International Freight Forwarder Association

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IATA Cargo Overview

Thursday, June 7, 2012

  • Downward pressure on cargo profitability eased slightly in Q2, following an improvement in air freight demand, a small rise in yields, and a decline in oil prices;
  • Freight load factors bottomed out at the end of 2011, along with a hesitant and narrowly based upturn in demand - worldwide FTKs have expanded by 2% in April compared to the lows of Q4;
  • Improvements in business confidence and growth in world trade have supported this expansion, as has the absence of an overhang in business inventories;
  • However, the improvement in air freight markets is not widespread, with weakness in European and Chinese consumer confidence keeping demand for air-freighted commodities down in those regions;
  • Furthermore, expected increases in belly-hold capacity are likely to continue to make asset utilization a challenge;
  • Looking ahead, cargo heads surveyed in April 2012 expect downward pressure to ease on cargo yields over the next 12 months; but risks associated with the Eurozone remain a threat to this improved outlook