Recent improvements in air cargo demand is on most trade lanes, says Atlas
04 / 11 / 2016
Improving air cargo demand over the peak season is “across most markets” and is also helping boost yields, according to Atlas Air Worldwide Holdings (AAWH).
Shortly after announcing third-quarter results, AAWH president and chief executive William Flynn said that the company had noticed a “very strong peak season” across its customer base.
He added: “It’s also across all markets – or most markets – that we serve. It’s not just strong in the transpacific but we are seeing very good strength in Asia, Asia to Europe trade lanes, South America trade lanes and Europe exports overall.
“In prior years we’ve seen, for example, maybe a strong transpacific fleet and if there were weakness in other markets, aircraft would start to migrate to that market.
“But the broad strength of the concern, I think is good for the industry overall. It’s certainly good for our customers and for us and the strength has a positive impact of yields as well.”
Executive vice president and chief financial officer Spencer Schwartz said that in the third quarter aircraft, crew, maintenance and insurance customers had flown 11% more than their minimums, which was “well above the prior third quarter”.
He said the strength of the market was such that the company now expected to match last year’s performance with customers flying 7.5% over their minimums. This comes despite an increase in demand in related to strikes at west coast US seaports.
Atlas’ thoughts on the current peak in demand reflect those of analysts. Several reasons have been suggested for the recent improvements, including inventory re-stocking, a slower summer pushing demand back into the latter part of the year, some pick-up from Hanjin and the recall of Samsung Note 7 devices.
Some contacts are also hopeful the increased demand could continue into the new year.