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Cargo growth ... due to increase in trade with the region

ME carriers register solid cargo growth in May

GENEVA, July 2, 2015

Middle Eastern carriers recorded a significant growth in air freight movement in May with a 19.4 per cent jump in the capacity thanks to the increased trade within the region even as the global demand hit a new low, said a report by International Air Transport Association (Iata).

In contrast to the performance of the global air cargo sector in May, Middle Eastern carriers have seen their demand grow by 18.1 per cent, as shippers take advantage of the Gulf carriers’ hub strategy, stated IATA in its monthly report.

Data for global air freight markets revealed that the sector experienced sluggish growth when compared to the same period in 2014. Growth in freight tonne km (FTK) was 2.1 per cent, the slowest rate this year and outpaced by a capacity expansion of 4.3 per cent.

In aggregate, airlines in North and Latin America and Europe reported that their freight business was smaller in May this year than in the same month of 2014 while carriers in Asia-Pacific experienced slow growth as a result of poor import/export performance.

“Cargo growth has undoubtedly come off the boil. The expansion in volumes we saw in 2014 has ground to a halt, and load factors are falling,” said Tony Tyler, IATA’s Director General and CEO.
 
The Iata figures showed that Asia-Pacific carriers reported demand growth of 2.8 per cent in May, below a capacity expansion of 6.7 per cent.

European carriers saw demand decline by 1.3 per cent in May, compared to a year ago while capacity grew by 2.7 per cent.

North American airlines reported a fall in demand of 2.9 per cent year-on-year while capacity was cut by 4.2 per cent. Stronger growth, however, is expected in coming months as the effects of poor weather and US seaport congestion fade.

Latin American airlines reported a fall in demand of 10.5 per cent, while capacity grew by 4.7 per cent. A general increase in regional trade activity has not yet manifested itself in stronger air freight demand, possibly due to continued weakness in Brazil and Argentina, two of the region’s largest economies.

African airlines experienced a 3 per cent rise in demand and a 1.3 per cent increase in capacity.

“Some economic fundamentals still point to a rebound in the second half of the year, but we have to recognize that business confidence is flat and export orders in decline. There is also the risk of a shock to the economic system of a ‘Grexit’ from the Eurozone,” Tyler said. – TradeArabia News Service




Tags: Middle East | cargo |

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