Preliminary traffic figures for the month of March released today by the Association of Asia Pacific Airlines (AAPA) showed air cargo markets contracted for the fifth consecutive month, against a backdrop of continued weakness in trade activity.
Air cargo demand as measured in freight tonne kilometres (FTK) declined by 3.2 per cent in March compared to the same month last year, with the ongoing weakness in demand for intermediate goods and corresponding fall in new business orders affecting air cargo shipments.
Offered freight capacity increased by 1.1 per cent, resulting in a 2.8 percentage point decline in the average international freight load factor to 62.4 per cent for the month.
Andrew Herdman, AAPA Director General said: “Air cargo demand fell by 5.6% during the same period, reflecting cautious market sentiment linked to unresolved trade tensions, particularly between the United States and China.”
Looking ahead, Herdman said: “Prospects for air travel markets remain positive, on expectations of continued moderate growth in the global economy.
“The ongoing shift towards air cargo for e-commerce shipments of consumer goods should provide some level of support to air cargo demand, although prevailing conditions remain weak.”
He added: “Having faced increasing headwinds to operating conditions, many of the region’s carriers saw a deterioration in earnings performance last year. Higher fuel and labour costs led to a squeeze in margins, despite continued growth in demand and some improvements to airline yields.
“Overall, Asia Pacific carriers continue to respond to an intensely competitive marketplace, actively implementing strategic initiatives and pursuing avenues for growth to sustain profitability.”