Air freight markets stabilised in September, after an extended period of slow increase.
Global freight tonne kilometres were up 0.5% in September year-on-year, a slowdown on the 3.4% growth in August, and there was no increase in volumes in September compared to August. But current air freight volumes are still above those seen over the past 25 months, after steady increases in the size of the market since Q2 supported by improvements in business conditions.
The September airfreight result reflects a moderation in the growth trend for carriers in the Middle East and Europe, which have carried most of the rise in FTK over recent months. Middle Eastern carriers recorded strong growth in September, up 9.9%, but slightly below performance so far this year (12.3%). There has been further acceleration in the growth trend in Middle Eastern airlines' FTK over recent months, supported by improving conditions in advanced economies. Trade volumes in the Middle East have shown solid growth momentum throughout Q3.
European airlines experienced a 1.4% rise in FTK in September year-on-year, which is a slowdown on August (3.4%). Airlines in the region have seen a pick-up in the growth trend since Q2, and have carried about 30% of the rise in glob al volumes since Q2. European airlines benefitted from modest growth in the Eurozone economy during the three months to June. Indicators of manufacturing and services activity remain broadly positive, pointing to growth, albeit at a weak pace, in the second half of 2013. Growth momentum in imports has also picked up in Q3, providing further support to demand for air freight services. European airline FTK are now the highest they have been since mid – 2011.
Latin American carriers continue to see solid growth in air freight volumes, at the second fastest rate, with a 3.9% year-on-year rise in September. The region has seen the strongest increase in trade this year, with volumes of goods traded rising 8% in August compared to the start of 2013 – supporting the continued expansion in air freight demand. Latin American carriers also saw a rise in load factors in September compared to a year ago, the only region to do so. Airlines in the region have been containing growth in capacity this year, helping load factor s increase, but levels are still below that of the industry average.
By contrast, Asia Pacific airlines continue to see weakness in air freight demand. FTK fell 3.1% in September compared to a year ago, deepening the contraction so far this year to 2.1%. Downward pressure from regional economic weakness appears to be easing, which could contain further contraction during the remaining months of the year. China's GDP growth picked up slightly in Q3, rising 7.8% on a year ago, compared to 7.5% in Q2.
North American airlines experienced a soft 0.9% rise in FTK in September compared to a year ago, bucking the declining trend seen so far this year (- 1.1%). However, while business confidence started to improve in Q3, it Air Freight Market Analysis September 2013 remains below the average seen at the s tart of the year. Moreover, the improvement in air freight demand over recent months could be affected by the potentially damaging impacts on business activity of the 17-day US government shutdown in October.
The outlook for air freight markets remains tentatively positive. Global business confidence continues to rise slowly, now indicating the fastest pace of growth in the manufacturing sector since mid-2011, according to the JP Morgan/Markit Purchasing Managers' Index. Moreover, export orders rose solidly in September, also at the strongest rate since mid-2011, suggesting improvement in the pace of world trade growth ahead. But there are also some downward pressures on air freight growth. Performance of airlines in Asia Pacific, which carry the largest share of global air freight volumes, continues to decline. This region will have an important influence on how strongly air freight markets perform in the last quarter of 2013.
