Air cargo markets paint a dismal future

By Freddie Pierce
Follow @WDMEllaCopeland Junes Air Freight volumes remained at a disappointing low this week, recording a mere 0.8 percent increase compared to last yea...

June’s Air Freight volumes remained at a disappointing low this week, recording a mere 0.8 percent increase compared to last year.

The International Air Transport Association (IATA) announced global traffic results for June which showed a continued slowing of growth in the demand for air transport, a result which is in line with weakness in business and consumer confidence.

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This is particularly disappointing in the light of major product launches by Apple and Samsung, who are both expected to release new handheld devices in the coming months. It is believed that a disappointing summer for the European retail sector also contributed to the decline of air freight, as there is not so much demand for speedy delivery.

The garment industry has faced a wholesale shift this year. According to an industry expert speaking to the Loadstar: “The whole model has changed to sea freight, where air freight used to be the first choice. Whatever they shipped used to be sold as soon as it hit the floor, and the retailers would make their money on the first day stock arrived. But now stocks aren’t selling, it’s much better to have it sitting on a boat, or sitting at the quay. The problem with air freight is that stocks always arrive quickly.”

The news is not all bad however. IATA highlighted that whilst performance is disappointing, it remains an improvement on the weak market conditions last year. Compared to June 2011, freight demand has grown by 0.8 percent, behind a capacity expansion of 1.7 percent. This means the June demand remains about 2.5 percent above the low reached in Q4, 2011.

Despite a trend of low growth globally, there are some pockets of solid performance, namely in North America and the Middle East.

North America saw demand for carriers grow by 1.8 percent compared to last year, whilst the Middle East recorded a 17.9 percent demand  increase against a 14.2 increase in capacity. Africa also saw demand grow by 15.9 percent.

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