27 August: Updated to include Changi Airport results. See “Asia Pacific” notes, below.
20 August: Updated to include July results from Cathay Pacific. See “Asia Pacific” notes, below.
Many of the world’s big cargo carriers and handlers have now reported their July results. Detailed statistics for individual carriers and airports are provided below, but as shown in the chart at right, there is no overall pattern of either gain or loss. The results vary from exceptionally strong (Turkish Airlines reported July volume up 23%) to exceptionally weak (United Airlines reported an 18% decline in cargo traffic), but there are gains and losses within each geographic region.
Within each of the major regions, some carriers and airports reported year-over-year gains, while some reported losses. It is hard to predict whether worldwide air freight demand in July will be up or down once all results are available, but we expect the result will be buoyed by gains made by carriers in the Middle East, and that the overall result will be a small gain.
Optimism about the remainder of the year has been buoyed by economic data from Europe which appear to indicate that the eurozone has now officially exited recession. In addition, surveys in both the US and the EU show increasing consumer optimism – indeed, Bloomberg’s Consumer Comfort Index hit its highest point since 2008. However, we continue to believe that while a recovery may start in the second half of 2013, it will be relatively modest. However, if the countries of the European Union can put their political and economic problems behind them, solid, long-term growth in demand for air freight could return in 2014.
Asia Pacific
Cathay Pacific Airways reported July cargo traffic down 0.7% y-o-y to 715 million RTKs, it best year-over-year performance in 2013. continuing the general trend of declining demand that has been in place for over a year. For the year-to-date through July, Cathay’s cargo traffic was down 4.1% to 4.84 billion RTKs. While the July performance may have been an improvement over recent months, Cathay Pacific General Manager Cargo Sales & Marketing James Woodrow pointed out that it was anything but good: “Demand was soft out of many of the major airfreight markets last month and once again we saw tonnage and load factor dropping compared to 2012, when business was already weak. The bright spots in our network were the transpacific lanes and demand on intra-Asia routes, particular out of Hanoi and Dhaka. Europe and Japan remain two of the weaker markets at the moment.” As we noted last month, Cathay is ramping up the handling of its own cargo at the new Cathay Pacific Cargo Terminal at Hong Kong International, and is now processing a significant percentage of its import cargo. The terminal will be fully operational – handling all Cathay and Dragonair cargo – by the end of the year.
Hong Kong International Airport reported its July cargo handle up 1.9% y-o-y to 341,000 tonnes, with the increase driven by 4.6% growth in exports, particularly on the trans-Pacific. For the year through July, HKIA’s cargo handle was up 2.0% to 2.3 million tonnes.
Beijing-based Air China reported July cargo traffic down 1.5% y-o-y to 437 million RTKs. International traffic was down 0.7% to 321 million RTKs, and domestic traffic was down 2.2% to 108 million RTKs. This reverses Air China’s positive trend in recent months, but the carrier nonetheless reported cargo traffic for the first seven months of this year up 3.6% to 2.80 billion RTKs.
Shanghai-based China Eastern Airlines reported July cargo traffic up 3.4% y-o-y to 428 million RTKs. International traffic was up 3.6% to 339 million RTKs, while domestic traffic was up 2.3% to 74 million RTKs. For the year through July, China Eastern’s cargo traffic was up 1.7% to 2.72 billion RTKs.
Guangzhou-based China Southern Airlines reported July cargo traffic up 3.5% y-o-y to 356 million RTKs. International traffic was up 3.9% to 243 million RTKs, and domestic traffic was up 3.4% to 112 million RTKs. For the first seven months of 2013 China Southern’s cargo traffic was up 2.5% to 2.36 billion RTKs.
Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) reported its July handle down 2.7% y-o-y to 105,000 tonnes. International volume was down 3.7 % to 98,000 tonnes, while the much smaller domestic volume rose 14.8% to 7,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the first seven months of 2013, Pactl’s handle was up 0.9% to 603,000 tonnes.
Hong Kong Air Cargo Terminals (Hactl) reported its July handle down 10.6% y-o-y to 207,000 tonnes. Export volume was up strongly, increasing 8.0% to 116,000 tonnes. Import volume fell 22.1% to 47,000 tonnes, and transshipment volume dropped 36.7% to 35,000 tonnes. However, the import and transshipment results come as Cathay Pacific, Hactl’s biggest customer, has begun handling an increasing amount of its own import cargo in the new facility it opened in late February; and therefore do not say anything about the overall cargo volume at Hong Kong International. As we move further into 2013, and particularly when Cathay begins handling its export cargo, the impact on Hactl’s tonnage will become significant. For the year-to-date through July Hactl’s handle was down 1.4% to 1.53 million tonnes.
Singapore Airlines, which has seen steadily decreasing cargo demand for the last five months, reported July cargo traffic down 9.1% y-o-y to 553 million RTKs. For the first seven months of 2013 SIA’s cargo traffic was down 5.5% to 3.76 billion RTKs.
Singapore’s Changi Airport reported its July Cargo Handle up 1.1% y-o-y to 160,000 tonnes. For the year through July, Changi’s handle was down 1.8% to 1.04 million tonnes.
Europe & Middle East
Lufthansa Cargo reported its July traffic up 1.2% y-o-y to 742 million RTKs. This is the third month of positive results (traffic was up 0.8% in May and 1.7% in June), reversing a long-standing trend of declines. For the Lufthansa Group as a whole, July cargo traffic was up 1.0% to 873 million RTKs. While the overall gain was relatively modest, Lufthansa reported strong growth in air freight demand to/from the Asia-Pacific (up 6.7% to 409 million RTKs). Trans-Atlantic traffic, however, declined 2.9% to 357 million RTKs, and traffic to/from the Middle East/Africa dropped 9.9% to 73 million RTKs. For the first seven months of 2013, Lufthansa Cargo’s traffic was down 2.1% to 4.99 billion RTKs, while Group cargo traffic was down 1.5% to 5.88 billion RTKs.
Air France-KLM continued to report declining cargo demand, with July traffic down 5.8% y-o-y to 848 million RTKs. Traffic was down on all major trade lanes, with the Asia-Pacific continuing to suffer the biggest losses (down 8.2% to 328 million RTKs). And not only was traffic down, AF-KLM said cargo yield also fell, although it did not provide details. Cargo load factor for the month was down 1.8 percentage points to 59.7%. For the year-to-date through July, AF-KLM’s cargo traffic was down 6.3% to 5.78 billion RTKs.
International Airlines Group (parent of British Airways and Iberia) reported July cargo traffic down 8.6% y-o-y to 468 million RTKs. Both subsidiary carriers reported declines, with BA down 6.9% to 391 million RTKs and Iberia down 16.3% to 77 million RTKs. For the first seven months of 2013 IAG’s cargo traffic was down 8.4% to 3.22 billion RTKs.
Turkish Airlines continues to report exceptionally strong results, with July cargo volume up 23.2% y-o-y to 49,000 tonnes. For the first seven months of 2013, Turkish reported cargo volume up 16.0% to 312,000,000 tonnes.
Frankfurt Airport (FRA) reported its July freight handle down slightly (0.6%) y-o-y to 177,000 tonnes, continuing a trend of small gains and small declines that began in January. Those small gains and losses have cancelled out, and for the first seven months of 2013, Overall, however, the trend has been slightly positive and for the first seven months of 2013, FRA’s handle was up 0.7% to 1.19 million tonnes. However, while the year-to-date handle is up slightly over 2012, it is still slightly below 2007 – that is, FRA is handling less freight now than it did six years ago.
London’s Heathrow Airport (LHR) reported its July handle down 6.0% y-o-y to 119,000 tonnes. For the year-t-date through July, LHR’s handle was down 4.2% to 817,000 tonnes.
Americas
As was the case last month, only one of the four big non-express carriers in the Americas – American Airlines – reported a gain in July. The other three saw cargo traffic decline from 1.3% (LATAM) to 18.0% (United).
LATAM Airlines Group (parent of LAN and TAM), reported July cargo traffic down 1.2% y-o-y to 348 million RTKs. The company said the decline in traffic came was “driven by weaker imports into Latin America.” The company also reported cargo capacity up 1.9% “as a result of increased availability in the bellies of passenger aircraft, partially offset by reduced freighter operations.” For the first seven months of 2013, LATAM’s cargo traffic was up 1.2% to 2.57 billion RTKs.
United Airlines reported July cargo traffic down 18.0% y-o-y to 240 million RTKs. For the year through July, United’s cargo traffic was down 12.3% to 2.14 billion RTKs.
Delta Air Lines reported July cargo traffic down 4.9% y-o-y to 293 million RTKs. For the first seven months of the year, Delta’s cargo traffic was down 3.4% to 1.96 billion RTKs.
American Airlines reported July cargo traffic up 5.7% y-o-y to 225 million RTKs. For the first half, American’s cargo traffic was down 1.2% to 1.51 billion RTKs.
Updated on 20 August to include results from Cathay Pacific.
Updated on 27 August to include Changi Airport results.