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Air freight continues decline


The International Air Transport Association (IATA) has revealed that cargo demand was 4.7% below the same month in 2010, while passenger traffic showed a 3.6% rise over previous year levels in October.
 
“Cargo is the story of the month. Since mid-year the market has shrunk by almost 5% and this is far greater than the 1% fall in world trade. Air freight is among the first sectors to suffer when businesses confidence declines,” said Tony Tyler, IATA’s director general and CEO. “While business confidence has declined considerably in recent months, industrial output has not. But in anticipation of weaker economic activity, there is a shift to cheaper and slower modes of transport.”
 
In stark contrast to the decline in air freight, the trend for air travel remains upwards, but with very strong regional differences. Despite the deepening euro-zone crisis European carriers have showed above trend demand growth of 6.4%.
 
“With Europe accounting for 29.2% of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations,” said Mr Tyler.
 
The confidence of purchasing managers in the manufacturing sector has fallen to its lowest level since 2009. This loss of confidence appears to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight, which showed a 4.7% decline in October compared to the previous year.
 
Airlines have responded to weaker demand by cutting their freighter fleet. But this has not stopped a steady and substantial five percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft.
 
Asia-Pacific carriers account for about 40% of global freight markets and while they are the most exposed to the volatility of freight volumes, they are still benefiting from the dominance of trade flows to Asia. In October they posted the highest freight load factor (58.8%), a full 12.3 percentage points above the global average of 46.5%. This is a result of strong outward flows of freight from Asia which dominates the air cargo business.
 
“As we enter the year-end period, we are reminded of the vital role that aviation plays in our globalised world. Families and friends will reunite. Holiday gifts will be exchanged across countries and continents. Valuable tourism dollars will be spent in every corner of the planet. And critical climate change discussions will be held in Durban. Much of this is facilitated by efficient air links that have turned our planet into a global community,” said Mr Tyler.
 
Tyler urged policy makers to reflect on aviation’s significant social and economic benefits. Aviation supports 33 million jobs. And trillions of dollars of economic activity are supported by air transport’s connectivity. This year more than 2.8 billion people and 46 million tonnes of cargo are expected to be transported by safe and efficient air links.
 
“The economic prospects for 2012 are uncertain, but the track record of aviation’s ability to act as a catalyst for economic activity is rock-solid. Now is the time for governments to use aviation strategically in their efforts to put economies back on track. Implementing a Single European Sky, delivering NextGen air traffic management in the US and supporting the commercialization of sustainable biofuels for aviation are examples of government action that would generate jobs, improve environmental performance and help secure the industry’s long-term success and economic benefits,” said Mr Tyler.

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