IATA records freight downturn for October

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The International Air Transport Association (IATA) has recorded a sharp drop in air freight rates for the month of October, down 3.5 percent compared to October 2011.

After being up by 0.9 percent in September, October’s weakness could be in part attributed to Hurricane Sandy, which cancelled a total of 17,000 passenger and freight flights in the most affected airports, according to IATA.

Overall, October freight demand declined 2.2 percent compared to the previous month, whilst the freight load factor weakened to 46.1% from 46.7% a year ago.

The weakness in demand continues to be focused on Asia-Pacific airlines, while Middle East carriers experienced strong demand growth. Airlines reduced freight capacity 0.9% in October compared to September, but this was not sufficient to offset the demand decline with the result that unlike in passenger markets, freight load factors have started to weaken.

Country by country breakdown

Asia-Pacific carriers saw a 6.8% decline in demand in October compared to October 2011, the steepest decline for any region, while capacity fell 4.6%. Between September and October, two-thirds of the fall in global air freight volumes has come from Asia-Pacific carriers, as demand for Asian exports declined in the weak global economy. 

North American airlines had a 5.3% drop in demand, with a 5.4% reduction in capacity. 

European airlines had a 4.3% decline in traffic, with just a 1.7% decline in capacity. Europe’s airlines have seen only a 1% rise in demand since the 2011 fourth quarter.

Middle Eastern carriers’ 13.4% rise in traffic came on an 8.6% rise in capacity, raising load factor 2 percentage points to 46.4%.

Latin American airlines’ demand climbed 0.9% but this was exceeded by an 8.6% hike in capacity that pushed load factor down 3 percentage points to 39.3%.

African carriers saw a 0.5% decline in demand and a 2.7% rise in capacity. Load factor of 26.6% was the weakest for any region.

“Slowing world trade and weak business confidence are affecting demand for air travel, while Hurricane Sandy delivered a concentrated punch to US domestic and North Atlantic travel. And its impact was felt globally,” said Tony Tyler, IATA’s Director General and CEO. “Airlines are managing the softer passenger demand environment by limiting capacity growth to keep load factors high. But the rapid decline in freight traffic is outrunning the industry’s ability to respond.”