% to 82 million RTKs. For the year to date through October, China Eastern’s cargo traffic was up 8.7% to 3.90 billion RTKs.

Guangzhou-based China Southern Airlines reported October cargo traffic up 14.9% y-o-y to 360 million RTKs, led by a 23.8% jump in international traffic to 240 million RTKs, while domestic traffic was up only slightly (0.3%) to 118 million RTKs. For the first ten months of 2012, China Southern’s cargo traffic was up 14.4% to 3.38 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its October handle down 6.7% y-o-y to 108,000 tonnes. International volume fell 6.8% to 101,000 tonnes, while the much smaller domestic volume was down 5.5% to 7,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the year through October, Pactl’s handle was down 4.6% to 1.07 million tonnes.

Europe & Middle East

Europe’s biggest cargo carrier Air France-KLM reported October cargo traffic down 6.7% y-o-y to 915 million RTKs, dragged down by a 9.9% decline on the Asia-Pacific trade lane to 358 million RTKs. Traffic on the trans-Atlantic lane was down 4.9% to 369 million RTKs. For the year through October, AF-KLM’s cargo traffic was down 6.5% to 8.81 billion RTKs.

Lufthansa Cargo reported October traffic down 10.1% y-o-y to 752 million RTKs. For the Lufthansa Group as a whole (i.e. including subsidiary carrier SWISS) cargo traffic was down 7.8% to 877 million RTKs. For the first ten months of 2012, Lufthansa Cargo’s traffic was down 8.5% to 7.28 billion RTKs, while cargo traffic for the Group was down 6.6% to 8.50 billion RTKs.

International Airlines Group (parent of British Airways and Iberia) reported October cargo traffic down 0.6% y-o-y to 530 million RTKs, but as has been the case almost since the merging of the two carriers, the combined cargo traffic figure masks a huge split: British Airways’ cargo traffic in October was up 4.0% to 421 million RTKs – a solid result in difficult times. Iberia Cargo, on the other hand, reported traffic down 14.9% to 109 million RTKs. For the first ten months of 2012, IAG’s total cargo traffic was down 0.8%, again masking growth of 2.6% at BA and a drop of 13.1% at Iberia.

Turkish Airlines reported October cargo volume up just 3.3% y-o-y to 38,000 tonnes. We say “just 3.3%%” because for the past several years Turkish’s monthly cargo volume has been increasing at staggering rates – from 20% to as much as 38% on a year-over-year basis. Whether October’s relatively small gain of 3.3% is an indication that Turkish has reached a plateau and will now see an end to the huge increases, or is merely an oddity is not yet known. Obviously, no carrier can sustain a compound annual growth rate of over 20% forever, so we will be interested to see what Turkish reports over the next few months. For the year through October, Turkish reported cargo volume up 23.9% to 379,000 tonnes.

Frankfurt Airport (FRA) reported its October handle down 7.0% y-o-y to 178,000 tonnes. For the first ten months of 2012, FRA’s handle was down 8.1% to 1.71 million tonnes. While some of the decline in both the monthly and year-to-date volumes is obviously the result of the generally tough economic conditions in Europe and other parts of the world, we point out that FRA was hit late last year with a ban on night time aircraft movements – something that hits freighter operations disproportionately hard.

Cargo volume at London’s Heathrow Airport (LHR) was down 2.3% y-o-y to 125,000 tonnes. For the year-to-date through October, LHR’s cargo handle was down 1.4% to 1.22 million tonnes.

Americas

LATAM Airlines Group (parent of LAN and TAM) reported October cargo traffic down 3.7% y-o-y to 398 million RTKs. This is the first month for which LATAM’s published cargo figures include TAM, rather than just LAN, allowing us a look at TAM’s operation. The company did not break out separate figures for the two carriers, but comparing October to September (when LAN reported cargo traffic of 290 million RTK’s) shows that TAM’s monthly cargo traffic is likely a little over 100 million RTKs per month. Regarding the continued declines in traffic, LATAM pointed to weaker imports into Latin America, especially Brazil.  For the first ten months of 2012, LATAM’s cargo traffic was down 2.8% to 3.65 billion RTKs.

Delta Air Lines reported October cargo traffic down 1.3% y-o-y to 300 million RTKs. For the first ten months of 2012, Delta’s cargo traffic was up 0.8% to 2.92 billion RTKs.

United Airlines (including Continental) reported October cargo traffic down 10.3% y-o-y to 300 million RTKs. For the first ten months of 2012, American’s cargo traffic was down 6.8% to 3.01 billion RTKs.

American Airlines reported October cargo traffic down 7.6% y-o-y to 207 million RTKs. For the first ten months of 2012, American’s cargo traffic was down 1.9% to 2.14 billion RTKs.