Air cargo demand stagnant while yields decline

Airline data continues to point towards difficult market conditions for air cargo carriers, but some regions are showing improvements.
Figures released today by WorldACD show that volumes during August increased 0.9% against last year while yields fell by 1.2% compared with July.
The analyst said demand and yield data for the year so far had become repetitive with “volumes stagnant and yields falling”.
While yields slid on July levels, there were improvements in several markets.
WorldACD also highlighted the ongoing dispute between airlines and forwarders regarding the level of yield decline and whether this was a fair reflection of lower fuel prices.
“Falling yields ought to be good news for shippers and forwarders, yet they seem to take the view that – given the present low fuel cost — prices are not coming down fast enough,” the analyst said in its monthly market review.
“Airlines may well take a different view: that the worldwide dollar-yield drop of 18% over the past year properly reflects lower fuel cost, since fuel cost had become one third of their total cost before the roughly 50% drop in oil prices in the past year.
“Whatever the case, airlines must have welcomed the small month-over-month dollar-yield increase in August in more than half of the inter-regional markets.”
The markets that recorded improvements were: Africa to Asia Pacific, Latin America and Europe; Latin America to virtually all destination regions; Europe to Africa and Latin America; the Middle East & South Asia (MESA) to Asia Pacific; and North America to all destinations except MESA and Africa.
WorldACD said: “Africa and Latin America, the smaller regions in terms of air cargo, bucked the trend. Africa was clearly the region-of-the-month, showing a volume increase in air exports of almost 10% year-on-year coupled with a month-on-month yield drop of 0.2% only.
“Latin America was positively in the news, for the first time in many months. It saw month-on-month yields increase by 3.5% for outgoing and by 1% for incoming traffic. Unfortunately, it was one of two regions recording a (small) negative volume growth year-on-year; the other one was North America.”
The monthly data from WorldACD reflects figures released yesterday by Drewry and IATA. IATA showed a small increase in volumes during August, but load factors declined, while Drewry recorded a month-on-month increase in airfreight rates, although prices still lag behind last year’s levels.
WorldACD also compared the last 12 months with 2012 levels to see how airlines were performing over a longer period of time.
“No kudos, of course, for guessing that airlines from MESA fared best,” it said. “They trumped other carrier groups hands down, increasing their air cargo volume by 31% against a worldwide growth of 11%.”
“Airlines from Asia Pacific grew by 10%, whilst European and North American carriers stayed behind the worldwide average, with growth of 5% and 0% respectively.”

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