Freight markets look set to finish 2015 on a weak note as the slowdown in China and some disappointing global economic indicators push load factors down to six-year lows.
The International Air Transport Association (IATA) said the air cargo volumes, measured by freight tonne kilometres (FTK), rose just 0.5 per cent in October, compared with the prior corresponding period.
Despite the subdued demand for freight, cargo capacity has been growing in line with passenger demand, leaving left the cargo holds of aircraft flying, on average, well below 50 per cent.
“The outlook for air cargo continues to be very difficult,” IATA director general Tony Tyler said in a statement on Wednesday (European time).
“While there was some optimism from third quarter growth it has all but disappeared as the industry basically flat-lined.
“Cargo capacity has grown largely in lock-step with the continued robust demand for passenger travel. As a result, freight load factors have sunk to the 44 per cent range – a level not seen since 2009.
“Early signs of improvement in export orders may bode well for trade and air cargo but this is unlikely to prevent air cargo finishing 2015 on a low note.”
Asia-Pacific carriers reported an 0.3 per cent rise in FTKs in October, compared with the prior year, while capacity measured by available freight tonne kilometres (AFTK) rose 2.9 per cent.
IATA said trade growth in China and other key export economies remained disappointing. However, Chinese export orders were up in October, giving hope of better demand for air freight over the next two to three months.
Airlines in the Middle East led the way with an 8.3 per cent increase in demand, or FTKs, in October, while capacity rose 11.6 per cent. Although impressive, even this was below the recent trends experienced during the first half of 2015 as non-oil sectors in Saudi Arabia and the United Arab Emirates experienced a slowdown.
On a negative note, North American carriers suffered a 2.4 per cent decline in demand, while capacity was up six per cent. IATA said the region was expected to muddle along for a little while yet.
“Recent month-to-month results appeared to indicate a return to growth, but the latest manufacturing and export reports are poor. Strong demand for air freight in the coming months appears unlikely,” IATA said of North America.
Elsewhere, European airlines had a slender 0.2 per cent increase in demand, while AFTKs rose 5.6 per cent and African carriers reported a 1.1 per cent drop in demand.
Meanwhile, Latin America continued to lag the rest of the world with an 8.1 per cent drop in demand.
“Year-to-date performance for Latin American air cargo is the worst of any region by some margin, contracting by 5.9 per cent. Air cargo demand appears to be mirroring weakening consumer sentiment in key regional economies,” IATA said.