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Air cargo industry confidence rises with yields

AMSTERDAM: May 01, 2017. WorldACD Market Data says March 2017 will be remembered by the air cargo industry for a year-on-year (YoY) percentage growth not seen since the recovery years of 2009/2010:

Did Donald Trump's first 100 days in the White House bring any successes for American business? Certainly not for air cargo, unless his 'America First' sloganeering would mean that the USA looks to reduce its share ... The Q1 performance of USA-carriers as a group has been way behind all other regional carrier groups.

Interestingly, for all carriers together, revenues (in US$) from air cargo destined for the USA grew stronger than for any other destination region (+14.7 percent against +8.5 percent worldwide), but revenues from the USA showed the opposite trend: +2.3 percent vs +8.5 percent worldwide. By the way, revenues from domestic USA dropped by 2.9 percent.

The worldwide YoY numbers are impressive, by any standard:
- 14.6 percent increase in chargeable weight (origins Asia Pacific and Europe +19 percent)
- 16.4 percent increase in DTK's (Direct Tonne Kilometers, the measure combining weight with the geographical distance between origin and destination of shipments);
- 1.7 percent increase in yield when measured in US$ (5.6 percent in €)
- The WorldACD Worldwide Weight index (moving averagein the last 12 Months, 2008 = 100) jumped by more than one full point to 122.8.

Business was particularly upbeat from Hong Kong, Shanghai, Beijing, Guangzhou, London, Milano, Frankfurt and Chicago: all had a growth of more than 20 percent. Contributing elements seemed to be sea-to-air shifts and the launch of new consumer products.

A few other factors also helped to realize this unusual YoY growth. Especially in Europe, volumes tend to be lower around Easter (last year in March, this year in April). Also, March 2017 had one more Friday (usually one of the top cargo days) than March 2016.

Without these two factors, the March 2017 YoY growth would have been around 11 percent. We expect that April will be another very good month, but  in view of the Easter-effect, YoY growth may stop around 10 percent.

Airlines must have been pleased with a worldwide US$-yield improvement of 5.1 percent month-on-month. The origin area Asia Pacific showed the highest growth (+11.9 percent), but this area was also the only one with a yield drop for all incoming traffic (-0.7 percent). The yield index for eight of the ten largest region-to-region markets went up as well.

How did the different regional carrier groups fare in Q1 in specific cargo product categories?

Carriers from Asia Pacific and the Middle East recorded the largest overall YoY growth with 12 percent and 9.0 percent respectively. Their colleagues from the Americas grew more than their Asian and European competitors in non-general cargo.The Americans showed strong YoY growth in dangerous goods (DGR), pharmaceuticals (PIL) and vulnerable cargo, albeit from a small base.

The five African carriers in our database, although not necessarily representative for Africa as a whole, almost doubled their carriage of DGR and grew 40% in PIL, but again: from a low base.

In perishables, African carriers attained the highest growth percentage of all although the Europeans remain far ahead in total tonnes carried in PIL and DGR. While European carriers' percentage growth may have been lower, they still added an impressive 10 percent and 11 percent respectively to their volumes for this type of traffic.

WorldACD provides market data on air cargo with information based on primary sources covering all countries in the world.

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