Global air freight market grew faster at 4.1% in first half of 2014: IATA

Global air freight volumes grew at an average rate of 4.1 per cent in the first six months of 2014 (January-June) although the air freight market grew at a slower pace of 2.3 per cent in June, compared to the 4.9 per cent growth reported for May, data released by the International Air Transport Association (IATA) showed.

The growth in demand of the air freight market (measured in freight tonne kilometers) during the first half of 2014, at 4.1 per cent, was much stronger than the weak 1.4% increase reported for the full-year 2013 over 2012 levels.

The strengthened growth has been underpinned by improving global trade and stronger business activity over the past year, IATA noted.

''At the half-way point of the year, it is clear that overall cargo demand is much stronger than in 2013,'' said Tony Tyler, IATA's director general and CEO.

Carriers in Asia-Pacific and the Middle East have been the biggest beneficiaries of the improved market conditions, he said, adding that Europe is doing reasonably well, albeit slowly while the Americas remain in a weak spot.

The Middle East carriers recorded the strongest expansion, with air cargo volumes up 7.0 per cent in June and overall growth at 10.0 per cent year-to-date.

A general improvement in the economic environment may not always translate to an improvement in air cargo traffic for there are other extraneous risk factors - from conflicts and sanctions to potential national defaults and fear of the Ebola outbreak.

Also, while air cargo is slowly emerging from two years in the doldrums, logistics has become an even more intensely competitive sector.

''Shippers value faster end-to-end transit times, greater reliability and improved efficiency. More clearly than ever, the building blocks for the future of air cargo are found in global programs such as e-Freight and Cargo 2000. These are helping the entire value chain to deliver on the expectations of their customers,'' said Tyler.

Asia-Pacific airlines' freight volume grew 4.9 per cent in June, continuing the trend of strengthening results following the declines in the first quarter of the year. For the year-to-date, Asia-Pacific cargo is up 4.6 per cent, and with Chinese manufacturing expanding again for the first time since December 2013, growth looks set to continue. Capacity expanded 4.3 per cent.

European carriers saw freight volumes fall 1.5 per cent compared to June 2013, possibly reflecting recent weakness in manufacturing and export activity. Overall, for the year-to-date, European cargo is up 3.2 per cent, a stronger performance than in 2013. Capacity in June rose 2.1 per cent.

North American airlines' freight volumes declined 0.1 per cent, compared to June 2013, and for the year-to-date are up just 1.6 per cent, reflecting the weakness in trade volumes that followed the severe weather events in the first quarter. Recent data, however, points to much stronger business activity which could support stronger air cargo volumes in the months ahead. Capacity in June fell 1.0 per cent.

Middle East carriers continue to expand strongly. Air cargo growth was 7.0 per cent in June and is up 10.0 per cent for the year-to-date. Airlines in the region are capitalising on growth opportunities by expanding services to fast-growing emerging markets, such as Uganda and Mexico. Capacity expanded 8.6 per cent year-on-year.

Latin American airlines suffered a sharp contraction of 3.4 per cent in June. The overall performance for the year-to-date has also been a disappointing -0.1 per cent, the only region to be in decline this year. Sluggish trade growth and in particular the weakness of the Brazilian economy is dragging down growth. Capacity in June was up by 1.6 per cent, IATA noted.

African carriers grew 4.8 per cent in June, much stronger than the year-to-date average of 3.1 per cent. Growth has been affected by a slowdown in some African economies, notably South Africa. Improving trade data, however, points to a more optimistic outlook for the rest of the year. Capacity grew 0.3 per cent in June, year-on-year.