April data arriving from the world’s big cargo carriers, airports, and handlers suggests that the fall-off in demand growth exhibited in March was not a one-off, and that the more difficult year-over-year comparisons expected during 2018 are now materializing. With only a couple of exceptions, operators in the air cargo supply chain reported weaker growth, and in some cases declines, compared with the stronger growth the operators reported a year earlier, and the global freight tonne kilometer (FTK) growth of 8.5% y-o-y IATA reported for April 2017. Carriers and airports in Asia, particularly, recorded significantly weaker demand year-to-date for 2018. Bright spots in April 2018 serving as exceptions to the rule include Turkish Airlines, which extended the significant growth it experienced during 2017 into 2018, and LATAM Cargo, which reversed 2017’s declines to achieve nearly double-digit y-o-y growth in April 2018.
To take a closer look at April’s results…
Hong Kong International Airport reported a 4.8% increase in its April cargo handle to 426,000 tonnes, with 17% growth in transshipments – particularly in cargo throughput to North America – primarily responsible for the growth. However, April’s growth stood 4.1 percentage points under the 8.9% y-o-y growth reported in April 2017, and year-to-date traffic is even lower, at 4.2%. The comparison is particularly difficult, as the airport recorded nearly double-digit growth for the full year of 2017.
Guangzhou-based China Southern Airlines reported April cargo traffic up 4% year-over-year, sharply lower compared with April 2017’s 16.8% y-o-y growth. RTKs were up slightly month-to-month as well, rising 2.2% to 632 million RTKs for April.
Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest cargo handler at Shanghai’s Pudong Airport) reported a 7.2% increase in its April handle y-o-y, to 163,000 tonnes, representing only a slight increase from its March handle. Pactl’s year-to-date handle through April stood just under 600,000 tonnes for a 6.3% increase. The increase in Pactl’s handle comes from increases in international cargo, which was up 7.4% for April and 6.8% year-to-date, y-o-y. Domestic cargo year-to-date through April declined 2.4%, as most of the domestic cargo that moves through Shanghai is handled at Hongqiao Airport (SHA).
Singapore Airlines’ April cargo traffic fell 0.4% y-o-y to 578 million RTKs. However, year-to-date through April, the carrier recorded a 3.3% y-o-y increase in RTKs, up from the 2.8% growth during the first four months of 2017.
Taiwan-based China Airlines reported higher y-o-y growth for April 2018, of 5.4% to 491 million RTKs, compared with only 1.2% y-o-y growth recorded in April 2017. However, April figures represent a month-to-month decline for the carrier of about 0.6%.
Taiwan-based EVA Air also recorded an increase in y-o-y growth in April compared with 2017, via a 4.1% increase in cargo traffic to 311 million RTKs. Month-to-month, cargo traffic for the carrier declined 2.4%. Over the first four months of 2018, cargo traffic in RTKs increased by only 2.5%, however, compared with stronger growth of 5.6% for January through April 2017.
South Korea-based Incheon Airport reported a significantly lower cargo handle in April 2018 compared with the prior year, as April’s y-o-y growth for 2018 was virtually flat, increasing only 0.1% to 247,000 tonnes. Month-to-month volumes were 5.1% lower, and year-to-date volumes through April rose only 1.1% y-o-y, compared with 11.5% growth over the same period in 2017.
Europe & Middle East
Lufthansa Group reported April traffic up 3.4% y-o-y to 929 million RTKs, down from the 6% April growth recorded for 2017. Year-to-date traffic was up by 4.5% y-o-y, but still lags the stronger 7.7% growth over the first four months of 2017. Capacity grew more than demand for April – increasing 6.9% y-o-y to 1.383 billion available cargo tonne kilometers.
Air France-KLM reported a 6% decline in April cargo traffic y-o-y, to 675 million RTKs. Most of the decline in cargo traffic was on the Air France side, which declined 1.1% y-o-y in April to 275 million RTKs, while KLM reported a smaller RTK decline of 0.3% to 400 million RTKs. Year-to-date, Air France-KLM traffic declined by 1.9% through April, to 2.71 billion RTKs.
International Airlines Group reported a 3.0% increase in April traffic y-o-y, to 480 million RTKs, in line with the 3.1% growth reported for April 2017. April’s results mark the first month of 2018 in which the group recorded y-o-y volume growth, and subsequently, year-to-date growth through April was only 0.2%, at 1.84 billion RTKs. Of the airlines within the group, subsidiary carrier Iberia reported the strongest month with 11.9% y-o-y growth to 94 million RTKs.
Turkish Airlines reported April cargo volumes up 18.1% y-o-y to 112,999 tonnes, down from April 2017’s robust 35.8% growth. However, year-to-date growth at the carrier was an outstanding 31.5%, by far the strongest growth reported by any major carrier, airport, or handler so far in 2018, and well-above the 24.1% y-o-y growth recorded for the first four months of 2017. Month-to-month, volumes declined overall and for most regions, with the exceptions of North America and Central and South America.
Frankfurt Airport (FRA) reported an increase of 2.3% y-o-y in its cargo handle for April, to 190,000 tonnes. While the increase outpaced the past April’s 1.9% growth rate, year-to-date traffic through April 2018 was lower than during the same period in 2017, at only 1.1% for a total of 729,000 tonnes.
Amsterdam’s Schiphol Airport reported a 6.3% decline in April traffic y-o-y to 137,000 tonnes, and a 3.2% decline year-to-date through April, to 549,000 tonnes. The ongoing decline reflects the capacity squeeze at Schiphol, where recently-enforced slot restrictions have seen many freighter flights move to other airports in Europe.
London’s Heathrow Airport (LHR) reported a 2.3% increase in its cargo handle to 141,000 tonnes, down from an 8.6% increase recorded for April 2018. Volumes for the first four months of 2018 were up 3.8% year-over-year.
Chile-headquartered LATAM Airlines Group reported a 9.9% y-o-y increase for April, to 295 million RTKs. While April saw less growth than March, when traffic increased 13.6% y-o-y, the gain compared with April 2017’s y-o-y decline of 2.8% is significant, reflecting Brazil’s economic recovery and improved performance among Latin American operators.
Delta Air Lines reported a 4.1% increase in cargo traffic y-o-y for April, to 267 million RTKs, and a year-to-date increase of 6.3%. While the monthly increase is less than that reported for April 2017, when volumes increased 9.5% y-o-y, the ongoing growth reflects the overall improvement at the carrier, which has now recorded thirteen consecutive months of y-o-y gains after several years of demand decline.
United Airlines reported April cargo traffic up 5.7% to 410 million RTKs, while year-to-date traffic through April rose 8.3% to 1.60 billion RTKs. While growth has remained steady at United Airlines, it has slowed considerably from the 19.5% y-o-y growth recorded for April 2017.