August airfreight demand data reveals more of the same

Airports and carriers almost unanimously reported lackluster August 2019 cargo traffic. This was no surprise given market performance over the past quarter, as air freight demand responds to slowing global trade.

Indeed, FedEx cited lower volumes of German exports to China as a factor in its weaker-than-expected 1QFY20 results. This was echoed by Frankfurt Airport’s results and elsewhere as the trade war between the United States and China impacts the global economy.  

There is little change from July 2019, for which IATA reported a year-over-year decline of 3.2%. When IATA releases its August traffic report later this month, Cargo Facts expects total market declines between 3.5-4.5%.still Carriers remain optimistic that September will be better and that the market will see something of a peak season.

Turning to the results on a carrier-by-carrier basis:

Asia-Pacific  

Cathay Pacific Group reported August traffic down 11.6% year-over-year to 925 million freight tonne kilometers (FTKs) on tonnage that was 14.0% lower at 161,000 tonnes.  Year-to-date, Cathay’s traffic is 7.1% lower compared to the first eight months of 2018.  

Commenting on the cargo performance, Ronald Lam, chief customer and commercial officer, blamed the lower performance on “continued headwinds” from softening across all  major markets, “driven in particular by slow demand over the holiday season in different parts of the world, the effects of tropical storms and disruptions at Hong Kong International Airport.” Lam expects September to improve “slightly” and still holds out hope for a peak season.

Singapore Airlines reported August cargo traffic down 10.2% y-o-y to 535 million FTKs, while cargo tonnage declined by 8.8% to just over 102,000 tonnes. Year-to-date, cargo traffic is down 6.2% to 4.6 billion billion FTKs.    

Air China Cargo’s traffic for August was 6.2% lower than in August 2019 at 401 million FTKs. Overall tonnage decreased 2.5% to about 118,000 tonnes. For the first eight months of 2019, traffic is down 3.0% and tonnage is 1.4% lower than during the same period in 2018.     

China Southern’s traffic for August was down 3.0% to 642 million FTKs. Year-to-date through August, traffic is 0.3% lower at 4.9 billion FTKs. Domestic traffic for the carrier was up 5% y-o-y, while international traffic decreased by 5.4%.

EVA Air’s cargo traffic rose 1.9% year-over-year for the month of August to 398 million FTKs. Year-to-date through August, EVA’s cargo traffic is down 8.8% year-over-year, and tonnage is down 9.9%. 

Hong Kong International Airport (HKG) reported an 11.5% drop in August cargo throughput to 432,000 tonnes. Year-to-date through August, tonnage is down 7.9%.

Shanghai Pudong International Airport Cargo Terminal (Pactl) reported August cargo throughput of 144,000 tonnes, down 11.6% from August 2018. The terminal’s smaller domestic cargo operation reported year-over-year growth of 16.4% in August to 8,400 tonnes, and is up 4.4% year-to-date.

International cargo, meanwhile, slipped 12.9% for the month to 135,000 tonnes and is 10.1% lower for the first seven months of the year.  Year-to-date through August, PACTl’s throughput is down 10.2% to 1.1 million tonnes. 

Europe & Middle East 

Lufthansa Group reported a slight improvement in y-o-y August traffic, which increased by 1.5% to 898 million FTKs. The main inhibitor to growth can be traced to the carrier’s Asia-Pacific traffic, which declined 8.0% y-o-y, offsetting growth in all other regions that ranged from single-digit (Americas/Europe) to sharply higher (Middle East/Africa). Over the first eight months of 2019, Lufthansa has seen a 1.6% decline in its overall volumes to 7.03 billion FTKs.

Air France-KLM’s August cargo traffic declined by 5.7% y-o-y to 699 million FTKs. Both Air France and KLM saw similar declines in traffic, of 5.4% y-o-y to 306 million FTKs and 5.8% to 393 million FTKs, respectively, for the month. For the first seven months of the year, the group’s total cargo activity was down 0.9% y-o-y to 5.5 billion FTKs. Year-to-date, Air France’s demand was up 2.6% y-o-y to 2.4 billion FTKs, while KLM saw a decline of 3.5% to 3.0 billion FTKs.

International Airlines Group  reported group traffic down 6.1% y-o-y in August to 443 million FTKs. Traffic flatlined at Aer Lingus and increased at Iberia, which both account for a relatively small share of IAG’s overall cargo traffic. Meanwhile, traffic declined by 8.9% y-o-y at British Airways for the month, which accounts for most of the Group’s traffic. From January to August, IAG’s cargo traffic flatlined with 0.1% growth y-o-y at 3.1 billion FTKs, compared to the same period the year prior.

Frankfurt Airport (FRA) reported August cargo throughput down 5.2% to 173,000 tonnes on lower export volumes to China, a situation the airport links to the ongoing trade war between the United States and China. For the first eight months of the year, throughput was 2.6% lower at 1.42 million tonnes.  

Schiphol Airport (AMS) reported a 10.9% decline in cargo throughput to 131,000 tonnes for the month of August. The drop resulted from of the continued decline in the number of freighter movements, which were down 10.0% compared to August 2018. Although better utilization of bellyhold capacity on some routes has prevented steeper drops, declines are notable for cargo moving to and from the Far East and North America. 

Turkish Cargo reported a 11.5% y-o-y increase in cargo volumes during August, to just over 130,000 tonnes. For the first eight months of 2019, cargo volumes are up 9.6% y-o-y to more than 985,000 tonnes.

Heathrow Airport (LHR) reported a 10.4% y-o-y decline in June cargo throughput to 127,000 tonnes. Year-to-date tonnage was 5.4% lower at 1.06 million tonnes. 

Americas 

LATAM Cargo’s August traffic decreased 5.2% year-over-year to 283 million FTKs. Year-to-date, traffic is down 1.9% to 2.3 billion FTKs.  

Delta Air Lines reported a decline of 13.7%, to about 170 million FTKs. Year-to-date, Delta’s cargo traffic is down by 8.8%. 

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