Global air freight traffic rebounded in June in what was the strongest month of a subpar year. The issue now is whether the momentum can last more than a month.
Traffic, measured in freight ton-kilometers (one metric ton of revenue cargo flown one kilometer), rose 4.3 percent in June compared to the same period in 2015, the International Air Transport Association (IATA), the leading global aviation trade group, said today. That is the fastest pace of growth in 14 months, IATA said.
The Middle East, which accounts for 14 percent of world freight share, led the way among the six reporting regions with a 5.1-percent year-over-year rise in traffic. Europe, which accounts for 22.3 percent of share, reported a 5.1-percent year-over-year increase, spurred in part by a pickup in export orders out of Germany. North America, which accounts for 20.5 percent, reported a 4.3-percent gain. Asia-Pacific, the most active region with a 38.9-percent share, posted a 3.5-percent increase. Latin America and Africa each posted year-over-year declines, but the regions combined account for just 4.3 percent of global share, according to IATA data.
In a mildly positive trend for freight profitability at some airlines, traffic growth in North America and Europe slightly exceeded the growth in available freight capacity. For months, capacity in most regions has surpassed demand, depressing carrier selling prices and hurting their yields. Capacity in Asia and the Middle East slightly exceeded growth rates in the regions, according to IATA data.
There is a one-month lag in IATA's data-publishing schedule. As a result, there is yet no official word on July's activity. In its statement, IATA Director General and CEO Tony Tyler, cautioned against reading too much into any one month's performance, noting air cargo markets "have been in the doldrums for several years, during which time there were several false starts or indications of improvement."
Tyler, who has waxed bearish on air cargo's prospects for some time, said the sector remains plagued by declines in the growth of world trade, and lingering uncertainty following Britain's late-June decision to leave the European Union.
Benjamin J. Hartford, transport analyst for Robert W. Baird and Co. Inc., an investment firm, said June's results, especially among European-based air freight forwarders, came in better than expected. Hartford cautioned, however, that the figures could represent a "one-month blip," noting that pricing activity has been weak entering the second half of the year, reflecting sluggish demand, overcapacity, or a combination of both.
The June data marks the 16th consecutive month the Middle East region reported the fastest growth in freight traffic, and reflects the region's growing prominence on the world's air commerce stage. According to estimates from Dutch freight forwarding and logistics giant Ceva Logistics, Middle Eastern airlines account for 45 percent of the lower-hold, or "belly" space, in passenger aircraft ordered by the world's top 15 carriers. Aircraft maker Boeing Co. estimates that 40 to 45 percent of all global airfreight moves in bellies, and that belly space will grow at a faster rate than capacity of air freighters, which handle only freight.