Air freight demand continues positive in February

Many of the world’s big cargo airlines and airports have now reported their February results, as shown in the chart at right. As is always the case, the variable timing of the Lunar New Year holiday in Asia makes data from the individual months of January and February unreliable on their own. However, with a fair amount of data now in for the combined January/February period, it seems safe to predict that the overall trend of increasing demand for air freight that began last year is continuing.

With the exception of Singapore Airlines, the Asian carriers that have reported February results are all showing year-to-date gains. And more importantly, so are the region’s big airports. Turning to Europe, Lufthansa continued to report modest gains, Air France reported its first positive results in what seems like forever, and IAG Cargo is almost in positive territory, reversing its own long-standing negative trend. Turkish Airlines continued to report gains that almost make it seem to be operating on some other planet, and we expect that its neighbors in the nearby Middle East will also show strong January/February results. In the Americas, the 2013 trend of US-based American Airlines outperforming its main competitors continued into 2014.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported February cargo traffic down 4.4% y-o-y to 549 million RTKs. This follows a 4.0% gain (on much higher traffic) in January, resulting in a 0.3% overall gain for the combined January/February period to 1.30 billion RTKs. Commenting on the February traffic report, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “Demand in the key Hong Kong and Mainland China markets plummeted following the beginning of Chinese New Year and the pick-up after the holiday was slow. However, by the middle of the month we began to see an increase in demand on the North America and Europe lanes and also for intra-Asia traffic, and by the end of February we were operating close to a full schedule. The Americas will remain a key focus for our cargo business and March sees two new destinations added to our freighter network – Mexico City and Columbus, Ohio.”

Hong Kong International Airport reported cargo volume in February down 1.0% y-o-y to 248,000 tonnes. Export volume was down 5.9% over February 2013 to 107,000 tonnes, while import volume was up 6.4%) to 141,000 tonnes. For the first two months of 2014, HKIA’s cargo handle was up 2.6%% to 600,000 tonnes.

Beijing-based Air China reported February cargo traffic up 19.80% y-o-y to 314 million RTKs. International traffic was up 20.0% to 217 million RTKs and domestic traffic was up 19.4% to 91 million RTKs. For the combined January/February period, Air China’s cargo traffic was up 12.8% to 722 million RTKs.

Shanghai-based China Eastern Airlines reported February cargo traffic up 4.2% y-o-y to 293 million RTKs. International traffic was up 3.8% to 229 million RTKs, while domestic traffic was up 7.1% to 56 million RTKs. For the first two months of 2014, China Eastern’s cargo traffic was up 2.0% to 674 million RTKs.

Guangzhou-based China Southern Airlines  reported February cargo traffic up 6.8% y-o-y to 249 million RTKs. International traffic was down slightly (0.2%) to 158 million RTKs, while domestic traffic was up 21.5% to 90 million RTKs. For the first two months of 2014, China Southern’s cargo traffic was up 3.1% to 611 million RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its February handle up 9.5% y-o-y to 81,000 tonnes. For the month, Pactl’s international volume was up 9.3% to 76,000 tonnes, while the much smaller domestic volume rose 12.3% to 5,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). This year-over-year growth is highly significant, because it follows a 14.8% volume increase in January – indicating that the timing of the Lunar New Year holiday did not push a huge amount of freight from one month into the other. Last year, for example, Pactl’s cargo volume was up 17% in January and down 15% in February. Neither result was meaningful on its own, but the combined twe-month increase of 1% was roughly in line with industry trends. The combined January/February total this year is up 12.5% over 2013, to 191,000 tonnes, indicating that there may well be a strengthening of the trend of demand growth that began in mid 2013.

Singapore Airlines continued its two-year trend of declining cargo traffic, with an 11.1% y-o-y drop in February  to 415 million RTKs. For the first two months of the year, SIA’s cargo traffic was down 5.5% to 924 million RTKs.

Europe & Middle East

Lufthansa Cargo reported February traffic up 2.0% y-o-y to 640 million RTKs. For the Lufthansa Group as a whole, February cargo traffic was up 2.3% to 764 million RTKs. Lufthansa reported growth in air freight demand on both the trans-Atlantic and Asia-Pacific trade lanes (up 6.6% and 1.6%, respectively),  while traffic on the relatively low-volume Middle East/Africa lane was down 13.9%. For the first two months of the year, Lufthansa Cargo’s traffic was up 2.9% to 1.25 billion RTKs, while Group cargo traffic rose 2.8% to 1.49 billion RTKs.

Air France-KLM reversed a long-standing trend of decline, reporting February cargo traffic up 3.5% y-o-y to 790 million RTKs. Traffic was up on both major trade lands: Up 6.1% to 344 million RTKs on the trans-Atlantic and up 3.2% to 275 million RTKs on the Asia-Pacific. For the combined January/February period, AF-KLMs cargo traffic was up 1.3% to 1.56 billion RTKs.

International Airlines Group reported February cargo traffic down 0.9% y‑o‑y to 430 million RTKs. Since IAG was formed, British Airways’ cargo performance has been better than that of Iberia, but  this month saw a reversal of that trend, with subsidiary carrier BA reporting cargo traffic down 2.2% to 351 million RTKs,  while Iberia saw cargo traffic rise 5.5% to 79 million RTKs. For the first two months of 2014, IAG’s cargo traffic was almost flat with last year (down 0.3%)  at 862 million RTKs.

Turkish Airlines continues to report exceptionally strong results, with February cargo volume up 24.6% y‑o‑y to 49,000 tonnes. For the first two months of 2014 Turkish’s cargo volume was up 29.9% to 97,000 tonnes.

Frankfurt Airport (FRA) reported its February cargo handle up 1.9% y-o-y to 159,000 tonnes. For the first two months of 2014, FRA’s handle was up 4.5% to 320,000 tonnes.

London’s Heathrow Airport (LHR) reported its February handle down 1.0% y-o-y to 110,000 tonnes. For the first two months of this year, LHR’s handle was up 2.1% to 222,000 tonnes.

Americas

The big three non-express carriers in the US reported mixed results in February, with. American Airlines continuing to report solid growth and Delta continuing to report significant declines. In the Southern hemisphere, LATAM reported a slight reduction in cargo traffic.

LATAM Airlines Group reported February cargo traffic down 0.8% y-o-y to 341 million RTKs, as capacity declined 5.7%. The company said the decrease in capacity was “a result of a decreased availability in the bellies of passenger aircraft in addition to a reduced freighter operation.” For the first two months of the year, LATAM’s cargo traffic was up slightly (o.1%) to 691 million RTKs.

United Airlines reported February cargo traffic down 2.9% to 357 million RTKs. For the first two months of 2014, United’s cargo traffic was up 0.7% to 621 million RTKs.

Delta Air Lines reported February cargo traffic down 9.3% y-o-y to 237 million RTKs. For the first two months of 2014, Delta’s cargo traffic was down 6.6% to 484 million RTKs.

American Airlines (now including US Airways) reported February cargo traffic up 11.2% y-o-y to 253 million RTKs. For the first two months of 2014, American’s cargo traffic was up 12.6% to 507 million RTKs.