A first look at July cargo traffic

Early reports from some of the world’s major cargo carriers and airports indicate that the trend of increasing demand that has been underway since mid-2013 will continue in July. The big carriers in the US, and many of those in Asia posted strong results. Two of Europe’s big three, while still lagging the rest of the world, at least posted small gains, while IAG posted a small decline.

Missing from the chart above are carriers and airports from the Middle East. However, it is likely that they will all report solid gains, and we expect that when IATA and WorldACD publish their July cargo reports, the growth trend will continue.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported July cargo traffic up 20.9% y-o-y to 865 million RTKs. After a flat year-over-year performance in January and February, Cathay has consistently reported monthly year-over-year jumps of between 17% and 21% from March, through july, and the carrier’s cargo traffic for the first seven months of of 2014 was up 13.4% to 5.49 billion RTKs. Commenting on the July traffic report, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “After a strong end to the second quarter, demand remained robust in July and the year-on-year tonnage increase was above expectations. Our performance was underpinned by a strong Hong Kong market and a significant surge in shipments out of the main manufacturing centres in Mainland China. We operated a full freighter schedule to all points in the Americas in July with good demand in both directions. We operated fewer freighters to Europe than originally planned though we are now making better use of the belly space in our Boeing 777-300ER passenger aircraft.”

Hong Kong International Airport reported cargo volume in July up 8.3% y-o-y to 370,000 tonnes. Export volume was up 7.5% to 235,000 tonnes, while import volume was up 9.7% to 135,000 tonnes. For the year through July, HKIA’s handle was up 7.5% to 4.46 million tonnes. Commenting on the July results, HKIA said: “The growth in cargo throughput last month was driven mainly by transshipments, which was up 23% from a year ago. During the month, cargo throughput to/from Mainland China and North America improved most significantly compared to other key regions.”

Beijing-based Air China reported July cargo traffic up 4.4% y-o-y to 457 million RTKs, continuing the pattern of steady growth it has seen for most of the year. International traffic in July was up 65.3% to 339 million RTKs while domestic traffic was down 0.7% to 107 million RTKs. For the first seven months of this year, Air China’s cargo traffic was up 7.8% to 3.02 billion RTKs.

Guangzhou-based China Southern Airlines  reported yet another month of exceptional air freight demand growth, with July cargo traffic up 21.5% y-o-y to 432 million RTKs. International traffic leaped 27.5% to 310 million RTKs, while domestic traffic was up 8.3% to 121 million RTKs. For the year through July, China Southern’s cargo traffic was up 16.8% to 2.75 billion RTKs.

Shanghai-based China Eastern Airlines reported July cargo traffic down 1.0% y-o-y to 418 million RTKs, the fourth consecutive month of negative growth after a promising first quarter. International traffic was flat at 339 million RTKs, while domestic traffic was down 7.0% to 69 million RTKs. For the first seven months of 2014, China Eastern’s cargo traffic was flat with the previous year at 2.71 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its July handle up 23.0% to 119,000 tonnes. This follows jumps of between 13% and 15% for the first six months of the year, but we point out that some of the increase may have come through the addition of new customers rather than through organic growth. For July, Pactl’s international volume was up 24.4% to 122,000 tonnes, while the much smaller domestic volume was up 3.6% to 7,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the first seven months of 2014, Pactl’s handle was up 15.1% to 817,000 tonnes.

Singapore Airlines reported July cargo traffic down 3.2% y-o-y to 535 million RTKs, continuing its long-term trend of mid-single-digit declines. For the year through July, SIA’s cargo traffic was down 3.7% to 3.09 billion RTKs.

Europe & Middle East

Lufthansa Cargoreported July traffic down slightly (0.5%) y-o-y to 738 million RTKs. For the Lufthansa Group as a whole, July cargo traffic was up slightly (0.3%) to 876 million RTKs. For the first seven months of 2014, Lufthansa Cargo’s traffic was down 1.7% to 4.90 billion RTKs, while Group cargo traffic was down 0.7% to 5.84 billion RTKs. Lufthansa said its total cargo capacity in July was up slightly, despite a reduction of its main-deck capacity.

Air France-KLM reported June cargo traffic down 0.9% y-o-y to 841 million RTKs. Traffic was up 0.9% on the trans-Atlantic lane but down 2.7% on the Asia-Pacific lane, and down 2.8% on the Africa/Middle East lane. The July result continues the trend of very small gains and declines seen so far this year, leaving the carrier’s cargo traffic for the year through July almost flat (down 0.1%) with 1H13 at 5.77 billion RTKs.

International Airlines Group reported July cargo traffic down 3.0% y‑o‑y to 454 million RTKs. Subsidiary carrier British Airways reported its traffic for the month down 4.9% to 371 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 relatively little, 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 6.5% to 82 million RTKs, For the first seven months of 2014, IAG’s cargo traffic was down 2.4% to 3.15 billion RTKs.

Turkish Airlines reported its lowest monthly year-over-year growth in what seems like forever, with July cargo volume up just 3.0% to 50,000 tonnes. Whether this represents the end of the 20% to 30% growth the carrier has been reporting for the past several years, or whether it is a one-month anomaly, remains to be seen. For the year through July, Turkish’s cargo volume was up 21.4% to 379,000 tonnes.

Frankfurt Airport (FRA) reported its July cargo handle up 1.1% y-o-y to 181,000 tonnes. For the first seven months of 2014, FRA’s handle was up 2.6% to 1.24 million tonnes.

London’s Heathrow Airport (LHR) reported its July handle up 7.8% y-o-y to 128,000 tonnes. For the year through July, LHR’s handle was up 4.6% to 855,000 tonnes.

Americas

The big three non-express carriers in the US reported are now all reporting strong year-over-year growth in cargo traffic, while LATAM (one of the two big South American cargo players) is struggling..

LATAM Airlines Group reported July cargo traffic down slightly (0.4%) y-o-y to 346 million RTKs, continuing a year-long trend of declining cargo traffic. Commenting on the result, the company said “the cargo traffic decrease was driven by weaker imports into Latin America.” LATAM also noted that cargo capacity was down 5.3%, “as a result of a decreased availability in the bellies of passenger aircraft, in addition to a reduce freighter operation.” For the seven months of the year, LATAM’s cargo traffic was down 3.8% to 2.47 billion RTKs.

United Airlines reported July cargo traffic up 29.0% to 310 million RTKs. This marks the ninth month of a turnaround that started in November 2013. Prior to that point, United had for some time been reporting what may have been the worst results for any major cargo carrier in the world. Its cargo traffic for the first ten months of 2013 was down over 12% from 2012, and 2012 itself was a terrible year. However, until July, the carrier’s cargo traffic growth during the turnaround has been in the mid-single-digit range, and it remains to be seen whether the July result is a one month exception, or whether the carrier will return to less impressive gains. For the first seven months of 2014, United’s cargo traffic was up 9.1% to 2.05 billion RTKs

Delta Air Lines reported May cargo traffic up 8.4% y-o-y to 346 million RTKs. For the first seven months of 2014, Delta’s cargo traffic was up 0.5% to 1.97 billion RTKs.

American Airlines (now including US Airways) reported July cargo traffic up 9.5% to 291 million RTKs. As is the case with United, this is a continuation of a trend of growth, although for American the growth began earlier and has, until this month, been stronger. For the year through July, American’s cargo traffic was up 9.1% to 1.98 billion RTKs.