Asia Pacific carriers report weak January for international cargo

International air cargo markets weakened further in January 2019, with Asia Pacific airlines seeing demand fall 3.8% year on year in freight tonne kilometres (FTK).

Releasing its preliminary traffic figures for the month, the Association of Asia Pacific Airlines (AAPA) said that the decline in airfreight was due to “global new export orders contracting on the back of slowing demand for foreign goods”. The timing of the Chinese New Year can also affect year-on-year comparisons during the first couple of months of the year.

An AAPA spokesperson continued: “Concerns over slower growth in major economies and unresolved trade tensions are affecting air cargo demand.

“Meanwhile, the expansion in offered freight capacity continued to outpace demand growth, with January’s 2.8% increase in offered freight capacity resulting in a 3.9 percentage point decline in the average international freight load factor to 56.6% for the month.”

Airfreight’s decline in January was in contrast to “robust growth” in international air passenger demand, up by a 8%  to 32.2m passengers for the region’s carriers.

Commenting on the results, AAPA director general Andrew Herdman said: “Against a backdrop of increasing concerns about the global economy, the continued firm growth in passenger traffic was a welcome start to the year for the region’s carriers, which also saw demand sustained by travel ahead of the Lunar New Year celebrations in Asia.

“During the same period, however, expected increases in air cargo shipments were absent, as evidenced in the decline in air cargo volumes.”

Looking ahead, Herdman concluded: “Overall, the travel demand outlook is broadly positive for the coming year. Underlying global economic conditions remain relatively firm, with major economies leaning towards more accommodative policies to support demand.”

Looking at individual airline performance, Cathay Pacific, the largest Asian carrier, saw cargo demand decrease by 5.2% year on year during the month to 904m revenue freight tonne kms (RFTK).

Cathay Pacific director commercial and cargo Ronald Lam said: “Chinese New Year this year was earlier than last, leading to a slight distortion in both passenger and cargo revenue for January and February.

 “Cargo uplift gradually picked up before Chinese New Year but the pre-holiday rush was not as strong as last year. As a result, our cargo revenue recorded small negative year-on-year growth in January. Some short-term capacity rationalisation was made to better match demand.”

Another notable result for the month was at Air China where cargo volumes declined by 39.1% year on year to 404m RFTK. This was down to the company selling its 51% stake in freighter operator Air China Cargo to China National Aviation Capital Holding. This means the airline now only offers belly capacity.

There was a 5.9% increase in cargo traffic at China Southern, a 9.1% boost at China Eastern, Eva Air reported an 8.1% slide and SIA Cargo was down 6.2%.

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