Airports Council International celebrating the organization’s 25th Anniversary released the latest edition of the World Airport Traffic Forecasts (WATF) 2016–2040 at the opening day of the ACI North America/World Annual General Assembly, Conference and Exhibition in Montreal, September 26.
   The WATF presents airport traffic projections at global regional and country levels based on internationally comparable airport traffic data.
   Speaking at the opening, Angela Gittens, Director General of ACI World had this say about air cargo, “the weakened global economy and a sluggish global trade environment were definite deterrents to growth in air cargo volumes. There also continues to be a structural substitution effect in the delivery of goods across modes of transport, even in the face of strong economic fundamentals. While the shipment of raw materials and perishables have been affected the most by a move away from air cargo services to ocean freight, the modal shift can also be seen in shipments of high-tech and machinery parts. The largest trade flow from Asia has experienced the weightiest shift away from air cargo. Thus, in the short to medium terms, global air cargo volumes are expected to increase modestly, in the realm of 2.4% on annualized basis up to 2025.”
   The latest figures from Airports Council International (ACI) said 3.9 percent growth in international freight during the month of July inspired some optimism even though the year-to-date figure for both international and total freight was below 1 percent. International freight in Asia-Pacific, Europe and North America—the three largest international air freight markets—grew 5.3 percent, 1 percent and 6.7 percent respectively.
   Domestic air freight traffic was much weaker during the same period: major freight hubs in North America reported a 5 percent decline, while in Asia-Pacific domestic air freight grew only by 0.8 percent.
   The largest air freight hubs of the United States, China and Japan reported -0.2 percent, +4.5 percent and +1.8 percent respectively.
   Korea posted impressive growth of 8 percent during the month of July.
   Top growth worldwide for July was Doha (DOH, +20 percent or +24,173 tons), while the following six uptick in business positions belong to air cargo hubs in Asia-Pacific, namely Hong Kong (HKG, +4.7 percent or +17,134 tons), Incheon (ICN, +7.9 percent or + 16,141), Singapore (SIN, +9.4 percent or +13,900), and Shanghai-Pudong (PVG, +4.6 percent or +12,203).
   For the first seven months of 2016, ACI said growth rankings go to Doha (DOH), Guangzhou (CAN), and Singapore (SIN) at +162,491, +60,182, and +51,800 tons respectively.
Geoffrey Arend

     Analysts and leading forwarders now believe air freight pricing and volume gains this summer could last until deep into the fourth quarter after August and September demand ticked upwards.
     “The air freight market has picked up a bit and this is expected to be continuous until the second or third week of November,” said Paul Tsui, managing director of forwarding and logistics operator Janel Group and the immediate past chairman of the Hong Kong Association of Freight Forwarding & Logistics and the Federation of Asia Pacific Aircargo Associations.
     Buttressed by new product launches in the summer, Drewry’s East-West Airfreight Price Index - a weighted average of all-in airfreight "buy rates" paid by forwarders to airlines for standard deferred airport-to-airport airfreight services on 21 major East-West routes for cargoes above 1,000kg - posted a 0.7 point rise in August to climb to a reading of 87.5, representing an average price of $2.84 per kg.
     This supported bellwether figures out of Asia for August when Hong Kong International Airport reported an 11% increase in transhipment traffic, and Cathay Pacific posted a 3.8% year-on-year increase in cargo and mail uplift, with freighters on North American routes “generally full” demand “robust” and “momentum for exports out of Hong Kong and Mainland China building,” according to Cathay Pacific General Manager Cargo Sales & Marketing Mark Sutch.
     The August increase in Drewry’s Price Index consolidated a six month run of rising rate levels and dragged the index up to its highest level of the year, although it remained 6.9 points down compared to the same month of 2015 and was still the lowest August level since the index was first launched in 2012.
     However, Drewry predicted further gains when September’s numbers become available, not least due to the supply chain chaos that has followed the bankruptcy of Hanjin Shipping as reported extensively in FlyingTypers.
     “Pricing is expected to have recovered further in September thanks to tighter short term container shipping capacity conditions following the collapse of Korean ocean carrier Hanjin Shipping,” said Drewry.
     Sutch was also upbeat. “We are planning to operate our maximum freighter schedule over the coming peak to match with the forecast demand from various new product launches,” he said in mid-September.
     Late summer product launches by electronic companies including Microsoft and Apple have seen volumes pick up in recent weeks and may have boosted the short-term outlook, according to Sebastiaan Scholte, CEO of Netherlands-based air freight road feeder specialist Jan De Rijk Logistics. “Hanjin’s demise may also have been a factor as not all their containers have been cleared and some of the cargo will have been flown, so we’re busy now.”
     Elsewhere, Stifel’s Airfreight Logistics Index recorded a 0.1 point rise in September, taking it to 49.3 helped by ‘forward-looking’ six-month expectations improving.
     “For the current air freight situation, lanes between Europe and Asia recorded poor performance, whilst those between Europe and the U.S. achieved gains,” said the analyst. “Europe to Asia was down slightly, by 0.1 points to 42.8, with a more significant fall of 1.5 points to 45.0 on the Asia to Europe lane.      By contrast, the Europe to U.S. lane improved by 0.1 points to 46.7, with the U.S. to Europe lane rising 1.0 points to 46.1.”
     Stifel said that forward expectations on all lanes except Europe to Asia were up, with Asia to Europe surging 0.8 points to 56.5, and U.S. to Europe improving by 0.9 points to 55.2. The most significant gain was recorded on the Europe to U.S. lane, which rose by 3.3 points to 56.2.
     However, Scholte was pessimistic about the long-term future of air freight yields and margins. “I honestly can’t see any reason for growth over the next two years,” he added. “That’s across the globe. Passenger capacity is growing so much faster than freight and this means overcapacity and poor yields for airlines which is not good and not helped by world trade being stagnant.”
     Drewry was also pessimistic about the air freight supply-demand balance. “Despite the recent recovery, Drewry expects airfreight pricing to remain under pressure for the rest of the year as air cargo capacity continues to expand at a faster pace than demand,” concluded the analyst.
SkyKing

     “Aviation security needs to evolve in step with changing threats,” said ICAO Secretary General Dr. Fang Liu (left).
     “The global policy and regulatory framework has to adapt effectively and in a timely fashion to address this increasingly dynamic risk.
     “Having so many global aviation security experts and leading thinkers gathered together at AVSEC World provides a valuable opportunity to identify common objectives and combine the industry's strengths and resources towards achieving better aviation security and facilitation,” she said.
     The word is that ICAO is cooperating with Airports Council International (ACI) and IATA to host AVSEC World Conference taking place from the October 25-27, 2016, in Kuala Lumpur, Malaysia.
     “The recent tragic attacks on Brussels and Ataturk airports have brought aviation security sharply into focus in the worldwide media,” said ACI World Director General Angela Gittens.
     “Ensuring commercial aviation security is a top priority for ACI and its members, and a prerequisite for a sustainable aviation system.
     “This is a goal that can only be accomplished through close collaboration among stakeholders.
     “The landscape of aviation security is changing, and AVSEC World 2016 will lay the groundwork for where we're going and the best way to get there,” Angela declared.
     Alexandre de Juniac, (right) Director General and CEO of IATA since September 1, 2016, adds:
     “Aviation is the business of freedom. But recent months have shown that it remains a target for terrorists.
     “AVSEC World strengthens the vital partnership between industry and government on security.
     “It is a catalyst that helps to turn our common interest into a shared agenda to stay a step ahead of those with an agenda of evil," Alexandre de Juniac declared.
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Vol. 15 No. 74
The Go-Go World of ATC
Economic Impact Of Air Cargo
Chuckles For September 26, 2016 September Song