Enfeebled Asia-Pacific airfreight market and sluggish Europe warns ACI

A weakening of international trade activity has “enfeebled the Asia-Pacific airfreight market” in the first half of 2015, while Europe remains “sluggish” in the same period as North America and Middle East volumes rebound.
Latest data from Airports Council International (ACI) indicates that global airfreight volumes in June showed average “modest” growth at 2.1% year over year, with domestic freight traffic up by 4.8% and International freight lagging behind with only a 0.9% rise.
ACI warned that airfreight growth prospects for the rest of this year remain “limited”.
By contrast global passenger traffic increased by 4.2% year over year in June while international and domestic traffic posted growth rates of 5% and 3.6% respectively.

Airport industry body ACI said that although the rate of growth in airfreight markets has slowed compared to 2014, airfreight has still grown by 3.4% for the first half of 2015 as compared to the same period the previous year.
“Growth has become more subdued since global demand for foreign goods and commodities has weakened compared to 2014. Business confidence was in limbo for the first half of 2015 and this is reflected in a weakening of orders by air and the build-up of inventories.
“While the prospect of future global economic growth is cause for optimism, there are two forces at play which are pushing the pendulum in opposite directions. As key regional economies such as North America get back on course, a cyclical slowdown in emerging markets is dampening the potential for significant advances in the global airfreight market.
“Thus, future growth prospects in the latter half of 2015 will remain limited.”
A weakening of international trade activity has “enfeebled the Asia-Pacific airfreight market” in the first half of 2015. Overall growth in volumes has slowed to 3% on a year-to-date basis.
Said ACI: “The cross-border shipment of goods shows the weakest growth. International freight volumes, which make up the greatest proportion of freight traffic in the region, grew by only 2.7% for the first six months of 2015, whereas domestic freight traffic grew by 3.8%.
The top global airfreight hub, Hong Kong (HKG), had an increase of only 0.6% in traffic for the first half of 2015. PVG and Incheon (ICN), the region’s second and third busiest airfreight hubs, had year-over-year increases of 5% and 1.5% respectively.

In Europe, despite the signs of rising business confidence, the “shadow of uncertainty” regarding the Greek debt crisis and its potential contagion effects has left European airfreight volumes in a “sluggish state” in the first half of 2015. Volumes inched up by 0.5% during the period.

Source: ACI
“The ongoing geopolitical concerns in Eastern Europe may also represent a potential obstacle on the horizon for the European airfreight market,” ACI said.

ACI said that with ongoing capacity expansions in the Middle East, airports and airlines have capitalised on the strategic locations of major freight hubs in the region both for long-haul and short-haul operations.
The Middle East experienced the greatest increase in accumulated volumes as compared to other regions at 8.6% year over year from January to June 2015.

After the Middle East, the North America region posted the highest growth at 4.8% year over year in the first half of 2015. The higher growth in North America continues to coincide with an American rebound.
Said ACI of North America: “Strong economic fundamentals helped propel the airfreight market. For a mature market, the relatively high level of growth in airfreight volumes represents a banner year, at least with respect to the first half of 2015. Growth is exceeding 2013 levels.”
With weakness in the Brazilian and Argentine economies, growth in freight volumes in Latin-America-Caribbean remained weak. The region saw a modest rise in freight traffic of 1% year-over-year over the first two quarters of 2015. Growth patterns continue to be mixed for Latin America-Caribbean as a whole.
According to ACI, the African airfreight market grew by 7.4% in the first half of 2015. While results are “mixed” across the continent, Johannesburg, a leading airfreight hub, “bounced back after a bleak 2014 with respect to growth in volumes”.