March cargo results: Middle East carriers continue to take market share

The world’s major cargo carriers, handlers and airports have begun to publish their March cargo traffic and volume data, and while there are still some gaps the pattern that is emerging is very much a continuation of the small-single-digit year-over-year declines seen in the recent past. Perhaps things are a little less bad, but so far there are no signs of a real recovery in air freight demand. The general consensus seems to be that those signs will begin showing up in the second half of this year, particularly if there is no worsening of the economic and political situation in the Eurozone. For further analysis of the prospects for growth this year and next, please join us in Hong Kong next week at Cargo Facts Asia, 16 – 17 April. For more information, or to register, click here.

Before presenting the details from the carriers, airports and handlers that have reported, we note that there is a significant group that does not report. We are referring, of course, to the four big carriers from the Gulf Region: Emirates, Etihad, Qatar, and Saudia. With their big fleets of cargo-friendly widebody passenger aircraft (particularly 777-300ERs), and ever-widening networks, these carriers are continuing to muscle aggressively into the airfreight arena. They are not public companies, and do not report results in the way carriers like Cathay or Lufthansa do. However, they do often publish ad hoc news releases, as Abu Dhabi-based Etihad Airways did at the beginning of this week. In its note, the carrier said first-quarter cargo volume was up 20% to 102,000 tonnes, while cargo revenue rose 17% to US$193 million.

Given that cargo volume worldwide is roughly flat with last year, the 17,000 extra tonnes Etihad carried in the quarter represent 17,000 tonnes taken from other carriers. So when you see the declines in the chart below, remember that they are roughly balanced by gains made by other carriers – particularly carriers from the Middle East. Now, on to the results…

Asia Pacific

Cathay Pacific Airways has not yet published its traffic figures for March, but has indicated that its cargo traffic for the month will be down compared to March 2012. Speaking to our European Editor Alex Lennane, Cathay cargo boss Nick Rhodes said: “March was a better month than January and February, with each week a little better than the previous one, but still down on expectations and well down on last year. All very disappointing. Capacity continues to exceed demand, especially to Europe.” (The full text of Alex’s discussion is here.)

Hong Kong Air Cargo Terminals (Hactl) reported its March handle down 3.1% y-o-y to 246,000 tonnes, with a 10.6% gain in transshipment volume to 64,000 tonnes not enough to compensate for losses in import and export volumes. Imports were down 3.4% to 56,000 tonnes while exports (traditionally the driver of Hactl’s fortunes), were down 8.8% to 126,000 tonnes. As we move further into 2013, the impact on Hactl’s tonnage of the opening of Cathay Pacific’s new cargo terminal at Hong Kong International will become significant, but at least for this month, relatively little of Hactl’s 3.1% decline stems from that. For the first quarter of 2013 Hactl’s handle was up 1.7% over 1Q12 to 644,000 tonnes.

Guangzhou-based China Southern Airlines reported March cargo traffic up 1.0% y-o-y to 386 million RTKs. International traffic was down slightly (0.6%) to 263 million RTKs, but domestic traffic rose 5.0% to 122 million RTKs. China Southern turned in a strong performance in the combined January/February period, but the lack of growth in March meant that China Southern’s first-quarter cargo traffic was up just 6.2% to 979 million RTKs.

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its March handle up 0.6% y-o-y to 111,000 tonnes. International volume was flat with March 2012 at 103,000 tonnes, while the much smaller domestic volume was jumped 11.0% to 7,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the first quarter of 2013, Pactl’s handle was up 0.8% to 281,000 tonnes.

Europe & Middle East

Lufthansa Cargo reported its March traffic down 2.0% y-o-y to 802 million RTKs. For the Lufthansa Group as a whole, March cargo traffic was down 1.7% to 939 million RTKs reflecting the impact of slight growth (0.6%) at subsidiary SWISS. For the first quarter of 2013, Lufthansa Cargo’s traffic was down 5.9% to 2.02 billion RTKs, while Group cargo traffic was down 4.5% to 2.39 billion RTKs.

Air France-KLM continued to struggle on the cargo front, with March cargo traffic down 12.1% y-o-y to 874 million RTKs. Traffic was down on all trade lanes, with traffic to/from the Asia-Pacific region hit hardest – down 20.5% to 331 million RTKs. The best result was on the trans-Atlantic lane, where traffic was down just 4.3% to 359 million RTKs. The company did note, however, that in addition to “lackluster international trade” it was hit by snowy conditions and labor strife at its Paris hub. For the first quarter of 2013 AF-KLM’s cargo traffic was down 6.9% to 2.42 billion RTKs.

International Airlines Group (IAG, parent of British Airways and Iberia) reported March cargo traffic down 7.9% y-o-y to 499 million RTKs. As has been the case since the BA/Iberia merger, the monthly decline hides a considerable difference in the performance of the two carriers. BA’s cargo traffic in January was down just 3.3% to 415 million RTKs – not a good result, but better than its main European competitors – but Iberia, which has reported low-double digit declines through most of 2012, and a 22.7% drop in February, hit a new low in March with cargo traffic down 25.7% to just 84 million RTKs. For the first quarter, IAG’s cargo traffic was down 8.0% to 1.36 billion RTKs.

Frankfurt Airport (FRA) reported its March freight handle up 4.7% y-o-y to 189,000 tonnes. This is an acceleration of the general trend of small y-o-y increases at FRA that began in November last year, and a welcome change from the 18 months of declines before that. For the first quarter of 2013, FRA’s handle was up 1.2% to 483,000 tonnes. But while the first quarter total for 2013 may be up over the previous year, it is nonetheless 8.0% below the previous high point in 2010, and in fact 1.8% below the first quarter total in 2007 – six years ago!

Americas

LATAM Airlines Group (parent of LAN and TAM), reported March cargo traffic up slightly (0.4%) y-o-y to 407 million RTKs. The company said the increase in traffic came despite “a delay on certain seasonal demand.” For the first quarter of 2013, LATAM’s cargo traffic was down flat with 1Q12 at 1.10 billion RTKs.

United Airlines reported March cargo traffic down 13.2% y-o-y to 300 million RTKs. For the first quarter of this year, United’s cargo traffic was down 13.6% to 797 million RTKs.

Delta Air Lines reported March cargo traffic down 0.8% y-o-y to 304 million RTKs. For the first quarter, Delta’s cargo traffic was down 1.3% to 820 million RTKs.

American Airlines reported March cargo traffic down 4.6% y-o-y to 235 million RTKs. For the first quarter of the year, American’s cargo traffic was down 7.8% to 599 million RTKs.