Cargo demand growth continues in December

December data is now in from many of the world’s major cargo carriers, handlers, and airports, and all indications point to another good month – and a good year – for the air freight industry. Summary reports for the month from IATA, WorldACD, and the Airports Council International will not be published for some time, but the chart at right shows that the positive growth seen throughout the year continued in December.

However, the joy was not shared evenly throughout the world. While most of the rest of world’s carriers are enjoying substantial growth, Western Europe’s big three carriers – Air France KLM and IAG – continue to struggle. Given that Europe’s big airports show significant tonnage growth, we believe that the carriers are losing market share, rather than that the overall market is shrinking in the region. Regarding Latin America, we expect that once the carriers in the Avianca group report their December and full-year results, it will be clear that Avianca is taking market share from LATAM.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported December cargo traffic up 15.0% y-o-y to 934 million RTKs. This is the tenth consecutive month in which Cathay has reported year-over-year jumps of between 13% and 21% (after a flat January and February), and the carrier’s cargo traffic for the full year was up 14.8% to 10.04 billion RTKs. Commenting on the December performance, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “Following on from a strong November, demand for cargo shipments remained robust right up until the beginning of the Christmas holidays in key markets. Traffic was again driven by strong demand out of Hong Kong and Mainland China, particularly on transpacific routes, and we also saw solid shipments on the main intra-Asia lanes. Demand fell away when the holidays kicked in, as expected, though the markets began to pick up again from the second week of January.”

Hong Kong International Airport reported cargo volume in December up 3.1% y-o-y to 387,000 tonnes. Export volume was up 3.3% to 246,000 tonnes, while import volume was up 2.8% to 141,000 tonnes. For the full year, HKIA’s handle was up 6.0% to a record 4.38 million tonnes. Commenting on the December results, HKIA said: “Cargo throughput to/from North America and Southeast Asia increased most significantly compared to other key regions.” Looking ahead, the Airport was optimistic about 2015, saying it expected both cargo volume and passenger numbers to grow 4% – 6%.

Beijing-based Air China reported that its December cargo traffic jumped 27.5% y-o-y to 552 million RTKs. The carrier had been reporting steady, but unspectacular, growth through August, but that changed in September, October, and November when Air China Cargo reported 22%, 24%, and 20% y-o-y increases, respectively. December’s growth was driven by a staggering 37.4% jump in international traffic to 404 million RTKs. Domestic traffic was up 5.7% to 138 million RTKs. For the full year, Air China’s cargo traffic was up 13.5% to 5.69 billion RTKs.

Guangzhou-based China Southern Airlines reported another month of strong air freight demand growth, with December cargo traffic up 13.5% y-o-y to 451 million RTKs. International traffic rose 15.8% to 294 million RTKs, while domestic traffic was up 9.0% to 156 million RTKs. For the full year China Southern’s cargo traffic was up 16.9% to 5.06 billion RTKs.

While other Chinese carriers rode peak-season demand to double-digit gains, Shanghai-based China Eastern Airlines reported December cargo traffic down 5.8% y-o-y to 422 million RTKs. International traffic was down 1.3% to 331 million RTKs, and domestic traffic fell 10.4% to 82 million RTKs. For the full year, China Eastern’s cargo traffic was down 1.4% to 4.80 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its December handle up 14.6% to 137,000 tonnes, continuing Pactl’s pattern of strong growth in 2014. For December, Pactl’s international volume was up 14.3% to 127,000 tonnes, while the much smaller domestic volume was up 18.7% to 10,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the full year, Pactl’s handle was up 16.2% to record 1.50 million tonnes.

Singapore Airlines reported December cargo traffic down 1.7% y-o-y to 527 million RTKs, continuing its long-term trend of mid-single-digit declines. For the full year, SIA’s cargo traffic was down 3.0% to 6.49 billion RTKs.

Europe & Middle East

Lufthansa Cargoreported December traffic down 2.9% y-o-y to 675 million RTKs. For the Lufthansa Group as a whole, November cargo traffic was down 1.3% to 816 million RTKs. On a regional basis, Group cargo traffic was up 3.6% to 370 million RTKs on the trans-Atlantic lane, but down 6.5% to 343 million RTKs on the Asia-Pacific lane. On the less busy Middle East/Africa land, traffic was up 2.1% to 72 million RTKs. For the full year, Lufthansa Cargo’s traffic was down 1.4% to 8.61 billion RTKs, while Group cargo traffic was down 0.4% to 10.25 billion RTKs

Air France-KLM continued to report declining cargo traffic, with December down 4.2% % y-o-y to 813 million RTKs. The decline was the result of an 9.3% drop in traffic to/from the Asia Pacific region to 286 million RTKs, while traffic on the trans-Atlantic lane was up 0.8% to 354 million RTKs. For the full year, AF-KLM’s cargo traffic was down 2.4% to 10.09 billion RTKs.

International Airlines Group reported December cargo traffic down 4.2% y‑o‑y to 458 million RTKs. The results were similar for IAG’s two subsidiary carriers, with a 4.2% drop in cargo traffic at British Airways to 363 million RTKs, and a 4.0% decline at Iberia to 95 million RTKs. For the full year, IAG’s cargo traffic was down 3.5% to 5.45 billion RTKs.

Turkish Airlines reported December cargo volume up 10.3% y-o-y to 59,000 tonnes, continuing its year-long pattern of gradually diminishing gains – an inevitability, as the 25% to 35% gains of the past could not go on forever. For the full year 2014, Turkish’s cargo volume was up 18.2% to 668,000 tonnes.

Frankfurt Airport (FRA) reported its December cargo handle down 1.4% to 176,000 tonnes. For the full year, FRA’s handle was up  1.7% to 2.16 million tonnes.

London’s Heathrow Airport (LHR) reported its December handle up 6.2% y-o-y to 126,000 tonnes. For the full year, LHR’s handle was up 5.3% to 5037 million tonnes.

Amsterdam’s Schiphol Airport reported its December handle up slightly (0.7%) to 134,000 tonnes. For the full year, AMS’ handle was up 6.7% to 1.63 million tonnes.

Americas

LATAM Airlines Group reported December cargo traffic down 7.6% y-o-y to 369 million RTKs – a significantly bigger drop than the low-single-digit declines the carrier has reported for much of 2014. Commenting on the result, the company said the cargo traffic decrease was driven by weaker demand for imports into Latin America. LATAM also noted that cargo capacity was down 3.8%, “a result of reduced freighter operation in addition to decreased availability in the bellies of passenger aircraft.” For the full year, LATAM’s cargo traffic was down 3.3% to 4.32 billion RTKs.

United Airlines reported December cargo traffic up 13.8% to 328 million RTKs. This marks the fourteenth 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. Until July, the carrier’s cargo traffic growth during the turnaround was in the mid-single-digit range, but July saw a jump of almost 30%, and clearly, whatever fueled that jump carried on through August and September (up 25.8% and 23.2%, respectively) before falling back to 8.2% in November and 13.8% in December. For the full year, United’s cargo traffic was up 12.4% to 3.63 billion RTKs

American Airlines Group reported December cargo traffic up 3.2% to 288 million RTKs. Following a slight decline in November, the December gain sees American return to a pattern of growth that began in April 2013. For the full year, American’s cargo traffic was up 6.4% to 3.41 billion RTKs.

Delta Air Lines reported December cargo traffic up 0.7% y-o-y to 276 million RTKs. For the full year, Delta’s cargo traffic was up 0.8% to 3.46 billion RTKs.