Asian air cargo carriers record weak Chinese New Year period

Asian airlines saw airfreight demand decline in February after a weak Chinese New Year period and comparisons were affected by a boost in demand last year due to port strikes in the US.
The latest airline data shows that all six Asian airlines monitored in Air Cargo News’ monthly report saw demand decline on the levels recorded a year ago, with three airlines recording double-digit declines.
 
The largest drop in demand was experienced by Taiwan-based China Airlines, which recorded a 25.2% year-on-year decline to 327m freight revenue tonne km.
While the airline has now recorded declines in cargo volumes for nine months in a row, it is the largest decline experienced since October 2012.
While many airlines have been reporting weak Chinese New Year demand it does appear that comparisons with last year are also suffering because of a boost in demand related to strikes at US west coast ports that pushed sea shipments to air in 2015.
For instance, China Airlines recorded a 41.9% jump in demand in February last year ­– the largest increase since Air Cargo News began monitoring performance in 2012. Although some of this increase was down to Chinese New Year demand, it is likely that the US port strikes also provided a boost in 2015.
In terms of supply, the airline is currently drawing down cargo capacity, which was 8.2% lower than February 2015. This wasn’t enough to stop its cargo load factor slipping to 60.6% from 74.3% this time last year.
The largest of the airlines, Cathay Pacific, saw cargo demand decline by 10.4% in February compared with a year ago to 682m revenue tonne km.
Last February, its volumes jumped by 38.6% as a result of a surge ahead of the Chinese New Year factory closures and a port strike related bonus. The Hong Kong-based airline saw capacity increase by 1.1% year on year during the month and as a result its load factor dipped to 58% from 65.5% in February last year.
The airline said cargo yields came under pressure during the month as market overcapacity took its toll and demand was weak.
Cathay Pacific general manager cargo sales and marketing Mark Sutch said: “Airfreight demand dropped away sharply in the early part of the month as factories in mainland China closed down for the Chinese New Year holiday.
“In comparison to the holiday period last year, demand was much slower in picking up after factories reopened, which led to a higher concentration of lower-yield cargo from Southeast Asia and India being uplifted onto our transpacific freighter flights.
“The sustained drop in fuel prices has led to older aircraft become more economically viable.
“The resulting overcapacity continues to put downward pressure on cargo yields."
Eva Air was the other airline that recorded a double-digit demand decline in February as traffic slipped by 20.8% on a year earlier to 229m freight tonne km.
It is the twelfth monthly year-on-year decline recorded by the airline in a row and the largest since January 2013.
The airline is in the process of reducing cargo capacity, but the 6.1% slide in supply was not enough to offset the demand decline and as a result its load factor was down to 73.8% compared with 87.4% last year.
Until February, SIA had been performing well and had recorded increases in each of the previous five months.
However, February saw the Singapore-based airline record a demand decrease of 2.3% on a year earlier to 475m freight tonne km.
Capacity, meanwhile, jumped by 5% in February compared with a year earlier and as result its load factor was down at 59% compared with 63.3% last year.
China Southern, another growing airline, recorded its first year-on-year demand decline since March 2015 in February as traffic slipped by 6.9% to 311m revenue freight tonne km (RFTK).
Its load factor was down at 34% compared with 41.5% last year.
Finally, Air China saw demand drop by 1.9% year on year in February to 414m RFTK. This was its first demand decline since October 2015. Its load factor fell to 41.1% compared with 47.9% last year.
China Eastern, which is usually included in this report, has yet to report its traffic figures for February.

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