Global air cargo dip shows slowing world recovery

Demand for air cargo, which accounts for one third of the world's trade in goods, was down for the second consecutive month in September. Photo / Thinkstock

Growth in air cargo dipped last month, reflecting weak consumer and business confidence across the world, the International Air Transport Association (Iata) warned yesterday.

International passenger traffic rose by 10.5 per cent in September compared with the same month last year, outstripping the 6.5 per cent year-on-year growth recorded in August, according to the latest assessment by the global airline industry body.

Growth in demand for freight fell for the second consecutive month, dragging activity down by 6 per cent from May's post-crisis peak. Although freight traffic rose 14.8 per cent year on year, the growth rate was weaker than the year-on-year improvement of 19 per cent recorded in August.

Air cargo accounts for more than a third of the world's trade in goods, making air freight levels a widely watched and key indicator of economic activity. Although re-stocking prompted a mini-boom earlier in the year, ongoing spending to solidify the economic recovery has not been forthcoming, the Iata warned.

"The freight numbers are worrying," said Giovanni Bisignani, the director general of the Iata. "What we see in air cargo markets is inevitably reflected in the broader economy."

The European freight market is yet to return to pre-recession levels, and September's year-on-year gain of 11 per cent was nearly three percentage points lower than the previous month. In the US, the trend is worse still, with August's 21 per cent growth rate plummeting to 13 per cent last month.

But the biggest contributor to the surprisingly weak September was the Asia-Pacific region, which accounts for 44 per cent of all air freight. Although the region's cargo levels are back to what they were in 2008, the 7.3 percentage point drop between August and September dragged down the global total, the Iata said. Only the Middle East bucked the trend.

Its year-on-year rise of 24 per cent last month was 1.4 per cent higher than August.

On the passenger side, the outlook is rosier. Europe and the US are both back above their pre-recession levels, with demand outstripping increases in capacity last month and pushing "load factors" - the measure of how much capacity is used - up by more than 82 per cent in both regions. Asia-Pacific carriers are also reporting rising load factors, although the surge in demand earlier in the year has flattened off.

Taken together, the diverging trends in freight and passenger markets paint a "mixed picture" for the industry, the Iata said. Seasonally adjusted figures showed a 2.1 per cent rise in passenger numbers balanced against a 2.1 per cent contraction in freight markets.

"The industry's situation is volatile," Bisignani added. "While September's passenger growth is reassuring, the accelerating decline of air freight, including in Asia, is an early indicator of some turbulence ahead."

- THE INDEPENDENT