Airlines face accelerated decline in global air freight
Global freight markets are showing a shift from air to ground-based transport, according to the latest industry figures from the International Air Transport Association. The IATA said the airlines experienced an acceleration of the ongoing decline in freight in August, with a 3.8% reduction compared to the same month in 2010 more than twice the pace of July’s 1.8% year-on-year decline.
Apart from some good growth in Latin America, the Middle East and Africa, the world’s major air cargo markets are being hit by slowing economies.
Tony Tyler, IATA’s director general and CEO said there was little optimism for improved conditions in air freight “any time soon”.
The airlines’ association said there had been a loss of market share to other forms of transport from the second half of 2010 onwards, reflecting a “further deterioration in global economic conditions”.
Overall usage of freight markets has declined four percentage points since the second quarter of 2010, the IATA said, making the freight business “a very difficult market in which to sustain profitability”.
The decline has been particularly felt in major markets including North America, Asia and Europe.
In North America, carriers reported a 7% fall in cargo volumes in August, compared to August 2010. Carriers in the Asia-Pacific region reported a 5.4% year-on-year volume reduction, while those in Europe saw a 1.8% year-on-year drop.
Operators in Africa, the Middle East and particularly Latin America actually saw some good growth – with a 2.2% growth in cargo volumes in Africa and 3.7% growth in the Middle East, the growth economies in Latin America have brought a 5.4% growth in air cargo for August.
However, these markets currently represent respectively only 1.1%, 10% and 3.3% of the global air cargo market.
Tyler said the airlines are “bracing for tough times ahead”.
He said: “Economic uncertainty owing to the European soverign debt crisis and the growing likelihood of a protracted period of slow growth in developed economies mean the industry will be even more focused on reducing costs and improving efficiency.”
Global integrators including FedEx and UPS have recently noted slowdowns in various regional economies, and have been adjusting their air fleets to respond, particularly with the slump seen over the summer in the Asia-Pacific region.