The International Air Transport Association released its air freight market analysis for May 2016, showing a 0.9% year-over-year increase in worldwide cargo traffic (in freight tonne kilometers flown). International cargo traffic, which accounts for 87% of total traffic, was up 0.8%. For the first five months of 2016, IATA reported total traffic down 0.5% and international traffic down 0.9%.
The IATA May result is very much in line with that published by WorldACD last week, showing worldwide air cargo volume (in chargeable weight) up 0.5% y-o-y for the month. And both the IATA and WorldACD summaries are in line with our prediction two weeks ago that May traffic would be roughly flat with last year.
While neither May 2016 nor May 2015 featured any one-time events that might affect the year-over-year comparison, the year-to-date data are harder to interpret. Trans-Pacific air freight volumes received a huge boost in the first quarter of 2015 from the combined impact of the labor dispute at the US West Coast ocean ports and a massive automobile airbag recall in the US. IATA has said, and we agree, that adjusting for these impacts, underlying growth air freight traffic in the first quarter of 2016 was probably around 3%. This appeared to be confirmed in April, which saw traffic up 3.2% y-o-y, so the fall-off to 0.9% growth in May raises the question of whether this is just an anomaly, or whether it is the beginning of a trend.
IATA appears to believe May was an anomaly, and forecasts full-year 2016 FTK growth of 2.1%. Given that we are almost halfway through the year, and currently looking at a 0.5% year-to-date decline, this implies monthly year-over-year growth of somewhere around 4% for the remainder of the year.
Turning back to May, one interesting datum in the chart is the strong growth in traffic reported by carriers in Europe. Clearly, the well-publicized troubles at Air France-KLM and Lufthansa are not afflicting the rest of Europe’s carriers.