Reports of dismal May traffic continue into June with early Delta stats

Statistics released by the Association of Asia Pacific Airlines (AAPA) and WorldACD indicate air cargo demand continued to fall during the month, as export activity continued to slow in the face of challenging international business climates. Meanwhile, preliminary stats from Delta Air Lines suggest June is likely to be even slower. 

WorldACD reported that general traffic for cargo measured in freight tonne kilometers (FTKs) decreased 5.0% in May, year-over-year, while yields fell by 5.6% y-o-y. 

Across all regions, demand for airfreight suffered – Latin America and the Middle East & South Asia (MESA) saw declines of 4% and 3.4%, respectively. Africa and Europe suffered the least, with decreases in y-o-y FTKs of 2.2% and 2.4%, respectively. The U.S. and Asia–Pacific were the worst-performing regions, reporting declines of 7.2% and 7.0% for carriers in those regions, respectively. 

AAPA echoed these numbers, reporting that traffic measured in freight tonne kilometers (FTKs) for airlines in Asia decreased 6.5%. Trans-Pacific traffic has clearly suffered from continued tariffs imposed by the U.S. and China on one another, which has dampened demand and affected global supply chains. World ACD said air cargo from the U.S. to China continued to decline by 6.2% y-o-y, while volumes from China to the U.S. fell 3% in May.   

In addition to the effects of weaker air cargo demand AAPA director general Andrew Herdman said that a slowdown in the manufacturing sector, deteriorating business confidence, volatile oil prices and renewed downward pressure on passenger yields have contributed to the challenging operating conditions for Asia’s carriers. 

Speaking on volumes, WorldACD said that the y-o-y decrease in volume during May was still larger than the decrease for the first four months of 2019 together – for the period of January to May 2019, only Africa showed positive growth, though marginal, at 0.4%, largely derived from a 2.3 % increase in business from East Africa. 

Even with these dismal numbers, WorldACD reminded the air cargo industry in its report that it may behoove us to employ a more “realistic” comparison of this year’s figures to 2017, rather than the extreme growth figures seen in 2018. Compared with the first five months of 2017, the same period in 2019 so far shows worldwide growth of 1% y-o-y. Moreover, 22 of the 40 largest air cargo countries across regions show positive growth for the same period, according to WorldACD – growth between 2017 and 2019 ranges from 32.6% for Chile and 0.1% for India. 

Meanwhile, Delta Air Lines has already released its performance metrics for June, reporting a 13.4% decline in its traffic y-o-y. The slowdown has worsened Delta’s year-to-date decline, which for May stood at 6.8%, to 8.0%. 

Ultimately, these reports and Air Cargo World’s own monthly traffic and volume analyses suggest that volatility in cargo markets may result in continued declines in current political economic market conditions.