October shows promise

Enough of the world’s major cargo carriers and airports have reported their October cargo results to allow us to predict that while the month is unlikely to be remembered as exceptional, demand growth does appear to have picked up slightly.

It will be another two weeks before worldwide data are available from IATA and WorldACD, but we expect both organizations to report modest positive growth in demand for October. And, given that the last few months of 2014 saw solid year-over-year increases, the comparison is fairly tough, so a modest increase in October is not to be sneered at.

Looking ahead, even with a relatively good peak season we are unlikely to see any big jump in y-o-y growth in the the next two months, again due to the tough comparison offered by last year’s strong peak, but the October results leave us cautiously optimistic.

Now for the October details…

Asia Pacific

Cathay Pacific Airways reported October cargo traffic up 2.9% y-o-y to 954 million RTKs. This carries on a trend of low-to-mid-single-digit year-over-year increases that began in March. For the first ten months of 2015, Cathay’s cargo traffic was up 6.8% to 6.85 billion RTKs. Commenting on the October results, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “Demand for airfreight shipments continued to climb as we moved into the traditional peak period. We moved to a full freighter schedule as traffic on the transpacific routes increased and demand to and from India continued to strengthen. Our teams worked hard to push up the load factor for both freighters and passenger aircraft belly space; however, overcapacity in the market continued to put pressure on yield. Current indications are that this year’s cargo peak will run through until the end of November.”

Hong Kong International Airport reported cargo volume up 2.0% y-o-y in October to 392,000 tonnes, a continuation of September’s return to year-over-year growth after six months of declines. Export volume was up 1.6% to 253,000 tonnes, and import volume rose 2.8% to 139,000 tonnes. After beginning the year on a positive note – combined January/February volume was up 7.2% – HKIA saw year-over-year declines in the next six months, and the small increases in September and October bring HKIA’s handle for the first ten months of 2015 to 3.57 million tonnes, up only slightly (0.4%) over 2014. Commenting on the October results, HKIA said that among the key trading regions, traffic to/from Europe, Australasia, and North America increased most significantly.

Guangzhou-based China Southern Airlines reported October cargo traffic down 4.7% y-o-y, to 591 million RTKs. International traffic was flat with October 2014 at 351 million RTKs, but the total was dragged down by a 15.1% drop in domestic cargo traffic to 138 million RTKs. For the year through October, China Southern’s cargo traffic was up 10.9% to 4.55 billion RTKs.

Shanghai-based China Eastern Airlines reported October cargo traffic up 2.3% y-o-y to 423 million RTKs – not a big increase, but like a similar increase last month, a considerable improvement over the 11% declines the carrier reported in July and August. International traffic for the month was up 1.8% to 328 million RTKs, while domestic traffic was up 4.4% to 84 million RTKs. For the first ten months of 2015, China Eastern’s cargo traffic was up1.0% to 3.99 billion RTKs.

Taiwan-based EVA Air reported October cargo traffic down 14.2% y-o-y to 310 million RTKs. For the ten months of 2015 through October, EVA’s cargo traffic was down 8.9% to 3.06 billion RTKs.

Taiwan-based China Airlines (CAL) reported October cargo traffic down 2.2% y-o-y to 444 million RTKs. For 2015 through October, CAL’s cargo traffic was up 2.3% to 4.49 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG): reported its October handle up 1.4% y-o-y to 141,000 tonnes. This is a much smaller increase than the double-digit gains Pactl was reporting earlier this year, gains which Cargo Facts believes were the result of Pactl increasing its share of the cargo handled at PVG, rather than indicative of more cargo moving through PVG. With comparisons now more like-for-like, growth in Pactl’s handle is much more in line with the airport as a whole. International volume for the month was up 1.6% to 133,000 tonnes, while the much smaller domestic volume fell 1.7% to 9,000 tonnes. For the first ten months of 2015, Pactl’s handle was up 7.7% to 1.31 million tonnes.

Europe & Middle East

Lufthansa Cargo reported October traffic down 1.4% y-o-y to 759 million RTKs. For the Lufthansa Group as a whole, September cargo traffic was down 1.7% to 894 million RTKs. Traffic on the Asia-Pacific trade lane was up 3.6% y-o-y, but the total was dragged down by a 4.3% drop in trans-Atlantic traffic, and a 13.6% drop in traffic to/from the Middle East and Africa. The October decline is smaller than what the carrier has been reporting in recent months, but nonetheless continues the trend of year-over-year declines that began 119 months ago. It leaves Lufthansa Cargo’s traffic for the first ten months of 2015 down 1.7% from the same period last year to 6.99 billion RTKs. For the Lufthansa Group, cargo traffic through the first ten months was down 2.0% to 8.30 billion RTKs.

Air France-KLM continues to report steep falls in cargo traffic, with a 10.1% y-o-y drop in October to 786 million RTKs. Commenting on the ongoing problems, Air France-KLM said it had reduced freighter capacity by 32% since October 2014, but that yield was still “clearly down.” For the year through October, AF-KLM’s cargo traffic was down 8.3% to 8.17 billion RTKs.

International Airlines Group reported October cargo traffic down 3.4% y-o-y to 476 million RTKs (adjusted for the recent acquisition of Aer Lingus). Subsidiary carrier Iberia saw cargo traffic up 6.1% to 104 million RTKs, while IAG’s larger British Airways subsidiary reported traffic down 6.0% to 359 million RTKs. For the first ten months of 2015, IAG Cargo’s traffic was down 4.1% to 4.38 billion RTKs.

Turkish Airlines reported October cargo volume down 12.8% y-o-y to 50,000 tonnes. This is a drastic reversal of the long trend of strong year-over-year increases in demand the carrier has reported over the last several years. For the first ten months of 2015 Turkish’s cargo volume was up 6.7% to 582,000 tonnes.

Frankfurt Airport (FRA) reported its October cargo handle down 1.5% y-o-y to 185,000 tonnes. For 2015 through October, FRA’s handle was down 2.3% to 1.74 million tonnes.

London’s Heathrow Airport (LHR) reported its October handle down 1.4% y-o-y to 133,000 tonnes, continuing its year-long pattern of small gains and losses. For the first ten months of 2015, LHR’s handle was almost flat with last year – up 0.1% to 1.24 million tonnes.

Amsterdam’s Schiphol Airport reported its October cargo handle up 1.4% y-o-y to 147,000 tonnes. For the first ten months of 2015, AMS’ handle was down 1.1% to 1.34 million tonnes.

Americas

Cargo traffic continued to fall steeply at Chile-headquartered LATAM Airlines Group, which reported September traffic down 15.1% y-o-y to 333 million RTKs. The company said cargo traffic continued to be “weak during the month of October, especially in Brazil domestic and international markets.” For the first ten months of 2015, LATAM’s cargo traffic was down 12.0% to 3.13 billion RTKs.

United Airlines reported October cargo traffic up 2.3% to 340 million RTKs, continuing a period of growth growth that began in late 2013. For the year through October, United’s cargo traffic was up 6.3% to 3.17 billion RTKs.

American Airlines reported October cargo traffic down 2.5% to 304 million RTKs. For the first ten months of 2015, American’s cargo traffic was almost flat (down 0.5%) with 2014 at 2.81 billion RTKs.

Delta Air Lines reported October cargo traffic down 10.3% y-o-y to 281 million RTKs. For the year through October, Delta’s cargo traffic was down 6.4% to 2.70 billion RTKs.