Air freight industry shows signs of growth-IATA

Geneva, December 10, 2014 (STAT):-Air freight volumes continue to show solid gains on a year ago, supported by improving growth in trade in some regions, but weakness in load factors and yields continues to place downward pressure on financial performance. Emerging Asia trade volumes have seen continual increase over the past 6 months and in […]

Geneva, December 10, 2014 (STAT):-Air freight volumes continue to show solid gains on a year ago, supported by improving growth in trade in some regions, but weakness in load factors and yields continues to place downward pressure on financial performance. Emerging Asia trade volumes have seen continual increase over the past 6 months and in the US, optimism about the economic outlook is the highest it has been since the recession. These developments have supported growth in demand for air-freighted commodities like semi-conductors. However, in Europe consumer confidence and trade activity have weakened due to the Russia-Ukraine crisis. Moreover, there has been no increase in global business confidence for the past several months, which casts doubts over the strength of the global economic upturn and prospects for continued trade growth. There have been notable declines in jet fuel prices since mid-2014 which should help reduce airline costs. But yields continue to decline slowly, putting a strain on financial performance. Yields could weaken further as new aircraft deliveries come into service in 2015. Cargo heads surveyed in October do not expected to see any improvement in yields during the year ahead, but they do anticipate continued growth in demand.

The demand environment for air cargo is mixed. World trade volumes have recovered after weakness earlier in the year showing solid gains over recent months, mostly a result of more goods moving to/from Emerging Asia. Business confidence continues to signal expansion in manufacturing activity, but lack of further improvement over recent months means levels are now below those of a year ago . This casts doubts over the strength of the global economic upturn and further gains in trade. On the positive side, there has been no change in inventory to sales ratios suggesting businesses still have no immediate need to reduce their use of air cargo.

Demand drivers remain positive overall, but are showing signs of regional divergence. In China, consumer confidence remains broadly stable, and in the US, optimism about the economic outlook is the highest it has been since the recession. By contrast, European consumers have become more pessimistic over recent months, reflecting the adverse impacts of the Russia-Ukraine crisis . Nonetheless, demand drivers remain improved on a year ago, and this continues to support stronger demand for air-freighted commodities, as indicated by expansion in semi-conductor shipments . Capital expenditure intentions of companies in the UK and Japan remain positive on balance, but have declined slightly in Japan.

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