A look back at the cargo market – IATA Q1/2015 cargo chartbook synopsis


The year 2015 has begun on a down note for the cargo business. As the International Air Transport Association IATA is reporting in its latest Cargo eChartbook, overcapacity is the biggest reason why financial performance of airlines is poor.

Other factors surrounding the cargo business are positive, but because of the overcapacity issue, airlines are seeing lower load factors as well as downward pressure on yields. Global concerns are also giving pause, as the Russian-Ukraine crisis and unrest in the Middle East both continue. Oil price uncertainty, plus worries over sovereign debt in some EU countries also put the economic issue at the forefront.  

The best sources for industry optimism come in the form of positive economic news, including encouraging demand drivers and business confidence. A continued expansion in semi-conductor shipments related to a continued demand for air-freighted commodities is the biggest reason for hopefulness. 

Looking more closely at the helpful economic situation, in 2015, the global economy is expected to grow faster than at any time since 2010. That growth does remain unbalanced, with the most encouraging news coming from the US, UK, and to a slightly lesser extent the Eurozone. Brazil and Russia are the most worrying economies, while China and India remain ones to watch. 

Even with the challenges in the demand environment, air freight traffic in 2014 expanded by 4.5 percent compared to 2013. In January 2015, air freight volumes also expanded at 3.2 percent compared to a year ago. If business confidence continues, we would hope to see an expansion in manufacturing. Growth in air freight traffic to Asia is expected to continue.

Fleet expansion will most likely negatively affect aircraft utilization rates and freight load factors – there is an expected 7.4 percent increase in new wide-body aircraft in 2015. Air freight yields are down 16 percent since mid-2011.

Overall, the economic situation is the key to optimistic feelings for the heads of cargo surveyed for the report. They are expecting stronger growth in traffic volumes in the coming year. 

Text by Jacy Meyer


Published March 24, 2015

Category: Market updates