Double-digit growth in air freight demand continues

  • David Harris
  • July 17, 2017
  • 0

With June results in from many of the world’s major cargo carriers and airports, it is clear that growth in demand for air freight is continuing to be very strong – perhaps down slightly from what we reported in May, but only slightly. And since demand worldwide (whether measured in tonnes, freight tonne kilometers, or direct tonne kilometers) was about 13% in May, we expect that when IATA and WorldACD publish their detailed analyses in two weeks, we will see growth continuing in double digits.

What is most interesting about the early data from June is that there is no universal trend. Some carriers and airports saw stronger growth than they saw in May, while for others, growth was down somewhat. Overall, however, it was another good month for the air freight industry.

Now for the details…

Asia Pacific

Hong Kong International Airport reported cargo volume in June up 11.4% y-o-y to 410,000 tonnes, continuing this year’s pattern of strong volume growth. For the first half of 2016, HKIA’s cargo handle was up 11.2% to 2.3 million tonnes. Commenting on the results, HKIA said: “A 17% year-on-year increase in June exports led to high growth in cargo tonnage for the month. Transshipments also registered strong 10% growth. Amongst key trading regions, Europe and North America saw the most significant increases in June.”

Beijing-based Air China reported June cargo traffic up 7.0% y-o-y, to 638 million RTKs. International traffic was up 10% over June 2016, to 499 million RTKs, while domestic traffic was down 2.0%  to 130 million RTKs. The much smaller regional traffic was down 4.2% to 9.3 million RTKs. For the year through June, Air China’s cargo traffic was up 6.2% to 3.53 billion RTKs.

Guangzhou-based China Southern Airlines reported June cargo traffic up 19.4% y-o-y to 613 million RTKs. The overall growth came on the back of a 26.4% jump in international traffic to 477 million RTKs, while domestic traffic dropped slightly (0.3%) to 134 million RTKs. For the first six months of the year, China Southern’s cargo traffic was up 17.2% to 3.40 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported a 13.8% y-o-y increase in its June cargo handle to 155,000 tonnes, its best monthly result this year.

Pactl started the year strongly, with a 12.3% y-o-y increase for the combined January/February period, and stayed in double digits with an 11.4% jump in March tonnage. April saw a bit of a fall-off, with growth dropping to 9.6% over April 2015. This was part of a worldwide trend of slowing (though still strong) growth in April, and we wondered if it was the beginning of a return to slower growth for the rest of the year. But year-over-year jumps of 13.0% in May and 13.8% in June make it clear that cargo volume in Shanghai is still growing at a pace we have not seen for many years.

International volume for the month was up 15.4% to 147,000 tonnes, while the much smaller domestic volume was down 8.5% to 8,000 tonnes (most of Shanghai’s domestic cargo moves through nearby Hongqiao Airport). For the first half of 2017, Pactl’s handle was up 12.0% to 874,000 tonnes.

Taiwan-based China Airlines reported June cargo traffic up 4.0% y-o-y to 464 million RTKs, the eleventh month of increased traffic after a long period of declining demand. But, while CAL’s cargo traffic is growing modestly, cargo revenue is soaring – up 14.9% y-o-y in June. Year-to-date, CAL’s cargo traffic was up 5.2% to 2.68 billion RTKs, and cargo revenue was up 11.1%.

Taiwan-based EVA Air reported June cargo traffic up 6.5% y-o-y to 316 million RTKs, the carrier’s thirteenth consecutive positive result after a long period of declines. As is the case with fellow-Taiwanese carrier China Airlines, EVA’s cargo revenue is growing much more strongly than its traffic – up 9.9% y-o-y in June. For the first half of the year, EVA’s cargo traffic was up 5.3% to 1.77 billion RTKs.

South Korea’s Incheon Airport reported its June cargo handle up 4.4%, to 240,000 tonnes. For the first six months of 2017, ICN’s handle was up 9.4% to 1.4 million tonnes.

Europe & Middle East

The demand recovery at Lufthansa that started in July and August last year, continued through the first half of 2017, with the carrier reporting Group cargo traffic up 7.2% y-o-y in June to 903 million RTKs. The growth was led by a 9.2% increase on the Asia-Pacific lane to 420 million RTKs,  while traffic on the trans-Atlantic lane was up almost as much – up 7.6% to 386 million RTKs. Traffic to/from the Middle East and Africa rose 7.9% to 66 million RTKs. For the first six months of this year, Lufthansa’s Group cargo traffic was up 7.1% to 5.17 billion RTKs.

Air France-KLM reported June cargo traffic up 3.0% y-o-y to 701 million RTKs – the fourth consecutive month of positive growth after several years of declines. Of the two carriers in the group, Air France reported its June traffic up 9.1% to 309 million RTKs, while KLM reported a decline of 1.3% to 391 million RTKs. For the year to date through June, AF-KLM’s cargo traffic was up 1.6% to 4.19 billion RTKs.

International Airlines Group reported June cargo traffic up 11.7% y-o-y to 479 million RTKs, its best result – by far – in many years. Subsidiary carrier British Airways reported June cargo up 11.5% to 378 million RTKs and Spain-based Iberia’s cargo was up 10.0% to 88 million. But the biggest gain was at Ireland-based Aer Lingus, which reported June cargo traffic up 30.0% to 13 million RTKs – a huge jump, but from a very small base. For the first half of 2017, IAG’s cargo traffic was up 5.0% to 2.79 billion RTKs.

Turkish Airlines reported June cargo volume up 24.4% y-o-y to 97,000 tonnes – not quite a big a jump as the 35.8% growth the carrier reported in April and 34.0% in May, but still the strongest growth of any of the major airlines so far this month. Turkish’s cargo volume for the first half of 2017 was up 25.8% to 516,000 tonnes.

Frankfurt Airport (FRA) reported its cargo handle up 4.7% y-o-y to 188,000 tonnes in June. For the first six months of 2017, FRA’s handle was up 4.8% to 1.1 million tonnes.

Amsterdam’s Schiphol Airport reported its April handle up 9.8% to 149,000 tonnes. For the first half of the year, Schiphol’s handle was up 8.7% to 867,000 tonnes.

London’s Heathrow Airport (LHR) reported its June handle up 13.4% to 142,000 tonnes. Year-to-date, LHR’s handle was up 9.1%, to 823,000 tonnes.

 Americas

After years of declines, cargo traffic growth turned positive for Chile-headquartered LATAM Airlines Group in May, and the growth continued in June, with the carrier reporting traffic up 2.7% y-o-y to 259 million RTKs. While this is a welcome change, it still leaves LATAM’s cargo traffic for the first six months of 2017 down 3.7% to 1.61 billion RTKs. As we reported in April, as part of an ongoing restructuring process, LATAM Cargo appointed Andrés Bianchi as its new CEO. Under Bianchi’s leadership LATAM said it would focus on increasing competitiveness through productivity enhancements and improvements to its product portfolio. Whether the return to demand growth in May June marks the beginning of a real turnaround remains to be seen, but it must have brought welcome relief to the carrier’s cargo team.

United Airlines reported June cargo traffic up 22.2% y-o-y to 409 million RTKs, its fifteenth consecutive month of strong gains. Year-to-date, United’s cargo traffic was up 21.1% to 2.30 billion RTKs.

American Airlines Group reported June cargo traffic up 16.4% y-o-y to 344 million RTKs. For the first six months of this year, American’s cargo traffic was up 14.5% to 1.93 billion RTKs.

After a long period of declining cargo traffic, a turnaround plan at Delta Air Lines appears to be paying off. The Atlanta-based carrier reported June cargo traffic up 16.3% y-o-y to 285 million RTKs. This follows gains of 5.7%, 9.5%, and 12.2% in March, April and May, respectively, and brings Delta’s cargo traffic for the year to 1.50 billion RTKs, up 5.7% over the first half of 2016.

 

 

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