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IATA says May cargo demand down to 1.3pc from 4.3pc in 2007

2008-7-7

THE Air Transport Association (IATA) says that according to its latest international traffic data for May, the month suffered a significant drop in cargo growth to 1.3 per cent, while passenger traffic grew by 6.0 per cent against the same month last year.

At 1.3 per cent, cargo demand is considerably down from the 4.3 per cent recorded for the full year 2007.

For the first five months of 2008, airfreight volumes were up 2.8 per cent over the comparable period last year. The biggest cause of the slow growth came from a 0.5 per cent contraction in Asian carrier traffic. This resulted from the impact of the earthquake in China and weakness in the Japanese economy. Asian carriers also saw weakness in transpacific markets with increased competition from US carriers taking advantage of the weak US dollar, an IATA statement said.

International passenger demand increased by 6 per cent in May. This is slower than the 7.4 per cent rise recorded for the full year 2007, but stronger than expected given the economic downturn.

The passenger results were skewed by a shift in the US of 1.7 billion available seat miles from domestic routes to international routes, representing a 7.9 per cent year on year rise in capacity in international markets. North American carriers's international traffic grew 8.2 per cent, while domestic capacity fell 3.3 per cent over the same period in 2007. Overall the underlying growth rate in global domestic and international traffic was 3 to 4 per cent, down from an average of 6 per cent for 2007.

International load factors rose slightly for the first time in three months to 74.3 per cent on slower capacity growth of 5.4 per cent during the month.

"The high price of oil is reshaping the industry. The major shifts in traffic flows experienced during May reflect this," said Giovanni Bisignani, IATA's director general and CEO.

During May, jet fuel averaged US$160 per barrel, which is 87 per cent higher than the same time in 2007. "Jet fuel margins are increasing the impact of skyrocketing oil prices for the aviation industry. Unit costs are up 20-30 per cent and that is going to take its toll on the bottom line," said Mr Bisignani.

North American cargo traffic grew 4.6 per cent year on year. Europe recorded a 1.4 per cent increase in May as the strong euro was blamed for damaging competitiveness for both European exports and the European air cargo business.

Latin American freight volumes contracted 13.2 per cent. Africa, meanwhile, recorded its 11th month of airfreight contraction out of the past 12 months with a fall of 6.5 per cent during May as industry restructuring removes freight capacity.

The lone bright spot was the Middle East where volumes rose 10.7 per cent in May on the back of oil-based economic growth, the IATA release added.

 
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