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IATA's March air freight survey indicates gloomy outlook for industry
THE International Air Transport Association's (IATA) latest data for global air freight markets for March shows a two per cent drop in total volumes measured in freight tonne kilometres (FTKs) compared to the same period last year.
Worse yet, freight capacity (measured in available freight tonne kilometres or AFTKs) increased by 6.9 per cent, "putting increased pressure on already struggling yields," IATA said in a statement.
"The weak results reflect subdued growth in world trade, exaggerated by the comparison to a particularly strong start to 2015 when air freight volumes were boosted by the effects of the US west coast seaports strike.
"The most significant fall in demand was reported by carriers in Asia Pacific and North America. Combined they account for around 60 per cent of global freight traffic and reported declines of 5.2 per cent, and 1.8 per cent, respectively," the statement said.
"It is shaping up to be another tough year for air cargo. February 2016 world trade volumes were only 0.4 per cent higher than at the end of 2014. And the expectations of purchasing managers gives little optimism for an early uptick. The combination of fierce competition, capacity increases and stagnant demand makes this a very difficult environment in which to generate profits," said IATA director general Tony Tyler, former CEO of Hong Kong's Cathay Pacific Airways.
Asia Pacific carriers saw a 5.2 per cent drop in demand in March compared to the same month in 2015, with export volumes from emerging Asian economies having contracted in annual terms for 11 of the past 12 months.
European airlines saw demand for air cargo rise by just 1.3 per cent in March, compared to the same period in 2015, while capacity increased by 7.9 per cent.
Latin American carriers saw demand decrease by 5.9 per cent in March year on year. Volumes are now 15 per cent lower that their seasonally-adjusted peak in late-2014.
North American airlines saw demand fall by 1.8 per cent in March year on year, partially due to the rollover effect of the US port strike in 2015 which gave air freight in the region a boost.
Additionally, the region's carriers are negatively impacted by the drop in global trade while the strong US dollar is keeping exports under pressure.
Worse yet, freight capacity (measured in available freight tonne kilometres or AFTKs) increased by 6.9 per cent, "putting increased pressure on already struggling yields," IATA said in a statement.
"The weak results reflect subdued growth in world trade, exaggerated by the comparison to a particularly strong start to 2015 when air freight volumes were boosted by the effects of the US west coast seaports strike.
"The most significant fall in demand was reported by carriers in Asia Pacific and North America. Combined they account for around 60 per cent of global freight traffic and reported declines of 5.2 per cent, and 1.8 per cent, respectively," the statement said.
"It is shaping up to be another tough year for air cargo. February 2016 world trade volumes were only 0.4 per cent higher than at the end of 2014. And the expectations of purchasing managers gives little optimism for an early uptick. The combination of fierce competition, capacity increases and stagnant demand makes this a very difficult environment in which to generate profits," said IATA director general Tony Tyler, former CEO of Hong Kong's Cathay Pacific Airways.
Asia Pacific carriers saw a 5.2 per cent drop in demand in March compared to the same month in 2015, with export volumes from emerging Asian economies having contracted in annual terms for 11 of the past 12 months.
European airlines saw demand for air cargo rise by just 1.3 per cent in March, compared to the same period in 2015, while capacity increased by 7.9 per cent.
Latin American carriers saw demand decrease by 5.9 per cent in March year on year. Volumes are now 15 per cent lower that their seasonally-adjusted peak in late-2014.
North American airlines saw demand fall by 1.8 per cent in March year on year, partially due to the rollover effect of the US port strike in 2015 which gave air freight in the region a boost.
Additionally, the region's carriers are negatively impacted by the drop in global trade while the strong US dollar is keeping exports under pressure.
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