June upswing notes IATA

GLOBAL air cargo is showing clear signs of improvement, reports IATA. The airline association’s June figures show a 1.2 per cent year-on-year upwards swing in worldwide airfreight demand.

“Although weak, this is an improvement when compared to the 0.9 per cent year-on-year demand growth recorded in May and the 0.1 per cent growth achieved in the first half of the year,” reveals director general Tony Tyler.

While previously the global economic trend has been defined by robust emerging economies and stagnant growth in developed markets, the strongest improvements in business confidence are now occurring in some developed economies.

Nevertheless, overall business confidence, which is a key indicator for airfreight, continues to be weak, IATA cautions.

From May to June, global freight volumes increased by 0.8 per cent. A quarter of that improvement was captured by European airlines, which saw a 0.9 per cent improvement in demand compared to May, and 2.6 per cent up on June 2012.

By contrast, Asia-Pacific carriers (the biggest players in global airfreight) and North American airlines recorded year-on-year declines of 1.8 per cent and 1.2 per cent respectively.

"It’s too early to tell if June was a positive turning point after 18 months of stagnation,” Tyler warns. “Airfreight volumes are at their highest since mid-2011 – but that good news needs to be tempered with a dose of reality. The global economic environment remains weak, and the basis for the acceleration of air cargo growth in June appears to be fragile," he adds.

IATA’s July edition of its Airline Business Confidence Index showed that nearly 58 per cent of respondents expecting freight volumes to increase over the next year.

Despite this, a much greater percentage of respondents (72.2 per cent) expect no change in weak cargo yields despite their expected increase in demand over the same period.

The macro-economic trend remains challenging. Recent declines in global export orders do not bode well for trade growth.