International Freight Forwarder Association

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IATA Air Transport Market Analysis

Thursday, July 28, 2011

Freight (Domestic + International)

  • Asia Pacific carriers , the biggest players in the air freight market with a 40.5% market share, also recorded the largest year-on-year decline (-5.8%). This is mainly attributable to (1) disrupted supply chains for the electronics and auto industries in the wake of the Japanese tsunami and earthquake and (2) slower economic growth in China. The strength of the region however is shown in the maintenance of the highest load factors (58.6%) well ahead of the 45.7% industry average for the month.
  • European carriers posted a 1.3% decline and North American carriers recorded a decline of 3.0% compared to June 2010 levels.
  • Carriers in the Middle East, Latin America and Africa showed year-on-year growth for June, recording demand increases of 3.7%, 2.8% and 0.3% respectively.

Key points from our full report on air transport markets in June:

  • June saw a slight softening of demand for air travel and freight, following two months of improving traffic;
  • Total RPKs flown by commercial airlines worldwide were 4.4% higher in June, while freight volumes were 3% lower;
  • But the trend in air travel remains upwards;
  • We estimate that this trend is growing at a pace of 4-5% a year, slower than the immediate post-recession rebound due to slowing economies and higher fuel prices;
  • The trend in air freight looks little better than flat, though international is a little stronger than domestic;
  • World trade continued to expand but other modes of transport are benefiting, not air;
  • Regional differences persist;
  • The Japanese domestic market is recovering only slowly and remains 23% down on pre-crisis levels;
  • African markets remain 4% lower than before civil unrest broke out in several North African countries;
  • Indian and Brazil are growing strongly, but the Chinese domestic market has slowed under tighter economic policies;
  • Of note on international markets Latin American airlines continue to do well, reflecting the impact of strong economies and trade flows;
  • Despite the crisis in parts of Europe, airlines from this region have experienced strong growth in recent months;
  • Passenger market developments during the whole quarter will have supported overall airline financial results in Q2, freight market developments less so;
  • But the different market experiences for airlines, between geography and market segment, will be a significant influence on whether they have been able to recover the Q2 rise in fuel costs.

                                                                     - IATA Economics -