IATA: Early 2008 air cargo levels 5 years away
Global air cargo volume in June was 16.5 percent lower than in June 2008, but 6 percent higher than the December 2008 low point for the industry, according to a monthly traffic analysis by the International Air Transport Association.
'Air freight volumes continued to improve during June,' IATA said. 'At a level 16.5 percent lower than the same month last year the freight ton kilometers flown on international markets remains exceptionally weak. However, the level of airfreight volumes has now risen by 6 percent above the December 2008 low point. This reflects the bottoming out of the global recession and the slow recovery in world trade.
'Note that the recovery is slow because business inventories are still high and final demand remains weak,' the organization added. 'At this pace of recovery it will take another five years before early 2008 levels of air freight volumes are regained.'
IATA said Asia-Pacific airlines saw air cargo fall 15.8 percent in June, an improvement from the 18.1 percent decline in May.
'This is still exceptionally weak but at least is now moving in the right direction, and is likely to reflect the improvement in economic conditions during the second quarter in a number of emerging Asian economies, such as China,' the report said.
Meanwhile, European and North American airlines are not seeing similar improvement, with June volume declines either mirroring those in May or worsening.
'Unlike Asia the economic recovery in North America and many European economies is being held back by the high levels of consumer debts and weak asset prices, which is causing many to repay debt rather than increase spending,' IATA said. 'Unsurprisingly this balance sheet restructuring is also holding back any improvement in airfreight volumes in these regions.'
Air cargo capacity utilization, at 47.3 percent in June, is 'disappointingly weak,' IATA said, as reports from logistics providers indicate more cargo is being shifted to less expensive ocean freight during the demand downturn.
'There are some structural reasons why this is so much lower than passenger load factors ' very unbalanced trade flows with Asia and a loss of share to ocean freight on some markets ' but the recession has been the main driver in the past 10 months,' IATA said. 'The low point in freight utilization was December last year, when air freight demand also hit a low. Since then utilization has improved ' by around 5 percent points ' but it still remains very low compared to where it was at the same time last year.'
Downward pressure on cargo yields is expected to remain low, given the excess capacity that has been created in freighter and combo-carriers by slackening passenger and cargo demand. The limited recovery in air cargo the past couple months won't be enough to overcome that pressure, IATA said.
'We know freight yields fell by 17 percent in the first quarter, reducing revenues by over 35 percent,' the report said. 'A further decline in yields during the second quarter is likely to have limited to benefits to revenues from the move up in freight demand.'