European cargo monthly: Airlines brought back to earth as freight demand weakens

European airlines were brought back down to earth in May with cargo demand decreases registered at both Lufthansa and Air France KLM.
The decreases registered at Air France KLM and Lufthansa in May come after all four airlines in the Air Cargo News monthly review, the others being the IAG Group and Finnair, reported year on year demand increases in April – the first time they had managed this feat since March 2014.

Click on image for interactive dashboard
However, analyst WorldACD warned that April figures benefitted from an extra weekend, which is the busiest part of the week for cargo, and from Easter falling at the very start of the month, pushing some of the slowdown associated with the holiday into March.
The largest decrease in May came from Air France KLM, which registered a 5.8% year-on-year decline in demand to 698m revenue tonne km (RTK).
The airline has been reducing cargo capacity, which was down 2.9% compared with May 2015, but this wasn’t enough to stop cargo load factors slipping to 57.6% compared with 59.4% a year earlier.
The plan is to phase out the last of the MD-11Fs this year, as well as the Air France Combis in the coming five years, leaving a fleet of all-cargo aircraft consisting of four Boeing 747Fs and two B777Fs.
However, the introduction of more cargo-friendly widebody passenger aircraft such as B777s and B787s should limit the overall effect on total available capacity across AF-KL-MP Cargo.
Europe’s largest cargo carrier Lufthansa recorded a May decline of 2.9% to 827m revenue cargo tonne km.
Meanwhile, capacity was up by 0.9% meaning its cargo load factor reached 62.2% compared with 64.7% a year earlier.
The German airline group has now announced year on year demand declines in four of the five months of the year so far.
There was better news at the IAG Group, which includes British Airways, Aer Lingus and Iberia, as it recorded a demand increase of 3.7% year on year to 453m cargo tonne km.
However, if the Aer Lingus results for 2015 are included in the comparission – the Irish airline only became part of the IAG Group in September 2015 –demand was up by the lower amount of 0.7%.
During the month, British Airways registered a 1.4% increase, demand was flat at Iberia and there was a 15.4% decline at Aer Lingus.
Finally, Finnair continued its good run of form as it registered a 20.4% year on year increase in demand to 73.8m RTK.
The airline is taking delivery of a series of Airbus 350-XWB aircraft that will result in a 50% increase in cargo capacity by 2020.
It will also open a new larger and state-of-the-art cargo handling facility at Helsinki Airport next year.
It has registered demand increases in each of the months so far. Load factor, meanwhile, increased to 56.8% from 53.5% a year earlier.

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