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"Stagnating" cargo on IATA meeting agenda

MIAMI: Speaking at the start of IATA's annual general meeting - sponsored by American Airlines, FedEx and UPS - the association's CEO Tony Tyler said the slowing of world trade should be "sending some warning bells to governments who are pursuing protectionist policies".

Noting the cargo business "has been in the doldrums for some time", he said the optimism of a "more robust" increase has faded as a result of slower growth in China.

"After a volatile start to 2015, the market is settling down, and it is clear that momentum in airfreight growth is being lost. First there is the structural challenge of world trade no longer expanding at a faster rate than domestic production. Layered on top of that trend we now see a weakening of economic indicators in the crucial air cargo markets of Asia-Pacific and Europe," he said.

american airlines MIADespite a 3.3 percent rise in April airfreight traffic compared to the same month last year, IATA says there's been no aggregated cargo growth since late 2014 and it will remain unlikely in the near-term as business confidence and export orders are flat or declining.

"These factors point toward a need to kick-start trade by reversing protectionist trade measures. Implementing the Bali Trade Facilitation Agreement would be a good start, as well as commitments to help facilitate trade in emerging markets," added Tyler.

At a regional level, only Asia-Pacific and the Gulf carriers showed growth in April. North American airlines reported essentially flat demand while carriers in Europe, Latin America and Africa all reported declines when compared to 2014.

IAG Cargo, which has carrier presence in both Europe and Latin America with British Airways and Iberia, confirmed the trend with an overall 2.0 percent fall in cargo tonne-kilometers (CTKs) in May and 2.6 percent since the beginning of the year.

Individually, British Airways reported a drop of 3.5 percent for the month and minus 4.4 percent for the first five months compared to last year. Iberia, on the other hand, produced a CTK increase of 5.1 percent in May and 5.8 percent for the year-to-date.

"After a brief optimistic period, the global outlook for cargo shows that once again the business is stagnating," said Tyler. Reflecting the business interests of the event sponsors, IATA AGM attendees will devote some of their time exploring how to turn it around.

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