Airfreight volumes in first year-on-year decline since March 2016

01 / 11 / 2018

Analyst WorldACD Market Data has reported a year-on-year decrease in global airfreight volumes of 0.9% for September – the first negative growth figure for two-and-a-half years.

Airline revenues kept growing, however, thanks to a strengthening yield, although fuel costs were around 32% higher than one year ago.

Given the marginal growth in the world's air cargo traffic reported over recent months, it is perhaps not surprising that the total volume contracted in September compared with the previous year, WorldACD pointed out.

Plus, compared with September 2017, the month had one Sunday more and one Friday less. “This seemingly trivial fact makes for a drop of about 1%-1.5% in worldwide air cargo volumes, according to our earlier analysis of daily patterns,” the market analyst said.

Other factors included the negative impact of extreme weather events, with typhoons taking their toll on the performances of Hong Kong (-7.7%) and Japan (-4.8%), and the apparent initial consequences of the China-US trade war.

While volumes originating in China as a whole showed growth both year on year and month on month, the market from China to the US declined by 1.8% compared to September 2017 and by 4.4% compared to August of this year.

WorldACD said that the first three quarters of 2018 showed 2.8% volume growth over the same period of 2017, accompanied by a yield increase of 14.2% when measured in US dollars and of 6.6% when measured in Euros.

“Whilst the origin region Central and South America stood out for its 11% volume increase, Europe noted the best year-on-year revenue performance (+21% when measured in USD, + 13% in Euros),” it observed. “Europe was also the fastest growing destination (+5.4% in volume YoY).”

Underscoring the importance of the transport of specific products, the market analyst noted that all special product categories outperformed general cargo, with pharmaceuticals, express and live animals continuing to record double digit growth.

Yield premium?

WorldACD also considered the yield differences between carrier groups in their respective home markets.

Over the past 12 months, airlines based in the Middle East and South Asia (MESA) realised on average a yield premium in their home markets of 27% over all other carriers active in those same markets.

The corresponding figures for other carrier groups were much lower: carriers from Europe achieved a 10% yield premium in their home markets, those from Africa 7 percent and those from Asia Pacific 6 percent. Only the carriers from the Americas did not find this kind of yield premium in their home markets, trailing the average of their competitors by 3%.

“Interestingly, the European airlines as a group were the only ones coming up with a yield premium not only from their home markets (10%), but also to their home markets (3%) and in 'third country' markets, i.e. markets with both an origin and a destination outside their home turf (+7%),” WorldACD said.

“All other carrier groups had to accept the fact that yields realised in origin areas outside their home markets for business to their home markets, stayed below the average yields realised by other airline groups in these markets,” it concluded.

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