IATA provides gloomy outlook for air freight
The International Air Transport Association (IATA) provided a gloomy outlook for September’s global traffic today, with figures showing a continued slowdown in the rate of traffic growth.
Despite encouraging passenger results, demand growth for air cargo showed increasing weakness, displaying just 0.6 percent year on year growth.
According to IATA, the growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August. The year-on-year comparisons are now also starting to show slower rates of growth.
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In September, passenger travel increased 4.1% on a year ago, down on the 5.3% year-on-year growth rate in August and well below the 6% average growth rate seen throughout the first half of the year.
The minor 0.6% year-on-year growth posted for air cargo is less significant than the 0.6% fall in air freight volumes between August and September which is more indicative of the trend. This is the second notable month-on-month fall in air freight growth in as many months, which has eroded the stability in volumes achieved earlier in 2012. Capacity was trimmed 0.6% compared to year-ago levels. This strengthened the freight load factor slightly to 45.6% from 45.1% a year ago.
Tony Tyler, IATA’s Director General and CEO said:“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimize profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India,” said
Air Freight: A detailed breakdown
Air freight demand rose 0.6% compared to September 2011 but declined 0.6% month-on-month, eroding the small gains seen in August. All the major regions experienced year-on-year declines. The introduction of new consumer products such as the iPhone 5 could offset some downward pressure from the weak business environment.
- Asia-Pacific carriers saw a 1.6% decline in demand in September compared to the previous year. This is an improvement over August, when demand dropped 5.3% but still no progress compared to a year ago. Capacity dropped 3%. North American airlines had a 1.1% drop in demand, against a 3.1% drop in capacity. The load factor climbed 0.7% points to 35.2%. European airlines had a 0.4% decline in traffic, but capacity climbed 1.2% and the load factor dropped 0.7% points to 45.6%.
- Middle Eastern carriers had a 16.3% rise in traffic on a 6.9% rise in capacity, pushing up the load factor 3.8% points to 46.1%.
- Latin American airlines’ demand slipped 1.6% while capacity jumped 9%, resulting in a load factor of 37.8%, down 4.1% points.
- African carriers saw a 4.1% rise in demand with capacity up 1.4%, raising the load factor 0.6% points to 24.1%, the lowest for any region.
The Bottom Line: “Tough times deliver innovation. High oil prices have turned fuel management into a fine art of conserving every last drop. Consumer demand for convenience and simplified process supported the development of a whole new way to travel facilitated by e-tickets, bar-coded boarding passes and kiosk technology. And the recent approval of the foundation standard for a New Distribution Capability (NDC) means that travelers are set to benefit from a revolution in airline retailing,” said Tyler.
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.