A look back at the cargo market – IATA Q4/2014 cargo chartbook synopsis


The fourth quarter of 2014 is ending on a stable note for air transporters. Cargo heads interviewed for the International Air Transport Association’s Q4/2014 E-Chartbook have mixed feelings about the months to come, but do not see any major upheavals for the time being.

The best news comes from Asia and the United States. A steady increase in trade volumes in Asia combined with an optimistic economic outlook in the US means these two regions have led the growth in demand for air-freighted commodities.

Europe is still suffering in the consumer confidence and trade activities arena due to the ongoing Russia-Ukraine conflict. Cargo heads also noticed no change in inventory to sales ratio, which might mean that the current need for air cargo is not going to be cut. 

Worldwide, the lack of increase in global business confidence is also a worrying factor, calling into question the opportunity for increased trade or economic expansion. This means the overall demand environment is mixed – while global trade growth is increasing, there is no corresponding rise in business confidence. 

Airlines should be pleased with the decline in jet fuel prices. However, with yields continuing to decline, this has not led to financial gains. Even though fuel prices are down more than 30 percent compared to their mid-year highs, airlines are seeing wage rises in the US. That can be compared to Europe and China, where wages have actually fell. Traffic growth is up between four and five percent compared to one year ago. However, if the focus on local production continues, this increase could be short-lived. 

Both air and sea rates are stable compared to one year ago, even though container shipping has seen a rise in all markets apart from the Middle East. Air transport for Asian goods remains stable, but there has been no growth in this key region. 

Load factors remain weak at 45 percent, but aircraft utilization rates have improved. These weak load factors have obviously impacted financial performance, with air freight yields on a slowly declining trajectory (down two percent since mid-2011). Meanwhile, aircraft utilization could be affected in 2015 as aircraft deliveries should increase by six percent.

Looking ahead to 2015, cargo heads anticipate growth in demand but do not believe there will be much in the way of yield improvement. Global economic growth is expected to be stronger in 2015, especially in the US, Latin America and the Middle East. There is even some hope for the Eurozone, as it is expected to see some improvement compared to 2014. 

Cargo market analysis chartbooks are published quarterly on the IATA website.
Text by Jacy Meyer

Published December 16, 2014

Category: Market updates