Will year-over-year gains begin to decline in September?

When we summarized the worldwide air freight data from August, we predicted that, while demand would stay strong through September, the year-over-year percentage increase would probably show a slight decline. Why? Because it was in September 2016 that demand growth began to accelerate, making the year-over-year comparisons tougher.

Looking back at 2016, air freight demand growth was negative at the beginning of the year, turning positive in April, with low single-digit year-over-year gains through August. But in September, growth began to accelerate, up 6.1% in that month, and then 8.2%, 6.8%, and 9.8% in October, November, and December, respectively.

With September results now in from many of the world’s major cargo carriers and airports, it is clear that growth in demand for air freight is continuing to be very strong, but it does appear that the year-over year gains are, on average, slightly lower. We will update this post when we have more results (Cathay Pacific, Singapore Airlines, and Amsterdam’s Schiphol Airport have not yet reported), but we expect that when IATA and WorldACD publish their detailed analyses of cargo traffic worldwide in two weeks, we will see growth continuing in double digits, but closer to 10% than the 12% gains we have seen recently.

Now for the details…

Asia Pacific

Hong Kong International Airport reported cargo volume in September up 9.1% y-o-y to 430,000 tonnes, continuing this year’s pattern of strong volume growth. In fact, the September handle is HKIA’s second largest monthly handle ever, behind only the 433,000 tonnes handled at the airport in March of this year. On a year-over-year growth basis, however, the September gain marks a slight fall-off from recent months. For the first three quarters of 2017, HKIA’s cargo handle was up 10.8% to 3.58 million tonnes. Commenting on the results, HKIA said: “Exports registered a robust 14% year-on-year growth, continuing to lead the growth in cargo volume. Amongst the key trading regions, cargo throughput to Europe and Southeast Asia increased the most significantly.”

Beijing-based Air China reported September cargo traffic up 14.6% y-o-y, to 665 million RTKs, the largest year-over-year gain this year, by a considerable margin. International traffic was up strongly – 20.3% over September 2016 – to 501 million RTKs, but the total was dragged down by a 1.0% decline in domestic traffic to 154 million RTKs. The much smaller regional traffic was up 24.4% to 9.9 million RTKs. For the year through September, Air China’s cargo traffic was up 7.7% to 5.49 billion RTKs.

Guangzhou-based China Southern Airlines reported September cargo traffic up 16.0% y-o-y to 617 million RTKs. This is down from the 20% growth the carrier has posted in recent months, but very close to its year-to-date average. International traffic growth was strong in September, up 25.3% y-o-y to 455 million RTKs, but a 4.2% drop in domestic traffic to 160 million RTKs brought the total down. For the year through September, China Southern’s cargo traffic was up 16.4% to 5.15 billion RTKs.

Shanghai Pudong International Airport Cargo Terminal Co Ltd (Pactl, the biggest handler at Shanghai’s Pudong Airport) reported its September handle up 15.9% y-o-y to 166,000 tonnes, its best monthly result this year. International volume for the month was up 17.7% to 157,000 tonnes, while the much smaller domestic volume was down 7.4% to 10,000 tonnes (Pactl handles very little of PVG’s domestic cargo). For the first nine months of 2017, Pactl’s handle was up 13.0% to 1.36 million tonnes.

Taiwan-based China Airlines reported September cargo traffic up 13.1% y-o-y to 496 million RTKs, the thirteenth consecutive month of increased traffic after a long period of declining demand and the second-biggest monthly year-over-year jump in that period. And the gains are not coming at the expense of yield — cargo revenue is rising faster than traffic, up 26.9% y-o-y in September. Year-to-date, CAL’s cargo traffic was up 8.1% to 4.16 billion RTKs, and cargo revenue was up 20.6%.

Taiwan-based EVA Air reported September cargo traffic up 3.9% y-o-y to 306 million RTKs, the carrier’s sixteenth consecutive positive result after a long period of declines. As is the case with fellow-Taiwanese carrier China Airlines, EVA’s cargo revenue is growing much more strongly than its traffic – up 15.0% y-o-y in September. For the first nine months of the year, EVA’s cargo traffic was up 5.8% to 2.75 billion RTKs, while cargo revenue rose 11.8%.

South Korea’s Incheon Airport reported its September cargo handle up 10.7%, to 256,000 tonnes. For the first three quarters of 2017, ICN’s handle was up 9.6% to 3.1 million tonnes.

Europe & Middle East

Lufthansa reported Group cargo traffic up 6.0% y-o-y in September to 938 million RTKs, the lowest growth rate since the carrier reported 5.2% y-o-y growth in February. Traffic on the trans-Atlantic lane grew fairly strongly – up 8.3% to 399 million RTKs, but traffic to/from the Asia-Pacific region was up just 3.7% to 439 million RTKs. The strongest growth of all – a 12.0% increase – was in traffic to/from the Middle East/Africa region, but the total of 69 million RTKs was relatively small. For the first three quarters of 2017, Lufthansa Group’s cargo traffic was up 8.0% to 7.99 billion RTKs.

Air France-KLM Martinair reported September cargo traffic up slightly (0.5%) y-o-y to 715 million RTKs – the seventh consecutive month of positive growth after several years of declines. Air France reported September traffic up 4.6% to 312 million RTKs, but a 2.4% decline in KLM’s traffic to 404 million RTKs dragged the group result down. For the year through September, AF-KLM’s cargo traffic was up 1.3% to 6.32 billion RTKs.

International Airlines Group reported September cargo traffic up 8.7% y-o-y to 487 million RTKs, it’s second-strongest growth this year. Subsidiary carrier British Airways reported September cargo traffic up 9.2% to 380 million RTKs and Spain-based Iberia’s cargo was up 6.7% to 96 million RTKs. Ireland-based Aer Lingus reported September cargo traffic up 10.0% to 11 million RTKs. For the first nine months of 2017, IAG’s cargo traffic was up 5.9% to 4.22 billion RTKs.

Turkish Airlines reported September cargo volume up 25.3% y-o-y to 98,000 tonnes. Turkish has reported the strongest year-over-year growth among major carriers for several years now, and while September’s 25.3% is not at the level of the 40.2% gain in July, it is very much in line with Turkish’s year-to-date increase of 26.8% to 810,000 tonnes.

Frankfurt Airport (FRA) reported its cargo handle up 4.1% y-o-y to 188,000 tonnes in September. For the first three quarters of 2017, FRA’s handle was up 4.7% to 1.65 million tonnes.

London’s Heathrow Airport (LHR) reported its September handle up 11.5% to 141,000 tonnes. Year-to-date, LHR’s handle was up 10.5%, to 1.25 million tonnes.

 Americas

After years of declines, Chile-headquartered LATAM Airlines Group reported its fifth consecutive month of increasing air freight demand, with cargo traffic up 2.3% y-o-y in September, to 285 million RTKs. However, for the year to date, LATAM’s cargo traffic is still down 1.3% compared to 2016, at 2.46 billion RTKs.

United Airlines reported September cargo traffic up 14.6% y-o-y to 281 million RTKs, its eighteenth consecutive month of strong gains. Year-to-date, United’s cargo traffic was up 19.4% to 3.51 billion RTKs.

The turnaround plan at Delta Air Lines continues to pay off. The Atlanta-based carrier reported September cargo traffic up 9.4% y-o-y to 273 million RTKs – its sixth consecutive monthly y-o-y gain after years of declining demand. This brings Delta’s cargo traffic for the year to 2.35 billion RTKs, up 9.2% over the first nine months of 2016.