Asian carriers do well in April

Last month we said that while the first-quarter cargo results from the major carriers and airports were generally good, the impact of the US West Coast port labor dispute and the huge automobile recall in the US were still having an impact, and that we would have to wait for April to get a feel for the underlying growth trend. April results are now in from most of the big players, but the only “trend” that jumps out is that Asian carriers (and Asian handler Pactl) are doing very well, while results in other regions show no consistent pattern.

But given that Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch attributes some of Cathay’s growth to a continued boost from the “logjam of freight in seaports on the West Coast of the United States,” perhaps it is prudent to wait yet another month before making any firm statements about underlying trends.

Now for the details…

Asia Pacific

Cathay Pacific Airways reported April cargo traffic up 6.3% y-o-y to 849 million RTKs. This follows a spectacular gain of 24.5% for the combined January/February period, and a much smaller 2.4% increase in March, and leaves Cathay with cargo traffic up 13.0% to 3.40 billion RTKs for the first four months of this year. Commenting on the March results, Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch said: “Our cargo business benefitted from a modest rush in demand out of the home market before Easter and the pick-up after the holiday was reasonably swift. Demand out of the key manufacturing centres in Mainland China fluctuated throughout the month and we faced intense competition out of Western China cities. Transpacific business held up well and we continued to benefit from the logjam of freight in seaports on the West Coast of the United States, even after the industrial dispute was resolved. We saw robust demand out of Southeast Asia, and Vietnam in particular, in April while strong traffic to India remains a key focus.”

Beijing-based Air China reported April cargo traffic up strongly – 18.7% y-o-y to 545 million RTKs. This is Air China’s ninth consecutive month of double-digit cargo traffic growth, and makes Air China the undisputed leader, in terms of cargo traffic growth, among the big Asian carriers. The April growth was driven by a 24.2% increase in international traffic to 408 million RTKs, while domestic traffic rose 5.3% to 128 million RTKs. For the year through April, Air China’s cargo traffic was up 23.5% to 2.04 billion RTKs.

Guangzhou-based China Southern Airlines reported April cargo traffic up 7.9% y-o-y, to 462 million RTKs, with the overall gain coming on the back of a 12.3% increase in international traffic to 321 million RTKs. Domestic traffic for the month was down 1.0% to 139 million RTKs. For the first four months of 2015, China Southern’s cargo traffic was up 11.8% to 1.66 billion RTKs.

Shanghai-based China Eastern Airlines reported April cargo traffic up 6.2% y-o-y to 406 million RTKs returning to solid growth after posting a 3.4% decline in March. International traffic was up 4.0% to 308 million RTKs, while domestic traffic jumped 16.2% to 87 million RTKs. For the first four months of 2015, China Eastern’s cargo traffic was up 7.7% to 1.62 billion RTKs.

Taiwan-based EVA Air reported April cargo traffic down 4.8% y-o-y to 310 million RTKs. When looking at this decline, remember that EVA is in the process of downsizing its freighter fleet, and cargo capacity was down over 5.1% from April 2014, and therefore load factor actually rose slightly to 84.4%. For the year through April, EVA’s cargo traffic was down 1.9% to 1.26 billion RTKs, but again, this was against a backdrop of reduced capacity, and both cargo revenue and cargo yield were up (1.5% and 3.4%, respectively).

Taiwan-based China Airlines (CAL) reported April cargo traffic up 4.2% y-o-y to 465 million RTKs. For the first four months of 2015, CAL’s cargo traffic was up 9.6% to 1.82 billion RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG): reported its April handle up 9.8% y-o-y to 135,000 tonnes. International volume was up 8.6% to 125,000 tonnes, while the much smaller domestic volume jumped 28.8% to 9,000 tonnes. For the year through April, Pactl’s handle was up 11.9% to 497,000 tonnes.

Singapore Airlines reported April cargo traffic up 4.3% y-o-y to 5i7 million RTKs. For the first four months of 2015, SIA’s cargo traffic was up 3.7% to 2.02 billion RTKs. The 2015 gains are a reversal of SIA’s long-term trend of single-digit declines, and it will be interesting to see if the carrier can continue to grow its cargo traffic over the remainder of the year.

Europe & Middle East

Lufthansa Cargo reported April traffic up 7.2% y-o-y to 680 million RTKs. For the Lufthansa Group as a whole, April cargo traffic was up 5.2% to 806 million RTKs. The gain was driven by a 10.5% increase in traffic on the trans-Atlantic lane to 383 million RTKs, and a 7.5% increase in traffic to/from the Middle East & Africa to 65 million RTKs. Traffic to/from the Asia-Pacific was effectively flat (up 0.1%) with April 2014 at 349 million RTKs. For the first four months of 2015, Lufthansa Cargo reported traffic down slightly (0.3%) to 2.69 billion RTKs, while the Lufthansa Group’s cargo traffic was down 0.2% to 3.21 billion RTKs.

Cargo woes at Air France-KLM are getting worse. In each of the first three months of 2015, Air France-KLM reported year-over-year declines of between 8% and 9%. Bad enough, but in April, things got worse, and the carrier reported cargo traffic down 14.9% to 703 million RTKs. Air France-KLM is in the process of shrinking its freighter fleet, and said main-deck capacity was down 30% y-o-y in April. But total cargo capacity was down only 7.0%, so there is more involved here than just capacity reduction For the first four months of 2015, AF-KLM’s cargo traffic was down 10.0%

International Airlines Group reported April cargo traffic up 1.9% y-o-y to 440 million RTKs. The growth came entirely on the back of 16.0% growth in cargo traffic at subsidiary carrier Iberia to 87 million RTKs, while traffic at IAG’s larger British Airways subsidiary was down 1.1% to 353 million RTKs in April. We point out, however, that April 2014 was the last month that BA’s fleet included three 747-8 freighters ACMI-leased from Atlas Air, so May will be the first month in which year-over-year comparisons can be made on a like-for-like basis. For the year through April, IAG Cargo’s traffic was down 2.7% to 1.75 billion RTKs.

Turkish Airlines reported April cargo volume up 3.4% y-o-y to 58,000 tonnes. This continues the carrier’s trend of low-single-digit gains this year, and is a significant change from the 20% to 35% gains of the last few years. Obviously, growth at that rate could not go on forever, but it will be interesting to see what happens to Turkish’s cargo volume as more A330-200Fs enter its fleet this year. For the first quarter of 2015, Turkish’s cargo volume was up 2.3% to 218,000 tonnes.

Frankfurt Airport (FRA) reported its April cargo handle down 0.8% y-o-y to 173,000 tonnes. For 2015 through April, FRA’s handle was down 1.3% to 685,000 thousand tonnes.

London’s Heathrow Airport (LHR) reported its April handle up 2.2% y-o-y to 123,000 tonnes. For the first four months of 2015, LHR’s handle was up 3.9% to 494,000 tonnes.

Amsterdam’s Schiphol Airport reported its April cargo handle down 4.3% y-o-y to 129,000 tonnes. For the year through April, AMS’ handle was down 2.5% to 515,000 tonnes.

Americas

Cargo traffic continued its ever-steepening decline at Chile-headquartered LATAM Airlines Group, which reported April traffic down 11.2% y-o-y to 320 million RTKs. Cargo capacity for the month was effectively flat with April 2014. The company said the decline in traffic in April “was driven by a weaker cargo scenario in Latin America, mainly due to the economic slowdown in the region.” For the first four months of 2015, LATAM’s cargo traffic was down 10.0% to 1.29 billion RTKs.

United Airlines reported March cargo traffic up 9.3% to 310 million RTKs, continuing a period of strong growth that began in late 2013. For the year through April, United’s cargo traffic was up 12.2% to 1,28 billion RTKs.

American Airlines Group reported April cargo traffic down 2.4% to 280 million RTKs. For the first four months of 2015, American’s cargo traffic was down 1.5% to 1.09 billion RTKs.

Delta Air Lines reported April cargo traffic down 1.7% y-o-y to 263 million RTKs. For the year through April, Delta’s cargo traffic was up 2.1% to 1.06 billion RTKs.