February results show that 2018 is off to a strong start

As we  pointed out last month, air freight demand growth statistics for January must be treated with considerable skepticism. The variable timing of the Chinese New Year holiday can push traffic that would normally move in January to February, or vice versa. Therefore, it makes sense to wait for the February data before reaching any conclusions.

This year, with the holiday falling in mid-February, one would  expect shippers to have scrambled to get their goods into and out of the country early – thereby inflating the January numbers – and to some extent that did happen. However, as we look at the February reports from many of the world’s big cargo carriers, airports, and handlers, there is no huge fall-off. Year-over-year percentage demand growth in February will not be in double digits, but it looks solid. And combining the February results with a strong January, 2018 is off to a great start.

Now for the details…

Asia Pacific

Beijing-based Air China reported February cargo traffic up 5.2% y-o-y, to 487 million RTKs – not as big a jump as some of the gains it reported last year, but likely influenced by the timing of the Chinese New Year holiday. Looking at the combined January/February period, which washes out the impact of the holiday, we see Air China reporting a very strong 12.8% increase in cargo traffic to 1.15 billion RTKs. In the two-month period, international traffic was up 16.0% to 880 million RTKs, and domestic traffic rose 3.4% to 254 million RTKs.

Guangzhou-based China Southern Airlines also reported a strong start to 2018, with February cargo traffic up 10.0% y-o-y to 441 million RTKs. For the first two months of the year, China Southern’s cargo traffic was up 11.6% to 1.05 billion RTKs. International traffic for the combined January/February period rose 17.0% to 783 million RTKs, while domestic traffic declined 1.9% to 259 million RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported its February handle up 1.4% y-o-y to 116,000 tonnes. For the first two months of 2018 (and washing out the impact of Chinese New Year), Pactl’s handle was up 7.9% to 273,000 tonnes. International volume for the two-month period was up 8.4% to 259,000 tonnes, while the much smaller domestic volume was down slightly (0.1%) to 15,000 tonnes (most of Shanghai’s domestic cargo moves through Hongqiao Airport (SHA)).

Taiwan-based China Airlines reported February cargo traffic up 4.4% y-o-y to 379 million RTKs. For the combined January/February period, CAL’s traffic was up 3.3% to 815 million RTKs. The carrier’s cargo revenue growth continues to outpace traffic, up 16.6% for the two-month period.

Taiwan-based EVA Air reported February cargo traffic up 2.2% y-o-y to 251 million RTKs. For the first two months of 2018, EVA’s cargo traffic was up 1.9% to 548 million RTKs. Cargo revenue for the two-month period was up 14.7%.

South Korea’s Incheon Airport reported its February cargo handle down 2.1%% to 204,000 tonnes. For the first two months of 2018, ICN’s handle was up 2.4% to 436,000 tonnes.

Europe & Middle East

Lufthansa reported Group cargo traffic up 6.3% y-o-y in February to 828 million RTKs. Traffic on the Asia-Pacific lane was up 8.1% to 354 million RTKs, while traffic on the trans-Atlantic lane grew 7.7% to 388 million RTKs. However, a 7.2% decline in traffic to/from the Middle East/Africa region to 59 million RTKs brought the overall total down. For the combined January/February period, Lufthansa reported Group cargo traffic up 7.7% to 1.64 billion RTKs.

Air France-KLM reported February cargo traffic up slightly (0.7%) y-o-y to 637 million RTKs. Subsidiary carrier Air France reported February traffic down 1.8% to 266 million RTKs, while KLM’s traffic increased 2.5% to 371 million RTKs. For the first two months of the year, AF-KLM reported cargo traffic up 0.5% to 1.30 billion RTKs.

International Airlines Group reported February cargo traffic down 1.1% y-o-y to 427 million RTKs. Subsidiary carrier British Airways reported February cargo traffic down 0.9% to 335 million RTKs, while Spain-based Iberia’s traffic was down 1.2% to 82 million RTKs. Ireland-based Aer Lingus reported February cargo traffic in line with 2017 at 11 million RTKs. For the first two months of 2018, IAG’s cargo traffic was down 0.8% to 859 million RTKs.

Turkish Airlines reported February cargo volume up 39.4% y-o-y to 100,000 tonnes. The carrier also corrected its January cargo volume up from the previously reported 86,000 tonnes to 96,000. This revision puts Turkish’s combined January/February volume at 195,000 tonnes – up 43.6% over the same two-month period in 2017.

Frankfurt Airport (FRA) reported its air cargo and mail handle up 3.2% y-o-y to 167,000 tonnes in February. For the combined January/February period, FRA’s handle was up 2.2% to 338,000 tonnes.

London’s Heathrow Airport (LHR) reported its February handle up 5.0% to 133,000 tonnes. For the first two months of 2018, LHR’s handle was up 6.0% to 266,000 tonnes.

Americas

Chile-headquartered LATAM Airlines Group reported February cargo traffic up 8.0% y-o-y to 281 million RTKs. For the first two months of the year, LATAM’s cargo traffic was up 6.4% to 576 million RTKs.

United Airlines reported February cargo traffic up 9.6% y-o-y to 377 million RTKs, continuing a two-year period of strong gains. For the combined January/February period, United’s cargo traffic was up 9.4% to 749 million RTKs.

Delta Air Lines reported February cargo traffic up 7.9% y-o-y to 234 million RTKs – its eleventh consecutive monthly y-o-y gain after years of declining demand. For the first two months of 2018, Delta’s cargo traffic was up 5.6% to 460 million RTKs.

Will the trend of strong demand and rising yields continue for the rest of the year? And beyond? To hear what senior executives from all branches of the air freight and express industry see in their crystal balls, join us Cargo Facts Asia, 23-25 April, at the Mandarin Oriental Pudong in Shanghai. For more information, or to register, visit www.cargofactsasia.com.