IATA: overcapacity on the up, yields declining

IATA has warned that air cargo’s financial performance “remains poor and does not deliver adequate returns for investors”.
The airline association’s 2015 first quarter Cargo eChartbook, while seeing continued positive demand for airfreight commodities, states that overcapacity has resulted in lower load factors and placed downward pressure on yields.
Lower jet fuel prices may provide “temporary relief” to some carriers but are not expected to have a lasting impact on cargo business profitability as jet fuel price reductions will be passed on to consumers.
“If lower jet fuel prices persist, it will help boost demand for air cargo services but a favorable impact on financial performance on the cargo business will only be achieved if coupled with capacity discipline.”
IATA adds: “Underlying economic demand drivers remain positive and business confidence continues to signal expansion in manufacturing activity but with dampened expectations.
“Risks remain high as deepening of the Russian-Ukraine crisis, uncertainty in oil price, turmoil in the Middle East and continued concerns around sovereign debt of European Union member states weigh on confidence.
“However, continued positive demand for airfreight commodities, as indicated by expansion in semi-conductor shipments, are a potential source of optimism for the year ahead.” 

Share this story

Related Topics

Latest africa news

African airfreight on the ascent

As it emerges from the pandemic, Africa’s airfreight and logistics market is in expansion mode, attracting significant investment, writes Roger…

Read More

Share this story

Ethiopian signs up for five more B777Fs

By Damian Brett

Ethiopian Airlines has added to its freighter orderbook with the addition of five more Boeing 777Fs. The aircraft will add…

Read More

Share this story

GIG Aviation to add ATR freighters as it targets e-commerce

By Damian Brett

Nigeria-based GIG Aviation has signed up to purchase two ATR 72-500 freighters as it looks to meet growing e-commerce demand…

Read More

Share this story