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IATA takes positive view of 2015 based on late blooming 2014

Worldwide demand for air freight should expand by 4.5 per cent in 2015, according to the International Air Transport Association (IATA), surpassing the anticipated rise in world trade by 0.5 per cent.

But IATA chief executive Tony Tyler, former CEO of Hong Kong's Cathay Pacific Airways, said while he remains optimistic, other factors such as political risk and macro-economics could impact trade flow.

IATA released strong air cargo demand figures for November 2014, due in part to a healthy rise in world trade. The stagnation in the air cargo industry that began in 2011 was met with strong growth in international trade in the second half of 2014, while domestic production of goods remained stable.

For the peak-season figure from November, IATA reported that air freight demand, measured in freight tonne kilometres (FTK), rose by 4.2 per cent year on year, which was also a robust month.

This global rise in demand came overwhelmingly from the Asia-Pacific and Middle East regions, representing 93 per cent of worldwide growth in November. Asia-Pacific carriers captured 55 per cent of the global FTK growth, with a market share of 39.7 per cent, while the Middle East region accounted for 38 per cent, with a market share of 13.3 per cent.

Meanwhile, freight capacity grew by 3.3 per cent year on year in November. Compared to October, air freight demand in November grew 0.8 per cent, reported Atlanta area Air Cargo World.

By region, Asia-Pacific airlines reported a 5.9 per cent increase in FTKs with a four per cent capacity increase. Although business confidence in China has weakened, government policies to encourage consumption are having a positive impact.

Japan, although weakened by a recent consumption tax increase, has seen business confidence improve. Reflecting these trends, emerging Asian economies have seen a sharp rise in imports over the last six months.

Middle Eastern carriers had the highest year-on-year growth in November, at 12.9 per cent, followed by a 10.5 per cent rise among African airlines. Load factors in the African region improved as capacity was down by 2.9 per cent.

European carriers saw only a small 0.9 per cent rise in FTKs, with capacity increasing by 2.6 per cent. The EU continues to languish due to concerns over the euro and economic sanctions against Russia.

North America too saw a decline of 0.3 percent in FTKs, along with a drop in capacity of 2.6 per cent, even though port strikes by ILWU workers created more demand for air freight. The US economy should support a return to growth, IATA predicted.

Latin American airlines saw FTKs fall by 0.7 per cent, reflecting economic weaknesses across the continent, particularly in Brazil and Argentina. Capacity in the region was reduced by 0.5 per cent.