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Middle East airfreight soars 9.7%
Published in The Saudi Gazette on 03 - 07 - 2013

JEDDAH – Middle Eastern carriers' cargo markets grew 9.7 percent last May compared to May 2012, the International Air Transport Association (IATA) said in a report Tuesday.
For the year to date, air cargo demand in the region has grown 10.9 percent. In addition to their aggressive hub strategy at the crossroads of East and West, and the growth of routes out of Africa to China, the Gulf-based carriers have also been airfreighting goods that have arrived by sea. In addition new routes from the Gulf to Japan are set to benefit from an upswing in Japanese exports, the report noted.
Globally, air cargo markets showed flat growth in the month under review, broadly following the trend of the last 18 months.
Global freight ton kilometers increased just 0.8 percent in May compared to a year ago. Capacity, however, increased by 2.1 percent causing load factors to fall to 44.9 percent - their lowest level since the post crisis recovery. As about 60 percent of global air cargo utilizes capacity in the belly of passenger aircraft, managing capacity at a time when growth in air travel is outpacing that of cargo is particularly challenging.
The stall in cargo markets appears to be the result of a recent softening in growth in developing economies, including China. Moreover, business confidence is flat globally and declining in some developing economies, meaning chances of a significant upturn in the near future is unlikely.
“It is getting harder to find optimistic signs for air cargo growth. The Middle East remains a bright spot, and the rate of decline in the Eurozone is easing. But this is offset by the weakening of expansion in Asia-Pacific. It is now clear that the positive global upswing in air cargo at the end of 2012 was an illusion. Air cargo, along with many parts of the world economy, appears to be in suspended animation at the moment,” said Tony Tyler, IATA's Director General and CEO.
Europe and particularly the Middle East were the standout year-on-year performers, but poor performance in Asia Pacific and North America dragged growth down.
European carriers grew 1.0 percent year-on-year, the second-best growth of any region. However the trend in recent months has been little or no growth. The pace of economic decline in the Eurozone has slowed, and business confidence, while still negative, recorded a 15-month high in May. It is hoped that this improvement will ease the downward pressure on trade volumes and airfreight demand in coming months.
North American carriers posted a 1.2 percent decline in demand for air cargo, and capacity grew very slightly (0.1 percent). Demand for cargo shipments from the US to Europe is still soft, and unlike the carriers in the Middle East and Africa, North American carriers are unable to buck the weak global trend.
Asia-Pacific carriers had a difficult month. Volumes fell 0.5 percent compared to May 2012, while capacity grew 0.3 percent, further depressing load factors. Asia-Pacific freight volumes have slipped 2.5 percent for the year to date, and growth in the Chinese economy is below expectations. Economic growth in Japan, however, is looking positive.
Latin American carriers' cargo volumes fell 0.1 percent, a disappointing figure after a good performance for the year to May of 3.1 percent. The weakness could reflect softening confidence indicators in the Brazilian economy, but overall export performance in Latin America is strong, so future months should see a return to solid growth.
African carriers grew just 0.2 percent in May, but the underlying growth trend is positive. Parts of Africa have some of the fastest-growing economies in the world, driving demand for high-value consumer goods. Growth on routes connected to the Middle East and Asia has more than offset the decline in demand for African goods from European markets. – SG


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