November data is now in from many of the world’s major cargo carriers, handlers, and airports, and all indications point to another good month 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 Summary reports for the month from IATA, WorldACD, and the Airports Council International will not be published for some time, but the chart at right shows that earlier anecdotal evidence of a strong peak season was correct.
While most of the rest of world’s carriers are enjoying substantial growth, two of the big three Western European carriers – Air France KLM and IAG – continue to struggle. However, since Europe’s big airports show significant year-over-year increases, 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 October results it will be clear that the region is seeing growth, with Avianca taking market share from LATAM.
Now for the details…
Cathay Pacific Airways reported November cargo traffic up 13.1% y-o-y to 998 million RTKs. This is the ninth 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 first eleven months of 2014 was up 14.8% to 8.11 billion RTKs. Commenting on the November performance, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “The demand for air cargo shipments remained very robust throughout November, again driven primarily by strong traffic on the transpacific lanes. Our business was helped by the bottlenecks in seaports on the West Coast of the USA, leading to more shipments being moved by air. Intra-Asian traffic remained robust in November, and it was a better month for our cargo business in Europe, helped by big shipments of the new-release Beaujolais out of France. We carried close to 2,000 tonnes of the wine in total, most of it bound for Japan.”
Hong Kong International Airport reported cargo volume in November up 5.5% y-o-y to 421,000 tonnes – an all-time record for a single month. Export volume was up 5.6% to 279,000 tonnes, while import volume was up 5.2% to 143,000 tonnes. For the year through November, HKIA’s handle was up 6.4% to 3.99 million tonnes. Commenting on the November results, HKIA said: “This is the first time HKIA has handled over 400,000 tonnes of cargo in a single month. This achievement further solidifies HKIA’s position as the world’s busiest cargo airport. Boosted by the seasonal surge in both cargo shipments and passenger traffic demand, we expect across-the-board growth in traffic volume to continue as we approach the end of the year, setting new annual records for all traffic categories.”
Beijing-based Air China reported November cargo traffic up 20.0% y-o-y to 546 million RTKs. The carrier had been reporting steady, but unspectacular, growth through August, but that changed in September and October when Air China Cargo reported 22% and 24% y-o-y increases, respectively. November’s growth was driven by a 26.2% jump in international traffic to 401 million RTKs. Domestic traffic was up 5.0% to 135 million RTKs. For the year through November, Air China’s cargo traffic was up 12.1% to 5.14 billion RTKs.
Guangzhou-based China Southern Airlines reported another month of strong air freight demand growth, with November cargo traffic up 13.2% y-o-y to 500 million RTKs. International traffic rose 17.2% to 344 million RTKs, while domestic traffic was up 5.2% to 154 million RTKs. For the first eleven months of 2014 China Southern’s cargo traffic was up 16.9% to 4.60 billion RTKs.
While other Chinese carriers rode peak-season demand to double-digit gains, Shanghai-based China Eastern Airlines reported November cargo traffic down 1.5% y-o-y to 414 million RTKs. International traffic was down 0.2% to 322 million RTKs, and domestic traffic fell 6.7% to 80 million RTKs. For the first eleven months of 2014, China Eastern’s cargo traffic was down 1.2% to 4.38 billion RTKs.
Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its November handle up 13.8% to 147,000 tonnes, continuing Pactl’s pattern of strong growth in 2014. For November, Pactl’s international volume was up 13.9% to 147,000 tonnes, while the much smaller domestic volume was up 13.0% to 10,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the year through November, Pactl’s handle was up 16.3% to 1.37 million tonnes.
Europe & Middle East
Lufthansa Cargoreported November traffic up 1.4% y-o-y to 822 million RTKs. This does not sound like something to be excited about, given that worldwide cargo traffic for the month is likely to be up about 5%, but Lufthansa’s result comes despite ongoing strikes by pilots. Absent the strikes, the growth in traffic would likely have been significantly higher, and the result represents a turnaround from the disappointing performance so far this year. For the Lufthansa Group as a whole, November cargo traffic was up 2.3% to 969 million RTKs. On a regional basis, Group cargo traffic was up 4.6% to 423 million RTKs on the trans-Atlantic lane, down marginally (0.3%) to 426 million RTKs on the Asia-Pacific lane, and up 8.0% to 85 million RTKs on the Middle East/Africa lane. For the first eleven months of 2014, Lufthansa Cargo’s traffic was down 1.2% to 7.94 billion RTKs, while Group cargo traffic was down 0.2% to 9.43 billion RTKs.
Air France-KLM continued to report declining cargo traffic, with November down 3.6% % y-o-y to 859 million RTKs. The decline was the result of an 8.5% drop in traffic to/from the Asia Pacific region to 325 million RTKs, while traffic on the trans-Atlantic lane was down 0.8% to 358 million RTKs. For the first eleven months of 2014, AF-KLM’s cargo traffic was down 2.3% to 9.03 billion RTKs.
International Airlines Group reported November cargo traffic down 7.7% y‑o‑y to 492 million RTKs. The result was driven down by an 11.1% drop in cargo traffic at subsidiary carrier British Airways to 393 million RTKs. We point out that BA terminated the leases of three 747-8Fs in April of this year, cutting its capacity substantially. IAG’s other subsidiary carrier, Iberia, reported its September cargo traffic up 8.8% to 99 million RTKs. For the year through November, IAG’s cargo traffic was down 3.5% to 5.00 billion RTKs.
Etihad Airways reported November cargo volume up 7.20% y-o-y to 53,000 tonnes, an all time monthly record. For the first eleven months of 2014, Etihad’s cargo volume was up 17.0% to 518,000 tonnes. Worth noting is that the gains in volume do not appear to be coming at the expense of yield, as Etihad has consistently reported cargo revenue growth on par with, or greater than, the growth in volume. Looking ahead, the carrier said it expected total cargo volume for 2014 of more than 570,000 tonnes, a 17% increase on 2013.
Frankfurt Airport (FRA) reported its November cargo handle up 3.2% to 203,000 tonnes. For the first eleven months of 2014, FRA’s handle was up 2.0% to 1.99 million tonnes.
London’s Heathrow Airport (LHR) reported its November handle up 2.3% y-o-y to 136,000 tonnes. For the year through November, LHR’s handle was up 5.3% to 1.37 million tonnes
Amsterdam’s Schiphol Airport reported its November handle up slightly (0.4%) to 141,000 tonnes. For the first eleven months of the year, AMS’ handle was up 7.3% to 1.50 million tonnes.
LATAM Airlines Group reported November cargo traffic down 2.5% y-o-y to 394 million RTKs – very much in line with the trend of 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 first eleven months of the year, LATAM’s cargo traffic was down 2.9% to 3.95 billion RTKs.
United Airlines reported October cargo traffic up 8.2% to 324 million RTKs. This marks the thirteenth 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. For the first eleven months of 2014, United’s cargo traffic was up 12.2% to 3.30 billion RTKs
American Airlines Group reported November cargo traffic down 1.1% to 293 million RTKs. This is American’s first month of declining traffic demand since April 2013, following eighteen months of strong growth. For the year through November, American’s cargo traffic was up 6.4% to 3.12 billion RTKs.
Delta Air Lines reported October cargo traffic down 2.2% y-o-y to 287 million RTKs. For the first eleven months of 2014, Delta’s cargo traffic was up 0.8% to 3.18 billion RTKs.