Air cargo continues low gear acceleration

Geneva: The International Air Transport Association (IATA) reported a continued modest improvement in air cargo markets in August. August air freight demand was up 3.6% on the previous year. That is considerably better than year-to-date performance of a 0.7% expansion.

Demand for air freight began increasing slowly from April, in line with strengthening business confidence, as economic performance in Europe and the US improved. The Eurozone economy, for example, stabilised in the second quarter of 2013 and import volumes improved. A strong upswing, however, would require a significant improvement in the cargo performance of airlines in the Asia-Pacific region. They are the largest players in global air cargo with a collective 38% market share. Their year-on-year performance for August was basically flat (-0.2%).

"There are some signs of improvement in demand, but the air freight business remains tough. Freight volumes are only now reaching the levels of 2011 when the cargo business peaked with a revenue of $67 billion. This year we expect $59 billion of revenue from air cargo globally. That takes the top line back to 2007 levels. But to earn that revenue, we will be moving nearly 17% more cargo and dealing with a 40% hike in jet fuel. The road ahead will be challenging," said IATA Director General and CEO, Tony Tyler.