Cargo growth continues in May results

May data arriving from the world’s big cargo carriers, airports, and handlers show that, with a couple of exceptions, growth in airfreight traffic has remained surprisingly strong despite increasingly tough year-over-year comparisons. While a couple of European outfits (Frankfurt Airport and Air France-KLM, in particular) posted y-o-y declines for the month, Asian operators that have released May results posted gains across the board, while Latin American and Middle Eastern carriers recorded double-digit gains. As has been the case every month since September 2017, Turkish Airlines reported the highest growth for the month. On the other hand, after reporting double-digit growth y-o-y at this time in 2017, United States-based Delta Air Lines and United Airlines recorded only slight gains last month. Those European operators that did not post declines for the month were virtually flat year-over-year, which is unsurprising considering the slot shortages European operators have faced since late last year.

To consider May’s results more closely…

Asia-Pacific

Beijing-based Air China reported an increase of 5.6% year-over-year for May cargo traffic, to 684 million RTKs, amounting to a 1% increase from April traffic. Meanwhile, growth in available capacity outpaced traffic growth, rising 7.8% during the month. While May’s growth has slowed compared to the same month last year, year-to-date growth has so far been more robust in 2018 than during the prior year, as cargo traffic reported by the carrier from January through May increased 9.4% y-o-y, compared with only 6.0% over the same months in 2017. In tonnage, Air China has reported more domestic than international cargo traffic for May and year-to-date – however, international cargo volumes at the carrier have increased more y-o-y. In May, domestic volumes increased 1.7%, compared to an 8.0% y-o-y increase in international volumes. Year-to-date, domestic volumes at the carrier have declined by 0.2%, while international volumes rose by 12.8%.

Guangzhou-based China Southern Airlines reported May cargo traffic up 2.2% year-over-year to 640 million RTKs. Growth has slowed substantially compared with the same time last year, when the carrier reported y-o-y traffic rose 23.4% for May. Year-to-date, traffic at China Southern rose by 5.3% compared with the first five months of 2017.

Taiwan-based China Airlines reported May cargo traffic up 5.9% y-o-y to 490 million RTKs, the strongest year-over-year showing for the carrier so far this year. Nevertheless, May results for China Airlines also represent the second month in a row of month-over-month declines in RTKs since their 2018 peak in March. Year-to-date growth has been modest at 3.5%, to 2.3 billion RTKs, compared to last year’s 5.5% through May.

Taiwan-based EVA Air also recorded an increase in May cargo traffic, which rose 4.1% year-over-year to 320 million RTKs. May FTKs are the strongest the company has reported so far for 2018, but year-to-date growth currently stands at only 2.8%, while by this time in 2017, EVA Air recorded 5% growth through May.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the largest cargo handler at Shanghai’s Pudong Airport) reported an 8.4% year-over-year increase in May cargo volumes to 168,000 tonnes – the highest monthly cargo handle for Pactl since December. Y-o-y growth for May is unimpressive by 2017 standards, when y-o-y growth averaged 12.2% for the year, but is the strongest reported in 2018 since January and demonstrates the strength of air cargo in 2018, despite more difficult y-o-y comparisons. The increase in May comes primarily from growing international cargo volumes, with outbound international volumes increasing 12% y-o-y.

South Korea-based Incheon Airport’s cargo traffic posted more substantial year-over-year growth for the first month since January, rising 4.4% to 248,000 tonnes, slightly above April’s cargo tonnage. Year-to-date volumes through May rose by a slight 1.8%, sharply lagging the much stronger 10.7% growth during the same period in 2017.

Europe & Middle East

Lufthansa Group reported May traffic up by only 0.4% y-o-y to 908 million RTKs, with year-to-date growth through May reported at 3.6%. Month-to-month traffic for the group declined by 2.3%, and growth has slowed significantly from last year, when the group posted a 7.2% y-o-y increase during May. Meanwhile, capacity increased significantly during the month, rising by 6.3%.

Air France-KLM reported cargo volumes down year-over-year for the third consecutive month, as May traffic fell 3.6% y-o-y to 699 million RTKs, while year-to-date traffic is also lower compared to 2017, with a 2.3% decline to 3.4 billion RTKs. Air France cargo traffic declined by 5.6% to 296 million RTKs, while KLM reported a 2.2% decline in traffic to 403 million RTKs. Despite the y-o-y declines, traffic has increased month-to-month.

International Airlines Group reported a narrow increase in May cargo traffic during May, which rose only 0.3% y-o-y across the group for the month to 475 million RTKs. While growth has slowed compared to April, even modest growth marks an improvement from early this year, when the group experienced three months of y-o-y declines in RTKs. Year-to-date, traffic increased by 0.2% compared with the same period in 2017. Among the group airlines, subsidiary Iberia recorded the only y-o-y growth, of 3.5%, for May.

Turkish Airlines reported a year-over-year increase of 21.6% in cargo volumes for May, to 118,417 tonnes – its highest-volume month so far this year, even while the rate of growth slowed substantially from the outstanding 33.2% y-o-y increase reported for May 2017. However, at 545,186 total tonnes of cargo reported by the carrier so far in 2018, year-to-date growth at Turkish Airlines, at 29.8% stands above 2017’s growth rate during the same months. Regionally, cargo volumes for most regions in which the carrier operates rose month-to-month, with the exceptions of North America and Central and South America, where volumes were slightly lower compared to April.

Frankfurt Airport (FRA) reported a decline of 1.6% y-o-y in its May cargo handle, to 181,000 tonnes, for a 4.7% decline from April’s handle. Year-to-date, cargo volumes at Frankfurt have been mostly in line with year-ago levels, increasing by only 0.1% from January through May, compared to last year during the same time.

London’s Heathrow Airport (LHR) reported a 0.5% year-over-year increase in its cargo handle to 144,000 tonnes, the smallest y-o-y increase at the airport since the second half of 2016. Month-over-month volumes increased 2.1%, and volumes through the first five months of 2018 were up by 3.1% y-o-y.

Americas

Chile-headquartered LATAM Airlines Group reported an 11.8% y-o-y increase in cargo traffic for May to 303 million RTKs, as y-o-y performance continues to reflect improved economic performance in Brazil and among Latin American operators. Year-to-date, cargo traffic has increased by 9.6%, compared to last year’s y-o-y decline of 4.8% for the first five months of the year.

Delta Air Lines reported a y-o-y increase of 2.3% in May cargo traffic, to 275 million RTKs, along with a year-to-date increase of 5.4% compared to the same period in 2017. Cargo traffic also rose month-to-month, by 3.0%, but the rate of growth has slowed substantially from the past year, when May RTKs increased by around 10-20% from April through October.

United Airlines reported an increase of 1.6% y-o-y in May cargo traffic to 418 million RTKs, for a 2.0% month-to-month increase from April. Year-over-year comparisons are likely to remain difficult for United, considering the carrier reported a y-o-y increase of 23.7% for May 2017, and saw its total 2017 cargo traffic increase 18.2%. Year-to-date so far in 2018, traffic is up 6.8% compared to the first five months of 2017.