While demand for air freight remained strong in September and October, the year-over-year rate of demand growth began to fall from the double-digit heights achieved in the first eight months of the year as the tougher comparisons of late 2016 began to kick in. But despite the solid demand growth in November 2016, early reports from some of the world’s major carriers and airports indicate that November 2017 will be a month to remember, with overall demand growth worldwide likely to once again approach double digits.
We will have to wait until WorldACD and IATA report their conclusions in early January, but, as you can see in the chart at right, and in the details below, demand growth in November appears well up from October.
Further, anecdotal evidence available so far in December indicates that demand is not slowing at all, and many forwarders and airlines are predicting that it will not slack off until late February.
Now for the details…
Cathay Pacific Airways reported November cargo traffic up 11.2% y-o-y to 1.07 billion RTKs. This is well up from the 4.2% and 7.5% demand growth the carrier reported in September and October, respectively, and in line with the double-digit growth rates in June, July, and August. For the first eleven months of the year, Cathay’s cargo traffic was up 8.9% to 10.53 billion RTKs.
Discussing the results, Cathay’s Director for Commercial and Cargo Ronald Lam said: “Our high year-on-year tonnage growth reflects the overall strength in the world’s air cargo markets. E-commerce related movements were boosted by events such as Chinese Singles’ Day, which helped to even out the traditional dip in demand following the Thanksgiving holiday, and we saw high load factors and improving yields. We broke our weekly tonnage uplift record in the week starting 26 November, while a number of key markets across our network also established new revenue records during the month. The outlook remains positive and is expected to carry through until Christmas.”
Hong Kong International Airport reported cargo volume in November up 6.9% y-o-y to 466,000 tonnes, not as much of an increase as the airport reported in the first three quarters, but up from October’s 2.4% increase. Export volume was up 4.1% to 282,000 tonnes, but the total was weighed down by a 0.9% decline in imports. Discussing the results, the airport said: “Transshipments and exports were the main drivers of growth in cargo throughput in November. Compared to the same month last year, transshipments registered 10% year-on-year growth, and exports recorded an 8% increase. Amongst the key trading regions, traffic to/from North America, India and Europe increased most significantly.” For 2017 through November, HKIA’s cargo handle was up 9.5% to 4.48 million tonnes.
Beijing-based Air China reported November cargo traffic up 8.0% y-o-y, to 688 million RTKs, down from the 14% gains reported in September and October, but in line with its year-to-date increase. International traffic was up strongly – 12.0% over November 2016 – to 529 million RTKs, but the total was dragged down by a 4.8% decline in domestic traffic to 149 million RTKs. For the year through November, Air China’s cargo traffic was up 8.4% to 6.87 billion RTKs.
Guangzhou-based China Southern Airlines reported November cargo traffic up 11.6% y-o-y to 662 million RTKs. This is well up from the 6.8% increase the carrier reported in October, though down slightly from its year-to-date average. International traffic growth was strong in November, up 12.6% y-o-y to 452 million RTKs, while domestic traffic grew at a slower rate, up 8.6% to 151 million RTKs. China Southern’s cargo traffic for the first eleven months of 2017 was up 13.9% to 6.41 billion RTKs.
Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported its November handle up 10.9% y-o-y to 176,000 tonnes. This is a fall-off from the 14% and 15% y-o-y growth Pactl was reporting earlier this year, but while the rate of demand growth may be falling, demand itself is booming – we believe Pactl’s November cargo handle was an all-time record for the company, besting the previous record of 169,000 tonnes set the month before. International volume for the month was up 12.4% to 167,000 tonnes, while the much smaller domestic volume was down 10.5% to 9,000 tonnes (Pactl handles very little of PVG’s domestic cargo). For the year through November, Pactl’s handle was up 12.5% to 1.70 million tonnes.
Singapore Airlines reported November cargo traffic up 7.1% y-o-y to 671 million RTKs. For the year through November, SIA’s cargo traffic was up 4.9% to 6.23 billion RTKs.
Taiwan-based China Airlines reported November cargo traffic up 8.8% y-o-y to 519 million RTKs, the fifteenth consecutive month of increased traffic after a long period of declining demand. And the carrier’s cargo revenue growth continues to outpace traffic, up 25.5% y-o-y in November. Year-to-date, CAL’s cargo traffic was up 7.9% to 5.21 billion RTKs, and cargo revenue was up 21.1%.
Taiwan-based EVA Air reported October cargo traffic down slightly (0.9%) y-o-y to 315 million RTKs, the carrier’s second consecutive negative result after sixteen months of gains. However, EVA’s cargo yield continues to grow strongly and cargo revenue for the month was up 15.1%, despite the drop in traffic. For the first eleven months of the year, EVA’s cargo traffic was up 3.9% to 3.38 billion RTKs, while cargo revenue rose 11.1%.
South Korea’s Incheon Airport reported its October cargo handle up 7.1%, to 267,000 tonnes. For the first eleven months of 2017, ICN’s handle was up 7.9% to 2.66 million tonnes.
Europe & Middle East
Lufthansa reported Group cargo traffic up 9.4% y-o-y in November to 962 million RTKs, up strongly from the 2.4% growth the carrier reported last year, and also above its year-to-date average. Traffic on the trans-Atlantic lane grew 10.5% to 412 million RTKs, and traffic to/from the Asia-Pacific region was up 7.5% to 442 million RTKs. The strongest growth for the month – a 17.4% increase – was in traffic to/from the Middle East/Africa region, but the total of 75 million RTKs was relatively small. For the first eleven months of 2017, Lufthansa Group’s cargo traffic was up 7.6% to 9.93 billion RTKs.
Air France-KLM Martinair reported November cargo traffic up 6.9% y-o-y to 759 million RTKs – its strongest growth in years. Traffic at Air France was up 7.5% to 330 million RTKs, While KLM’s traffic was up 6.4% to 429 million RTKs. For the year through October, AF-KLM’s cargo traffic was up 1.7% to 7.84 billion RTKs.
International Airlines Group reported November cargo traffic up 9.7% y-o-y to 531 million RTKs. Subsidiary carrier British Airways reported November cargo traffic up 9.9% to 412 million RTKs, while Spain-based Iberia’s cargo traffic was up 5.2% to 102 million RTKs. Ireland-based Aer Lingus reported November cargo traffic up 41.7% to 17 million RTKs. For the first eleven months of 2017, IAG’s cargo traffic was up 6.1% to 5.28 billion RTKs.
Turkish Airlines continues to report large increases in air freight demand, with November cargo volume up 26.9% y-o-y to 103,000 tonnes. Turkish has reported the strongest year-over-year growth among major carriers for several years now, and its November gain is very much in line with its year-to-date increase of 26.4% to 1.02 million tonnes.
Frankfurt Airport (FRA) reported its cargo handle up 4.9% y-o-y to 201,000 tonnes in November. For the first eleven months of 2017, FRA’s handle was up 4.3% to 2.05 million tonnes.
Amsterdam’s Schiphol Airport reported its November handle up 0.9% y-o-y to 147,000 tonnes. For the first eleven months of the year, Schiphol’s handle was up 6.6% to 1.61 million tonnes.
London’s Heathrow Airport (LHR) reported its November handle up 11.8% to 154,000 tonnes. Year-to-date, LHR’s handle was up 10.5%, to 1.56 million tonnes.
After five months of small year-over-year increases in air freight demand, Chile-headquartered LATAM Airlines Group returned to its long-standing pattern of declines in October, and the decline continued in November, with the carrier reporting cargo traffic down 2.4% y-o-y to 314 million RTKs. For the year to date, LATAM’s cargo traffic is down 1.6% compared to 2016, at 3.09 billion RTKs.
United Airlines reported November cargo traffic up 16.8% y-o-y to 438 million RTKs, its twentieth consecutive month of strong gains. Year-to-date, United’s cargo traffic was up 18.4% to 4.40 billion RTKs.
The turnaround plan at Delta Air Lines continues to pay off. The Atlanta-based carrier reported November cargo traffic up 6.2% y-o-y to 248 million RTKs – its eighth consecutive monthly y-o-y gain after years of declining demand. This brings Delta’s cargo traffic for the year to 2.89 billion RTKs, up 8.9% over the first eleven months of 2016.