Air cargo markets from Turkey to the Middle East & South Asia showed an increase of 50 per cent during June, a report.

Meanwhile, markets from Belgium to Asia Pacific and from Belgium to North America showed 54 per cent and 46 per cent respectively, added the report from WorldACD Market Data.

In general, load factors increased, as capacity growth was clearly lower than the increase in volumes in all regions.

For well over half a year now, air cargo volumes have been growing strongly year-over-year (YoY) and USD-yields stopping their 2015-2016 free fall. This trend did not show the slightest tendency of tapering off in June, on the contrary. The volume increase year-over-year (YoY) for the month was 10.5 per cent, accompanied by an increase in Direct Ton Kilometers of 12 per cent, showing that the average distance between origin and destination of shipments continues to increase.

And yield worldwide, measured in USD, was 7 per cent higher, a big bonus for airlines and a development we have not been able to report since the recovery of 2010-2011.

 In terms of volume growth, the second quarter of 2017 was the best quarter for the industry in almost seven years. The origins Germany and Hong Kong grew most in absolute kilograms.

Whereas the first quarter showed stable YoY yields, Q2 surprised with a remarkable yield improvement YoY of 5.4 per cent in USD, and of 8.1 per cent in Euros. Yield improvements in Q2 were particularly visible in markets with an origin in Asia Pacific. Yields ex China grew even harder than those from other countries in the region.

Interestingly, positive yield and volume developments seemed to go hand in hand: from Asia Pacific to North America, growth of each was around 20 per cent, and from Asia Pacific to Europe around 15 per cent. A prominent element in the growth of both volumes and yields between Asia and North America was the modest capacity increase.

The YoY yield performance in Q2 may be explained partly by movements in fuel prices & surcharges: fuel prices were about 10 per cent higher YoY. Past experience has taught the air cargo world that yields usually react to fuel price developments with a time delay. Since the 2016 fuel prices increased strongly between Q1 and Q2, Q2-yields in 2016 could be said to have been relatively low as the rising fuel prices had not yet been fully factored in. Given the increasing practice of net pricing, more research needs to be done on this subject, however.

 The month of June also showed how air cargo and geopolitics can be intertwined as the transport of perishables to Qatar increased well beyond the overall growth pattern of this sector of the business. As a matter of fact, June confirmed the trend we reported earlier, which shows general cargo growing faster than most specific product categories; only pharma grows faster than general cargo. It also confirmed that the average shipment size is growing YoY: by more than 8 per cent in June and by almost 7 per cent for the first half of the year. – TradeArabia News Service