IATA: “solid improvement” in air freight growth

AIRFREIGHT growth has seen a “solid improvement” in 2014 over prior year, but IATA warns that demand could weaken as the on-shoring trend continues.
Volumes are being supported by the cyclical upswing in the global economy but high fuel prices, stable at $120 per barrel, and weak cargo yields continue to exert “downward pressure” on airlines’ financial performance.
IATA’s latest Cargo e-Chartbook states: “Consumers in Europe and the US are becoming increasingly more confident, which has supported growth in demand for air-freighted commodities like semi-conductors. However, recent developments in the demand environment suggest that growth could weaken in months ahead.”
While traffic volumes have increased, there has been “little progress” in recent months, and future growth may be “dampened” by production trends which suggest “a shift towards domestic activity” or on-shoring.
As new aircraft deliveries come into service in 2014, there could be further downward pressure on yields, says IATA, adding: “Cargo heads surveyed in April expect yields to remain stable during the year ahead, and while they anticipate volumes to increase, rates of growth have been downgraded.”
The Euro-zone is expected to show modest rates of growth in 2014, at around 1.6 per cent, which is a “significant turnaround from the contraction and near stagnation of recent past”.
A loosening of bank lending will help support US growth of three per cent in 2014, an improvement on 2013.
In China, consumer confidence remains stable, although in Japan there has been a decline in capital expenditure sentiment among local companies.
The global economic outlook for 2014 remains improved on 2013, states IATA, but the rate of expected growth has been revised down slightly since the start of the year.
“Although rates of expansion in emerging markets are still much stronger than in advanced economies, there has been some slowdown this year, particularly in Latin America and Africa.”