Cargo on the upswing in June

With June results now in from many of the world’s major cargo carriers and airports, it appears that there has been something of a rebound from the lackluster performance of the industry in May.

Asia-based carriers in particular had a strong month, and we expect that when IATA and WorldACD publish their comprehensive June data in two weeks we will see worldwide cargo traffic up somewhere around 5% over June 2015.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported June cargo traffic up 4.6% y-o-y to 876 million RTKs, a sharp turn for the better from the 4.6% decline the carrier reported in May. Cargo volume for the month was up even more strongly, with Cathay reporting tonnage for the month up 7.1%,. Discussing the June results, Cathay’s General Manager Cargo Sales & Marketing Mark Sutch said: “Helped by the half-year end rush, the overall tonnage for June was healthy, thanks to growing feed from Asia. The Americas saw a surge in the export of seasonal produce into Asia, particularly from the West Coast. Our new Madrid service was well-received by the cargo community and we filled the west-bound leg with consumer goods and carried fresh produce on the return leg. However, overall yield remains challenging, as market supply continues to outstrip demand. We will continue to diversify and develop special products, some of which have shown encouraging results.” For the first half of this year, Cathay’s cargo traffic was down 2.3% to 5.00 billion RTKs.

Hong Kong International Airport reported cargo volume in May up 5.4% y-o-y to 368,000 tonnes – a turnaround similar to that reported by HKIA’s biggest customer, Cathay Pacific. Export and import volumes were up 5% and 2%, respectively, while transshipment volume jumped 11%. This follows three months of slight gains, and almost compensates for the dismal first two months of the year, leaving HKG’s handle for the first half of 2016 down just 0.8% from 1H15 at 2.01 million tonnes. Commenting on the June results, HKIA said: “Traffic to / from Southeast Asia and Mainland China outperformed other regions.”

Beijing-based Air China reported its May cargo traffic up 6.3% y-o-y to 596 million RTKs. The gain was driven by a 5.3% increase in International traffic to 454 million RTKs, and a bigger jump of 10.4% in domestic traffic 133 million RTKs. The much smaller regional traffic was up 3.0% to 10 million RTKs. For the six months of 2016 to date, Air China’s cargo traffic was up 5.0% to 3.32 billion RTKs.

Guangzhou-based China Southern Airlines reported May cargo traffic up 1.2% y-o-y to 513 million RTKs, continuing a long-standing pattern of growth that has seen only five monthly declines in the last four years – four years in which most months have seen China Southern reporting double-digit y-o-y increases in cargo traffic. The June gain came courtesy of a 4.7% increase in international cargo traffic to 377 million RTKs, which was enough to overcome a 7.3% drop in domestic traffic to 135 million RTKs. For the first half of 2016, China Southern’s cargo traffic was up 12.9% to 2.90 billion RTKs.

Shanghai-based China Eastern Airlines reported June cargo traffic up 3.8% y-o-y to 387 million RTKs – its first positive result this year. International traffic was up 5.1% to 307 million RTKs while the smaller domestic traffic fell 2.6% for the month to 70 million RTK. For the first six months of 2016, China Eastern’s cargo traffic was down 4.8% to 2.30 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported a 4.9% y-o-y increase in its June cargo handle to 136,000 tonnes. This is the fourth month of positive growth following lackluster results in the first two months, when Pactl’s handle was down 1.6%, and brings the total handle for the first half of 2016 to 780,000 tonnes, up 2.3% over 1H15.  International cargo in June was up 4.8% to 127,000 tonnes, while the much smaller domestic handle was up 6.0% to 9.000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport).

Singapore Airlines reported June cargo traffic up 5.9% y-o-y to 551 million RTKs, continuing the solid gains of recent months. For the first half of this year, SIA’s cargo traffic was up 4.2% to 3.28 billion RTKs.

Taiwan-based EVA Air reported May cargo traffic up 0.5% y-o-y to 297 million RTKs. While this may not seem a particularly good result, we point out that it is a considerable improvement on the double-digit declines EVA has been reporting for much of the past two years. For the first six months of 2016, EVA’s cargo traffic was down 9.4% to 1.68 billion RTKs.

Europe & Middle East

Lufthansa continued its trend of declining demand for cargo, reporting Group cargo traffic down 2.0% y-o-y to 829 million RTKs. Traffic to/from the Asia-Pacific region was up 1.7% to 382 million RTKs, but the total was dragged down by a 4.7% drop on the trans-Atlantic to 355 million RTKs, and a 9.1% drop to/from the Middle East/Africa to 61 million RTKs. For the first half of this year, Lufthansa’s cargo traffic was down 2.5% to 4.81 billion RTKs.

Air France-KLM continued its two-year trend of declines, reporting June cargo traffic down 9.4% to 680 million RTKs. For the year through June, AF-KLM’s cargo traffic was down 7.5% to 4.12 billion RTKs.

International Airlines Group reported June cargo traffic almost flat with last year (up 0.2% y-o-y to 429 million RTKs. For the first half of 2016, IAG’s cargo traffic was down 1.0% to 2.65 billion RTKs.

Turkish Airlines reported June cargo volume down 2.4% y-o-y to 62,000 tonnes, a reversal of its long-standing pattern of solid gains. For the first half of 2016, Turkish’s cargo volume was up 11.3% to 389,000 tonnes.

Frankfurt Airport (FRA) reported its June cargo handle up 3.3% y-o-y to 180,000 tonnes. For the first six months of 2016, FRA’s handle was up slightly (0.7%) to 1.05 million tonnes.

Amsterdam’s Schiphol Airport reported its June handle up 2.5% to 136,000 tonnes. For 2016 through June, AMS’ handle was up 1.6% to 797,000 tonnes.

London’s Heathrow Airport (LHR) reported its June handle up 2.1% y-o-y to 126,000 tonnes. For the first half of 2016, LHR’s handle was up 1.7% to 755,000 tonnes.

Americas

Cargo traffic continued to fall steeply at Chile-headquartered LATAM Airlines Group, which reported June traffic down 14.0% y-o-y to 253 million RTKs. For the first six months of 2016, LATAM’s cargo traffic was down 11.5% to 1.67 billion RTKs.

United Airlines reported June cargo traffic up 9.4% y-o-y to 334 million RTKs, its third consecutive month of positive results after a shaky start to the year. For 2016 through June, United’s cargo traffic was up slightly (0.5%) to 1.90 billion RTKs.

American Airlines Group reported June cargo traffic flat y-o-y at 296 million RTKs. For the first half of 2016, American’s cargo traffic was up slightly (0.5%) to 1.68 billion RTKs.

Delta Air Lines reported June cargo traffic down 7.3% y-o-y to 251 million RTKs. For the year through June, Delta’s cargo traffic was down 11.2% to 1.42 billion RTKs.