A handful of carriers see traffic growth return in March

After a dismal February for Asia-Pacific carriers, March cargo traffic results are painting a more positive picture, with China Southern Airlines and Air China, in particular, seeing cargo traffic growth from 2018 levels of at least a few percent. Among those Asian carriers still reporting declines for the month, in all cases, March declines were less than those posted earlier in the year – suggesting that after a shaky start to 2019, the industry may have better things ahead for the remaining quarters. However, a trend that has certainly been confirmed by these early 2019 reports shows that for the China-based carriers, domestic cargo traffic is certainly on the decline. Most of the growth was instead supported by international cargo traffic demand. In other regions, carriers reported mixed results for March, with many airlines or groups – including Lufthansa Group, Air France-KLM, IAG Cargo, and LATAM Cargo – all reporting gains or declines of within 3%. As is typical by now in the slower growth environment that began at least in mid-2018, Turkish Cargo was the true outlier, reporting 17.1% growth in its cargo volumes for March. Turning to the individual results: Asia-Pacific Cathay Pacific Group reported combined March traffic for Cathay Pacific and Cathay Dragon fell 2.9% y-o-y for March, to 1.0 billion RTKs – now the fifth consecutive month for which Cathay has reported y-o-y declines in cargo traffic. Cargo tonnage also fell 2.5% for March, to 185,000 tonnes. Cathay’s Director, Commercial and Cargo, Ronald Lam, acknowledged the continuing slide, but noted some slight improvements from “key markets of Hong Kong and mainland China to both regional and long-haul destinations.” Year-to-date, traffic and cargo are down 5.5% and 4.9%, respectively. Singapore Airlines reported March cargo traffic down 0.4% year-over-year to 618 million FTKs, representing the smallest decline for SIA Cargo since October 2018. Cargo volumes, on the other hand, were up slightly to 114,000 tonnes. Year-to-date, cargo traffic is down 6.8% to 1.6 billion FTKs. Beijing-based Air China ’s cargo traffic for March was 2.8% higher than in March 2018 at 412 million RTKs – a striking change from February’s 8.7% year-over-year decline, thanks to 4.5% y-o-y growth in international RTKs during March. Total tonnage for March was also up 2.7% y-o-y, to 123,000 tonnes, marking a 56.5% change from February tonnage. Year to date, traffic through March is still down1.3% to 1.1 billion RTKs, while total cargo tonnage is down 0.8% to 333,000 tonnes. Guangzhou-based China Southern Airlines bounced back from double-digit declines in cargo traffic for February to grow y-o-y traffic by 7.2% in March, to 665 million RTKS, thanks to stronger international traffic demand. Tonnage for the month was also 2.6% higher y-o-y, to 148,000 tonnes. For the first quarter of 2019, China Southern’s cargo traffic is up by a slight 0.9%, while tonnage is 1.4% lower y-o-y. Taiwan-based EVA Air reported a 5.9% y-o-y decline in traffic for March, to 300 million FTKs. Tonnage declined 7.6% to roughly 52,400 tonnes. For the first quarter of 2019, EVA’s cargo tonnage is 7.7% lower than 2018. Europe & Middle East Air France-KLM’s March traffic grew sufficiently y-o-y to push year-to-date traffic up from a slight decline for January through February, to 0.5% for January through March. March cargo traffic increased by 1.5% y-o-y to 746 million FTKs, thanks to strong performance from Air France, which increased its cargo traffic by 7.9% to 345 million FTKs in March. KLM cargo, on the other hand, continued its y-o-y declines, falling 3.5% to 401 million FTKs. Year-to-date, Air France-KLM cargo traffic is up by a small 0.5% compared to 2018. International Airlines Group reported March cargo traffic up 3.0% y‑o‑y to 513 million RTKs, on increasing cargo activity at the Group’s subsidiary carriers British Airways and Iberia. The former reported March traffic up 2.6% to 391 million FTKs, reversing last month’s declines of 2.1% and pushing year-to-date traffic up 0.6% at British Airways. Cargo traffic at the latter rose 5.9% to 107 million FTKS for March and 9.1% to 287 million FTKs year-to-date. Aer Lingus traffic declined 12.5% in March, but the subsidiary’s traffic makes up only about 2.7% of IAG’s overall cargo traffic. Year-to-date, cargo traffic for IAG’s group airlines is up by about the same level as last month’s year-to-date result, at 2.6%. Lufthansa Cargo Group airlines reported March traffic down by only 1.1% y-o-y to 974 million RTKs, making March the best month for the group so far this year. On a regional basis, Group cargo traffic saw the sharpest decline for the Asia-Pacific region, which fell 6.4% y-o-y to 419 million FTKs for March. On the other hand, the Middle East/Africa region grew by a strong 26.5% to 82 million FTKs, while the Americas region was up by a slight 0.5% to 441 million FTKs. Traffic in Europe fell by a modest 3.2% to 31 million FTKs. Year-to-date, traffic is down 3.0% y-o-y to 2.5 billion FTKs across Lufthansa Group Airlines. Turkish Cargo reported cargo tonnage up 17.1% y-o-y for March, and 15.6% year-to-date, continuing the consistent double-digit growth that has come to distinguish Turkish’s performance. However, as overall volumes have grown strikingly higher – 138,000 tonnes in March, and 363,000 tonnes for the first quarter overall – the growth rates of the past have subsequently been difficult for the carrier to maintain. The three 777Fs Turkish has on order with Boeing for delivery by February 2020 should help the carrier’s capacity keep up with its growing demand, however. Americas LATAM Airlines Group reported March cargo up 2.2% y-o-y, to 313 million RTKs. Year-to-date, LATAM cargo traffic is up 1.9%, at 899 million FTKs. Delta Air Lines reported March cargo traffic fell 5.4% y-o-y to 261 million RTKs. Year-to-date, traffic was down 3.2% to 712 million RTKs, with Delta reporting lower cargo volumes for the first quarter.

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