Air freight dives in Asia – should we panic?

The Association of Asia Pacific Airlines (AAPA) published February international traffic results, and while passengers continue to board airplanes in droves, for cargo the news is bleak.

As we regularly point out, neither January nor February data are meaningful on their own, as year-over-year comparisons are skewed by the timing of the Lunar New Year holiday. But combined data for the two months eliminates this effect, and paints a more accurate picture. In 2016, the picture is not pretty.

In January, the AAPA reported cargo traffic for its member airlines down 0.7% y-o-y. Not a great result, but, on the surface at least, not terrible. However, with the Lunar New Year holiday taking place in early February this year, as opposed to mid-February last year, we wondered if more shipments had been pushed into January this year, making the month look stronger than it really was.

Now, with the AAPA reporting February cargo traffic down 12.1%, it seems clear that is what happened, and overall traffic for the two months combined is down 6.2% from the same period last year.

However, there are several factors that combine to make it difficult to draw conclusions from this 6.2% decline.

• Asia is not the world
• Not every Asian carrier reports to the AAPA (see below for complete list)
• The AAPA results do not include domestic traffic
• Traffic in the first two months of 2015 benefitted from the labor dispute at the US West Coast ocean ports.

The International Air Transport Association (IATA) reported worldwide cargo traffic in January up 2.7% y-o-y, considerably better than AAPA members’ decline of 0.7%, so when IATA reports February and year-to-date results we do not expect to see the same 6% drop reported by AAPA members. We do expect IATA to report worldwide traffic down compared to Jan/Feb 2015, but probably by an amount about equal to the boost provided by the US port problems.

AAPA member carriers include: AirAsia, Air Astana, Air China, Air India, Air New Zealand, All Nippon Airways, Asiana Airlines, Bangkok Airways, Cathay Pacific, Cebu Pacific, China Airlines, China Eastern Airlines, China Southern Airlines, Dragonair, EVA, Garuda Indonesia, IndiGo, Japan Airlines, Jet Airways, Jetstar Airways, Korean Air, Malaysia Airlines, Philippine Airlines, Qantas, Royal Brunei Airlines, Singapore Airlines, SpiceJet, Thai Airways International, Tigerair, Vietnam Airways, Virgin Australia.