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   Vol. 13 No. 66   Friday August 1, 2014

Buoyant Asia Even IATA Upbeat

Buoyant Asia Even IATA Upbeat


Like a midsummer night’s dream, confidence in major air freight markets is surging and is now supported by evidence of pricing gains on lanes out of Asia.
     Drewry’s East-West Air Freight Price Index was up 2.3 points in June and is now considerably higher than a year earlier, although the analyst warned that more seasonal bellyhold capacity entering the market over the summer could exert downward pressure in the coming months.
     One leading handler in South East Asia told FlyingTypers that spot rates increases in recent weeks had been “encouraging,” while a leading forwarder said the unexpected spike in volumes over the last month had prompted “some interesting gains on rates which the industry desperately needs.”
     The latter added that capacity restrictions out of China linked to military exercises could further boost spot rates, although another forwarder countered that the impact of the air space restrictions was minimal so far, as the flights affected were mostly regional short-hauls.
     The Stifel Logistics Confidence Index has ebbed and flowed for much of 2014, but was up 0.9 points in July from 56.1 in June. Of more significance, the air freight segment of the survey jumped to 50.8 this month, a move indicative of “improving conditions with all but one lane above the 50-level, a situation not seen since November 2013,” according to analysis by Transport Intelligence.
     Stifel’s data revealed that the Asia to Europe trade lane noted the biggest month-on-month gain in July by climbing 3.3 points to 52.4, a jump Ti said was most likely due to improving economic conditions in Europe.
     IATA is also increasingly upbeat.
     Its quarterly survey of airline CFOs and heads of cargo in July revealed expectations of “further growth in profitability” bolstered by “confidence that air transport volumes will continue to expand over the next 12 months and support growth in yields, and that cost pressures will remain broadly stable.”
     IATA said a majority of respondent CFOs expected passenger and cargo volumes to expand over the year ahead due to the improvement in demand drivers.
     “Yields are expected to increase during the year ahead, supported by the outlook for growth in air transport demand and potentially also by capacity management,” said IATA in a statement.
ACI Logo     The most current handling figures available suggest such upbeat outlooks are built on solid foundations. Airports Council International’s latest Asia Pacific data revealed that the region’s airports recorded year-on-year freight growth of +5.6 percent in May and had handled 5 percent more cargo over the first five months of the year than in the same period of 2013.
     Hong Kong International Airport, the world’s leading international cargo hub, has also seen steady expansion in volumes. Over the first six months of 2014 cargo throughput rose by 6.3 percent year-on-year to 2.1 million tons, aided by a 7.3 percent surge in June when 361,000 tons were handled.
     “The growth in cargo throughput last month was driven mainly by transshipments and exports, which were up 17 percent and 6 percent respectively from a year ago,” said HKIA. “During the month, cargo throughput to and from Mainland China and North America recorded the most significant growth, compared to other key regions.”
AAPA Logo      The Association of Asia Pacific Airlines also said its members had seen continued growth in demand in June, helped by positive consumer and business sentiment in major developed economies.
     Demand jumped 4.7 percent year-on-year, measured in freight ton kilometers (FTK), and with capacity up 3.4 percent this saw the average international freight load factor rise for the second consecutive month.
     Air freight demand was up 4.6 percent over the first half of the year “underpinned by a long awaited pick-up in global trade activities,” concluded AAPA Director General Andrew Herdman.
SkyKing




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