Momentum continues in October

October results are in for many of the world’s major cargo carriers and airports and they are, for the most part, excellent. Among Europe’s “big three”, only Air France-KLM reported negative growth. Even so, the 3.5% drop in cargo traffic reported by Air France-KLM was a vast improvement over previous months. A similar situation exists in North America where United and American reported strong double-digit growth while the third carrier, Delta Air Lines bucked the trend with a 5.9% drop in October cargo traffic.

Based on these individual reports, we expect that when IATA publishes its summary of worldwide air freight demand for October, we will see year-over-year growth of 6% or higher. Looking ahead, November is also said to be off to a strong start.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported October cargo traffic up 3.2% y-o-y to 985 million RTKs, continuing the sharp upswing that began in June after five months of declining demand. Discussing the October results, Cathay’s General Manager Cargo Sales & Marketing Mark Sutch said: “Overall cargo demand in October was fairly strong and tonnage continued to grow. We had some negative impact on our forecasts during the month from typhoon disruptions and unscheduled aircraft maintenance but overall exports from Europe, Asia and Mainland China were robust. The team continues to work hard to push up the yield, and the rates are getting back to peak season levels. The new twice-weekly service to Portland, introduced in early November, further strengthened our US network.” For the first ten months of this year-to-date, Cathay’s cargo traffic was up 0.4% from 2015, to 8.70 billion RTKs.

Hong Kong International Airport reported cargo volume in October up 7.1% y-o-y to 420,000 tonnes – echoing the strong performance reported by Cathay Pacific, the Airport’s biggest customer. After a slow start to 2016, the gains that began in June have brought HKIA’s handle for the year to date up 1.9% to 3.7 million tonnes. Commenting on the October results, HKIA said: “The strong growth was mainly attributed to the robust 13% year-on-year growth in transshipments. Amongst the key trading regions, traffic to / from Europe and Southeast Asia increased most significantly during the month.”

Beijing-based Air China reported its October cargo traffic up 9.4% y-o-y to 609 million RTKs. The cumulative gain was led by a 14.7% surge in domestic traffic, which grew to 149 million RTKs. International traffic meanwhile, rose 8.2% to 452 million RTKs. Regional traffic however, continued to shrink, dropping 7.2% to 9 million RTKs. For the first ten months of 2016 to date, Air China’s cargo traffic was up 5.6% to 5.70 billion RTKs.

Guangzhou-based China Southern Airlines reported October traffic up 4.6% y-o-y to 556 million RTKs. International traffic was up 9.9% to 398 million RTKs, while domestic traffic fell 6.92% to 155 million RTKs. The much smaller regional traffic was up 17.0% to 2.1 million RTKs. For the first ten months of 2016, China Southern’s cargo traffic was up 9.2% to 4.98 billion RTKs.

Shanghai-based China Eastern Airlines reported October cargo traffic up 5.1% y-o-y to 445 million RTKs, extending its positive growth trend to four consecutive months. International traffic was up 6.2% to 349 million RTKs while the smaller domestic traffic grew 2.5%, to 86 million RTK. For the first ten months of 2016, China Eastern’s cargo traffic was still down slightly (0.5%) to 3.99 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported an 8.9% y-o-y increase in its October cargo handle, which grew to 154,000 tonnes, its largest handle ever. This is the eighth month of positive growth following lackluster results in during the first two months, when Pactl’s handle was down 1.6%. PACTL’s total handle for the first ten months of 2016 grew 3.2% to 1.35 million tonnes, up 3.0% over 2015.  International cargo in October was up 8.7% to 144,000 tonnes, while the much smaller domestic handle jumped 12.7% to 9,500 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport).

Taiwan-based EVA Air is another turnaround story. The carrier reported October cargo traffic up 8.6% y-o-y to 336 million RTKs, its fifth consecutive positive result after a year-and-a-half of declines, and its busiest month yet since March 2015.  For the first ten months of 2016, EVA’s cargo traffic was still down 4.2% to 2.93 billion RTKs.

Europe & Middle East

Demand recovery at Lufthansa that started in July has continued into October, with Group cargo traffic up 4.8% y-o-y for the month, to 937 million RTKs. The growth was led by a 6.3% increase in traffic on the Asia-Europe lane which grew to 431 million RTKs. The trans-Atlantic lane also did well, with traffic up 4.3% to 403 million RTKs, while traffic to/from the Middle East and Africa was down 1.2% to 68 million RTKs. For the first ten months of 2016, Lufthansa’s cargo traffic was up 0.3% over the same period in 2015 with 8.9 billion RTKs.

Air France-KLM continued its multi-year trend of declines, reporting October cargo traffic down 3.5% to 758 million RTKs. For the year through October, Air France-KLM’s cargo traffic was down 6.7% to 7.0 billion RTKs. Of the two carriers in the group, Air France actually reported moderately strong growth in air freight demand, with October traffic up 3.2% to 318 million RTKs, but this was negated at the group level by a 7.8% drop at KLM with reported traffic of 440 million RTKs.

International Airlines Group, like Lufthansa, reported accelerating demand for cargo in October, with Group traffic up 5.9% y-o-y to 504 million RTKs. Year-to-date IAG’s cargo traffic was up 3.3% to 4.49 billion RTKs. Both IAG subsidiary carriers reported strong growth in October. British Airways reported cargo traffic up 6.4% to 382 million RTKs, while Iberia traffic grew of 6.7 % to 111 million RTKs.

AirBridgeCargo was the star of the air cargo show in October, as it has been for all of 2016. The Russia-based all-cargo carrier reported October cargo volume up 30% to 57,600 tonnes. For the year-to-date ABC said cargo volumes were up 29% to 483,000 tonnes, but did not provide the number of RTKs flown.

Passenger traffic may have taken a big dive in Turkey, but Turkish Airlines  continued to report strong growth in cargo volumes. October cargo volumes rose 25.3% y-o-y to 79,000 tonnes. For the first ten months of 2016, Turkish’s cargo volume was up 21% to 718,000 tonnes.

Frankfurt Airport (FRA) reported its cargo handle up 4.8% y-o-y to 194,000 tonnes in October. For the first ten months of 2016, FRA’s handle was up 1.6% to 1.78 million tonnes.

London’s Heathrow Airport (LHR) reported its October handle up 6.3% to 141,000 tonnes. Year-to-date, LHR’s handle was up 2.5% to 1.27 million tonnes.

Americas

Cargo traffic continued to fall at Chile-headquartered LATAM Airlines Group, which reported October traffic down 1.7% y-o-y to 328 million RTKs. However, the decline was far less steep than LATAM has been reporting for much of the year, and for the first ten months of 2016, LATAM’s cargo traffic was down 9.8% to 2.80 billion RTKs.

United Airlines reported October cargo traffic up 18.1% y-o-y to 401 million RTKs, its seventh consecutive month of positive results. For 2016 through October, United’s cargo traffic was up 5.6% to 3.34 billion RTKs.

American Airlines Group reported October cargo traffic up 14.6% y-o-y to 347 million RTKs. For the first ten months of 2016, American’s cargo traffic was up 3.5% to 2.90 billion RTKs.

Its big US competitors may have posted double-digit growth, but Delta Air Lines remains firmly mired in decline, reporting October cargo traffic down 5.9% y-o-y to 264 million RTKs. For the year through October, Delta’s cargo traffic was down 10.5% to 2.41 billion RTKs. The drop continues Delta’s pattern of reporting high-single, to low-double-digit growth for most of the year.

Will the momentum continue into next year? We invite you to join us at Cargo Facts Asia 2017, 25 -26 April at the Shanghai Grand Hyatt where the current and future state of the air freight industry will be explored at length. To register, or for more information, go to CargoFactsAsia.com.