January results have begun to come in from some of the world’s larger carriers and airports, and with the exception of LATAM Cargo and Turkish Cargo, cargo traffic was notably lower year-over-year compared with January 2019.
While the varying timing of the Lunar New Year holiday often muddies annual comparisons for the months of January and February, last month’s declines are unlikely to be countered by strong February air cargo demand. The outbreak of the novel coronavirus has led to extensive cancellations for scheduled passenger and freighter flights, and has had the effect of prolonging the Lunar New Year holiday in China, which was originally scheduled to end Jan. 30. As of mid-February, many offices and factories in China remain idle, or at partial output, in an attempt to control the outbreak.
Chartered freighter flights are on the rise, but will not compensate for the number of scheduled passenger and freighter flight cancellations. With industrial production yet to pick up, export volumes remain low, even as demand for imported medical supplies throttles. When IATA reports overall cargo market performance for the month of January, we expect declines in the high single digits. Annual comparisons between February 2020 and February 2019 are likely to show more precipitous drops. Last year, the Asia Pacific region was the largest market for air cargo with a 34.6% share of total freight tonne kilometers (FTKs).
When the coronavirus is eventually contained and flights resume, many in the industry expect a modest to heavy airfreight peak.
It should also be noted that fewer carriers are reliably reporting monthly cargo traffic figures. In the past, U.S.-based carriers American Airlines, Delta Air Lines and United Airlines all reported monthly traffic within 30 days of a month’s end. That is no longer the case. International Airlines Group and Lufthansa Cargo are two other carriers that have historically been quick to post traffic results for the previous month, but have not this month.
A closer look at carrier results reveals January declines for several carriers.
Cathay Pacific Airways reported a 5.4% YoY decline in cargo and mail to 855 million FTKs. Meanwhile, tonnage declined 8.9% YoY in January to 151,964 tonnes.
“We saw reasonably solid demand across our network for the first three weeks of January,” said Ronald Lam, Cathay Pacific Group’s chief customer and commercial officer. “Our mainland China point of sales particularly stood out, recording year-on-year tonnage growth. By the last week of January, however, overall demand plummeted as manufacturing came to a halt in mainland China during the Chinese New Year holiday.”
Lam further commented on the impact of the new coronavirus on business, saying the delay of the post-Lunar New Year resumption of manufacturing across mainland China affected the company’s Hong Kong and mainland markets.
In line with Cathay Pacific’s January traffic, the carrier’s hub, Hong Kong International Airport (HKG) reported a 10.4% YoY drop in January cargo throughput, to 359,000 tonnes. Freighter movements were down 8.7%. Traffic to and from Southeast Asia and North America Imports and transshipments were down 15% and 10%, respectively. Total air cargo exports were down 9%, on lower export activity to the regions Southeast Asia and North America.
“HKIA’s traffic has been affected by multiple factors, including the outbreak of Novel Coronavirus in late January and social circumstances,” said Vivian Cheung, executive director of airport operations for the Airport Authority Hong Kong (AA).
EVA Air’s cargo traffic saw a decline of 0.6% YoY for the month of January to 271 million FTKs. Load factors were down 6.8%, with an 8.8% YoY increase in available tonne kilometers (AFTKs) for the month.
China Southern’s traffic for January decreased by 8.8% YoY to 587 million FTKs. Domestic traffic for the carrier was down 9.2% YoY, while international traffic dropped by 8.5%. Month over month, the carrier’s total cargo handle decreased 13.5% from December.
Air China’s cargo traffic for January was 14.2% lower than the same month last year at 351 million FTKs. Overall tonnage decreased by 15.5% to about 11,0836 tonnes. Domestic and international traffic for the carrier saw double digit declines of 16.9% and 11.3%, respectively.
Shanghai Pudong International Airport Cargo Terminals Co. Ltd, or Pactl, reported its January handle cargo down 12.1% YoY to 127,200 tonnes. Pactl’s international volume was down 12.0% to 119,000 tonnes, while the much smaller domestic volume was down 13.4% to 8,000 tonnes.
Singapore Airlines reported January cargo traffic down 13.9% YoY to 472 million FTKs, while cargo tonnage declined by 4.1% to just over 905,000 tonnes. Cargo load factor was 5.9 percentage points lower and all routes registered declines in cargo load factor, according to a press release.
Europe and the Middle East
Air France-KLM’s January cargo traffic declined by 0.6% YoY to 652 million FTKs. Air France reported traffic up 2.9% YoY to 294 million FTKs, while KLM reported a decline of 3.4%, to 358 million FTKs.
Turkish Cargo reported an 8.4% YoY increase in cargo and mail tonnage carried to 121,605 tonnes.
Frankfurt Airport (FRA), the hub of German carrier Lufthansa, reported its January cargo handle down 8.6% YoY to 149,000 tonnes.
Amsterdam Schiphol Airport (AMS) reported its January handle down 7.8% YoY to 113,000 tonnes on a 10.2% drop in freighter flights.
London Heathrow (LHR) reported its January handle up 2.9% to 119,000 tonnes
LATAM Cargo reported January traffic up 2.1% YoY to 291 million FTKs.
This week, Cargo Facts released a refreshed agenda for its ninth annual presentation of Cargo Facts Asia, which will take place at the Mandarin Oriental Singapore on April 20-22. Given the extraordinary level of volatility the airfreight industry currently faces, this year’s event is designed to help air cargo uncover opportunities for countering headwinds and finding success in 2020, and beyond.